Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2018 | Oct. 29, 2018 | |
Document And Entity Information [Abstract] | ||
Entity Registrant Name | SRC Energy Inc. | |
Entity Central Index Key | 1,413,507 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Emerging Growth Company | false | |
Entity Small Business | false | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2018 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 242,600,829 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 19,236 | $ 48,772 |
Accounts receivable: | ||
Oil, natural gas, and NGL sales | 110,912 | 86,013 |
Trade | 29,559 | 18,134 |
Other current assets | 11,996 | 7,116 |
Total current assets | 171,703 | 160,035 |
Oil and gas properties, full cost method: | ||
Proved properties, net of accumulated depletion | 1,364,116 | 970,584 |
Wells in progress | 244,206 | 106,269 |
Unproved properties and land, not subject to depletion | 748,695 | 793,669 |
Oil and gas properties, net | 2,357,017 | 1,870,522 |
Other property and equipment, net | 5,902 | 6,054 |
Total property and equipment, net | 2,362,919 | 1,876,576 |
Goodwill | 40,711 | 40,711 |
Other assets | 3,599 | 2,242 |
Total assets | 2,578,932 | 2,079,564 |
Current liabilities: | ||
Accounts payable and accrued expenses | 171,951 | 74,672 |
Revenue payable | 82,670 | 64,111 |
Production taxes payable | 77,115 | 52,413 |
Asset retirement obligations | 2,771 | 3,246 |
Commodity derivative liabilities | 18,570 | 7,865 |
Total current liabilities | 353,077 | 202,307 |
Revolving credit facility | 115,000 | 0 |
Notes payable, net of issuance costs | 539,050 | 538,186 |
Commodity derivative liabilities | 1,671 | 0 |
Asset retirement obligations | 48,951 | 28,376 |
Deferred taxes | 18,076 | 0 |
Other liabilities | 2,308 | 2,261 |
Total liabilities | 1,078,133 | 771,130 |
Commitments and contingencies (See Note 15) | ||
Shareholders' equity: | ||
Preferred stock - $0.01 par value, 10,000,000 shares authorized: no shares issued and outstanding | 0 | 0 |
Common stock - $0.001 par value, 400,000,000 and 300,000,000 shares authorized: 242,572,199 and 241,365,522 shares issued and outstanding as of September 30, 2018 and December 31, 2017, respectively | 243 | 241 |
Additional paid-in capital | 1,488,588 | 1,474,273 |
Retained earnings (deficit) | 11,968 | (166,080) |
Total shareholders' equity | 1,500,799 | 1,308,434 |
Total liabilities and shareholders' equity | $ 2,578,932 | $ 2,079,564 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Sep. 30, 2018 | Dec. 31, 2017 |
Statement of Financial Position [Abstract] | ||
Preferred stock, shares authorized (in shares) | 10,000,000 | 10,000,000 |
Preferred stock, par value per share (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, shares authorized (in shares) | 400,000,000 | 300,000,000 |
Common stock, par value per share (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares issued (in shares) | 242,572,199 | 241,365,522 |
Common stock, shares outstanding (in shares) | 242,572,199 | 241,365,522 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Revenues [Abstract] | ||||
Revenues | $ 160,978 | $ 103,593 | $ 455,298 | $ 222,419 |
Expenses: | ||||
Lease operating expenses | 10,360 | 4,316 | 29,868 | 13,008 |
Transportation and gathering | 1,994 | 838 | 5,729 | 1,136 |
Production taxes | 12,824 | 10,083 | 41,325 | 21,013 |
Depreciation, depletion, and accretion | 45,188 | 33,740 | 124,146 | 73,396 |
Unused commitment charge | 0 | 0 | 0 | 669 |
General and administrative | 10,685 | 8,484 | 29,691 | 24,289 |
Total expenses | 81,051 | 57,461 | 230,759 | 133,511 |
Operating income | 79,927 | 46,132 | 224,539 | 88,908 |
Other income (expense): | ||||
Commodity derivatives gain (loss) | (8,529) | (2,383) | (28,604) | 2,324 |
Interest expense, net of amounts capitalized | 0 | 0 | 0 | 0 |
Interest income | 23 | 16 | 37 | 47 |
Other income | 125 | 83 | 152 | 385 |
Total other income (expense) | (8,381) | (2,284) | (28,415) | 2,756 |
Income before income taxes | 71,546 | 43,848 | 196,124 | 91,664 |
Income tax expense | 8,918 | 0 | 18,076 | 0 |
Net income | $ 62,628 | $ 43,848 | $ 178,048 | $ 91,664 |
Net income per common share: | ||||
Basic (in dollars per share) | $ 0.26 | $ 0.22 | $ 0.74 | $ 0.46 |
Diluted (in dollars per share) | $ 0.26 | $ 0.22 | $ 0.73 | $ 0.46 |
Weighted-average shares outstanding: | ||||
Basic (in shares) | 242,536,781 | 200,881,447 | 242,184,348 | 200,807,436 |
Diluted (in shares) | 243,560,046 | 201,460,915 | 243,207,058 | 201,326,129 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Cash flows from operating activities: | ||
Net income | $ 178,048 | $ 91,664 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depletion, depreciation, and accretion | 124,146 | 73,396 |
Settlement of asset retirement obligation | (5,234) | (4,077) |
Provision for deferred taxes | 18,076 | 0 |
Stock-based compensation expense | 9,347 | 8,390 |
Mark-to-market of commodity derivative contracts: | ||
Total loss (gain) on commodity derivatives contracts | 28,604 | (2,324) |
Cash settlements on commodity derivative contracts | (13,263) | 778 |
Changes in operating assets and liabilities | 3,830 | (25,010) |
Net cash provided by operating activities | 343,554 | 142,817 |
Cash flows from investing activities: | ||
Acquisition of oil and gas properties and leaseholds | (129,069) | (62,562) |
Capital expenditures for drilling and completion activities | (331,702) | (305,636) |
Other capital expenditures | (26,439) | (11,198) |
Acquisition of land and other property and equipment | (2,914) | (4,058) |
Proceeds from sales of oil and gas properties and other | 1,233 | 77,017 |
Net cash used in investing activities | (488,891) | (306,437) |
Cash flows from financing activities: | ||
Proceeds from the employee exercise of stock options | 4,302 | 114 |
Payment of employee payroll taxes in connection with shares withheld | (1,106) | (631) |
Proceeds from the revolving credit facility | 115,000 | 170,000 |
Principal repayments on the revolving credit facility | 0 | (20,000) |
Fees on debt and equity issuances and revolving credit facility amendments | (2,173) | (1,372) |
Capital lease payments | (222) | 0 |
Net cash provided by financing activities | 115,801 | 148,111 |
Net decrease in cash, cash equivalents, and restricted cash | (29,536) | (15,509) |
Cash, cash equivalents, and restricted cash at beginning of period | 48,772 | 36,834 |
Cash, cash equivalents, and restricted cash at end of period | $ 19,236 | $ 21,325 |
Organization and Summary of Sig
Organization and Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Summary of Significant Accounting Policies | Organization and Summary of Significant Accounting Policies Organization : SRC Energy Inc. is an independent oil and natural gas company engaged in the acquisition, exploration, development, and production of oil, natural gas, and natural gas liquids ("NGLs"), primarily in the Denver-Julesburg Basin ("D-J Basin") of Colorado. The Company’s common stock is listed and traded on the NYSE American under the symbol "SRCI." Basis of Presentation: The Company operates in one business segment, and all of its operations are located in the United States of America. At the directive of the Securities and Exchange Commission ("SEC") to use "plain English" in public filings, the Company will use such terms as "we," "our," "us," or the "Company" in place of SRC Energy Inc . When such terms are used in this manner throughout this document, they are in reference only to the corporation, SRC Energy Inc., and are not used in reference to the Board of Directors, corporate officers, management, or any individual employee or group of employees. The condensed consolidated financial statements include the accounts of the Company, including its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. The Company prepares its condensed consolidated financial statements in accordance with accounting principles generally accepted in the United States of America (“US GAAP”). Interim Financial Information: The unaudited condensed consolidated interim financial statements included herein have been prepared by the Company pursuant to the rules and regulations of the SEC as promulgated in Rule 10-01 of Regulation S-X. The condensed consolidated balance sheet as of December 31, 2017 was derived from the Company's annual consolidated financial statements included within its Annual Report on Form 10-K for the year ended December 31, 2017 as filed with the SEC on February 21, 2018. Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with US GAAP have been condensed or omitted pursuant to such SEC rules and regulations. The Company believes that the disclosures included are adequate to make the information presented not misleading and recommends that these condensed financial statements be read in conjunction with the audited financial statements and notes thereto for the year ended December 31, 2017 . In our opinion, the unaudited condensed consolidated financial statements contained herein reflect all adjustments, consisting solely of normal recurring items, which are necessary for the fair presentation of the Company's financial position, results of operations, and cash flows on a basis consistent with that of its prior audited financial statements. However, the results of operations for interim periods may not be indicative of results to be expected for the full fiscal year. Major Customers: The Company sells production to a small number of customers as is customary in the industry. Customers representing 10% or more of our oil, natural gas, and NGL revenues (“major customers”) for each of the periods presented are shown in the following table: Three Months Ended September 30, Nine Months Ended September 30, Major Customers 2018 2017 2018 2017 Company A 23% 30% 13% 27% Company B 21% 27% 19% 26% Company C 14% 13% 28% 15% Company D 14% * 11% * Company E 14% * 16% * * less than 10% Based on the current demand for oil and natural gas, the availability of other buyers, the multiple contracts for sales of our products, and the Company having the option to sell to other buyers if conditions warrant, the Company believes that the loss of our existing customers or individual contracts would not have a material adverse effect on us. Our oil and natural gas production is a commodity with a readily available market, and we sell our products under many distinct contracts. In addition, there are several oil and natural gas purchasers and processors within our area of operations to whom our production could be sold. Accounts receivable consist primarily of receivables from oil, natural gas, and NGL sales and amounts due from other working interest owners who are liable for their proportionate share of well costs. The Company typically has the right to withhold future revenue disbursements to recover outstanding joint interest billings on outstanding receivables from joint interest owners. Customers with balances greater than 10% of total receivable balances as of each of the periods presented are shown in the following table (these companies do not necessarily correspond to those presented above): As of As of Major Customers September 30, 2018 December 31, 2017 Company A 23% 26% Company B 16% 16% Company C 14% 23% Company D 14% * Company E * 11% * less than 10% The Company operates exclusively within the United States of America, and except for cash and cash equivalents, all of the Company’s assets are utilized in, and all of our revenues are derived from, the oil and gas industry. Recently Adopted Accounting Pronouncements: In May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standard Update ("ASU") 2014-09, “Revenue from Contracts with Customers (Topic 606)” (“ASU 2014-09”), which establishes a comprehensive new revenue recognition standard designed to depict the transfer of goods or services to a customer in an amount that reflects the consideration the entity expects to receive in exchange for those goods or services. In March 2016, the FASB released certain implementation guidance through ASU 2016-08 (collectively with ASU 2014-09, the "Revenue ASUs") to clarify principal versus agent considerations. The Revenue ASUs allow for the use of either the full or modified retrospective transition method, and the standard became effective for annual reporting periods beginning after December 15, 2017 including interim periods within that period. The Company adopted the guidance using the modified retrospective method with the effective date of January 1, 2018. The Company did not record a cumulative-effect adjustment to the opening balance of retained earnings as no adjustment was necessary. The adoption of the Revenue ASUs did not impact net income or cash flows. See Note 14 for the new disclosures required by the Revenue ASUs. Recently Issued Accounting Pronouncements: We evaluate the pronouncements of various authoritative accounting organizations to determine the impact of new accounting pronouncements on us. In February 2016, the FASB issued ASU 2016-02, "Leases (Topic 842)" ("ASU 2016-02"), which establishes a comprehensive new lease standard designed to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. In transition, lessees and lessors are required to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach. The modified retrospective approach includes a number of optional practical expedients that entities may elect to apply. An entity that elects to apply the practical expedients will, in effect, continue to account for leases that commence before the effective date in accordance with previous US GAAP. ASU 2016-02 is effective for public businesses for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. We are currently evaluating the impact of the adoption of this standard on our financial statements. There were various updates recently issued by the FASB, most of which represented technical corrections to the accounting literature or application to specific industries and are not expected to a have a material impact on our reported financial position, results of operations, or cash flows. |
Property and Equipment
Property and Equipment | 9 Months Ended |
Sep. 30, 2018 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | Property and Equipment The capitalized costs related to the Company’s oil and gas producing activities were as follows (in thousands): As of As of September 30, 2018 December 31, 2017 Oil and gas properties, full cost method: Costs of proved properties: Producing and non-producing $ 2,148,278 $ 1,629,789 Less, accumulated depletion and full cost ceiling impairments (784,162 ) (659,205 ) Subtotal, proved properties, net 1,364,116 970,584 Costs of wells in progress 244,206 106,269 Costs of unproved properties and land, not subject to depletion: Lease acquisition and other costs 739,303 786,469 Land 9,392 7,200 Subtotal, unproved properties and land 748,695 793,669 Costs of other property and equipment: Other property and equipment 9,462 8,134 Less, accumulated depreciation (3,560 ) (2,080 ) Subtotal, other property and equipment, net 5,902 6,054 Total property and equipment, net $ 2,362,919 $ 1,876,576 The Company periodically reviews its oil and gas properties to determine if the carrying value of such assets exceeds estimated fair value. For proved producing and non-producing properties, the Company performs a ceiling test each quarter to determine whether there has been an impairment to its capitalized costs. At September 30, 2018 and 2017 , the calculated value of the ceiling limitation exceeded the carrying value of our oil and gas properties subject to the test, and no impairments were necessary. Capitalized Overhead: A portion of the Company’s overhead expenditures are directly attributable to acquisition, exploration, and development activities. Under the full cost method of accounting, these expenditures, in the amounts shown in the table below, were capitalized in the full cost pool (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Capitalized overhead $ 3,129 $ 2,518 $ 9,522 $ 7,729 |
Acquisitions
Acquisitions | 9 Months Ended |
Sep. 30, 2018 | |
Business Combinations [Abstract] | |
Acquisitions | Acquisitions September 2018 Acquisition and Swap In September 2018, the Company completed the purchase of vertical and horizontal wells in the Greeley-Crescent development area in Weld County, Colorado for $64.1 million in cash and the assumption of certain liabilities for a total purchase price of $96.8 million . This purchase was contemplated as part of the GCII Acquisition discussed below in "‑December 2017 Acquisition." The effective date of this part of the transaction was September 1, 2018. The transaction was accounted for as an asset acquisition under ASC 805, Business Combinations , which requires the acquired assets and liabilities to be recorded at cost on the acquisition date of September 27, 2018. In September 2018, we completed a trade with another party of approximately 2,500 net acres. This transaction further enhances the contiguous nature of the Company's acreage position. August 2018 Acquisition In August 2018, the Company completed the purchase of leasehold acreage and associated non-operated production for $37.6 million in cash and the assumption of certain liabilities for a total purchase price of $38.0 million . The acreage increased our working interest in existing operations and planned wells. The transaction was accounted for as an asset acquisition under ASC 805, Business Combinations , which requires the acquired assets and liabilities to be recorded at cost on the acquisition date of August 3, 2018. December 2017 Acquisition In December 2017, the Company completed the purchase of approximately 30,200 net acres and the associated non-operated production in the Greeley-Crescent development area in Weld County, Colorado for $576.4 million in cash and the assumption of certain liabilities for a total purchase price of $577.5 million ("GCII Acquisition"). The purchase price has been allocated as $60.8 million to proved oil and gas properties and $516.7 million to unproved oil and gas properties. The effective date of this part of the transaction was November 1, 2017. The transaction was accounted for as an asset acquisition under ASC 805, Business Combinations , which requires the acquired assets and liabilities to be recorded at cost on the acquisition date of December 15, 2017. |
Depletion, depreciation, and ac
Depletion, depreciation, and accretion ("DDA") | 9 Months Ended |
Sep. 30, 2018 | |
Other Costs and Disclosures [Abstract] | |
Depletion, depreciation, and accretion (DDA) | Depletion, depreciation, and accretion ("DD&A") DD&A consisted of the following (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Depletion of oil and gas properties $ 44,230 $ 32,944 $ 121,259 $ 71,389 Depreciation and accretion 958 796 2,887 2,007 Total DD&A Expense $ 45,188 $ 33,740 $ 124,146 $ 73,396 Capitalized costs of proved oil and gas properties are depleted quarterly using the units-of-production method based on a depletion rate, which is calculated by comparing production volumes for the quarter to estimated total reserves at the beginning of the quarter. |
Asset Retirement Obligations
Asset Retirement Obligations | 9 Months Ended |
Sep. 30, 2018 | |
Asset Retirement Obligation Disclosure [Abstract] | |
Asset Retirement Obligations | Asset Retirement Obligations Upon completion or acquisition of a well, the Company recognizes obligations for its oil and natural gas operations for anticipated costs to remove and dispose of surface equipment, remediate the well, and reclaim the drilling site to its original use. The estimated present value of such obligations is determined using several assumptions and judgments about the ultimate settlement amounts, inflation factors, credit-adjusted discount rates, timing of settlement, and changes in regulations. Changes in estimates are reflected in the obligations as they occur. If the fair value of a recorded asset retirement obligation changes, a revision is recorded to both the asset retirement obligation and the capitalized asset retirement cost. The following table summarizes the changes in asset retirement obligations associated with the Company's oil and gas properties (in thousands): Nine Months Ended September 30, 2018 Asset retirement obligations, December 31, 2017 $ 31,622 Obligations incurred with development activities 1,488 Obligations assumed with acquisitions 26,150 Accretion expense 1,406 Obligations discharged with asset retirements and divestitures (8,944 ) Asset retirement obligation, September 30, 2018 $ 51,722 Less, current portion (2,771 ) Long-term portion $ 48,951 |
Revolving Credit Facility
Revolving Credit Facility | 9 Months Ended |
Sep. 30, 2018 | |
Line of Credit Facility [Abstract] | |
Revolving Credit Facility | Revolving Credit Facility On April 2, 2018, the Company entered into a second amended and restated credit agreement (the “Restated Credit Agreement”) with certain banks and other lenders. The Restated Credit Agreement provides a revolving credit facility (sometimes referred to as the "Revolver") and a $25 million swingline facility with a maturity date of April 2, 2023 . The Revolver is available for working capital for exploration and production operations, acquisitions of oil and gas properties, and general corporate purposes and to support letters of credit. At September 30, 2018 , the terms of the Revolver provided for up to $1.5 billion in borrowings, an aggregate elected commitment of $450 million , and a borrowing base limitation of $550 million . As of September 30, 2018 and December 31, 2017 , the outstanding principal balance was $115.0 million and nil , respectively. At September 30, 2018 , the Company had no letters of credit issued. In October 2018, the lenders under the Revolver completed their semi-annual redetermination of our borrowing base. The borrowing base was increased from $550 million to $650 million , and we increased our aggregate elected commitment from $450 million to $500 million . Interest under the Revolver accrues monthly at a variable rate. For each borrowing, the Company designates its choice of reference rates, which can be either the Prime Rate plus a margin or LIBOR plus a margin. The interest rate margin, as well as other bank fees, varies with utilization of the Revolver. The average annual interest rate for borrowings during the nine months ended September 30, 2018 and 2017 was 4.0% and 3.3% , respectively. Certain of the Company’s assets, including substantially all of its producing wells and developed oil and gas leases, have been designated as collateral under the Restated Credit Agreement. The amount available to be borrowed is subject to scheduled redeterminations on a semi-annual basis. If certain events occur or if the bank syndicate or the Company so elects in certain circumstances, an unscheduled redetermination could be undertaken. The Restated Credit Agreement contains covenants that, among other things, restrict the payment of dividends and limit our overall commodity derivative position to a maximum position that varies over 5 years as a percentage of the projected production from proved developed producing or total proved reserves as reflected in the most recently completed reserve report. Furthermore, the Restated Credit Agreement requires the Company to maintain compliance with certain financial and liquidity ratio covenants. In particular, the Company must not (a) permit its ratio of total funded debt to EBITDAX, as defined in the agreement, to be greater than or equal to 4.0 to 1.0 as of the last day of any fiscal quarter or (b) permit its ratio of current assets to current liabilities, each as defined in the agreement, to be less than 1.0 to 1.0 as of the last day of any fiscal quarter. As of September 30, 2018 , the most recent compliance date, the Company was in compliance with these loan covenants and expects to remain in compliance throughout the next 12-month period. |
Notes Payable
Notes Payable | 9 Months Ended |
Sep. 30, 2018 | |
Debt Disclosure [Abstract] | |
Notes Payable | Notes Payable 2025 Senior Notes In November 2017, the Company issued $550 million aggregate principal amount of 6.25% Senior Notes due 2025 (the "2025 Senior Notes") in a private placement to qualified institutional buyers. The maturity for the payment of principal is December 1, 2025. Interest on the 2025 Senior Notes accrues at 6.25% and began accruing on November 29, 2017. Interest is payable on June 1 and December 1 of each year, beginning on June 1, 2018. The 2025 Senior Notes were issued pursuant to an indenture dated as of November 29, 2017. The net proceeds from the sale of the 2025 Senior Notes were $538.1 million after deductions of $11.9 million for expenses and underwriting discounts and commissions. The associated expenses and underwriting discounts and commissions are amortized using the interest method at an effective interest rate of 6.6% . The net proceeds were used to fund the GCII Acquisition as discussed further in Note 3 , to repay our previously outstanding senior notes due 2021, and to pay off the outstanding Revolver balance . At any time prior to December 1, 2020, the Company may redeem all or a part of the 2025 Senior Notes at a redemption price equal to 100% of the principal amount plus an Applicable Premium (as defined in the Indenture) and accrued and unpai d interest. On and after December 1, 2020, the Company may redeem all or a part of the 2025 Senior Notes at a redemption price equal to a specified percentage of the principal amount of the redeemed notes ( 104.688% for 2020, 103.125% for 2021, 101.563% for 2022, and 100% for 2023 and thereafter, during the twelve-month period beginning on December 1 of each applicable year), plus accrued and unpaid interest. Additionally, prior to December 1, 2020, the Company can, on one or more occasions, redeem up to 35% of the principal amount of the 2025 Senior Notes with all or a portion of the net cash proceeds of one or more Equity Offerings (as defined in the Indenture) at a redemption price equal to 106.25% of the principal amount of the redeemed notes, plus accrued and unpaid interest, subject to certain conditions. The Indenture contains covenants that restrict the Company’s ability and the ability of certain of its subsidiaries to, among other restrictions and limitations: (i) incur additional indebtedness; (ii) incur liens; (iii) pay dividends; (iv) consolidate, merge, or transfer all or substantially all of its or their assets; (v) engage in transactions with affiliates; or (vi) engage in certain restricted business activities. These covenants are subject to a number of exceptions and qualifications. The indenture governing the 2025 Senior Notes provides that, in certain circumstances, the notes will be guaranteed by one or more subsidiaries of the Company, in which case such guarantee would be made on a full and unconditional and joint and several senior unsecured basis. A s of September 30, 2018 , the most recent compliance date, the C ompany was in compliance with these covenants and expects to remain in compliance throughout the next 12-month period. |
Commodity Derivative Instrument
Commodity Derivative Instruments | 9 Months Ended |
Sep. 30, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Commodity Derivative Instruments | Commodity Derivative Instruments The Company has entered into commodity derivative instruments as described below. Our commodity derivative instruments may include but are not limited to "collars," "swaps," and "put" positions. Our derivative strategy, including the volumes and commodities covered and the relevant strike prices, is based in part on our view of expected future market conditions and our analysis of well-level economic return potential. In addition, our use of derivative contracts is subject to stipulations set forth in the Revolver. The Company may, from time to time, add incremental derivatives to cover additional production, restructure existing derivative contracts, or enter into new transactions to modify the terms of current contracts in order to realize the current value of the Company’s existing positions. The Company does not enter into derivative contracts for speculative purposes. The use of derivatives involves the risk that the counterparties to such instruments will be unable to meet the financial terms of such contracts. The Company’s derivative contracts are currently with seven counterparties. Five of the counterparties are lenders in the Restated Credit Agreement. The Company has netting arrangements with the counterparties that provide for the offset of payables against receivables from separate derivative arrangements with the counterparty in the event of contract termination. The derivative contracts may be terminated by a non-defaulting party in the event of default by one of the parties to the agreement. The Company’s commodity derivative instruments are measured at fair value and are included in the accompanying condensed consolidated balance sheets as commodity derivative assets or liabilities. Unrealized gains and losses are recorded based on the changes in the fair values of the derivative instruments. Both the unrealized and realized gains and losses are recorded in the condensed consolidated statements of operations. The Company’s cash flow is only impacted when the actual settlements under commodity derivative contracts result in it making or receiving a payment to or from the counterparty. Actual cash settlements can occur at either the scheduled maturity date of the contract or at an earlier date if the contract is liquidated prior to its scheduled maturity. These settlements under the commodity derivative contracts are reflected as operating activities in the Company’s condensed consolidated statements of cash flows. The Company’s commodity derivative contracts as of September 30, 2018 are summarized below: Settlement Period Derivative Instrument Volumes (Bbls per day) Weighted-Average Floor Price Weighted-Average Ceiling Price Crude Oil - NYMEX WTI Oct 1, 2018 - Dec 31, 2018 Collar 10,000 $ 43.63 $ 61.29 Jan 1, 2019 - Dec 31, 2019 Collar 6,000 $ 55.00 $ 74.31 Settlement Period Derivative Instrument Volumes (MMBtu per day) Weighted-Average Weighted-Average Ceiling Price Natural Gas - CIG Rocky Mountain Oct 1, 2018 - Dec 31, 2018 Collar 15,000 $ 2.25 $ 2.82 Settlement Period Derivative Instrument Volumes (MMBtu per day) Fixed Basis Difference Natural Gas - CIG Rocky Mountain Jan 1, 2019 - Dec 31, 2019 Swap 10,000 $ (0.79 ) Settlement Period Derivative Instrument Volumes Weighted-Average Fixed Price Propane - Mont Belvieu Oct 1, 2018 - Dec 31, 2018 Swap 1,000 $ 33.60 Jan 1, 2019 - Dec 31, 2019 Swap 2,000 $ 37.52 Subsequent to September 30, 2018 , the Company added the following positions: Settlement Period Derivative Instrument Volumes Weighted-Average Fixed Basis Difference Natural Gas - CIG Rocky Mountain Nov 1, 2018 - Dec 31, 2018 Swap 50,000 $ (0.21 ) Jan 1, 2019 - Dec 31, 2019 Swap 20,000 $ (0.74 ) Offsetting of Derivative Assets and Liabilities As of September 30, 2018 and December 31, 2017 , all derivative instruments held by the Company were subject to enforceable master netting arrangements held by various financial institutions. In general, the terms of the Company’s agreements provide for offsetting of amounts payable or receivable between the Company and the counterparty, at the election of either party, for transactions that occur on the same date and in the same currency. The Company’s agreements also provide that, in the event of an early termination, each party has the right to offset amounts owed or owing under that and any other agreement with the same counterparty. The Company’s accounting policy is to offset these positions in its condensed consolidated balance sheets. The following table provides a reconciliation between the net assets and liabilities reflected on the accompanying condensed consolidated balance sheets and the potential effect of master netting arrangements on the fair value of the Company’s derivative contracts (in thousands): As of September 30, 2018 Underlying Balance Sheet Location Gross Amounts of Recognized Assets and Liabilities Gross Amounts Offset in the Balance Sheet Net Amounts of Assets and Liabilities Presented in the Balance Sheet Commodity derivative contracts Current assets $ 1,740 $ (1,740 ) $ — Commodity derivative contracts Noncurrent assets 1,078 (1,078 ) — Commodity derivative contracts Current liabilities 20,310 (1,740 ) 18,570 Commodity derivative contracts Noncurrent liabilities $ 2,749 $ (1,078 ) $ 1,671 As of December 31, 2017 Underlying Balance Sheet Location Gross Amounts of Recognized Assets and Liabilities Gross Amounts Offset in the Balance Sheet Net Amounts of Assets and Liabilities Presented in the Balance Sheet Commodity derivative contracts Current assets $ 1,960 $ (1,960 ) $ — Commodity derivative contracts Noncurrent assets — — — Commodity derivative contracts Current liabilities 9,825 (1,960 ) 7,865 Commodity derivative contracts Noncurrent liabilities $ — $ — $ — The amount of gain (loss) recognized in the condensed consolidated statements of operations related to derivative financial instruments was as follows (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Realized gain (loss) on commodity derivatives $ (8,273 ) $ 116 $ (16,228 ) $ (26 ) Unrealized gain (loss) on commodity derivatives (256 ) (2,499 ) (12,376 ) 2,350 Total gain (loss) $ (8,529 ) $ (2,383 ) $ (28,604 ) $ 2,324 Realized gains and losses represent the monthly settlement of derivative contracts at their scheduled maturity date, net of the previously incurred premiums attributable to settled commodity contracts. The following table summarizes derivative realized gains and losses during the periods presented (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Monthly settlement $ (8,273 ) $ 376 $ (16,228 ) $ 927 Previously incurred premiums attributable to settled commodity contracts — (260 ) — (953 ) Total realized loss $ (8,273 ) $ 116 $ (16,228 ) $ (26 ) Credit Related Contingent Features As of September 30, 2018 , five of the seven counterparties to the Company's derivative instruments were members of the Company’s credit facility syndicate. The Company’s obligations under the credit facility and its derivative contracts are secured by liens on substantially all of the Company’s producing oil and gas properties. The agreement with the sixth and seventh counterparties, which are not lenders under the credit facility, is unsecured and does not require the posting of collateral. |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements ASC 820, Fair Value Measurements and Disclosure , establishes a hierarchy for inputs used in measuring fair value for financial assets and liabilities that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing the asset or liability based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions of what market participants would use in pricing the asset or liability based on the best information available in the circumstances. The hierarchy is broken down into three levels based on the reliability of the inputs as follows: • Level 1: Quoted prices available in active markets for identical assets or liabilities; • Level 2: Quoted prices in active markets for similar assets and liabilities that are observable for the asset or liability; and • Level 3: Unobservable pricing inputs that are generally less observable from objective sources, such as discounted cash or valuation models. The financial assets and liabilities are classified based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the valuation of the fair value of assets and liabilities and their placement within the fair value hierarchy levels. The Company’s non-recurring fair value measurements include unproved properties, asset retirement obligations, and purchase price allocations for the fair value of assets and liabilities acquired through certain asset acquisitions. Please refer to Notes 2 , 3 , and 5 for further discussion of unproved properties, asset acquisitions, and asset retirement obligations, respectively. The acquisition of a group of assets in certain asset acquisitions requires fair value estimates for assets acquired and liabilities assumed. The fair value of assets and liabilities acquired is calculated using a net discounted cash flow approach for the proved producing, proved undeveloped, probable, and possible properties. The discounted cash flows are developed using the income approach and are based on management’s expectations for the future. Unobservable inputs include estimates of future oil and natural gas production from the Company’s reserve reports, commodity prices based on the NYMEX forward price curves as of the date of the estimate (adjusted for basis differentials), estimated operating and development costs, and a risk-adjusted discount rate (all of which are designated as Level 3 inputs within the fair value hierarchy). For unproved properties, the fair value is determined using market comparables. The Company determines the estimated fair value of its asset retirement obligations by calculating the present value of estimated cash flows related to plugging and abandonment liabilities using Level 3 inputs. The significant inputs used to calculate such liabilities include estimates of costs to be incurred, the Company’s credit-adjusted risk-free rate, inflation rates, and estimated dates of abandonment. The asset retirement liability is accreted to its present value each period, and the capitalized asset retirement cost is depleted as a component of the full cost pool using the units-of-production method. See Notes 3 and 5 for additional information. The following table presents the Company’s financial assets and liabilities that were accounted for at fair value on a recurring basis by level within the fair value hierarchy (in thousands): Fair Value Measurements at September 30, 2018 Level 1 Level 2 Level 3 Total Financial assets and liabilities: Commodity derivative asset $ — $ — $ — $ — Commodity derivative liability $ — $ 20,241 $ — $ 20,241 Fair Value Measurements at December 31, 2017 Level 1 Level 2 Level 3 Total Financial assets and liabilities: Commodity derivative asset $ — $ — $ — $ — Commodity derivative liability $ — $ 7,865 $ — $ 7,865 Commodity Derivative Instruments The Company determines its estimate of the fair value of commodity derivative instruments using a market approach based on several factors, including quoted market prices in active markets, quotes from third parties, the credit rating of each counterparty, and the Company’s own credit standing. In consideration of counterparty credit risk, the Company assessed the possibility of whether the counterparties to its derivative contracts would default by failing to make any contractually required payments. The Company considers the counterparties to be of substantial credit quality and believes that they have the financial resources and willingness to meet their potential repayment obligations associated with the derivative transactions. At September 30, 2018 , derivative instruments utilized by the Company consist of swaps and collars. The oil and natural gas derivative markets are highly active. Although the Company’s derivative instruments are valued based on several factors including public indices, the instruments themselves are traded with third-party counterparties. As such, the Company has classified these instruments as Level 2. Fair Value of Financial Instruments The Company’s financial instruments consist primarily of cash and cash equivalents, accounts receivable, accounts payable, commodity derivative instruments (discussed above), notes payable, and credit facility borrowings. The carrying values of cash and cash equivalents, accounts receivable, and accounts payable are representative of their fair values due to their short-term maturities. Due to the variable interest rate paid on the credit facility borrowings, the carrying value is representative of its fair value. The fair value of the notes payable is estimated to be $514.3 million at September 30, 2018 . The Company determined the fair value of its notes payable at September 30, 2018 by using observable market-based information for these debt instruments. The Company has classified the notes payable as Level 1. |
Interest Expense
Interest Expense | 9 Months Ended |
Sep. 30, 2018 | |
Interest and Debt Expense [Abstract] | |
Interest Expense | Interest Expense The components of interest expense are (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Revolving bank credit facility $ 376 $ 1,016 $ 461 $ 1,286 Notes payable 8,593 1,800 25,781 5,400 Amortization of issuance costs and other 905 1,090 2,905 2,267 Less: interest capitalized (9,874 ) (3,906 ) (29,147 ) (8,953 ) Interest expense, net of amounts capitalized $ — $ — $ — $ — |
Weighted-Average Shares Outstan
Weighted-Average Shares Outstanding | 9 Months Ended |
Sep. 30, 2018 | |
Earnings Per Share [Abstract] | |
Weighted-Average Shares Outstanding | Weighted-Average Shares Outstanding The following table sets forth the Company's outstanding equity grants which have a dilutive effect on earnings per share: Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Weighted-average shares outstanding — basic 242,536,781 200,881,447 242,184,348 200,807,436 Potentially dilutive common shares from: Stock options 230,067 415,524 332,953 412,902 TSR PSUs 1 411,738 — 336,882 — Restricted stock units and stock bonus shares 381,460 163,944 352,875 105,791 Weighted-average shares outstanding — diluted 243,560,046 201,460,915 243,207,058 201,326,129 1 The number of awards assumes that the associated vesting condition is met at the respective period end based on market prices as of the respective period end. The final number of shares of the Company’s common stock issued may vary depending on the performance multiplier, which ranges from zero to two , depending on the level of satisfaction of the vesting condition. The following potentially dilutive securities outstanding for the periods presented were not included in the respective weighted-average shares outstanding-diluted calculation above: Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Potentially dilutive common shares from: Stock options 1 3,456,300 4,726,500 3,438,167 4,756,500 TSR PSUs 1,2 160,754 951,884 160,754 951,884 Goal-Based PSUs 2,3 281,872 — 281,872 — Restricted stock units and stock bonus shares 1 13,907 308,094 13,907 497,806 Total 3,912,833 5,986,478 3,894,700 6,206,190 1 Potential common shares excluded from the weighted-average shares outstanding-diluted calculation as the securities had an anti-dilutive effect on earnings per share. 2 The number of awards reflects the target amount of shares granted. The final number of shares of the Company’s common stock issued may vary depending on the performance multiplier, which ranges from zero to two , depending on the level of satisfaction of the vesting condition. 3 Potential common shares excluded from the weighted-average shares outstanding-diluted calculation as the securities are considered contingently issuable, and the performance criteria are not considered met as of period end. |
Equity and Stock-Based Compensa
Equity and Stock-Based Compensation | 9 Months Ended |
Sep. 30, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Equity and Stock-Based Compensation | Equity and Stock-Based Compensation Equity At the 2018 annual meeting of shareholders of the Company held on May 18, 2018, the shareholders approved the Third Amended and Restated Articles of Incorporation of the Company to increase the number of authorized shares of common stock of the Company from 300,000,000 to 400,000,000 . Stock-Based Compensation In addition to cash compensation, the Company may compensate employees and directors with equity-based compensation in the form of stock options, performance-vested stock units, restricted stock units, stock bonus shares, and other equity awards. The Company records its equity compensation by pro-rating the estimated grant-date fair value of each grant over the period of time that the recipient is required to provide services to the Company (the "vesting period"). The calculation of fair value is based, either directly or indirectly, on the quoted market value of the Company’s common stock. Indirect valuations are calculated using the Black-Scholes-Merton option pricing model or a Monte Carlo model. For the periods presented, all stock-based compensation was either classified as a component within general and administrative expense in the Company's condensed consolidated statements of operations or, for that portion which is directly attributable to individuals performing acquisition, exploration, and development activities, was capitalized to the full cost pool. As of September 30, 2018 , there were 10,500,000 common shares authorized for grant under the 2015 Equity Incentive Plan, of which 4,251,410 shares were available for future grant. The shares available for future grant exclude 1,555,263 shares which have been reserved for future vesting of performance-vested stock units in the event that these awards meet the criteria to vest at their maximum multiplier. The amount of stock-based compensation was as follows (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Stock options $ 1,072 $ 1,277 $ 3,470 $ 3,825 Performance-vested stock units 1,187 807 3,216 2,130 Restricted stock units and stock bonus shares 1,771 1,386 4,507 3,779 Total stock-based compensation $ 4,030 $ 3,470 $ 11,193 $ 9,734 Less: stock-based compensation capitalized (625 ) (440 ) (1,846 ) (1,344 ) Total stock-based compensation expensed $ 3,405 $ 3,030 $ 9,347 $ 8,390 Stock options No stock options were granted during the three and nine months ended September 30, 2018 or 2017 . The following table summarizes activity for stock options for the periods presented: Number of Shares Weighted-Average Exercise Price Weighted-Average Remaining Contractual Life Aggregate Intrinsic Value (thousands) Outstanding, December 31, 2017 5,636,834 $ 9.38 7.0 years $ 4,806 Granted — — Exercised (823,883 ) 5.36 4,611 Expired (23,400 ) 11.27 Forfeited (104,917 ) 9.57 Outstanding, September 30, 2018 4,684,634 $ 10.07 6.6 years $ 2,505 Outstanding, Exercisable at September 30, 2018 3,142,430 $ 10.25 6.4 years $ 1,452 The following table summarizes information about issued and outstanding stock options as of September 30, 2018 : Outstanding Options Exercisable Options Range of Exercise Prices Options Weighted-Average Exercise Price per Share Weighted-Average Remaining Contractual Life Options Weighted-Average Exercise Price per Share Weighted-Average Remaining Contractual Life Under $5.00 35,000 $ 3.31 3.8 years 35,000 $ 3.31 3.8 years $5.00 - $6.99 723,800 6.30 6.7 years 389,200 6.27 5.9 years $7.00 - $10.99 1,362,334 9.42 6.7 years 864,830 9.49 6.4 years $11.00 - $13.46 2,563,500 11.58 6.7 years 1,853,400 11.57 6.6 years Total 4,684,634 $ 10.07 6.6 years 3,142,430 $ 10.25 6.4 years The estimated unrecognized compensation cost from stock options not vested as of September 30, 2018 , which will be recognized ratably over the remaining vesting phase, is as follows: Unrecognized compensation cost (in thousands) $ 5,685 Remaining vesting phase 1.8 years Restricted stock units and stock bonus awards The Company grants restricted stock units and stock bonus awards to directors, eligible employees, and officers under its equity incentive plan. Restrictions and vesting periods for the awards are determined by the Compensation Committee of the Board of Directors and are set forth in the award agreements. Each restricted stock unit or stock bonus award represents one share of the Company’s common stock to be released from restrictions upon completion of the vesting period. The awards typically vest in equal increments over three to five years . Restricted stock units and stock bonus awards are valued at the closing price of the Company’s common stock on the grant date and are recognized over the vesting period of the award. The following table summarizes activity for restricted stock units and stock bonus awards for the nine months ended September 30, 2018 : Number of Shares Weighted-Average Grant-Date Fair Value Not vested, December 31, 2017 1,087,386 $ 8.89 Granted 747,168 9.35 Vested (439,945 ) 8.77 Forfeited (54,111 ) 9.56 Not vested, September 30, 2018 1,340,498 $ 9.16 The estimated unrecognized compensation cost from restricted stock units and stock bonus awards not vested as of September 30, 2018 , which will be recognized ratably over the remaining vesting phase, is as follows: Unrecognized compensation cost (in thousands) $ 9,075 Remaining vesting phase 2.0 years Performance-vested stock units The Company grants two types of performance-vested stock units ("PSUs") to certain executives under its long-term incentive plan. The number of shares of the Company’s common stock that may be issued to settle PSUs ranges from zero to two times the number of PSUs awarded. The shares issued for PSUs are determined based on the Company’s performance over a three -year measurement period and vest in their entirety at the end of the measurement period. The PSUs will be settled in shares of the Company’s common stock following the end of the three -year performance cycle. Any PSUs that have not vested at the end of the applicable measurement period are forfeited. Goal-Based PSUs - These PSUs are earned and vested after 2020 based on a discretionary assessment by the Compensation Committee. This assessment is anticipated to measure the performance of the Company and the executives over the defined vesting period. As vesting is based on the discretion of the Compensation Committee, we have not yet met the requirements of establishing an accounting grant date for them. This will occur when the Compensation Committee determines and communicates the vesting percentage to the award recipients, which will then trigger the service inception date, the fair value of the awards, and the associated expense recognition period. As of September 30, 2018 , 281,872 Goal-Based PSUs had been awarded to certain executives. Total Shareholder Return ("TSR") PSUs - The vesting criterion for the TSR PSUs is based on a comparison of the Company’s TSR for the measurement period compared with the TSRs of a group of peer companies for the same measurement period. As the vesting criterion is linked to the Company's share price, it is considered a market condition for purposes of calculating the grant-date fair value of the awards. The assumptions used in valuing the TSR PSUs granted were as follows: Nine Months Ended September 30, 2018 2017 Weighted-average expected term 2.8 years 2.9 years Weighted-average expected volatility 52 % 59 % Weighted-average risk-free rate 2.41 % 1.34 % The fair value of the TSR PSUs granted during the nine months ended September 30, 2018 and 2017 was $4.2 million and $5.1 million , respectively. As of September 30, 2018 , unrecognized compensation cost for TSR PSUs was $6.0 million and will be amortized through 2020. A summary of the status and activity of TSR PSUs is presented in the following table: Number of Units 1 Weighted-Average Grant-Date Fair Value Not vested, December 31, 2017 951,884 $ 9.44 Granted 321,507 13.11 Vested — — Forfeited — — Not vested, September 30, 2018 1,273,391 $ 10.36 1 The number of awards assumes that the associated vesting condition is met at the target amount. The final number of shares of the Company’s common stock issued may vary depending on the performance multiplier, which ranges from zero to two , depending on the level of satisfaction of the vesting condition. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes We evaluate and update our estimated annual effective income tax rate on a quarterly basis based on current and forecasted operating results and tax laws. Consequently, based upon the mix and timing of our actual earnings compared to annual projections, our effective tax rate may vary quarterly and may make quarterly comparisons not meaningful. The quarterly income tax provision is generally comprised of tax expense on income or benefit on loss at the most recent estimated annual effective tax rate, adjusted for the effect of discrete items. During the three months ended March 31, 2018, the Company concluded it is more likely than not it will realize the benefits of its net deferred tax assets by the end of 2018 as a result of current year ordinary income. This conclusion was based upon the Company’s projection of cumulative positive net income for the three-year period ended December 31, 2018. The release of the valuation allowance is reflected in the Company’s estimated annual effective tax rate since the realization of the Company’s deferred tax assets is supported by current year ordinary income. The Company is projecting a net deferred tax liability with a full release of its beginning valuation allowance by the end of 2018. The effective tax rates for the three and nine months ended September 30, 2018 were 12% and 9% , respectively. For the three and nine months ended September 30, 2017 , the effective tax rates were nil . The effective tax rates for the three and nine months ended September 30, 2018 and 2017 differed from the statutory rates due primarily to the release of valuation allowances previously recorded against deferred tax assets. As of September 30, 2018 , we had no liability for unrecognized tax benefits. The Company believes that there are no new items or changes in facts or judgments that should impact the Company’s tax position. Given the substantial NOL carryforwards at both the federal and state levels, it is anticipated that any changes resulting from a tax examination would simply adjust the carryforwards and would not result in significant interest expense or penalties. Most of the Company's tax returns filed since August 31, 2011 are still subject to examination by tax authorities. As of the date of this report, we are current with our income tax filings in all applicable state jurisdictions, and we are not currently under any state income tax examinations. No significant uncertain tax positions were identified as of any date on or before September 30, 2018 . The Company’s policy is to recognize interest and penalties related to uncertain tax benefits in income tax expense. As of September 30, 2018 , the Company has not recognized any interest or penalties related to uncertain tax benefits. Each period, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. As of September 30, 2018 , the Company believes it will be able to generate sufficient future taxable income within the carryforward periods and, accordingly, believes that it is more likely than not that its net deferred income tax assets will be fully realized. |
Revenue from Contracts with Cus
Revenue from Contracts with Customers | 9 Months Ended |
Sep. 30, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Revenue from Contracts with Customers | Revenue from Contracts with Customers Sales of oil, natural gas, and NGLs are recognized at the point control of the product is transferred to the customer and collectability is reasonably assured. All of our contracts’ pricing provisions are tied to a market index, with certain adjustments based on, among other factors, whether a well delivers to a gathering or transmission line, quality of the oil or natural gas, and prevailing supply and demand conditions. As a result, the price of the oil, natural gas, and NGLs fluctuates to remain competitive with other available oil, natural gas, and NGLs supplies. Three Months Ended September 30, Nine Months Ended September 30, Revenues (in thousands): 2018 2017 2018 2017 Oil $ 123,540 $ 73,144 $ 354,601 $ 154,232 Natural Gas and NGLs 37,438 30,449 100,697 68,187 $ 160,978 $ 103,593 $ 455,298 $ 222,419 Natural Gas and NGLs Sales Under our natural gas processing contracts, we deliver natural gas to a midstream processing entity at the wellhead or the inlet of the midstream processing entity’s system. The midstream processing entity gathers and processes the natural gas and remits proceeds to us for the resulting sales of NGLs and residue gas. For these contracts, we have concluded that the midstream processing entity is our customer. We recognize natural gas and NGL revenues based on the net amount of the proceeds received from the midstream processing. Oil Sales Our oil sales contracts are generally structured in one of the following ways: • We sell oil production at the wellhead and collect an agreed-upon index price, net of pricing differentials. In this scenario, we recognize revenue when control transfers to the purchaser at the wellhead at the net price received. • We deliver oil to the purchaser at a contractually agreed-upon delivery point at which the purchaser takes custody, title, and risk of loss of the product. Under this arrangement, we pay a third party to transport the product and receive a specified index price from the purchaser, net of pricing differentials. In this scenario, we recognize revenue when control transfers to the purchaser at the delivery point based on the price received from the purchaser. The third party costs are recorded as transportation and gathering in our condensed consolidated statements of operations. Transaction Price Allocated to Remaining Performance Obligations A significant number of our product sales are short-term in nature with a contract term of one year or less. For those contracts, we have utilized the practical expedient in ASC 606-10-50-14 exempting the Company from disclosure of the transaction price allocated to remaining performance obligations if the performance obligation is part of a contract that has an original expected duration of one year or less. For our product sales that have a contract term greater than one year, we have utilized the practical expedient in ASC 606-10-50-14(a) which states the Company is not required to disclose the transaction price allocated to remaining performance obligations if the variable consideration is allocated entirely to a wholly unsatisfied performance obligation. Under these sales contracts, each unit of product generally represents a separate performance obligation; therefore, future volumes are wholly unsatisfied and disclosure of the transaction price allocated to remaining performance obligations is not required. Contract Balances Under our product sales contracts, we invoice customers once our performance obligations have been satisfied, at which point payment is unconditional. Accordingly, our product sales contracts do not typically give rise to contract assets or liabilities under ASC 606. As of September 30, 2018 , we had contract assets recorded within other current assets of $1.6 million representing cash advances to customers which are expected to be realized within a year. Prior-Period Performance Obligations We record revenue in the month production is delivered to the purchaser. However, settlement statements for certain sales may not be received for 30 to 90 days after the date production is delivered, and as a result, we are required to estimate the amount of production delivered to the purchaser and the price that will be received for the sale of the product. We record the differences between our estimates and the actual amounts received for product sales when that payment is received from the purchaser. We have existing internal controls for our revenue estimation process and related accruals, and any identified differences between our revenue estimates and actual revenue received historically have not been significant. For the three and nine months ended September 30, 2018 , revenue recognized in the reporting period related to performance obligations satisfied in prior reporting periods was not material. |
Other Commitments and Contingen
Other Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Other Commitments and Contingencies | Other Commitments and Contingencies Oil Commitments The Company entered into firm sales agreements for its oil production with four counterparties. Deliveries under three of the sales agreements have commenced. Deliveries under the fourth agreement are expected to commence in the first quarter of 2019. Pursuant to these agreements, we must deliver specific amounts of oil either from our own production or from oil that we acquire from third parties. If we are unable to fulfill all of our contractual obligations, we may be required to pay penalties or damages pursuant to these agreements. Our commitments over the next five years, excluding the contingent commitment described below, are as follows: Year ending December 31, Oil (MBbls) Remainder of 2018 1,072 2019 5,167 2020 4,003 2021 1,672 2022 — Thereafter — Total 11,914 During the third quarter of 2018 , we were able to meet all of our delivery obligations, and we anticipate that our current gross operated production will continue to meet our future delivery obligations; although, this cannot be guaranteed. Natural Gas Commitments In collaboration with several other producers and DCP Midstream, LP ("DCP Midstream"), we have agreed to participate in the expansion of natural gas gathering and processing capacity in the D-J Basin. • The first agreement includes a new 200 MMcf per day processing plant ("Mewbourn 3") as well as the expansion of a related gathering system. Starting in August 2018, Mewbourn 3 was complete and in service. Our share of the commitment requires 46.4 MMcf per day to be delivered after the plant in-service date for a period of 7 years. • The second agreement includes an additional 300 MMcf per day processing plant ("O'Connor 2"), including up to 100 MMcf per day of bypass, as well as the expansion of a related gathering system. Construction of the plant is underway and is expected to be placed into service in the second quarter of 2019. Our share of the commitment will require an additional 43.8 MMcf per day to be delivered after the plant in-service date for a period of 7 years. These contractual obligations can be reduced by the collective volumes delivered to the plants by other producers in the D-J Basin that are in excess of such producers' total commitment. If we are unable to fulfill all of our contractual obligations and our obligations are not sufficiently reduced by the collective volumes delivered by other producers, we may be required to pay penalties or damages pursuant to these agreements. During the third quarter of 2018 , we were able to meet all of our delivery obligations, and we anticipate that our current gross operated production will continue to meet our future delivery obligations; although, this cannot be guaranteed. Litigation From time to time, the Company is a party to various commercial and regulatory claims, pending or threatened legal action, and other proceedings that arise in the ordinary course of business. It is the opinion of management that none of the current proceedings are reasonably likely to have a material adverse impact on the Company's business, financial position, results of operations, or cash flows. Office leases The Company’s principal office space located in Denver is under lease through July 2022. Current rent under the lease is approximately $66,000 per month. The Company also has a field office lease in Greeley which requires monthly payments of $7,500 through October 2021. Rent expense for offices leases was $0.3 million and $0.2 million for the three months ended September 30, 2018 and 2017 , respectively. For the nine months ended September 30, 2018 and 2017 , rent expense for office leases was $0.7 million and $0.9 million , respectively. Vehicle Leases The Company has entered into a leasing arrangement for its vehicles used in our operations. These leases terminate after four years and are classified as capital leases. The assets associated with these capital leases are recorded within "Other property and equipment, net." A schedule of the minimum lease payments under non-cancellable capital and operating leases as of September 30, 2018 follows (in thousands): Year ending December 31: Vehicles Leases Office Leases Remainder of 2018 $ 41 $ 222 2019 163 896 2020 163 916 2021 189 913 2022 136 500 Thereafter — — Total minimum lease payments $ 692 $ 3,447 Less: Amount representing estimated executory cost (57 ) Net minimum lease payments 635 Less: Amount representing interest (92 ) Present value of net minimum lease payments * $ 543 * Reflected in the balance sheet as current and non-current obligations of $111 thousand and $432 thousand , respectively, within "Accounts payable and accrued expenses" and "Other liabilities," respectively. |
Supplemental Schedule of Inform
Supplemental Schedule of Information to the Condensed Consolidated Statements of Cash Flows | 9 Months Ended |
Sep. 30, 2018 | |
Supplemental Cash Flow Information [Abstract] | |
Supplemental Schedule of Information to the Condensed Consolidated Statements of Cash Flows | Supplemental Schedule of Information to the Condensed Consolidated Statements of Cash Flows The following table supplements the cash flow information presented in the condensed consolidated financial statements for the periods presented (in thousands): Nine Months Ended September 30, Supplemental cash flow information: 2018 2017 Interest paid $ 17,701 $ 4,796 Non-cash investing and financing activities: Accrued well costs as of period end $ 143,015 $ 122,387 Asset retirement obligations incurred with development activities 1,488 2,782 Asset retirement obligations assumed with acquisitions 26,150 23,521 Obligations discharged with asset retirements and divestitures $ (8,944 ) $ (7,023 ) Net changes in operating assets and liabilities: Accounts receivable $ (31,170 ) $ (85,027 ) Accounts payable and accrued expenses (842 ) 1,413 Revenue payable 15,858 41,997 Production taxes payable 20,504 17,548 Other (520 ) (941 ) Changes in operating assets and liabilities $ 3,830 $ (25,010 ) |
Organization and Summary of S_2
Organization and Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation: The Company operates in one business segment, and all of its operations are located in the United States of America. At the directive of the Securities and Exchange Commission ("SEC") to use "plain English" in public filings, the Company will use such terms as "we," "our," "us," or the "Company" in place of SRC Energy Inc . When such terms are used in this manner throughout this document, they are in reference only to the corporation, SRC Energy Inc., and are not used in reference to the Board of Directors, corporate officers, management, or any individual employee or group of employees. The condensed consolidated financial statements include the accounts of the Company, including its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. The Company prepares its condensed consolidated financial statements in accordance with accounting principles generally accepted in the United States of America (“US GAAP”). |
Interim Financial Information | Interim Financial Information: The unaudited condensed consolidated interim financial statements included herein have been prepared by the Company pursuant to the rules and regulations of the SEC as promulgated in Rule 10-01 of Regulation S-X. The condensed consolidated balance sheet as of December 31, 2017 was derived from the Company's annual consolidated financial statements included within its Annual Report on Form 10-K for the year ended December 31, 2017 as filed with the SEC on February 21, 2018. Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with US GAAP have been condensed or omitted pursuant to such SEC rules and regulations. The Company believes that the disclosures included are adequate to make the information presented not misleading and recommends that these condensed financial statements be read in conjunction with the audited financial statements and notes thereto for the year ended December 31, 2017 . In our opinion, the unaudited condensed consolidated financial statements contained herein reflect all adjustments, consisting solely of normal recurring items, which are necessary for the fair presentation of the Company's financial position, results of operations, and cash flows on a basis consistent with that of its prior audited financial statements. However, the results of operations for interim periods may not be indicative of results to be expected for the full fiscal year. |
Major Customers | Based on the current demand for oil and natural gas, the availability of other buyers, the multiple contracts for sales of our products, and the Company having the option to sell to other buyers if conditions warrant, the Company believes that the loss of our existing customers or individual contracts would not have a material adverse effect on us. Our oil and natural gas production is a commodity with a readily available market, and we sell our products under many distinct contracts. In addition, there are several oil and natural gas purchasers and processors within our area of operations to whom our production could be sold. Accounts receivable consist primarily of receivables from oil, natural gas, and NGL sales and amounts due from other working interest owners who are liable for their proportionate share of well costs. The Company typically has the right to withhold future revenue disbursements to recover outstanding joint interest billings on outstanding receivables from joint interest owners. |
Recent Accounting Pronouncements | Recently Adopted Accounting Pronouncements: In May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standard Update ("ASU") 2014-09, “Revenue from Contracts with Customers (Topic 606)” (“ASU 2014-09”), which establishes a comprehensive new revenue recognition standard designed to depict the transfer of goods or services to a customer in an amount that reflects the consideration the entity expects to receive in exchange for those goods or services. In March 2016, the FASB released certain implementation guidance through ASU 2016-08 (collectively with ASU 2014-09, the "Revenue ASUs") to clarify principal versus agent considerations. The Revenue ASUs allow for the use of either the full or modified retrospective transition method, and the standard became effective for annual reporting periods beginning after December 15, 2017 including interim periods within that period. The Company adopted the guidance using the modified retrospective method with the effective date of January 1, 2018. The Company did not record a cumulative-effect adjustment to the opening balance of retained earnings as no adjustment was necessary. The adoption of the Revenue ASUs did not impact net income or cash flows. See Note 14 for the new disclosures required by the Revenue ASUs. Recently Issued Accounting Pronouncements: We evaluate the pronouncements of various authoritative accounting organizations to determine the impact of new accounting pronouncements on us. In February 2016, the FASB issued ASU 2016-02, "Leases (Topic 842)" ("ASU 2016-02"), which establishes a comprehensive new lease standard designed to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. In transition, lessees and lessors are required to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach. The modified retrospective approach includes a number of optional practical expedients that entities may elect to apply. An entity that elects to apply the practical expedients will, in effect, continue to account for leases that commence before the effective date in accordance with previous US GAAP. ASU 2016-02 is effective for public businesses for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. We are currently evaluating the impact of the adoption of this standard on our financial statements. There were various updates recently issued by the FASB, most of which represented technical corrections to the accounting literature or application to specific industries and are not expected to a have a material impact on our reported financial position, results of operations, or cash flows. |
Organization and Summary of S_3
Organization and Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Cash and Cash Equivalents | Major Customers: The Company sells production to a small number of customers as is customary in the industry. Customers representing 10% or more of our oil, natural gas, and NGL revenues (“major customers”) for each of the periods presented are shown in the following table: Three Months Ended September 30, Nine Months Ended September 30, Major Customers 2018 2017 2018 2017 Company A 23% 30% 13% 27% Company B 21% 27% 19% 26% Company C 14% 13% 28% 15% Company D 14% * 11% * Company E 14% * 16% * * less than 10% |
Schedule of Customers With Balances Greater Than 10% of Total Receivables | Customers with balances greater than 10% of total receivable balances as of each of the periods presented are shown in the following table (these companies do not necessarily correspond to those presented above): As of As of Major Customers September 30, 2018 December 31, 2017 Company A 23% 26% Company B 16% 16% Company C 14% 23% Company D 14% * Company E * 11% * less than 10% Customers representing 10% or more of our oil, natural gas, and NGL revenues (“major customers”) for each of the periods presented are shown in the following table: Three Months Ended September 30, Nine Months Ended September 30, Major Customers 2018 2017 2018 2017 Company A 23% 30% 13% 27% Company B 21% 27% 19% 26% Company C 14% 13% 28% 15% Company D 14% * 11% * Company E 14% * 16% * * less than 10% |
Property and Equipment (Tables)
Property and Equipment (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Capitalized Costs | The capitalized costs related to the Company’s oil and gas producing activities were as follows (in thousands): As of As of September 30, 2018 December 31, 2017 Oil and gas properties, full cost method: Costs of proved properties: Producing and non-producing $ 2,148,278 $ 1,629,789 Less, accumulated depletion and full cost ceiling impairments (784,162 ) (659,205 ) Subtotal, proved properties, net 1,364,116 970,584 Costs of wells in progress 244,206 106,269 Costs of unproved properties and land, not subject to depletion: Lease acquisition and other costs 739,303 786,469 Land 9,392 7,200 Subtotal, unproved properties and land 748,695 793,669 Costs of other property and equipment: Other property and equipment 9,462 8,134 Less, accumulated depreciation (3,560 ) (2,080 ) Subtotal, other property and equipment, net 5,902 6,054 Total property and equipment, net $ 2,362,919 $ 1,876,576 |
Schedule of Capitalized Overhead | Under the full cost method of accounting, these expenditures, in the amounts shown in the table below, were capitalized in the full cost pool (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Capitalized overhead $ 3,129 $ 2,518 $ 9,522 $ 7,729 |
Depletion, depreciation, and _2
Depletion, depreciation, and accretion ("DDA") (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Other Costs and Disclosures [Abstract] | |
Schedule of Depletion, Depreciation and Amortization | DD&A consisted of the following (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Depletion of oil and gas properties $ 44,230 $ 32,944 $ 121,259 $ 71,389 Depreciation and accretion 958 796 2,887 2,007 Total DD&A Expense $ 45,188 $ 33,740 $ 124,146 $ 73,396 |
Asset Retirement Obligations (T
Asset Retirement Obligations (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Asset Retirement Obligation Disclosure [Abstract] | |
Schedule of Asset Retirement Obligations | The following table summarizes the changes in asset retirement obligations associated with the Company's oil and gas properties (in thousands): Nine Months Ended September 30, 2018 Asset retirement obligations, December 31, 2017 $ 31,622 Obligations incurred with development activities 1,488 Obligations assumed with acquisitions 26,150 Accretion expense 1,406 Obligations discharged with asset retirements and divestitures (8,944 ) Asset retirement obligation, September 30, 2018 $ 51,722 Less, current portion (2,771 ) Long-term portion $ 48,951 |
Commodity Derivative Instrume_2
Commodity Derivative Instruments (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Commodity Derivative Contracts | The Company’s commodity derivative contracts as of September 30, 2018 are summarized below: Settlement Period Derivative Instrument Volumes (Bbls per day) Weighted-Average Floor Price Weighted-Average Ceiling Price Crude Oil - NYMEX WTI Oct 1, 2018 - Dec 31, 2018 Collar 10,000 $ 43.63 $ 61.29 Jan 1, 2019 - Dec 31, 2019 Collar 6,000 $ 55.00 $ 74.31 Settlement Period Derivative Instrument Volumes (MMBtu per day) Weighted-Average Weighted-Average Ceiling Price Natural Gas - CIG Rocky Mountain Oct 1, 2018 - Dec 31, 2018 Collar 15,000 $ 2.25 $ 2.82 Settlement Period Derivative Instrument Volumes (MMBtu per day) Fixed Basis Difference Natural Gas - CIG Rocky Mountain Jan 1, 2019 - Dec 31, 2019 Swap 10,000 $ (0.79 ) Settlement Period Derivative Instrument Volumes Weighted-Average Fixed Price Propane - Mont Belvieu Oct 1, 2018 - Dec 31, 2018 Swap 1,000 $ 33.60 Jan 1, 2019 - Dec 31, 2019 Swap 2,000 $ 37.52 Subsequent to September 30, 2018 , the Company added the following positions: Settlement Period Derivative Instrument Volumes Weighted-Average Fixed Basis Difference Natural Gas - CIG Rocky Mountain Nov 1, 2018 - Dec 31, 2018 Swap 50,000 $ (0.21 ) Jan 1, 2019 - Dec 31, 2019 Swap 20,000 $ (0.74 ) |
Schedule of Fair Value of Derivatives | The following table provides a reconciliation between the net assets and liabilities reflected on the accompanying condensed consolidated balance sheets and the potential effect of master netting arrangements on the fair value of the Company’s derivative contracts (in thousands): As of September 30, 2018 Underlying Balance Sheet Location Gross Amounts of Recognized Assets and Liabilities Gross Amounts Offset in the Balance Sheet Net Amounts of Assets and Liabilities Presented in the Balance Sheet Commodity derivative contracts Current assets $ 1,740 $ (1,740 ) $ — Commodity derivative contracts Noncurrent assets 1,078 (1,078 ) — Commodity derivative contracts Current liabilities 20,310 (1,740 ) 18,570 Commodity derivative contracts Noncurrent liabilities $ 2,749 $ (1,078 ) $ 1,671 As of December 31, 2017 Underlying Balance Sheet Location Gross Amounts of Recognized Assets and Liabilities Gross Amounts Offset in the Balance Sheet Net Amounts of Assets and Liabilities Presented in the Balance Sheet Commodity derivative contracts Current assets $ 1,960 $ (1,960 ) $ — Commodity derivative contracts Noncurrent assets — — — Commodity derivative contracts Current liabilities 9,825 (1,960 ) 7,865 Commodity derivative contracts Noncurrent liabilities $ — $ — $ — |
Schedule of Loss Recognized in Statements of Operations | The amount of gain (loss) recognized in the condensed consolidated statements of operations related to derivative financial instruments was as follows (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Realized gain (loss) on commodity derivatives $ (8,273 ) $ 116 $ (16,228 ) $ (26 ) Unrealized gain (loss) on commodity derivatives (256 ) (2,499 ) (12,376 ) 2,350 Total gain (loss) $ (8,529 ) $ (2,383 ) $ (28,604 ) $ 2,324 |
Schedule of Hedge Realized Gains (Losses) | The following table summarizes derivative realized gains and losses during the periods presented (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Monthly settlement $ (8,273 ) $ 376 $ (16,228 ) $ 927 Previously incurred premiums attributable to settled commodity contracts — (260 ) — (953 ) Total realized loss $ (8,273 ) $ 116 $ (16,228 ) $ (26 ) |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
Schedule of Assets and Liabilities Measured on a Recurring Basis | The following table presents the Company’s financial assets and liabilities that were accounted for at fair value on a recurring basis by level within the fair value hierarchy (in thousands): Fair Value Measurements at September 30, 2018 Level 1 Level 2 Level 3 Total Financial assets and liabilities: Commodity derivative asset $ — $ — $ — $ — Commodity derivative liability $ — $ 20,241 $ — $ 20,241 Fair Value Measurements at December 31, 2017 Level 1 Level 2 Level 3 Total Financial assets and liabilities: Commodity derivative asset $ — $ — $ — $ — Commodity derivative liability $ — $ 7,865 $ — $ 7,865 |
Interest Expense (Tables)
Interest Expense (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Interest and Debt Expense [Abstract] | |
Schedule of the Components of Interest Expense | The components of interest expense are (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Revolving bank credit facility $ 376 $ 1,016 $ 461 $ 1,286 Notes payable 8,593 1,800 25,781 5,400 Amortization of issuance costs and other 905 1,090 2,905 2,267 Less: interest capitalized (9,874 ) (3,906 ) (29,147 ) (8,953 ) Interest expense, net of amounts capitalized $ — $ — $ — $ — |
Weighted-Average Shares Outst_2
Weighted-Average Shares Outstanding (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Earnings Per Share [Abstract] | |
Schedule of Weighted Average Number of Shares | The following table sets forth the Company's outstanding equity grants which have a dilutive effect on earnings per share: Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Weighted-average shares outstanding — basic 242,536,781 200,881,447 242,184,348 200,807,436 Potentially dilutive common shares from: Stock options 230,067 415,524 332,953 412,902 TSR PSUs 1 411,738 — 336,882 — Restricted stock units and stock bonus shares 381,460 163,944 352,875 105,791 Weighted-average shares outstanding — diluted 243,560,046 201,460,915 243,207,058 201,326,129 1 The number of awards assumes that the associated vesting condition is met at the respective period end based on market prices as of the respective period end. The final number of shares of the Company’s common stock issued may vary depending on the performance multiplier, which ranges from zero to two , depending on the level of satisfaction of the vesting condition. |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | The following potentially dilutive securities outstanding for the periods presented were not included in the respective weighted-average shares outstanding-diluted calculation above: Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Potentially dilutive common shares from: Stock options 1 3,456,300 4,726,500 3,438,167 4,756,500 TSR PSUs 1,2 160,754 951,884 160,754 951,884 Goal-Based PSUs 2,3 281,872 — 281,872 — Restricted stock units and stock bonus shares 1 13,907 308,094 13,907 497,806 Total 3,912,833 5,986,478 3,894,700 6,206,190 1 Potential common shares excluded from the weighted-average shares outstanding-diluted calculation as the securities had an anti-dilutive effect on earnings per share. 2 The number of awards reflects the target amount of shares granted. The final number of shares of the Company’s common stock issued may vary depending on the performance multiplier, which ranges from zero to two , depending on the level of satisfaction of the vesting condition. 3 Potential common shares excluded from the weighted-average shares outstanding-diluted calculation as the securities are considered contingently issuable, and the performance criteria are not considered met as of period end. |
Equity and Stock-Based Compen_2
Equity and Stock-Based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of Stock-based Compensation Expense Recognized | The amount of stock-based compensation was as follows (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Stock options $ 1,072 $ 1,277 $ 3,470 $ 3,825 Performance-vested stock units 1,187 807 3,216 2,130 Restricted stock units and stock bonus shares 1,771 1,386 4,507 3,779 Total stock-based compensation $ 4,030 $ 3,470 $ 11,193 $ 9,734 Less: stock-based compensation capitalized (625 ) (440 ) (1,846 ) (1,344 ) Total stock-based compensation expensed $ 3,405 $ 3,030 $ 9,347 $ 8,390 |
Summary of Stock Option Activity Under Stock Option | The following table summarizes activity for stock options for the periods presented: Number of Shares Weighted-Average Exercise Price Weighted-Average Remaining Contractual Life Aggregate Intrinsic Value (thousands) Outstanding, December 31, 2017 5,636,834 $ 9.38 7.0 years $ 4,806 Granted — — Exercised (823,883 ) 5.36 4,611 Expired (23,400 ) 11.27 Forfeited (104,917 ) 9.57 Outstanding, September 30, 2018 4,684,634 $ 10.07 6.6 years $ 2,505 Outstanding, Exercisable at September 30, 2018 3,142,430 $ 10.25 6.4 years $ 1,452 |
Schedule of Issued and Outstanding Stock Options | The following table summarizes information about issued and outstanding stock options as of September 30, 2018 : Outstanding Options Exercisable Options Range of Exercise Prices Options Weighted-Average Exercise Price per Share Weighted-Average Remaining Contractual Life Options Weighted-Average Exercise Price per Share Weighted-Average Remaining Contractual Life Under $5.00 35,000 $ 3.31 3.8 years 35,000 $ 3.31 3.8 years $5.00 - $6.99 723,800 6.30 6.7 years 389,200 6.27 5.9 years $7.00 - $10.99 1,362,334 9.42 6.7 years 864,830 9.49 6.4 years $11.00 - $13.46 2,563,500 11.58 6.7 years 1,853,400 11.57 6.6 years Total 4,684,634 $ 10.07 6.6 years 3,142,430 $ 10.25 6.4 years |
Schedule of Unrecognized Compensation Cost | The estimated unrecognized compensation cost from restricted stock units and stock bonus awards not vested as of September 30, 2018 , which will be recognized ratably over the remaining vesting phase, is as follows: Unrecognized compensation cost (in thousands) $ 9,075 Remaining vesting phase 2.0 years The estimated unrecognized compensation cost from stock options not vested as of September 30, 2018 , which will be recognized ratably over the remaining vesting phase, is as follows: Unrecognized compensation cost (in thousands) $ 5,685 Remaining vesting phase 1.8 years |
Summary of Restricted Stock Awards | The following table summarizes activity for restricted stock units and stock bonus awards for the nine months ended September 30, 2018 : Number of Shares Weighted-Average Grant-Date Fair Value Not vested, December 31, 2017 1,087,386 $ 8.89 Granted 747,168 9.35 Vested (439,945 ) 8.77 Forfeited (54,111 ) 9.56 Not vested, September 30, 2018 1,340,498 $ 9.16 |
Schedule of assumptions used in valuation | The assumptions used in valuing the TSR PSUs granted were as follows: Nine Months Ended September 30, 2018 2017 Weighted-average expected term 2.8 years 2.9 years Weighted-average expected volatility 52 % 59 % Weighted-average risk-free rate 2.41 % 1.34 % |
Schedule of Performance Share Units | A summary of the status and activity of TSR PSUs is presented in the following table: Number of Units 1 Weighted-Average Grant-Date Fair Value Not vested, December 31, 2017 951,884 $ 9.44 Granted 321,507 13.11 Vested — — Forfeited — — Not vested, September 30, 2018 1,273,391 $ 10.36 1 The number of awards assumes that the associated vesting condition is met at the target amount. The final number of shares of the Company’s common stock issued may vary depending on the performance multiplier, which ranges from zero to two , depending on the level of satisfaction of the vesting condition. |
Revenue from Contracts with C_2
Revenue from Contracts with Customers (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Oil and Gas revenues | Three Months Ended September 30, Nine Months Ended September 30, Revenues (in thousands): 2018 2017 2018 2017 Oil $ 123,540 $ 73,144 $ 354,601 $ 154,232 Natural Gas and NGLs 37,438 30,449 100,697 68,187 $ 160,978 $ 103,593 $ 455,298 $ 222,419 |
Other Commitments and Conting_2
Other Commitments and Contingencies (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Fiscal Year Maturity Schedule of Contractual Obligations | Our commitments over the next five years, excluding the contingent commitment described below, are as follows: Year ending December 31, Oil (MBbls) Remainder of 2018 1,072 2019 5,167 2020 4,003 2021 1,672 2022 — Thereafter — Total 11,914 |
Operating Leases of Lessee Disclosure | A schedule of the minimum lease payments under non-cancellable capital and operating leases as of September 30, 2018 follows (in thousands): Year ending December 31: Vehicles Leases Office Leases Remainder of 2018 $ 41 $ 222 2019 163 896 2020 163 916 2021 189 913 2022 136 500 Thereafter — — Total minimum lease payments $ 692 $ 3,447 Less: Amount representing estimated executory cost (57 ) Net minimum lease payments 635 Less: Amount representing interest (92 ) Present value of net minimum lease payments * $ 543 * Reflected in the balance sheet as current and non-current obligations of $111 thousand and $432 thousand , respectively, within "Accounts payable and accrued expenses" and "Other liabilities," respectively. |
Supplemental Schedule of Info_2
Supplemental Schedule of Information to the Condensed Consolidated Statements of Cash Flows (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Supplemental Cash Flow Information [Abstract] | |
Schedule of Supplemental Information to the Statements of Cash Flows | The following table supplements the cash flow information presented in the condensed consolidated financial statements for the periods presented (in thousands): Nine Months Ended September 30, Supplemental cash flow information: 2018 2017 Interest paid $ 17,701 $ 4,796 Non-cash investing and financing activities: Accrued well costs as of period end $ 143,015 $ 122,387 Asset retirement obligations incurred with development activities 1,488 2,782 Asset retirement obligations assumed with acquisitions 26,150 23,521 Obligations discharged with asset retirements and divestitures $ (8,944 ) $ (7,023 ) Net changes in operating assets and liabilities: Accounts receivable $ (31,170 ) $ (85,027 ) Accounts payable and accrued expenses (842 ) 1,413 Revenue payable 15,858 41,997 Production taxes payable 20,504 17,548 Other (520 ) (941 ) Changes in operating assets and liabilities $ 3,830 $ (25,010 ) |
Organization and Summary of S_4
Organization and Summary of Significant Accounting Policies Narrative (Details) | 9 Months Ended |
Sep. 30, 2018segment | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of segments | 1 |
Organization and Summary of S_5
Organization and Summary of Significant Accounting Policies - Concentration Risk (Details) - Customer Concentration Risk | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Oil and gas revenues | Company A | |||||
Concentration Risk [Line Items] | |||||
Risk percentage | 23.00% | 30.00% | 13.00% | 27.00% | |
Oil and gas revenues | Company B | |||||
Concentration Risk [Line Items] | |||||
Risk percentage | 21.00% | 27.00% | 19.00% | 26.00% | |
Oil and gas revenues | Company C | |||||
Concentration Risk [Line Items] | |||||
Risk percentage | 14.00% | 13.00% | 28.00% | 15.00% | |
Oil and gas revenues | Company D | |||||
Concentration Risk [Line Items] | |||||
Risk percentage | 14.00% | 11.00% | |||
Oil and gas revenues | Company E | |||||
Concentration Risk [Line Items] | |||||
Risk percentage | 14.00% | 16.00% | |||
Accounts receivable | Company A | |||||
Concentration Risk [Line Items] | |||||
Risk percentage | 23.00% | 26.00% | |||
Accounts receivable | Company B | |||||
Concentration Risk [Line Items] | |||||
Risk percentage | 16.00% | 16.00% | |||
Accounts receivable | Company C | |||||
Concentration Risk [Line Items] | |||||
Risk percentage | 14.00% | 23.00% | |||
Accounts receivable | Company D | |||||
Concentration Risk [Line Items] | |||||
Risk percentage | 14.00% | ||||
Accounts receivable | Company E | |||||
Concentration Risk [Line Items] | |||||
Risk percentage | 11.00% |
Property and Equipment (Schedul
Property and Equipment (Schedule of Capitalized Costs) (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Costs of proved properties: | ||
Producing and non-producing | $ 2,148,278 | $ 1,629,789 |
Less, accumulated depletion and full cost ceiling impairments | (784,162) | (659,205) |
Subtotal, proved properties, net | 1,364,116 | 970,584 |
Costs of wells in progress | 244,206 | 106,269 |
Costs of unproved properties and land, not subject to depletion: | ||
Subtotal, unproved properties and land | 748,695 | 793,669 |
Costs of other property and equipment: | ||
Other property and equipment | 9,462 | 8,134 |
Less, accumulated depreciation | (3,560) | (2,080) |
Subtotal, other property and equipment, net | 5,902 | 6,054 |
Total property and equipment, net | 2,362,919 | 1,876,576 |
Lease acquisition and other costs | ||
Costs of unproved properties and land, not subject to depletion: | ||
Cumulative acquisition costs | 739,303 | 786,469 |
Land | ||
Costs of unproved properties and land, not subject to depletion: | ||
Cumulative acquisition costs | $ 9,392 | $ 7,200 |
Property and Equipment (Narrati
Property and Equipment (Narrative) (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Property, Plant and Equipment [Abstract] | ||
Full cost ceiling impairment | $ 0 | $ 0 |
Property and Equipment (Sched_2
Property and Equipment (Schedule of Capitalized Overhead) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Property, Plant and Equipment [Abstract] | ||||
Capitalized overhead | $ 3,129 | $ 2,518 | $ 9,522 | $ 7,729 |
Acquisitions (Narrative) (Detai
Acquisitions (Narrative) (Details) $ in Millions | Aug. 01, 2018USD ($)a | Apr. 01, 2018USD ($) | Nov. 01, 2017USD ($)a |
Business Acquisition [Line Items] | |||
Mineral acres, net (in acres) | a | 2,500 | 30,200 | |
Greeley-Crescent Agreement II | D-J Basin | |||
Business Acquisition [Line Items] | |||
Total purchase price | $ 96.8 | $ 577.5 | |
Cash paid to acquire business | $ 64.1 | 576.4 | |
Proved oil and gas properties | Greeley-Crescent Agreement II | D-J Basin | |||
Business Acquisition [Line Items] | |||
Total purchase price | 60.8 | ||
Unproved properties | Greeley-Crescent Agreement II | D-J Basin | |||
Business Acquisition [Line Items] | |||
Total purchase price | $ 516.7 | ||
August 2018 Acquisition | |||
Business Acquisition [Line Items] | |||
Total purchase price | $ 38 | ||
Cash paid to acquire business | $ 37.6 |
Depletion, depreciation, and _3
Depletion, depreciation, and accretion ("DDA") (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Other Costs and Disclosures [Abstract] | ||||
Depletion of oil and gas properties | $ 44,230 | $ 32,944 | $ 121,259 | $ 71,389 |
Depreciation and accretion | 958 | 796 | 2,887 | 2,007 |
Total DD&A Expense | $ 45,188 | $ 33,740 | $ 124,146 | $ 73,396 |
Asset Retirement Obligations (S
Asset Retirement Obligations (Schedule of Asset Retirement Obligations) (Details) - USD ($) $ in Thousands | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2018 | Dec. 31, 2017 | |
Asset Retirement Obligation, Roll Forward Analysis [Roll Forward] | |||
Beginning asset retirement obligation | $ 51,722 | $ 51,722 | $ 31,622 |
Obligations incurred with development activities | 1,488 | ||
Obligations assumed with acquisitions | 26,150 | ||
Accretion expense | 1,406 | ||
Obligations discharged with asset retirements and divestitures | (8,944) | ||
Ending asset retirement obligation | $ 51,722 | ||
Less, current portion | (2,771) | (3,246) | |
Long-term portion | $ 48,951 | $ 28,376 |
Revolving Credit Facility (Deta
Revolving Credit Facility (Details) | 9 Months Ended | ||||
Sep. 30, 2018USD ($) | Sep. 30, 2017 | Oct. 31, 2018USD ($) | Apr. 02, 2018USD ($) | Dec. 31, 2017USD ($) | |
Line of Credit Facility [Line Items] | |||||
Amount outstanding | $ 115,000,000 | $ 0 | |||
Line of Credit | Bridge Loan | |||||
Line of Credit Facility [Line Items] | |||||
Total borrowing commitment | $ 25,000,000 | ||||
Line of Credit | Revolving Credit Facility | |||||
Line of Credit Facility [Line Items] | |||||
Total borrowing commitment | 1,500,000,000 | ||||
Elected commitment | 450,000,000 | ||||
Borrowing base | $ 550,000,000 | ||||
Average interest rate | 4.00% | 3.30% | |||
Maximum funded debt to EBITDAX (greater than or equal to) | 4 | ||||
Current ratio covenant (less than) | 1 | ||||
Line of Credit | Letter of Credit | |||||
Line of Credit Facility [Line Items] | |||||
Amount outstanding | $ 0 | ||||
Subsequent Event | Minimum | Line of Credit | Revolving Credit Facility | |||||
Line of Credit Facility [Line Items] | |||||
Elected commitment | $ 450,000,000 | ||||
Borrowing base | 550,000,000 | ||||
Subsequent Event | Maximum | Line of Credit | Revolving Credit Facility | |||||
Line of Credit Facility [Line Items] | |||||
Elected commitment | 500,000,000 | ||||
Borrowing base | $ 650,000,000 |
Notes Payable (Details)
Notes Payable (Details) - USD ($) | 1 Months Ended | 9 Months Ended | |
Nov. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Debt Instrument [Line Items] | |||
Debt issuance costs | $ 2,173,000 | $ 1,372,000 | |
Notes payable | 6.25% Senior Notes Due 2025 | |||
Debt Instrument [Line Items] | |||
Debt instrument principal amount | $ 550,000,000 | ||
Debt instrument stated interest rate (percent) | 6.25% | ||
Proceeds from sale of Senior Notes | $ 538,100,000 | ||
Debt issuance costs | $ 11,900,000 | ||
Effective interest rate (percent) | 6.60% | ||
Redemption price (percent) | 100.00% | ||
Notes payable | 6.25% Senior Notes Due 2025 | 2020 | |||
Debt Instrument [Line Items] | |||
Redemption price (percent) | 104.688% | ||
Notes payable | 6.25% Senior Notes Due 2025 | 2021 | |||
Debt Instrument [Line Items] | |||
Redemption price (percent) | 103.125% | ||
Notes payable | 6.25% Senior Notes Due 2025 | 2022 | |||
Debt Instrument [Line Items] | |||
Redemption price (percent) | 101.563% | ||
Notes payable | 6.25% Senior Notes Due 2025 | 2023 | |||
Debt Instrument [Line Items] | |||
Redemption price (percent) | 100.00% | ||
Notes payable | 6.25% Senior Notes Due 2025 | Prior to December 1, 2020 | |||
Debt Instrument [Line Items] | |||
Redemption price (percent) | 106.25% | ||
Amount of principal that can be redeemed (percent) | 35.00% |
Commodity Derivative Instrume_3
Commodity Derivative Instruments (Narrative) (Details) | Sep. 30, 2018counterparty |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |
Number of total counterparties | 7 |
Credit Facility Syndicate | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |
Number of counterparties | 5 |
Commodity Derivative Instrume_4
Commodity Derivative Instruments (Schedule of Commodity Derivative Contracts) (Details) bbl / d in Thousands, MMBTU / d in Thousands | 9 Months Ended |
Sep. 30, 2018MMBTU / dbbl / d$ / bbl$ / MMBTU | |
Oct 1, 2018 - Dec 31, 2018 | Collar | Crude Oil | |
Derivatives, Fair Value [Line Items] | |
Volumes (Bbls per day) | bbl / d | 10 |
Derivative, Floor Price | 43.63 |
Ceiling Price (in USD per barrel) | 61.29 |
Oct 1, 2018 - Dec 31, 2018 | Swap | Propane | |
Derivatives, Fair Value [Line Items] | |
Volumes (Bbls per day) | bbl / d | 1 |
Derivative, Floor Price | 33.60 |
Jan 1, 2019 - Dec 31, 2019 | Collar | Crude Oil | |
Derivatives, Fair Value [Line Items] | |
Volumes (Bbls per day) | bbl / d | 6 |
Derivative, Floor Price | 55 |
Ceiling Price (in USD per barrel) | 74.31 |
Jan 1, 2019 - Dec 31, 2019 | Swap | Natural Gas | |
Derivatives, Fair Value [Line Items] | |
Volumes (MMBtu per day) | MMBTU / d | 20 |
Average Fixed Price (in USD per barrel) | $ / MMBTU | (0.74) |
Jan 1, 2019 - Dec 31, 2019 | Swap | Propane | |
Derivatives, Fair Value [Line Items] | |
Volumes (Bbls per day) | bbl / d | 2 |
Derivative, Floor Price | 37.52 |
Oct 1, 2018 - Dec 31, 2018 | Collar | Natural Gas | |
Derivatives, Fair Value [Line Items] | |
Derivative, Floor Price | $ / MMBTU | 2.25 |
Volumes (MMBtu per day) | MMBTU / d | 15 |
Ceiling Price (in USD per barrel) | $ / MMBTU | 2.82 |
Oct 1, 2018 - Dec 31, 2018 | Swap | Natural Gas | |
Derivatives, Fair Value [Line Items] | |
Volumes (MMBtu per day) | MMBTU / d | 10 |
Average Fixed Price (in USD per barrel) | $ / MMBTU | (0.79) |
Nov 1, 2018 - Dec 31, 2018 | Swap | Natural Gas | |
Derivatives, Fair Value [Line Items] | |
Volumes (MMBtu per day) | MMBTU / d | 50 |
Average Fixed Price (in USD per barrel) | $ / MMBTU | (0.21) |
Commodity Derivative Instrume_5
Commodity Derivative Instruments (Schedule of Fair Value of Derivatives) (Details) - Commodity derivative contracts - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Current assets | ||
Derivatives, Fair Value [Line Items] | ||
Derivative asset, Gross Amount Recognized | $ 1,740 | $ 1,960 |
Derivative asset, Gross Amounts Offset in the Balance Sheet | (1,740) | (1,960) |
Derivative asset, Net | 0 | 0 |
Noncurrent assets | ||
Derivatives, Fair Value [Line Items] | ||
Derivative asset, Gross Amount Recognized | 1,078 | 0 |
Derivative asset, Gross Amounts Offset in the Balance Sheet | (1,078) | 0 |
Derivative asset, Net | 0 | 0 |
Current liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Derivative liability, Gross Amount Recognized | 20,310 | 9,825 |
Derivative liability, Gross Amounts Offset in the Balance Sheet | (1,740) | (1,960) |
Derivative liability, Net | 18,570 | 7,865 |
Noncurrent liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Derivative liability, Gross Amount Recognized | 2,749 | 0 |
Derivative liability, Gross Amounts Offset in the Balance Sheet | (1,078) | 0 |
Derivative liability, Net | $ 1,671 | $ 0 |
Commodity Derivative Instrume_6
Commodity Derivative Instruments (Schedule of Gain (Loss) Recognized in Statements of Operations) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||||
Realized gain (loss) on commodity derivatives | $ (8,273) | $ 116 | $ (16,228) | $ (26) |
Unrealized gain (loss) on commodity derivatives | (256) | (2,499) | (12,376) | 2,350 |
Total gain (loss) | $ (8,529) | $ (2,383) | $ (28,604) | $ 2,324 |
Commodity Derivative Instrume_7
Commodity Derivative Instruments (Derivative Gains (Losses) Realized) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||||
Monthly settlement | $ (8,273) | $ 376 | $ (16,228) | $ 927 |
Previously incurred premiums attributable to settled commodity contracts | 0 | (260) | 0 | (953) |
Total realized loss | $ (8,273) | $ 116 | $ (16,228) | $ (26) |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Level 2 | Estimate of Fair Value Measurement | ||
Financial Liabilities: | ||
Fair value of notes payable | $ 514,300 | |
Recurring | ||
Financial Assets: | ||
Commodity derivative asset | 0 | $ 0 |
Financial Liabilities: | ||
Commodity derivative liability | 20,241 | 7,865 |
Recurring | Level 1 | ||
Financial Assets: | ||
Commodity derivative asset | 0 | 0 |
Financial Liabilities: | ||
Commodity derivative liability | 0 | 0 |
Recurring | Level 2 | ||
Financial Assets: | ||
Commodity derivative asset | 0 | 0 |
Financial Liabilities: | ||
Commodity derivative liability | 20,241 | 7,865 |
Recurring | Level 3 | ||
Financial Assets: | ||
Commodity derivative asset | 0 | 0 |
Financial Liabilities: | ||
Commodity derivative liability | $ 0 | $ 0 |
Interest Expense (Details)
Interest Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Debt Instrument [Line Items] | ||||
Amortization of issuance costs and other | $ 905 | $ 1,090 | $ 2,905 | $ 2,267 |
Less: interest capitalized | (9,874) | (3,906) | (29,147) | (8,953) |
Interest expense, net of amounts capitalized | 0 | 0 | 0 | 0 |
Notes payable | ||||
Debt Instrument [Line Items] | ||||
Interest from debt | 8,593 | 1,800 | 25,781 | 5,400 |
Revolving bank credit facility | Line of Credit | ||||
Debt Instrument [Line Items] | ||||
Interest from debt | $ 376 | $ 1,016 | $ 461 | $ 1,286 |
Weighted-Average Shares Outst_3
Weighted-Average Shares Outstanding (Details) - shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Weighted-average shares outstanding - basic (in shares) | 242,536,781 | 200,881,447 | 242,184,348 | 200,807,436 |
Potentially dilutive common shares from: | ||||
Stock options (shares) | 230,067 | 415,524 | 332,953 | 412,902 |
Performance-vested stock units (in shares) | 411,738 | 0 | 336,882 | 0 |
Restricted stock units and stock bonus (shares) | 381,460 | 163,944 | 352,875 | 105,791 |
Weighted-average shares outstanding - diluted (in shares) | 243,560,046 | 201,460,915 | 243,207,058 | 201,326,129 |
Total potentially dilutive common shares (in shares) | 3,912,833 | 5,986,478 | 3,894,700 | 6,206,190 |
Performance-vested stock units | Minimum | ||||
Potentially dilutive common shares from: | ||||
Award vesting rights (percent) | 0.00% | |||
Performance-vested stock units | Maximum | ||||
Potentially dilutive common shares from: | ||||
Award vesting rights (percent) | 200.00% | |||
Stock options | ||||
Potentially dilutive common shares from: | ||||
Total potentially dilutive common shares (in shares) | 3,456,300 | 4,726,500 | 3,438,167 | 4,756,500 |
Performance-vested stock units | ||||
Potentially dilutive common shares from: | ||||
Total potentially dilutive common shares (in shares) | 160,754 | 951,884 | 160,754 | 951,884 |
Corporate Goals PSUs | ||||
Potentially dilutive common shares from: | ||||
Total potentially dilutive common shares (in shares) | 281,872 | 0 | 281,872 | 0 |
Restricted stock units and stock bonus shares | ||||
Potentially dilutive common shares from: | ||||
Total potentially dilutive common shares (in shares) | 13,907 | 308,094 | 13,907 | 497,806 |
Equity and Stock-Based Compen_3
Equity and Stock-Based Compensation (Narrative) (Details) $ in Thousands | 9 Months Ended | ||||
Sep. 30, 2018USD ($)award_typeshares | Sep. 30, 2017USD ($) | May 18, 2018shares | May 17, 2018shares | Dec. 31, 2017shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Common stock, shares authorized | 400,000,000 | 400,000,000 | 300,000,000 | 300,000,000 | |
Unrecognized compensation | $ | $ 5,685 | ||||
Performance-vested stock units | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting period (in years) | 3 years | ||||
Types of PSUs | award_type | 2 | ||||
Grants in period fair value | $ | $ 4,200 | $ 5,100 | |||
Unrecognized compensation | $ | $ 6,000 | ||||
Corporate goal PSU's awarded (in shares) | 281,872 | ||||
Performance-vested stock units | Minimum | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Award vesting rights (percent) | 0.00% | ||||
Performance-vested stock units | Maximum | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Award vesting rights (percent) | 200.00% | ||||
Restricted Stock | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Unrecognized compensation | $ | $ 9,075 | ||||
Restricted Stock | Minimum | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting period (in years) | 3 years | ||||
Restricted Stock | Maximum | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting period (in years) | 5 years | ||||
2015 Equity Incentive Plan | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of share based compensation shares authorized (in shares) | 10,500,000 | ||||
Number of share based compensation shares available for grant (in shares) | 4,251,410 | ||||
Shares reserved for future vestings (in shares) | 1,555,263 |
Equity and Stock-Based Compen_4
Equity and Stock-Based Compensation (Stock Based Compensation Expense) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Total stock-based compensation | $ 4,030 | $ 3,470 | $ 11,193 | $ 9,734 |
Less: stock-based compensation capitalized | (625) | (440) | (1,846) | (1,344) |
Total stock-based compensation expensed | 3,405 | 3,030 | 9,347 | 8,390 |
Stock options | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Total stock-based compensation | 1,072 | 1,277 | 3,470 | 3,825 |
Performance-vested stock units | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Total stock-based compensation | 1,187 | 807 | 3,216 | 2,130 |
Restricted stock units and stock bonus shares | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Total stock-based compensation | $ 1,771 | $ 1,386 | $ 4,507 | $ 3,779 |
Equity and Stock-Based Compen_5
Equity and Stock-Based Compensation (Stock Option Activity) (Details) - USD ($) $ / shares in Units, $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2018 | Dec. 31, 2017 | |
Summary of activity for stock options (in shares): | ||
Outstanding, Beginning balance (shares) | 5,636,834 | |
Granted (shares) | 0 | |
Exercised (shares) | (823,883) | |
Expired (shares) | (23,400) | |
Forfeited (shares) | (104,917) | |
Outstanding, Ending balance (shares) | 4,684,634 | 5,636,834 |
Outstanding, Exercisable at end of period (shares) | 3,142,430 | |
Weighted Average Exercise Price (in dollars per share): | ||
Beginning balance, Weighted average exercise price (in dollars per share) | $ 9.38 | |
Granted, weighted average exercise price (in dollars per share) | 0 | |
Exercised, weighted average exercise price (in dollars per share) | 5.36 | |
Expired, weighted average exercise price (in dollars per share) | 11.27 | |
Forfeited, weighted average exercise price (in dollars per share) | 9.57 | |
Ending balance, Weighted average exercise price (in dollars per share) | 10.07 | $ 9.38 |
Outstanding, exercisable, weighted average exercise price (in dollars per share) | $ 10.25 | |
Weighted-Average Remaining Contractual Life | ||
Weighted-Average Remaining Contractual Life | 6 years 7 months 24 days | 6 years 11 months 16 days |
Outstanding, Exercisable | 6 years 5 months 9 days | |
Aggregate Intrinsic Value: | ||
Aggregate intrinsic value | $ 2,505 | $ 4,806 |
Exercised | 4,611 | |
Outstanding, Exercisable at end of period | $ 1,452 |
Equity and Stock-Based Compen_6
Equity and Stock-Based Compensation (Issued and Outstanding Option) (Details) - $ / shares | 9 Months Ended | 12 Months Ended |
Sep. 30, 2018 | Dec. 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Outstanding options (in shares) | 4,684,634 | |
Weighted average exercise price (in dollars per share) | $ 10.07 | $ 9.38 |
Weighted-Average Remaining Contractual Life | 6 years 7 months 24 days | 6 years 11 months 16 days |
Exercisable options (in shares) | 3,142,430 | |
Exercisable options, weighted average exercise price (in dollars per share) | $ 10.25 | |
Weighted-Average Remaining Contractual Life | 6 years 5 months 9 days | |
$5.00 | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Outstanding options (in shares) | 35,000 | |
Weighted average exercise price (in dollars per share) | $ 3.31 | |
Weighted-Average Remaining Contractual Life | 3 years 9 months 18 days | |
Exercisable options (in shares) | 35,000 | |
Exercisable options, weighted average exercise price (in dollars per share) | $ 3.31 | |
Weighted-Average Remaining Contractual Life | 3 years 9 months 18 days | |
Exercise price range maximum (in dollars per share) | $ 5 | |
$5.00 - $6.99 | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Outstanding options (in shares) | 723,800 | |
Weighted average exercise price (in dollars per share) | $ 6.30 | |
Weighted-Average Remaining Contractual Life | 6 years 8 months 19 days | |
Exercisable options (in shares) | 389,200 | |
Exercisable options, weighted average exercise price (in dollars per share) | $ 6.27 | |
Weighted-Average Remaining Contractual Life | 5 years 10 months 10 days | |
Exercise price range minimum (in dollars per share) | $ 5 | |
Exercise price range maximum (in dollars per share) | $ 6.99 | |
$7.00 - $10.99 | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Outstanding options (in shares) | 1,362,334 | |
Weighted average exercise price (in dollars per share) | $ 9.42 | |
Weighted-Average Remaining Contractual Life | 6 years 8 months 5 days | |
Exercisable options (in shares) | 864,830 | |
Exercisable options, weighted average exercise price (in dollars per share) | $ 9.49 | |
Weighted-Average Remaining Contractual Life | 6 years 5 months 1 day | |
Exercise price range minimum (in dollars per share) | $ 7 | |
Exercise price range maximum (in dollars per share) | $ 10.99 | |
$11.00 - $13.46 | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Outstanding options (in shares) | 2,563,500 | |
Weighted average exercise price (in dollars per share) | $ 11.58 | |
Weighted-Average Remaining Contractual Life | 6 years 7 months 28 days | |
Exercisable options (in shares) | 1,853,400 | |
Exercisable options, weighted average exercise price (in dollars per share) | $ 11.57 | |
Weighted-Average Remaining Contractual Life | 6 years 7 months 13 days | |
Exercise price range minimum (in dollars per share) | $ 11 | |
Exercise price range maximum (in dollars per share) | $ 13.46 |
Equity and Stock-Based Compen_7
Equity and Stock-Based Compensation (Unrecognized Compensation Costs ) (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2018USD ($) | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized compensation cost | $ 5,685 |
Remaining vesting phase | 1 year 9 months 11 days |
Restricted Stock | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized compensation cost | $ 9,075 |
Remaining vesting phase | 2 years 7 days |
Equity and Stock-Based Compen_8
Equity and Stock-Based Compensation (Restricted Stock and Performance Stock Unit Activity) (Details) | 9 Months Ended |
Sep. 30, 2018$ / sharesshares | |
Restricted Stock | |
Number of Shares | |
Nonvested, Beginning balance (shares) | shares | 1,087,386 |
Granted (shares) | shares | 747,168 |
Vested (shares) | shares | (439,945) |
Forfeited (shares) | shares | (54,111) |
Nonvested, Ending balance (shares) | shares | 1,340,498 |
Weighted Average Grant Date Fair Value (in dollars per share) | |
Nonvested, beginning balance (in dollars per share) | $ / shares | $ 8.89 |
Granted (in dollars per share) | $ / shares | 9.35 |
Vested (in dollars per share) | $ / shares | 8.77 |
Forfeited (in dollars per share) | $ / shares | 9.56 |
Nonvested, ending balance (in dollars per share) | $ / shares | $ 9.16 |
Performance-vested stock units | |
Number of Shares | |
Nonvested, Beginning balance (shares) | shares | 951,884 |
Granted (shares) | shares | 321,507 |
Vested (shares) | shares | 0 |
Forfeited (shares) | shares | 0 |
Nonvested, Ending balance (shares) | shares | 1,273,391 |
Weighted Average Grant Date Fair Value (in dollars per share) | |
Nonvested, beginning balance (in dollars per share) | $ / shares | $ 9.44 |
Granted (in dollars per share) | $ / shares | 13.11 |
Vested (in dollars per share) | $ / shares | 0 |
Forfeited (in dollars per share) | $ / shares | 0 |
Nonvested, ending balance (in dollars per share) | $ / shares | $ 10.36 |
Performance-vested stock units | Minimum | |
Weighted Average Grant Date Fair Value (in dollars per share) | |
Award vesting rights (percent) | 0.00% |
Performance-vested stock units | Maximum | |
Weighted Average Grant Date Fair Value (in dollars per share) | |
Award vesting rights (percent) | 200.00% |
Equity and Stock-Based Compen_9
Equity and Stock-Based Compensation (Stock Option Assumptions) (Details) - Performance-vested stock units | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Weighted-average expected term | 2 years 9 months 18 days | 2 years 10 months 7 days |
Weighted-average expected volatility | 52.00% | 59.00% |
Weighted-average risk-free rate | 2.41% | 1.34% |
Income Taxes (Narrative) (Detai
Income Taxes (Narrative) (Details) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Income Tax Disclosure [Abstract] | ||||
Effective rate expressed as a percentage | 12.00% | 0.00% | 9.00% | 0.00% |
Revenue from Contracts with C_3
Revenue from Contracts with Customers (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Disaggregation of Revenue [Line Items] | ||||
Revenues | $ 160,978 | $ 103,593 | $ 455,298 | $ 222,419 |
Contract assets | 1,600 | 1,600 | ||
Oil | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 123,540 | 73,144 | 354,601 | 154,232 |
Natural Gas and NGLs | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | $ 37,438 | $ 30,449 | $ 100,697 | $ 68,187 |
Other Commitments and Conting_3
Other Commitments and Contingencies (Narrative) (Details) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018USD ($)MMcf | Sep. 30, 2017USD ($) | Sep. 30, 2018USD ($)counterpartyMMcf | Sep. 30, 2017USD ($) | |
Long-term Purchase Commitment [Line Items] | ||||
Transport agreement number of counterparties | counterparty | 4 | |||
Number of agreements commenced | counterparty | 3 | |||
Rent expense | $ | $ 300,000 | $ 200,000 | $ 700,000 | $ 900,000 |
Denver | ||||
Long-term Purchase Commitment [Line Items] | ||||
Monthly rent expense | $ | 66,000 | |||
Greeley | ||||
Long-term Purchase Commitment [Line Items] | ||||
Monthly rent expense | $ | $ 7,500 | |||
Agreement One | ||||
Long-term Purchase Commitment [Line Items] | ||||
New processing plant capacity energy (in mmcfe) | 200 | |||
Volume commitment from contractual obligation, first agreement (in mmcfe) | 46.4 | 46.4 | ||
Length of contractual obligation, first agreement | 7 years | |||
Agreement Two | ||||
Long-term Purchase Commitment [Line Items] | ||||
New processing plant capacity energy (in mmcfe) | 300 | |||
New bypass capacity energy (in mmcfe) | 100 | |||
Volume commitment from contractual obligation, first agreement (in mmcfe) | 43.8 | 43.8 | ||
Length of contractual obligation, first agreement | 7 years |
Other Commitments and Conting_4
Other Commitments and Contingencies (Volume Commitments) (Details) bbl in Thousands | Sep. 30, 2018bbl |
Commitments and Contingencies Disclosure [Abstract] | |
Remainder of 2018 (in MBbls) | 1,072 |
2019 (in MBbls) | 5,167 |
2020 (in MBbls) | 4,003 |
2021 (in MBbls) | 1,672 |
2022 (in MBbls) | 0 |
Thereafter (in MBbls) | 0 |
Total (in MBbls) | 11,914 |
Other Commitments and Conting_5
Other Commitments and Contingencies (Minimum Lease Payments Under Non-Cancelable Operating Leases) (Details) $ in Thousands | Sep. 30, 2018USD ($) |
Vehicles Leases | |
Operating Leased Assets [Line Items] | |
Vehicle Leases 2018 | $ 41 |
Vehicle Leases 2019 | 163 |
Vehicle Leases 2020 | 163 |
Vehicle Leases 2021 | 189 |
Vehicle Leases 2022 | 136 |
Vehicle Leases Thereafter | 0 |
Total vehicle lease minimum payments | 692 |
Less: Amount representing estimated executory cost | (57) |
Net minimum lease payments | 635 |
Less: Amount representing interest | (92) |
Present value of net minimum lease payments | 543 |
Vehicles Leases | Accounts payable and accrued expenses | |
Operating Leased Assets [Line Items] | |
Present value of net minimum lease payments | 111 |
Vehicles Leases | Other liabilities | |
Operating Leased Assets [Line Items] | |
Present value of net minimum lease payments | 432 |
Office Leases | |
Operating Leased Assets [Line Items] | |
Office Leases 2018 | 222 |
Office Leases 2019 | 896 |
Office Leases 2020 | 916 |
Office Leases 2021 | 913 |
Office Leases 2022 | 500 |
Office Leases Due Thereafter | 0 |
Total office lease minimum payments | $ 3,447 |
Supplemental Schedule of Info_3
Supplemental Schedule of Information to the Condensed Consolidated Statements of Cash Flows (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Supplemental cash flow information: | ||
Interest paid | $ 17,701 | $ 4,796 |
Non-cash investing and financing activities: | ||
Accrued well costs as of period end | 143,015 | 122,387 |
Asset retirement obligations incurred with development activities | 1,488 | 2,782 |
Asset retirement obligations assumed with acquisitions | 26,150 | 23,521 |
Obligations discharged with asset retirements and divestitures | (8,944) | (7,023) |
Net changes in operating assets and liabilities: | ||
Accounts receivable | (31,170) | (85,027) |
Accounts payable and accrued expenses | (842) | 1,413 |
Revenue payable | 15,858 | 41,997 |
Production taxes payable | 20,504 | 17,548 |
Other | (520) | (941) |
Changes in operating assets and liabilities | $ (3,830) | $ 25,010 |