Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2018 | Apr. 30, 2018 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2018 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q1 | |
Trading Symbol | AREX | |
Entity Registrant Name | Approach Resources Inc | |
Entity Central Index Key | 1,405,073 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 94,627,262 |
Unaudited Consolidated Balance
Unaudited Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
CURRENT ASSETS: | ||
Cash and cash equivalents | $ 22 | $ 21 |
Accounts receivable: | ||
Joint interest owners | 193 | 117 |
Oil, NGLs and gas sales | 9,521 | 9,678 |
Derivative instruments | 1,250 | 1,398 |
Prepaid expenses and other current assets | 1,558 | 5,486 |
Total current assets | 12,544 | 16,700 |
PROPERTIES AND EQUIPMENT: | ||
Oil and gas properties, at cost, using the successful efforts method of accounting | 1,944,388 | 1,930,577 |
Furniture, fixtures and equipment | 5,689 | 5,658 |
Total oil and gas properties and equipment | 1,950,077 | 1,936,235 |
Less accumulated depletion, depreciation and amortization | (868,923) | (853,359) |
Net oil and gas properties and equipment | 1,081,154 | 1,082,876 |
Total assets | 1,093,698 | 1,099,576 |
CURRENT LIABILITIES: | ||
Accounts payable | 10,028 | 9,450 |
Oil, NGLs and gas sales payable | 5,438 | 5,363 |
Derivative instruments | 2,430 | 2,181 |
Accrued liabilities | 8,761 | 8,073 |
Total current liabilities | 26,657 | 25,067 |
NON-CURRENT LIABILITIES: | ||
Senior secured credit facility, net | 290,449 | 289,275 |
Senior notes, net | 84,260 | 84,185 |
Deferred income taxes | 80,492 | 82,102 |
Asset retirement obligations | 11,042 | 11,065 |
Other non-current liabilities | 604 | 466 |
Total liabilities | 493,504 | 492,160 |
COMMITMENTS AND CONTINGENCIES | ||
STOCKHOLDERS’ EQUITY: | ||
Preferred stock, $0.01 par value, 10,000,000 shares authorized, none outstanding | ||
Common stock, $0.01 par value, 180,000,000 shares authorized, 94,605,086 and 94,533,246 issued and outstanding, respectively | 946 | 945 |
Additional paid-in capital | 742,614 | 742,391 |
Accumulated deficit | (143,366) | (135,920) |
Total stockholders’ equity | 600,194 | 607,416 |
Total liabilities and stockholders’ equity | $ 1,093,698 | $ 1,099,576 |
Unaudited Consolidated Balance3
Unaudited Consolidated Balance Sheets (Parenthetical) - $ / shares | Mar. 31, 2018 | Dec. 31, 2017 |
Statement Of Financial Position [Abstract] | ||
Preferred stock, par value | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 180,000,000 | 180,000,000 |
Common stock, issued | 94,605,086 | 94,533,246 |
Common stock, outstanding | 94,605,086 | 94,533,246 |
Unaudited Consolidated Statemen
Unaudited Consolidated Statements of Operations - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | ||
REVENUES: | |||
Oil, NGLs and gas sales | $ 28,772 | $ 26,355 | |
EXPENSES: | |||
Lease operating | 5,268 | 4,170 | |
Production and ad valorem taxes | 2,500 | 2,357 | |
Exploration | 1,043 | ||
General and administrative | [1] | 6,567 | 5,928 |
Depletion, depreciation and amortization | 15,680 | 17,962 | |
Total expenses | 30,015 | 31,460 | |
OPERATING LOSS | (1,243) | (5,105) | |
OTHER: | |||
Interest expense, net | (5,886) | (5,463) | |
Gain on debt extinguishment | 5,053 | ||
Commodity derivative (loss) gain | (1,928) | 3,444 | |
Other income | 1 | 3 | |
LOSS BEFORE INCOME TAX (BENEFIT) PROVISION | (9,056) | (2,068) | |
INCOME TAX (BENEFIT) PROVISION | (1,610) | 138,700 | |
NET LOSS | $ (7,446) | $ (140,768) | |
LOSS PER SHARE: | |||
Basic | $ (0.08) | $ (2) | |
Diluted | $ (0.08) | $ (2) | |
WEIGHTED AVERAGE SHARES OUTSTANDING: | |||
Basic | 94,516,280 | 70,409,303 | |
Diluted | 94,516,280 | 70,409,303 | |
[1] | Includes non-cash share-based compensation expense as follows: |
Unaudited Consolidated Stateme5
Unaudited Consolidated Statements of Operations (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Income Statement [Abstract] | ||
Includes non-cash share-based compensation expense | $ 828 | $ 1,159 |
Unaudited Consolidated Stateme6
Unaudited Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
OPERATING ACTIVITIES: | ||
Net loss | $ (7,446) | $ (140,768) |
Adjustments to reconcile net loss to cash provided by operating activities: | ||
Depletion, depreciation and amortization | 15,680 | 17,962 |
Amortization of debt issuance costs | 262 | 219 |
Gain on debt extinguishment | (5,053) | |
Commodity derivative loss (gain) | 1,928 | (3,444) |
Settlements of commodity derivatives | (1,531) | (961) |
Exploration expense | 1,033 | |
Share-based compensation expense | 828 | 1,159 |
Deferred income tax provision (benefit) | (1,610) | 138,700 |
Other non-cash items | (3) | |
Changes in operating assets and liabilities: | ||
Accounts receivable | 85 | 863 |
Prepaid expenses and other current assets | (466) | (266) |
Accounts payable | (1,781) | (3,973) |
Oil, NGLs and gas sales payable | 72 | 318 |
Accrued liabilities | (636) | (97) |
Cash provided by operating activities | 5,385 | 5,689 |
INVESTING ACTIVITIES: | ||
Additions to oil and gas properties | (13,685) | (13,359) |
Additions to furniture, fixtures and equipment, net | (31) | (6) |
Change in working capital related to investing activities | 8,329 | 6,479 |
Cash used in investing activities | (5,387) | (6,886) |
FINANCING ACTIVITIES: | ||
Borrowings under credit facility | 29,500 | 21,500 |
Repayment of amounts outstanding under credit facility | (28,500) | (19,500) |
Equity issuance costs | (2,468) | |
Tax withholdings related to restricted stock | (604) | (93) |
Debt issuance costs | (14) | |
Change in working capital related to financing activities | (379) | 1,816 |
Cash provided by financing activities | 3 | 1,255 |
CHANGE IN CASH AND CASH EQUIVALENTS | 1 | 58 |
CASH AND CASH EQUIVALENTS, beginning of period | 21 | 21 |
CASH AND CASH EQUIVALENTS, end of period | 22 | 79 |
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | ||
Cash paid for interest | $ 4,174 | 4,202 |
SUPPLEMENTAL DISCLOSURE OF NON-CASH TRANSACTION: | ||
Asset retirement obligations capitalized | $ 11 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2018 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 1. Summary of Significant Accounting Policies Organization and Nature of Operations Approach Resources Inc. (“Approach,” the “Company,” “we,” “us” or “our”) is an independent energy company engaged in the exploration, development, production and acquisition of oil and gas properties. We focus on finding and developing oil and natural gas reserves in oil shale and tight gas sands. Our properties are primarily located in the Permian Basin in West Texas. We also own interests in the East Texas Basin. Consolidation, Basis of Presentation and Significant Estimates The interim consolidated financial statements of the Company are unaudited and contain all adjustments (consisting primarily of normal recurring accruals) necessary for a fair statement of the results for the interim periods presented. Results for interim periods are not necessarily indicative of results to be expected for a full year, due in part to the volatility in prices for oil, natural gas liquids (“NGLs”) and gas, future commodity prices for commodity derivative contracts, global economic and financial market conditions, interest rates, access to sources of liquidity, estimates of reserves, drilling risks, geological risks, transportation restrictions, the timing of acquisitions, product supply and demand, market competition and interruptions of production. You should read these consolidated interim financial statements in conjunction with the audited consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2017, filed with the Securities and Exchange Commission on March 9, 2018. The accompanying interim consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America and include the accounts of the Company and its wholly owned subsidiaries. Intercompany accounts and transactions are eliminated. In preparing the accompanying financial statements, management has made certain estimates and assumptions that affect reported amounts in the financial statements and disclosures of contingencies. Actual results may differ from those estimates. Significant assumptions are required in the valuation of proved oil and gas reserves, which affect our estimate of depletion expense as well as our impairment analyses. Significant assumptions also are required in our estimation of accrued liabilities, commodity derivatives, income tax provision, share-based compensation and asset retirement obligations. It is at least reasonably possible these estimates could be revised in the near term, and these revisions could be material. Certain prior-year amounts have been reclassified to conform to current-year presentation. These classifications have no impact on the net loss reported. Recent Accounting Pronouncements On January 1, 2018, we adopted the Financial Accounting Standards Board (“FASB”) accounting standards update for “Revenue from Contracts with Customers,” which superseded the revenue recognition requirements in “Topic 605, Revenue Recognition,” using the modified retrospective method. Adoption of this standard did not have a significant impact on our consolidated statements of operations or cash flows. We implemented processes to ensure new contracts are reviewed for the appropriate accounting treatment and generate the disclosures required under the new standard. See Note 2 for additional disclosures required under this accounting standards update related to the nature, amount, timing and uncertainty of revenue and cash flows from contracts with customers including disaggregation of revenue. In February 2016, FASB issued an accounting standards update for “Leases,” which amends existing guidance to require lessees to recognize assets and liabilities on the balance sheet for the rights and obligations created by long-term leases and to disclose additional quantitative and qualitative information about leasing arrangements. This new guidance is effective for interim and annual periods beginning after December 15, 2018, and we will adopt it using a modified retrospective approach. Currently, the Company is evaluating the standard’s applicability to our various contractual arrangements. We believe that the adoption of this standard will result in recognition of assets and liabilities on the balance sheet for current operating leases. The Company is still evaluating the impact of this new guidance on its consolidated financial statements. In January 2017, FASB issued an accounting standards update for “Clarifying the Definition of a Business,” which provides guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. This standard requires entities to use a screen test to determine when an integrated set of assets and activities is not a business or if the integrated set of assets and activities needs to be further evaluated against the framework. impact our consolidated statements of operations or cash flows. In August 2017, FASB issued an accounting update for “Derivatives and Hedging,” impact our consolidated statements of operations or cash flows. Prepaid Expenses and Other Assets In April 2017, we entered into an agreement that secured pricing of a hydraulic fracturing services crew. Under this agreement, we made a prepayment of $5 million, to be used as we completed wells. We have used $1.2 million of this prepayment related to hydraulic fracturing services provided during the first year of the agreement. In March 2018, this agreement was terminated and $3.8 million of the unused prepaid balance was refunded to us. |
Revenue Recognition
Revenue Recognition | 3 Months Ended |
Mar. 31, 2018 | |
Revenue Recognition [Abstract] | |
Revenue Recognition | 2. Revenue Recognition Revenues for the sale of oil, NGLs, and gas are recognized as the product is delivered to our customers’ custody transfer points and collectability is reasonably assured. We fulfill the performance obligations under our customer contracts through daily delivery of oil, NGLs and gas to our customers’ custody transfer points and revenues are recorded on a monthly basis. The prices received for oil, NGLs and natural gas sales under our contracts are generally derived from stated market prices which are then adjusted to reflect deductions including transportation, fractionation and processing. As a result, our revenues from the sale of oil, natural gas and NGLs will decrease if market prices decline. To the extent actual volumes and prices of oil and natural gas sales are unavailable for a given reporting period because of timing or information not received from third parties, the expected sales volumes and prices for those properties are estimated and recorded. The following table presents our disaggregated revenue by major source for the three months ended March 31, 2018, and 2017 (in thousands). Three Months Ended March 31, 2018 2017 Revenues (in thousands): Oil $ 16,343 $ 13,694 NGLs 7,332 6,060 Gas 5,097 6,601 Total oil, NGLs and gas sales $ 28,772 $ 26,355 |
Earnings Per Common Share
Earnings Per Common Share | 3 Months Ended |
Mar. 31, 2018 | |
Earnings Per Share [Abstract] | |
Earnings Per Common Share | 3. Earnings Per Common Share We report basic earnings per common share, which excludes the effect of potentially dilutive securities, and diluted earnings per common share, which includes the effect of all potentially dilutive securities unless their impact is antidilutive. The following table provides a reconciliation of the numerators and denominators of our basic and diluted earnings per share (dollars in thousands, except per-share amounts). Three Months Ended March 31, 2018 2017 Income (numerator): Net loss – basic $ (7,446 ) $ (140,768 ) Weighted average shares (denominator): Weighted average shares – basic 94,516,280 70,409,303 Dilution effect of share-based compensation, treasury method (1) — — Weighted average shares – diluted 94,516,280 70,409,303 Net loss per share: Basic $ (0.08 ) $ (2.00 ) Diluted $ (0.08 ) $ (2.00 ) (1) Approximately 39,000 options to purchase our common stock were excluded from this calculation because they were antidilutive for the three months ended March 31, 2017. No options were outstanding as of March 31, 2018, as they had expired. |
Equity Exchange Transactions
Equity Exchange Transactions | 3 Months Ended |
Mar. 31, 2018 | |
Equity Exchange Transactions [Abstract] | |
Equity Exchange Transactions | 4. Equity Exchange Transactions Debt exchange On November 2, 2016, we entered into an exchange agreement with Wilks Brothers, LLC and SDW Investments, LLC (collectively, “Wilks”) the largest holder of our 7% Senior Notes due 2021 (the “Senior Notes”), to exchange $130,552,000 principal amount of our Senior Notes for 39,165,600 newly issued shares of common stock, par value $0.01 per share (the “Initial Exchange”). On January 26, 2017, our stockholders approved the Exchange Transactions (defined below) and an increase in our authorized common stock from 90 million shares to 180 million shares. We closed the Initial Exchange on January 27, 2017, and paid $1.1 million of accrued interest on the Senior Notes held by Wilks. In connection with the Initial Exchange, a second supplemental indenture became effective, which removed certain covenants and events of default from the indenture governing our Senior Notes and eliminated certain restrictive covenants discussed in Note 5. On March 22, 2017, we exchanged an additional $14,528,000 principal amount of outstanding Senior Notes for 4,009,728 shares of our common stock (the “Follow-On Exchange”). The Initial Exchange and the Follow-On Exchange (together, the “Exchange Transactions”) reduced the principal amount of outstanding Senior Notes by $145.1 million and reduced interest payments by $44.3 million over the remaining term of the Senior Notes. The Exchange Transactions were accounted for as a debt extinguishment. A gain of $5.1 million was recognized on the Exchange Transactions for the difference between the fair market value of the shares issued, a Level 1 fair value measurement, and the net carrying value of the Senior Notes exchanged. We incurred equity issuance costs of $2.8 million related to the Exchange Transactions, which were recorded as a reduction to additional paid-in capital. The Exchange Transactions triggered a cumulative change in ownership of our common stock by more than 50% under Section 382 of the Internal Revenue Code as of March 22, 2017. This established an annual limitation on the usage of our pre-change net operating losses (“NOLs”) in the future. Accordingly, we recognized a write-off of deferred tax assets of $139.1 million. Acquisition On November 1, 2017, we entered into a definitive agreement (the “Purchase Agreement”) to acquire producing properties directly adjacent to our acreage in the Permian Basin (the “Bolt-On Acquisition”). The Bolt-On Acquisition closed on November 20, 2017, and we issued 7,573,403 newly issued shares of common stock, par value $0.01 per share, with an effective date of September 1, 2017. The purchase price was finalized in April 2018, and we expect to receive 142,362 of the previously issued shares of our common stock, which will be retired, pursuant to adjustments under the Purchase Agreement. |
Long-Term Debt
Long-Term Debt | 3 Months Ended |
Mar. 31, 2018 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | 5. Long-Term Debt The following table provides a summary of our long-term debt at March 31, 2018, and December 31, 2017 (in thousands). March 31, December 31, 2018 2017 Senior secured credit facility: Outstanding borrowings $ 292,000 $ 291,000 Debt issuance costs (1,551 ) (1,725 ) Senior secured credit facility, net 290,449 289,275 Senior notes: Principal 85,240 85,240 Debt issuance costs (980 ) (1,055 ) Senior notes, net 84,260 84,185 Total long-term debt $ 374,709 $ 373,460 Senior Secured Credit Facility At March 31, 2018, the borrowing base and aggregate lender commitments under our amended and restated senior secured credit facility (the “Credit Facility”) were $325 million, with maximum commitments from the lenders of $1 billion. The Credit Facility has a maturity date of May 7, 2020. The borrowing base is redetermined semi-annually based on our oil, NGLs and gas reserves. We, or the lenders, can each request one additional borrowing base redetermination each calendar year. Our semi-annual borrowing base redetermination was completed on May 1, 2018, and our borrowing base and aggregate lender commitments were reaffirmed at $325 million. At March 31, 2018, borrowings under the Credit Facility bore interest based on the agent bank’s prime rate plus an applicable margin ranging from 2% to 3%, or the sum of the LIBOR rate plus an applicable margin ranging from 3% to 4%. In addition, we pay an annual commitment fee of 0.50% of unused borrowings available under the Credit Facility. Margins vary based on the borrowings outstanding compared to the borrowing base of the lenders. We had outstanding borrowings of $292 million under the Credit Facility at March 31, 2018, compared to $291 million of outstanding borrowings at December 31, 2017. The weighted average interest rate applicable to borrowings under the Credit Facility for the three months ended March 31, 2018, was 5.5%. We had outstanding unused letters of credit under the Credit Facility totaling $0.3 million at March 31, 2018, and December 31, 2017, respectively, which reduce amounts available for borrowing under the Credit Facility. Obligations under the Credit Facility are secured by mortgages on substantially all of the oil and gas properties of the Company and its subsidiaries. The Company is required to grant liens in favor of the lenders covering the oil and gas properties of the Company and its subsidiaries representing at least 95% of the total value of all oil and gas properties of the Company and its subsidiaries. On December 21, 2017, we entered into a fourth amendment to the Credit Facility. The fourth amendment, among other things, (a) extended the maturity date of the Credit Facility from May 7, 2019, to May 7, 2020, (b) increased the applicable margin rates on borrowings by Covenants The Credit Facility contains three principal financial covenants: • a consolidated interest coverage ratio covenant that requires us to maintain a ratio of (i) consolidated EBITDAX for the period of four fiscal quarters then ending to (ii) Cash Interest Expense for such period as of the last day of any fiscal quarter of not less than 1.75 to 1.0 through December 31, 2018, a ratio of not less than 2.25 to 1.0 through December 31, 2019, and 2.5 to 1.0 thereafter. EBITDAX is defined as consolidated net (loss) income plus (i) interest expense, net, (ii) income tax provision (benefit), (iii) depreciation, depletion, amortization, (iv) exploration expenses and (v) other noncash loss or expense (including share-based compensation and the change in fair value of any commodity derivatives), less noncash income. Cash Interest Expense is calculated as interest expense, net less amortization of debt issuance costs. At March 31, 2018, our consolidated interest coverage ratio was 2.6 to 1.0; • a consolidated modified current ratio covenant that requires us to maintain a ratio of not less than 1.0 to 1.0 as of the last day of any fiscal quarter. The consolidated modified current ratio is defined as the ratio of (i) current assets plus funds available under our revolving credit facility, less the current derivative asset, to (ii) current liabilities less the current derivative liability. At March 31, 2018, our consolidated modified current ratio was 1.8 to 1.0; and • a consolidated total leverage ratio covenant that imposes a maximum permitted ratio of (i) Total Debt to (ii) EBITDAX for the period of four fiscal quarters then ending of not more than 5.0 to 1.0, as of the last day of any fiscal quarter from March 31, 2019, through June 30, 2019, thereafter not more than 4.75 to 1.0 as of the last day of any fiscal quarter through December 31, 2019, and (iii) not more than 4.0 to 1.0 as of the last day of any fiscal quarter thereafter. Total Debt is defined as the face or principal amount of debt. Our leverage ratio is currently above the level that will be required as of March 31, 2019. At March 31, 2018, our leverage ratio was 6.9 to 1.0. The Credit Facility also contains covenants restricting cash distributions and other restricted payments, transactions with affiliates, incurrence of other debt, consolidations and mergers, the level of operating leases, asset sales, investment in other entities and liens on properties. In addition, the obligations of the Company may be accelerated upon the occurrence of an Event of Default (as defined in the Credit Facility). Events of Default include customary events for a financing agreement of this type, including, without limitation, payment defaults, the inaccuracy of representations and warranties, defaults in the performance of affirmative or negative covenants, defaults on other indebtedness of the Company or its subsidiaries, bankruptcy or related defaults, defaults related to judgments and the occurrence of a Change of Control (as defined in the Credit Facility), which includes instances where a third party becomes the beneficial owner of more than 50% of the Company’s outstanding equity interests entitled to vote. Senior Notes At March 31, 2018, and December 31, 2017, $85.2 million of Senior Notes were outstanding. We issued the Senior Notes under a senior indenture dated June 11, 2013, among the Company, our subsidiary guarantors and Wilmington Trust, National Association, as successor trustee. The senior indenture, as supplemented by supplemental indentures dated June 11, 2013, and December 20, 2016, is referred to as the “Indenture.” We may redeem some or all of the Senior Notes at specified redemption prices, plus accrued and unpaid interest to the redemption date. The Senior Notes are fully and unconditionally guaranteed on a senior unsecured basis by each of our subsidiaries, subject to certain customary release provisions. A subsidiary guarantor may be released from its obligations under the guarantee: • in connection with any sale or other disposition of all or substantially all of the assets of that guarantor (including by way of merger or consolidation) to a person that is not (either before or after giving effect to such transaction) the Company or a subsidiary guarantor, if the sale or other disposition otherwise complies with the Indenture; • in connection with any sale or other disposition of the capital stock of that guarantor to a person that is not (either before or after giving effect to such transaction) the Company or a subsidiary guarantor, if that guarantor no longer qualifies as a subsidiary of the Company as a result of such disposition and the sale or other disposition otherwise complies with the Indenture; • if the Company designates any restricted subsidiary that is a guarantor to be an unrestricted subsidiary in accordance with the Indenture; • upon defeasance or covenant defeasance of the notes or satisfaction and discharge of the Indenture, in each case, in accordance with the Indenture; • upon the liquidation or dissolution of that guarantor, provided that no default or event of default occurs under the Indenture as a result thereof or shall have occurred and is continuing; or • in the case of any restricted subsidiary that, after the issue date of the notes is required under the Indenture to guarantee the notes because it becomes a guarantor of indebtedness issued or an obligor under a credit facility with respect to the Company and/or its subsidiaries, upon the release or discharge in full from its (i) guarantee of such indebtedness or (ii) obligation under such credit facility, in each case, which resulted in such restricted subsidiary’s obligation to guarantee the notes. The Indenture contains limited events of default. Subsidiary Guarantors The Senior Notes are guaranteed on a senior unsecured basis by each of our consolidated subsidiaries. Approach Resources Inc. is a holding company with no independent assets or operations. The subsidiary guarantees are full and unconditional and joint and several, and any subsidiaries of the Company other than the subsidiary guarantors are minor. There are no significant restrictions on the Company’s ability, or the ability of any subsidiary guarantor, to obtain funds from its subsidiaries through dividends, loans, advances or otherwise. At March 31, 2018, we were in compliance with all of our covenants, and there were no existing defaults or events of default, under our debt instruments. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2018 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 6. Commitments and Contingencies Our contractual obligations include long-term debt, operating lease obligations, asset retirement obligations and employment agreements with our executive officers. Since December 31, 2017, there have been no material changes to our contractual obligations. We are involved in various legal and regulatory proceedings arising in the normal course of business. While we cannot predict the outcome of these proceedings with certainty, we do not believe that an adverse result in any pending legal or regulatory proceeding, individually or in the aggregate, would be material to our consolidated financial condition or cash flows. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 7. Income Taxes For the three months ended March 31, 2018, our income tax benefit was $1.6 million, compared to an income tax provision of $138.7 million for the three months ended March 31, 2017. The following table reconciles our income tax expense for the three months ended March 31, 2018, and 2017, to the U.S. federal statutory rates of 21% and 35%, respectively (dollars in thousands). March 31, March 31, 2018 2017 Statutory tax at 21% and 35%, respectively $ (1,902 ) $ (724 ) State taxes, net of federal impact 162 41 Share-based compensation tax shortfall 70 290 Nondeductible compensation 57 — Other differences 3 3 Write-off of deferred tax assets — $ 139,090 Income tax (benefit) provision $ (1,610 ) $ 138,700 On December 22, 2017, the Tax Cuts and Jobs Act was enacted which, among other things, lowered the U.S. Federal income tax rate applicable to corporations from 35% to 21% and repealed the corporate alternative minimum tax. The Exchange Transactions triggered a cumulative change in ownership of our common stock by more than 50% under Section 382 of the Internal Revenue Code as of March 22, 2017. This established an annual limitation on the usage of our pre-change NOLs in the future. Accordingly, we recognized a write-off of our deferred tax assets of $139.1 million in the three months ended March 31, 2017. |
Derivative Instruments and Fair
Derivative Instruments and Fair Value Measurements | 3 Months Ended |
Mar. 31, 2018 | |
Derivative Instruments And Hedging Activities Disclosure [Abstract] | |
Derivative Instruments and Fair Value Measurements | 8. Derivative Instruments and Fair Value Measurements The following table provides our outstanding commodity derivative positions at March 31, 2018. Commodity and Period Contract Type Volume Transacted Contract Price Crude Oil April 2018 – December 2018 Swap 300 Bbls/day $50.00/Bbl April 2018 – June 2018 Collar 500 Bbls/day $55.00/Bbl - $60.00/Bbl April 2018 – September 2018 Swap 1,500 Bbls/day $60.50/Bbl Natural Gas April 2018 – December 2018 Swap 200,000 MMBtu/month $3.085/MMBtu April 2018 – December 2018 Swap 250,000 MMBtu/month $3.084/MMBtu NGLs (C2 - Ethane) April 2018 – December 2018 Swap 1,000 Bbls/day $11.424/Bbl NGLs (C3 - Propane) April 2018 – December 2018 Swap 600 Bbls/day $32.991/Bbl NGLs (IC4 - Isobutane) April 2018 – December 2018 Swap 50 Bbls/day $38.262/Bbl NGLs (NC4 - Butane) April 2018 – December 2018 Swap 200 Bbls/day $38.22/Bbl NGLs (C5 - Pentane) April 2018 – December 2018 Swap 200 Bbls/day $56.364/Bbl After March 31, 2018, we entered into swaps for the NYMEX Calendar Monthly Average Roll (the “CMA Roll”) covering 2,000 Bbls of oil per day for May 2018 through December 2018 at $0.66/bbl. Swaps for the CMA Roll are pricing adjustments to the trade month versus the delivery month for contract pricing. The following table summarizes the fair value of our open commodity derivatives as of March 31, 2018, and December 31, 2017 (in thousands). Balance Sheet Location Fair Value March 31, December 2018 2017 Derivatives not designated as hedging instruments Commodity derivatives Derivative assets $ 1,250 $ 1,398 Commodity derivatives Derivative liabilities (2,430 ) (2,181 ) The following table summarizes the change in the fair value of our commodity derivatives (in thousands). Three Months Ended March 31, 2018 2017 Derivatives not designated as hedging instruments Commodity derivatives Net cash payment on derivative settlements $ (1,531 ) $ (961 ) Non-cash fair value (loss) gain on derivatives (397 ) 4,405 Commodity derivative (loss) gain $ (1,928 ) $ 3,444 Derivative assets and liabilities , at fair value, are included on our consolidated balance sheets as current or non-current assets or liabilities based on the anticipated timing of cash settlements under the related contracts. Changes in the fair value of our commodity derivative contracts, not designated as cash-flow hedges, are recorded in earnings as they occur and included in income (expense) on our consolidated statements of operations. We estimate the fair values of swap contracts based on the present value of the difference in exchange-quoted forward price curves and contractual settlement prices multiplied by notional quantities. We internally valued the option contracts using industry-standard option pricing models and observable market inputs. We use our internal valuations to determine the fair values of the contracts that are reflected on our consolidated balance sheets. We are exposed to credit losses in the event of nonperformance by the counterparties on our commodity derivatives positions and have considered the exposure in our internal valuations. However, we do not anticipate nonperformance by the counterparties over the term of the commodity derivatives positions. To estimate the fair value of our commodity derivatives positions, we use market data or assumptions that market participants would use in pricing the asset or liability, including assumptions about risk and the risks inherent in the inputs to the valuation technique. These inputs can be readily observable, market corroborated or generally unobservable. We primarily apply the market approach for recurring fair value measurements and attempt to use the best available information. We determine the fair value based upon the hierarchy that prioritizes the inputs used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurement) and lowest priority to unobservable inputs (Level 3 measurement). The three levels of fair value hierarchy are as follows: • Level 1 — Quoted prices are available in active markets for identical assets or liabilities as of the reporting date. The shares of our common stock issued in the Exchange Transactions were valued as a Level 1 measurement. At March 31, 2018, we had no Level 1 measurements. • Level 2 — Pricing inputs are other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date. Level 2 includes those financial instruments that are valued using models or other valuation methodologies. These models are primarily industry-standard models that consider various assumptions, including quoted forward prices for commodities, time value, volatility factors and current market and contractual prices for the underlying instruments, as well as other relevant economic measures. Our derivatives, which consist primarily of commodity swaps and collars, are valued using commodity market data, which is derived by combining raw inputs and quantitative models and processes to generate forward curves. Where observable inputs are available, directly or indirectly, for substantially the full term of the asset or liability, the instrument is categorized in Level 2. At March 31, 2018, all of our commodity derivatives were valued using Level 2 measurements. • Level 3 — Pricing inputs include significant inputs that are generally less observable from objective sources. These inputs may be used with internally developed methodologies that result in management’s best estimate of fair value. At March 31, 2018, we had no recurring Level 3 measurements. Financial Instruments Not Recorded at Fair Value The following table sets forth the fair values of financial instruments that are not recorded at fair value on our financial statements (in thousands). March 31, 2018 Carrying Amount Fair Value Senior Notes $ 84,260 $ 80,978 The fair value of the Senior Notes is based on quoted market prices, but the Senior Notes are not actively traded in the public market. Accordingly, the fair value of the Senior Notes would be classified as Level 2 in the fair value hierarchy. |
Share-Based Compensation
Share-Based Compensation | 3 Months Ended |
Mar. 31, 2018 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Share-Based Compensation | 9. Share-Based Compensation In March 2018, we issued 774,590 cash-settled performance awards, subject to certain performance conditions, and 387,295 restricted shares subject to three-year total shareholder return (“TSR”) conditions, assuming maximum TSR, to our executive officers. The aggregate fair market value of the cash-settled performance awards and TSR restricted shares on the date of grant was approximately $2.4 million and $0.8 million, respectively, to be expensed over a service period of approximately three years. Cash-settled performance awards As of March 31, 2018, we had 1,508,286 unvested cash-settled performance awards, subject to certain performance conditions outstanding. The cash-settled performance awards represent a non-equity unit with a conversion value equal to the fair market value of a share of the Company’s common stock at the vesting date. These awards are classified as liability awards due to the cash settlement feature. Compensation costs associated with the cash-settled performance awards are re-measured at each interim reporting period and an adjustment is recorded in general and administrative expenses on our consolidated statements of operations. For the three months ended March 31, 2018, we recognized $0.3 million in expense, compared to a benefit of $0.1 million for the three months ended March 31, 2017. At March 31, 2018, we recorded a current liability of $0.8 million and a non-current liability of $0.6 million related to the cash-settled performance awards on our consolidated balance sheets. During the three months ended March 31, 2018, we paid $1 million related to vested cash-settled performance awards. |
Related Party Transactions
Related Party Transactions | 3 Months Ended |
Mar. 31, 2018 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 10. Related Party Transactions Wilks, a related party, purchased a portion of our outstanding Senior Notes in the open market subsequent to the Exchange Transactions. The Company believes that Wilks held approximately $60 million of our outstanding Senior Notes as of March 31, 2018. The Senior Notes held by Wilks are included in Senior Notes, net on our consolidated balance sheets. Our interest expense includes interest attributable to any Senior Notes held by Wilks on our consolidated statements of operations. In April 2018, we engaged ProFrac Services, LLC (“ProFrac”) to perform completion services to the Company. There is no required minimum or maximum number of wells committed, and we intend to use ProFrac on a well-by-well basis throughout 2018. Matthew D. Wilks, a member of our Board of Directors, serves as the Chief Financial Officer of ProFrac, and Wilks has an equity ownership interest in ProFrac. |
Summary of Significant Accoun17
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2018 | |
Accounting Policies [Abstract] | |
Organization and Nature of Operations | Organization and Nature of Operations Approach Resources Inc. (“Approach,” the “Company,” “we,” “us” or “our”) is an independent energy company engaged in the exploration, development, production and acquisition of oil and gas properties. We focus on finding and developing oil and natural gas reserves in oil shale and tight gas sands. Our properties are primarily located in the Permian Basin in West Texas. We also own interests in the East Texas Basin. |
Consolidation, Basis of Presentation and Significant Estimates | Consolidation, Basis of Presentation and Significant Estimates The interim consolidated financial statements of the Company are unaudited and contain all adjustments (consisting primarily of normal recurring accruals) necessary for a fair statement of the results for the interim periods presented. Results for interim periods are not necessarily indicative of results to be expected for a full year, due in part to the volatility in prices for oil, natural gas liquids (“NGLs”) and gas, future commodity prices for commodity derivative contracts, global economic and financial market conditions, interest rates, access to sources of liquidity, estimates of reserves, drilling risks, geological risks, transportation restrictions, the timing of acquisitions, product supply and demand, market competition and interruptions of production. You should read these consolidated interim financial statements in conjunction with the audited consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2017, filed with the Securities and Exchange Commission on March 9, 2018. The accompanying interim consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America and include the accounts of the Company and its wholly owned subsidiaries. Intercompany accounts and transactions are eliminated. In preparing the accompanying financial statements, management has made certain estimates and assumptions that affect reported amounts in the financial statements and disclosures of contingencies. Actual results may differ from those estimates. Significant assumptions are required in the valuation of proved oil and gas reserves, which affect our estimate of depletion expense as well as our impairment analyses. Significant assumptions also are required in our estimation of accrued liabilities, commodity derivatives, income tax provision, share-based compensation and asset retirement obligations. It is at least reasonably possible these estimates could be revised in the near term, and these revisions could be material. Certain prior-year amounts have been reclassified to conform to current-year presentation. These classifications have no impact on the net loss reported. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements On January 1, 2018, we adopted the Financial Accounting Standards Board (“FASB”) accounting standards update for “Revenue from Contracts with Customers,” which superseded the revenue recognition requirements in “Topic 605, Revenue Recognition,” using the modified retrospective method. Adoption of this standard did not have a significant impact on our consolidated statements of operations or cash flows. We implemented processes to ensure new contracts are reviewed for the appropriate accounting treatment and generate the disclosures required under the new standard. See Note 2 for additional disclosures required under this accounting standards update related to the nature, amount, timing and uncertainty of revenue and cash flows from contracts with customers including disaggregation of revenue. In February 2016, FASB issued an accounting standards update for “Leases,” which amends existing guidance to require lessees to recognize assets and liabilities on the balance sheet for the rights and obligations created by long-term leases and to disclose additional quantitative and qualitative information about leasing arrangements. This new guidance is effective for interim and annual periods beginning after December 15, 2018, and we will adopt it using a modified retrospective approach. Currently, the Company is evaluating the standard’s applicability to our various contractual arrangements. We believe that the adoption of this standard will result in recognition of assets and liabilities on the balance sheet for current operating leases. The Company is still evaluating the impact of this new guidance on its consolidated financial statements. In January 2017, FASB issued an accounting standards update for “Clarifying the Definition of a Business,” which provides guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. This standard requires entities to use a screen test to determine when an integrated set of assets and activities is not a business or if the integrated set of assets and activities needs to be further evaluated against the framework. impact our consolidated statements of operations or cash flows. In August 2017, FASB issued an accounting update for “Derivatives and Hedging,” impact our consolidated statements of operations or cash flows. |
Prepaid Expenses and Other Assets | Prepaid Expenses and Other Assets In April 2017, we entered into an agreement that secured pricing of a hydraulic fracturing services crew. Under this agreement, we made a prepayment of $5 million, to be used as we completed wells. We have used $1.2 million of this prepayment related to hydraulic fracturing services provided during the first year of the agreement. In March 2018, this agreement was terminated and $3.8 million of the unused prepaid balance was refunded to us. |
Derivatives Designated as Cash Flow Hedge | After March 31, 2018, we entered into swaps for the NYMEX Calendar Monthly Average Roll (the “CMA Roll”) covering 2,000 Bbls of oil per day for May 2018 through December 2018 at $0.66/bbl. Swaps for the CMA Roll are pricing adjustments to the trade month versus the delivery month for contract pricing. |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Revenue Recognition [Abstract] | |
Schedule of Disaggregated of Revenue by Major Source | The following table presents our disaggregated revenue by major source for the three months ended March 31, 2018, and 2017 (in thousands). Three Months Ended March 31, 2018 2017 Revenues (in thousands): Oil $ 16,343 $ 13,694 NGLs 7,332 6,060 Gas 5,097 6,601 Total oil, NGLs and gas sales $ 28,772 $ 26,355 |
Earnings Per Common Share (Tabl
Earnings Per Common Share (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Earnings Per Share [Abstract] | |
Reconciliation of Numerators and Denominators of Basic and Diluted Earnings Per Share | The following table provides a reconciliation of the numerators and denominators of our basic and diluted earnings per share (dollars in thousands, except per-share amounts). Three Months Ended March 31, 2018 2017 Income (numerator): Net loss – basic $ (7,446 ) $ (140,768 ) Weighted average shares (denominator): Weighted average shares – basic 94,516,280 70,409,303 Dilution effect of share-based compensation, treasury method (1) — — Weighted average shares – diluted 94,516,280 70,409,303 Net loss per share: Basic $ (0.08 ) $ (2.00 ) Diluted $ (0.08 ) $ (2.00 ) (1) Approximately 39,000 options to purchase our common stock were excluded from this calculation because they were antidilutive for the three months ended March 31, 2017. No options were outstanding as of March 31, 2018, as they had expired. |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Debt Disclosure [Abstract] | |
Schedule of Long Term Debt | The following table provides a summary of our long-term debt at March 31, 2018, and December 31, 2017 (in thousands). March 31, December 31, 2018 2017 Senior secured credit facility: Outstanding borrowings $ 292,000 $ 291,000 Debt issuance costs (1,551 ) (1,725 ) Senior secured credit facility, net 290,449 289,275 Senior notes: Principal 85,240 85,240 Debt issuance costs (980 ) (1,055 ) Senior notes, net 84,260 84,185 Total long-term debt $ 374,709 $ 373,460 |
Income Taxes (Tables)
Income Taxes (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Reconciles of Income Tax Expense to the U.S. Federal Statutory Rate | The following table reconciles our income tax expense for the three months ended March 31, 2018, and 2017, to the U.S. federal statutory rates of 21% and 35%, respectively (dollars in thousands March 31, March 31, 2018 2017 Statutory tax at 21% and 35%, respectively $ (1,902 ) $ (724 ) State taxes, net of federal impact 162 41 Share-based compensation tax shortfall 70 290 Nondeductible compensation 57 — Other differences 3 3 Write-off of deferred tax assets — $ 139,090 Income tax (benefit) provision $ (1,610 ) $ 138,700 |
Derivative Instruments and Fa22
Derivative Instruments and Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Derivative Instruments And Hedging Activities Disclosure [Abstract] | |
Outstanding Commodity Derivatives Volumes and Prices | The following table provides our outstanding commodity derivative positions at March 31, 2018. Commodity and Period Contract Type Volume Transacted Contract Price Crude Oil April 2018 – December 2018 Swap 300 Bbls/day $50.00/Bbl April 2018 – June 2018 Collar 500 Bbls/day $55.00/Bbl - $60.00/Bbl April 2018 – September 2018 Swap 1,500 Bbls/day $60.50/Bbl Natural Gas April 2018 – December 2018 Swap 200,000 MMBtu/month $3.085/MMBtu April 2018 – December 2018 Swap 250,000 MMBtu/month $3.084/MMBtu NGLs (C2 - Ethane) April 2018 – December 2018 Swap 1,000 Bbls/day $11.424/Bbl NGLs (C3 - Propane) April 2018 – December 2018 Swap 600 Bbls/day $32.991/Bbl NGLs (IC4 - Isobutane) April 2018 – December 2018 Swap 50 Bbls/day $38.262/Bbl NGLs (NC4 - Butane) April 2018 – December 2018 Swap 200 Bbls/day $38.22/Bbl NGLs (C5 - Pentane) April 2018 – December 2018 Swap 200 Bbls/day $56.364/Bbl |
Summary of Fair Value of Open Commodity Derivatives | The following table summarizes the fair value of our open commodity derivatives as of March 31, 2018, and December 31, 2017 (in thousands). Balance Sheet Location Fair Value March 31, December 2018 2017 Derivatives not designated as hedging instruments Commodity derivatives Derivative assets $ 1,250 $ 1,398 Commodity derivatives Derivative liabilities (2,430 ) (2,181 ) |
Summary of Change in Fair Value of Commodity Derivatives | The following table summarizes the change in the fair value of our commodity derivatives (in thousands). Three Months Ended March 31, 2018 2017 Derivatives not designated as hedging instruments Commodity derivatives Net cash payment on derivative settlements $ (1,531 ) $ (961 ) Non-cash fair value (loss) gain on derivatives (397 ) 4,405 Commodity derivative (loss) gain $ (1,928 ) $ 3,444 |
Summary of Financial Instruments Not Recorded at Fair Value | The following table sets forth the fair values of financial instruments that are not recorded at fair value on our financial statements (in thousands). March 31, 2018 Carrying Amount Fair Value Senior Notes $ 84,260 $ 80,978 |
Summary of Significant Accoun23
Summary of Significant Accounting Policies - Additional Information (Detail) - USD ($) $ in Millions | 1 Months Ended | 3 Months Ended | |
Mar. 31, 2018 | Apr. 30, 2017 | Mar. 31, 2018 | |
Summary Of Significant Accounting Policies [Line Items] | |||
Prepayment under the agreement | $ 5 | ||
Utilization of prepayment related to hydraulic fracturing services provided | $ 1.2 | ||
Agreement termination date | Mar. 31, 2018 | ||
Unused Prepaid Balance [Member] | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Proceeds from prepayment under the agreement | $ 3.8 |
Revenue Recognition - Schedule
Revenue Recognition - Schedule of Disaggregated of Revenue by Major Source (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Disaggregation of Revenue [Line Items] | ||
Oil, NGLs and gas sales | $ 28,772 | $ 26,355 |
Oil [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Oil, NGLs and gas sales | 16,343 | 13,694 |
NGLs [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Oil, NGLs and gas sales | 7,332 | 6,060 |
Gas [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Oil, NGLs and gas sales | $ 5,097 | $ 6,601 |
Earnings Per Common Share - Rec
Earnings Per Common Share - Reconciliation of Numerators and Denominators of Basic and Diluted Earnings Per Share (Detail) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Earnings Per Share [Abstract] | ||
Net loss – basic | $ (7,446) | $ (140,768) |
Weighted average shares – basic | 94,516,280 | 70,409,303 |
Weighted average shares – diluted | 94,516,280 | 70,409,303 |
Basic | $ (0.08) | $ (2) |
Diluted | $ (0.08) | $ (2) |
Earnings Per Common Share - R26
Earnings Per Common Share - Reconciliation of Numerators and Denominators of Basic and Diluted Earnings Per Share (Parenthetical) (Detail) - shares | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2018 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Shares subject to stock options, outstanding | 0 | |
Employee Stock Option [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per common share | 39,000 |
Equity Exchange Transactions -
Equity Exchange Transactions - Additional Information (Detail) - USD ($) | Sep. 01, 2017 | Mar. 22, 2017 | Jan. 27, 2017 | Nov. 02, 2016 | Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | Jan. 26, 2017 |
Equity Exchange Transactions [Line Items] | ||||||||
Common stock, par value | $ 0.01 | $ 0.01 | ||||||
Common stock, shares authorized | 180,000,000 | 180,000,000 | ||||||
Gain recognized on exchange of senior notes | $ 5,100,000 | $ 5,053,000 | ||||||
Equity issuance costs | 2,800,000 | 2,468,000 | ||||||
NOLs, limitations on use | The Exchange Transactions triggered a cumulative change in ownership of our common stock by more than 50% under Section 382 of the Internal Revenue Code as of March 22, 2017. This established an annual limitation on the usage of our pre-change net operating losses (“NOLs”) in the future. | |||||||
Write-off of deferred tax assets | $ 139,090,000 | |||||||
Bolt-On Acquisition [Member] | ||||||||
Equity Exchange Transactions [Line Items] | ||||||||
Common stock, par value | $ 0.01 | |||||||
Date of definitive agreement to acquire producing properties | Nov. 1, 2017 | |||||||
Common stock, shares issued | 7,573,403 | |||||||
Effective date of acquisition | Nov. 20, 2017 | |||||||
Common stock shares expect to receive and retired | 142,362 | |||||||
7% Senior Notes Due 2021 [Member] | ||||||||
Equity Exchange Transactions [Line Items] | ||||||||
Debt exchange to common stock, principal amount | 145,100,000 | |||||||
Reduction of debt interest payment for remaining term of senior notes | 44,300,000 | |||||||
7% Senior Notes Due 2021 [Member] | Initial Exchange [Member] | Wilks [Member] | ||||||||
Equity Exchange Transactions [Line Items] | ||||||||
Debt exchange to common stock, principal amount | $ 130,552,000 | |||||||
Common stock, par value | $ 0.01 | |||||||
Common stock, shares authorized | 90,000,000 | 180,000,000 | ||||||
Payments of accrued interest | $ 1,100,000 | |||||||
Debt conversion, interest rate of debt | 7.00% | |||||||
Debt exchange date | Jan. 27, 2017 | |||||||
7% Senior Notes Due 2021 [Member] | Initial Exchange [Member] | Common Stock [Member] | Wilks [Member] | ||||||||
Equity Exchange Transactions [Line Items] | ||||||||
Debt exchange to common stock, shares issued | 39,165,600 | |||||||
7% Senior Notes Due 2021 [Member] | Follow-On Exchange [Member] | ||||||||
Equity Exchange Transactions [Line Items] | ||||||||
Debt exchange to common stock, principal amount | $ 14,528,000 | |||||||
Debt exchange date | Mar. 22, 2017 | |||||||
7% Senior Notes Due 2021 [Member] | Follow-On Exchange [Member] | Common Stock [Member] | ||||||||
Equity Exchange Transactions [Line Items] | ||||||||
Debt exchange to common stock, shares issued | 4,009,728 |
Long-Term Debt - Schedule of Lo
Long-Term Debt - Schedule of Long Term Debt (Detail) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 | Dec. 21, 2017 |
Debt Instrument [Line Items] | |||
Senior secured credit facility, net | $ 290,449 | $ 289,275 | |
Senior notes, net | 84,260 | 84,185 | |
Total long-term debt | 374,709 | 373,460 | |
Senior Notes [Member] | |||
Debt Instrument [Line Items] | |||
Principal | 85,240 | 85,240 | |
Debt issuance costs | (980) | (1,055) | |
Senior notes, net | 84,260 | 84,185 | |
Senior Secured Credit Facility [Member] | |||
Debt Instrument [Line Items] | |||
Outstanding borrowings | 292,000 | 291,000 | |
Debt issuance costs | (1,551) | (1,725) | $ (1,000) |
Senior secured credit facility, net | $ 290,449 | $ 289,275 |
Long-Term Debt - Additional Inf
Long-Term Debt - Additional Information (Detail) | Dec. 21, 2017USD ($) | Dec. 20, 2017 | Mar. 31, 2018USD ($) | May 01, 2018USD ($) | Dec. 31, 2017USD ($) |
Senior Notes [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Senior notes outstanding | $ 85,200 | ||||
Senior Secured Credit Facility [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Senior secured credit facility, borrowing base | 325,000,000 | ||||
Senior secured facility, maximum borrowing capacity | $ 1,000,000,000 | ||||
Maturity period of senior secured credit facility | May 7, 2020 | May 7, 2019 | May 7, 2020 | ||
Additional borrowing base, re-determination description | We, or the lenders, can each request one additional borrowing base redetermination each calendar year. Our semi-annual borrowing base redetermination was completed on May 1, 2018, and our borrowing base and aggregate lender commitments were reaffirmed at $325 million. | ||||
Borrowing base re-determined completion date | May 1, 2018 | ||||
Annual commitment fee of unused borrowings | 0.50% | ||||
Senior secured credit facility, interest rate description | Borrowings under the Credit Facility bore interest based on the agent bank's prime rate plus an applicable margin ranging from 0.50% to 1.50%, or the sum of the LIBOR rate plus an applicable margin ranging from 1.50% to 2.50%. In addition, we pay an annual commitment fee ranging from 0.375% to 0.50% of unused borrowings available. | ||||
Senior secured credit facility | $ 292,000,000 | $ 291,000,000 | |||
Interest rate applicable of senior secured credit facility | 5.50% | ||||
Unused letters of credit outstanding | $ 300,000 | 300,000 | |||
Production from liens covering the oil and gas properties | 95.00% | ||||
Required percentage of anticipated production to be hedged | 50.00% | ||||
Increase in applicable margin rates on borrowings | 0.50% | ||||
Debt issuance costs | $ 1,000,000 | $ 1,551,000 | $ 1,725,000 | ||
Consolidated interest coverage ratio | 2.6 | ||||
Consolidated modified current ratio | 1.8 | ||||
Outstanding equity interests ownership percentage | 50.00% | ||||
Senior Secured Credit Facility [Member] | Covenants Agreements One [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Covenant description | A consolidated interest coverage ratio covenant (as defined in the Credit Facility) that requires us to maintain a ratio of consolidated EBITDAX (as defined in the Credit Facility) to cash Interest Expense (as defined in the Credit Facility) as of the last day of any fiscal quarter of not less than 1.25 to 1.0 (or 1.0 to 1.0 following the issuance of second lien indebtedness) through December 31, 2017, a ratio of not less than 1.5 to 1.0 through December 31, 2018, and a ratio of not less than 2.0 to 1.0 thereafter, and a consolidated modified current ratio covenant (as defined in the Credit Facility) that requires us to maintain a ratio of not less than 1.0 to 1.0 as of the last day of any fiscal quarter. | ||||
Minimum interest coverage ratio, through December 31, 2018 | 1.75 | ||||
Minimum interest coverage ratio, through December 31, 2019 | 2.25 | ||||
Interest coverage ratio, thereafter | 2.5 | ||||
Senior Secured Credit Facility [Member] | Covenants Agreements Two [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Minimum current ratio | 1 | ||||
Senior Secured Credit Facility [Member] | Minimum [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Leverage ratio | 1 | ||||
Senior Secured Credit Facility [Member] | Minimum [Member] | Prime Rate [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Senior secured credit facility, marginal percentage | 2.00% | ||||
Senior Secured Credit Facility [Member] | Minimum [Member] | London Interbank Offered Rate (LIBOR) [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Senior secured credit facility, marginal percentage | 3.00% | ||||
Senior Secured Credit Facility [Member] | Maximum [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Leverage ratio | 6.9 | ||||
Senior Secured Credit Facility [Member] | Maximum [Member] | Covenants Agreements Three [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Leverage ratio, March 31, 2019 | 5 | ||||
Leverage ratio, through June 30, 2019 | 5 | ||||
Leverage ratio, September 30, 2019 | 4.75 | ||||
Leverage ratio, through December 31, 2019 | 4.75 | ||||
Leverage ratio, thereafter | 4 | ||||
Senior Secured Credit Facility [Member] | Maximum [Member] | Prime Rate [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Senior secured credit facility, marginal percentage | 3.00% | ||||
Senior Secured Credit Facility [Member] | Maximum [Member] | London Interbank Offered Rate (LIBOR) [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Senior secured credit facility, marginal percentage | 4.00% | ||||
Senior Secured Credit Facility [Member] | Subsequent Event [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Borrowing base and aggregate lender commitments reaffirmed | $ 325,000,000 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |||
Income tax (benefit) provision | $ (1,610) | $ 138,700 | |
Statutory tax rate | 21.00% | 35.00% | 35.00% |
NOLs, limitations on use | The Exchange Transactions triggered a cumulative change in ownership of our common stock by more than 50% under Section 382 of the Internal Revenue Code as of March 22, 2017. This established an annual limitation on the usage of our pre-change net operating losses (“NOLs”) in the future. | ||
Write-off deferred tax assets | $ 139,090 |
Income Taxes - Reconciles of In
Income Taxes - Reconciles of Income Tax Expense to the U.S. Federal Statutory Rate (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Income Tax Disclosure [Abstract] | ||
Statutory tax at 21% and 35%, respectively | $ (1,902) | $ (724) |
State taxes, net of federal impact | 162 | 41 |
Share-based compensation tax shortfall | 70 | 290 |
Nondeductible compensation | 57 | |
Other differences | 3 | 3 |
Write-off of deferred tax assets | 139,090 | |
Income tax (benefit) provision | $ (1,610) | $ 138,700 |
Income Taxes - Reconciles of 32
Income Taxes - Reconciles of Income Tax Expense to the U.S. Federal Statutory Rate (Parenthetical) (Detail) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |||
Statutory tax rate | 21.00% | 35.00% | 35.00% |
Derivative Instruments and Fa33
Derivative Instruments and Fair Value Measurements - Outstanding Commodity Derivatives Volumes and Prices (Detail) | 3 Months Ended |
Mar. 31, 2018MMBTU$ / bbl$ / MMBTUbbl | |
Crude Oil April 2018 – December 2018 Contract [Member] | Swap [Member] | |
Derivatives Fair Value [Line Items] | |
Volume Transacted | bbl | 300 |
Contract Price | 50 |
Crude Oil April 2018 – June 2018 Contract [Member] | Collar [Member] | |
Derivatives Fair Value [Line Items] | |
Volume Transacted | bbl | 500 |
Crude Oil April 2018 – June 2018 Contract [Member] | Collar [Member] | Minimum [Member] | |
Derivatives Fair Value [Line Items] | |
Contract Price | 55 |
Crude Oil April 2018 – June 2018 Contract [Member] | Collar [Member] | Maximum [Member] | |
Derivatives Fair Value [Line Items] | |
Contract Price | 60 |
Crude Oil April 2018 – September 2018 Contract [Member] | Swap [Member] | |
Derivatives Fair Value [Line Items] | |
Volume Transacted | bbl | 1,500 |
Contract Price | 60.50 |
Natural Gas April 2018 - December 2018 Contract One [Member] | Swap [Member] | |
Derivatives Fair Value [Line Items] | |
Volume Transacted | MMBTU | 200,000 |
Contract Price | $ / MMBTU | 3.085 |
Natural Gas April 2018 - December 2018 Contract Two [Member] | Swap [Member] | |
Derivatives Fair Value [Line Items] | |
Volume Transacted | MMBTU | 250,000 |
Contract Price | $ / MMBTU | 3.084 |
NGLs (C2 - Ethane) April 2018 - December 2018 Contract [Member] | Swap [Member] | |
Derivatives Fair Value [Line Items] | |
Volume Transacted | bbl | 1,000 |
Contract Price | 11.424 |
NGLs (C3 - Propane) April 2018 - December 2018 Contract [Member] | Swap [Member] | |
Derivatives Fair Value [Line Items] | |
Volume Transacted | bbl | 600 |
Contract Price | 32.991 |
NGLs (IC4 - Isobutane) April 2018 - December 2018 Contract [Member] | Swap [Member] | |
Derivatives Fair Value [Line Items] | |
Volume Transacted | bbl | 50 |
Contract Price | 38.262 |
NGLs (NC4 - Butane) April 2018 - December 2018 Contract [Member] | Swap [Member] | |
Derivatives Fair Value [Line Items] | |
Volume Transacted | bbl | 200 |
Contract Price | 38.22 |
NGLs (C5 - Pentane) April 2018 - December 2018 Contract [Member] | Swap [Member] | |
Derivatives Fair Value [Line Items] | |
Volume Transacted | bbl | 200 |
Contract Price | 56.364 |
Derivative Instruments and Fa34
Derivative Instruments and Fair Value Measurements - Additional Information (Detail) - Swap [Member] - Cash Flow Hedges [Member] - Scenario, Forecast [Member] - May 2018 – December 2018 Contract [Member] | 9 Months Ended |
Dec. 31, 2018$ / bblbbl | |
Derivative Instruments And Hedging Activities Disclosures [Line Items] | |
Volume Transacted | bbl | 2,000 |
Contract Price | $ / bbl | 0.66 |
Derivative Instruments and Fa35
Derivative Instruments and Fair Value Measurements - Summary of Fair Value of Open Commodity Derivatives (Detail) - Commodity Derivatives [Member] - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Derivatives Fair Value [Line Items] | ||
Derivatives not designated as hedging instruments, Derivatives assets, Fair Value | $ 1,250 | $ 1,398 |
Derivatives not designated as hedging instruments, Derivatives liabilities, Fair Value | $ (2,430) | $ (2,181) |
Derivative Instruments and Fa36
Derivative Instruments and Fair Value Measurements - Summary of Change in Fair Value of Commodity Derivatives (Detail) - Derivatives Not Designated as Hedging Instruments [Member] - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Derivatives Fair Value [Line Items] | ||
Commodity derivative (loss) gain | $ (1,928) | $ 3,444 |
Net Cash (Payment) Receipt on derivatives Settlements [Member] | ||
Derivatives Fair Value [Line Items] | ||
Commodity derivative (loss) gain | (1,531) | (961) |
Non-Cash Fair Value Gain (Loss) on Derivatives [Member] | ||
Derivatives Fair Value [Line Items] | ||
Commodity derivative (loss) gain | $ (397) | $ 4,405 |
Derivative Instruments and Fa37
Derivative Instruments and Fair Value Measurements - Summary of Financial Instruments Not Recorded at Fair Value (Detail) $ in Thousands | Mar. 31, 2018USD ($) |
Carrying Amount | |
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | |
Senior Notes | $ 84,260 |
Fair Value | |
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | |
Senior Notes | $ 80,978 |
Share-Based Compensation - Addi
Share-Based Compensation - Additional Information (Detail) - USD ($) $ in Millions | 1 Months Ended | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2018 | Mar. 31, 2017 | |
Executive Officers [Member] | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Service period | 3 years | ||
Cash Settled Performance Awards [Member] | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Number of unvested share awards outstanding | 1,508,286 | 1,508,286 | |
Payments to vested awards | $ 1 | ||
Cash Settled Performance Awards [Member] | Executive Officers [Member] | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Number of share awards | 774,590 | ||
Fair market value of shares | $ 2.4 | ||
Restricted Shares Total Shareholder Return Performance Stock Awards [Member] | Executive Officers [Member] | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Number of share awards | 387,295 | ||
Fair market value of shares | $ 0.8 | ||
Cash Settled Performance Shares [Member] | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Share-based compensation, current liability | 0.8 | 0.8 | |
Share-based compensation, non-current liability | $ 0.6 | 0.6 | |
Cash Settled Performance Shares [Member] | General and Administrative Expenses [Member] | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Share-based compensation (benefit) expense | $ 0.3 | $ (0.1) |
Related Party Transactions - Ad
Related Party Transactions - Additional Information (Detail) - Senior Notes [Member] - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Related Party Transaction [Line Items] | ||
Senior notes outstanding | $ 85,240 | $ 85,240 |
Wilks [Member] | ||
Related Party Transaction [Line Items] | ||
Senior notes outstanding | $ 60,000 |