Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2019 | Jul. 29, 2019 | |
Cover page. | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 2019 | |
Document Transition Report | false | |
Entity File Number | 001-35245 | |
Entity Registrant Name | SRC Energy Inc. | |
Entity Incorporation, State or Country Code | CO | |
Entity Tax Identification Number | 20-2835920 | |
Entity Address, Address Line One | 1675 Broadway | |
Entity Address, Address Line Two | Suite 2600 | |
Entity Address, City or Town | Denver | |
Entity Address, State or Province | CO | |
Entity Address, Postal Zip Code | 80202 | |
City Area Code | 720 | |
Local Phone Number | 616-4300 | |
Title of 12(b) Security | Common stock $.001 par value | |
Trading Symbol | SRCI | |
Security Exchange Name | NYSEAMER | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding (in shares) | 243,473,491 | |
Entity Central Index Key | 0001413507 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 27,839 | $ 49,609 |
Accounts receivable: | ||
Oil, natural gas, and NGL sales | 80,510 | 100,973 |
Trade | 21,961 | 39,415 |
Commodity derivative assets | 12,061 | 34,906 |
Other current assets | 7,257 | 7,537 |
Total current assets | 149,628 | 232,440 |
Oil and gas properties, full cost method: | ||
Proved properties, net of accumulated depletion | 1,775,675 | 1,545,445 |
Wells in progress | 175,400 | 227,262 |
Unproved properties and land, not subject to depletion | 667,678 | 740,453 |
Oil and gas properties, net | 2,618,753 | 2,513,160 |
Other property and equipment, net | 4,881 | 5,540 |
Total property and equipment, net | 2,623,634 | 2,518,700 |
Other assets | 11,824 | 3,574 |
Total assets | 2,785,086 | 2,754,714 |
Current liabilities: | ||
Accounts payable and accrued expenses | 76,648 | 150,010 |
Revenue payable | 95,838 | 97,030 |
Production taxes payable | 81,905 | 95,099 |
Asset retirement obligations | 10,608 | 11,694 |
Total current liabilities | 264,999 | 353,833 |
Revolving credit facility | 165,000 | 195,000 |
Notes payable, net of issuance costs | 539,977 | 539,360 |
Asset retirement obligations | 38,609 | 40,052 |
Deferred taxes | 74,238 | 37,967 |
Other liabilities | 4,646 | 2,210 |
Total liabilities | 1,087,469 | 1,168,422 |
Commitments and contingencies | ||
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 shares authorized: 243,428,206 and 242,608,284 shares issued and outstanding as of June 30, 2019 and December 31, 2018, respectively | 243 | 243 |
Additional paid-in capital | 1,499,213 | 1,492,107 |
Retained earnings | 198,161 | 93,942 |
Total shareholders' equity | 1,697,617 | 1,586,292 |
Total liabilities and shareholders' equity | $ 2,785,086 | $ 2,754,714 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Jun. 30, 2019 | Dec. 31, 2018 |
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 | 400,000,000 |
Common stock, par value per share (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares issued (in shares) | 243,428,206 | 242,608,284 |
Common stock, shares outstanding (in shares) | 243,428,206 | 242,608,284 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Revenues [Abstract] | ||||
Oil, natural gas, and NGL revenues | $ 162,602 | $ 147,087 | $ 352,057 | $ 294,320 |
Expenses: | ||||
Lease operating expenses | 13,230 | 11,612 | 30,590 | 19,508 |
Transportation and gathering | 4,664 | 1,880 | 8,718 | 3,735 |
Production taxes | 13,185 | 15,058 | 20,271 | 28,501 |
Depreciation, depletion, and accretion | 58,027 | 41,877 | 118,945 | 78,958 |
General and administrative | 9,243 | 9,406 | 18,712 | 19,006 |
Total expenses | 98,349 | 79,833 | 197,236 | 149,708 |
Operating income | 64,253 | 67,254 | 154,821 | 144,612 |
Other income (expense): | ||||
Commodity derivative gain (loss) | 8,285 | (14,294) | (14,628) | (20,075) |
Interest expense, net of amounts capitalized | 0 | 0 | 0 | 0 |
Interest income | 92 | 5 | 161 | 14 |
Other income | 75 | 6 | 136 | 27 |
Total other income (expense) | 8,452 | (14,283) | (14,331) | (20,034) |
Income before income taxes | 72,705 | 52,971 | 140,490 | 124,578 |
Income tax expense | 18,237 | 3,347 | 36,271 | 9,158 |
Net income | $ 54,468 | $ 49,624 | $ 104,219 | $ 115,420 |
Net income per common share: | ||||
Basic (in dollars per share) | $ 0.22 | $ 0.20 | $ 0.43 | $ 0.48 |
Diluted (in dollars per share) | $ 0.22 | $ 0.20 | $ 0.43 | $ 0.47 |
Weighted-average shares outstanding: | ||||
Basic (in shares) | 243,404,917 | 242,255,724 | 243,348,141 | 242,005,211 |
Diluted (in shares) | 244,130,245 | 244,464,776 | 243,709,915 | 243,954,673 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Cash flows from operating activities: | ||
Net income | $ 104,219 | $ 115,420 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depletion, depreciation, and accretion | 118,945 | 78,958 |
Settlement of asset retirement obligations | (4,476) | (4,089) |
Provision for deferred taxes | 36,271 | 9,158 |
Stock-based compensation expense | 6,825 | 5,942 |
Mark-to-market of commodity derivative contracts: | ||
Total loss on commodity derivatives contracts | 14,628 | 20,075 |
Cash settlements on commodity derivative contracts | 7,715 | (6,121) |
Cash premiums paid for commodity derivative contracts | (977) | 0 |
Changes in operating assets and liabilities | 18,433 | 16,419 |
Net cash provided by operating activities | 301,583 | 235,762 |
Cash flows from investing activities: | ||
Acquisition of oil and gas properties and leaseholds, net of post-closing adjustments | 116 | |
Acquisition of oil and gas properties and leaseholds, net of post-closing adjustments | (16,402) | |
Capital expenditures for drilling and completion activities | (276,095) | (213,906) |
Other capital expenditures | (28,262) | (23,823) |
Acquisition of land and other property and equipment | (304) | (1,581) |
Proceeds from sales of oil and gas properties and other | 12,802 | 766 |
Net cash used in investing activities | (291,743) | (254,946) |
Cash flows from financing activities: | ||
Proceeds from the employee exercise of stock options | 0 | 4,192 |
Payment of employee payroll taxes in connection with shares withheld | (1,126) | (1,010) |
Proceeds from the revolving credit facility | 0 | 25,000 |
Principal repayments on the revolving credit facility | (30,000) | 0 |
Fees on debt and equity issuances and revolving credit facility amendments | (379) | (2,165) |
Capital lease payments | (105) | (135) |
Net cash provided by (used in) financing activities | (31,610) | 25,882 |
Net increase (decrease) in cash and cash equivalents | (21,770) | 6,698 |
Cash and cash equivalents at beginning of period | 49,609 | 48,772 |
Cash and cash equivalents at end of period | $ 27,839 | $ 55,470 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-In Capital | Retained Deficit |
Beginning balance (in shares) at Dec. 31, 2017 | 241,365,522 | |||
Beginning balance at Dec. 31, 2017 | $ 1,308,434 | $ 241 | $ 1,474,273 | $ (166,080) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Shares issued under stock bonus and equity incentive plans (in shares) | 268,676 | |||
Shares issued under stock bonus and equity incentive plans | 0 | $ 1 | (1) | |
Shares issued for exercise of stock options (in shares) | 268,303 | |||
Shares issued for exercise of stock options | 1,064 | 1,064 | ||
Stock-based compensation | 3,395 | 3,395 | ||
Payment of tax withholdings using withheld shares | (705) | (705) | ||
Other activity | (73) | (73) | ||
Net income | 65,796 | 65,796 | ||
Ending balance (in shares) at Mar. 31, 2018 | 241,902,501 | |||
Ending balance at Mar. 31, 2018 | 1,377,911 | $ 242 | 1,477,953 | (100,284) |
Beginning balance (in shares) at Dec. 31, 2017 | 241,365,522 | |||
Beginning balance at Dec. 31, 2017 | 1,308,434 | $ 241 | 1,474,273 | (166,080) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Net income | 115,420 | |||
Ending balance (in shares) at Jun. 30, 2018 | 242,496,080 | |||
Ending balance at Jun. 30, 2018 | 1,434,125 | $ 242 | 1,484,543 | (50,660) |
Beginning balance (in shares) at Mar. 31, 2018 | 241,902,501 | |||
Beginning balance at Mar. 31, 2018 | 1,377,911 | $ 242 | 1,477,953 | (100,284) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Shares issued under stock bonus and equity incentive plans (in shares) | 69,420 | |||
Shares issued under stock bonus and equity incentive plans | 0 | |||
Shares issued for exercise of stock options (in shares) | 524,159 | |||
Shares issued for exercise of stock options | 3,127 | 3,127 | ||
Stock-based compensation | 3,768 | 3,768 | ||
Payment of tax withholdings using withheld shares | (305) | (305) | ||
Net income | 49,624 | 49,624 | ||
Ending balance (in shares) at Jun. 30, 2018 | 242,496,080 | |||
Ending balance at Jun. 30, 2018 | $ 1,434,125 | $ 242 | 1,484,543 | (50,660) |
Beginning balance (in shares) at Dec. 31, 2018 | 242,608,284 | 242,608,284 | ||
Beginning balance at Dec. 31, 2018 | $ 1,586,292 | $ 243 | 1,492,107 | 93,942 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Shares issued under stock bonus and equity incentive plans (in shares) | 709,042 | |||
Shares issued under stock bonus and equity incentive plans | 0 | |||
Stock-based compensation | 4,413 | 4,413 | ||
Payment of tax withholdings using withheld shares | (876) | (876) | ||
Net income | 49,751 | 49,751 | ||
Ending balance (in shares) at Mar. 31, 2019 | 243,317,326 | |||
Ending balance at Mar. 31, 2019 | $ 1,639,580 | $ 243 | 1,495,644 | 143,693 |
Beginning balance (in shares) at Dec. 31, 2018 | 242,608,284 | 242,608,284 | ||
Beginning balance at Dec. 31, 2018 | $ 1,586,292 | $ 243 | 1,492,107 | 93,942 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Shares issued for exercise of stock options (in shares) | 0 | |||
Net income | $ 104,219 | |||
Ending balance (in shares) at Jun. 30, 2019 | 243,428,206 | 243,428,206 | ||
Ending balance at Jun. 30, 2019 | $ 1,697,617 | $ 243 | 1,499,213 | 198,161 |
Beginning balance (in shares) at Mar. 31, 2019 | 243,317,326 | |||
Beginning balance at Mar. 31, 2019 | 1,639,580 | $ 243 | 1,495,644 | 143,693 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Shares issued under stock bonus and equity incentive plans (in shares) | 110,880 | |||
Shares issued under stock bonus and equity incentive plans | 0 | |||
Stock-based compensation | 3,819 | 3,819 | ||
Payment of tax withholdings using withheld shares | (250) | (250) | ||
Net income | $ 54,468 | 54,468 | ||
Ending balance (in shares) at Jun. 30, 2019 | 243,428,206 | 243,428,206 | ||
Ending balance at Jun. 30, 2019 | $ 1,697,617 | $ 243 | $ 1,499,213 | $ 198,161 |
Organization and Summary of Sig
Organization and Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2019 | |
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, development, and production of oil, natural gas, and natural gas liquids ("NGLs") 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 significant 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, 2018 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, 2018 as filed with the SEC on February 20, 2019. 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, 2018 . 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 June 30, Six Months Ended June 30, Major Customers 2019 2018 2019 2018 Company A 28% * 26% * Company B 20% 17% 21% 17% Company C 16% 32% 18% 17% Company D 11% 19% 10% 33% Company E * 21% * 17% * 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 June 30, 2019 December 31, 2018 Company A 18% 15% Company B 15% 12% Company C 13% * Company D 11% 13% Company E 11% 12% * 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 February 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standard Update ("ASU") No. 2016-02, Leases (Topic 842), followed by other related ASUs that provided targeted improvements and additional practical expedient options (collectively “ASC 842”). ASC 842 requires lessees to recognize right-of-use (“ROU”) assets and lease payment liabilities on the balance sheet for leases representing the Company’s right to use the underlying assets over the lease term. Each lease that is recognized on the balance sheet will be classified as either finance or operating, with such classification affecting the pattern and classification of expense recognition in the consolidated statements of operations and presentation within the statements of cash flows. The Company adopted ASC 842 on January 1, 2019 using the modified retrospective method. The Company elected as part of its adoption to also use the optional transition methodology whereby previously reported periods continue to be reported in accordance with historical accounting guidance for leases that were in effect for those prior periods. Policy elections and practical expedients that the Company has implemented as part of adopting ASC 842 include (a) excluding from the balance sheet leases with terms that are less than or equal to one year, (b) for all existing asset classes that contain both lease and non-lease components, combining these components together and accounting for them as a single lease component, (c) the package of practical expedients, which among other things allows the Company to avoid reassessing contracts that commenced prior to adoption that were properly evaluated under legacy GAAP, and (d) excluding land easements, which were not accounted for under the previous leasing guidance, that existed or expired before adoption of ASC 842. The scope of ASC 842 does not apply to leases used in the exploration or use of minerals, oil, and natural gas. The Company's adoption of ASC 842 resulted in an increase in other assets, accounts payable and accrued expenses, and other liabilities line items on the accompanying condensed consolidated balance sheets as a result of the additional ROU assets and related lease liabilities. Upon adoption on January 1, 2019, the Company recognized approximately $2.4 million in ROU assets and $4.3 million in liabilities for its operating leases. There was no cumulative effect to retained earnings upon the adoption of this guidance. See Note 14 for the new disclosures required by ASC 842. Recently Issued Accounting Pronouncements: 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. Change in estimate: Production taxes are comprised primarily of two elements: severance tax and ad valorem tax. During the three months ended March 31, 2019, the Company reduced its estimate for 2018 severance taxes. When preparing the 2018 severance tax return, the credit for ad valorem taxes was greater than originally estimated, resulting in a reduction of 2018 severance taxes. Based on this analysis, the Company's prior year accrual was reduced, resulting in an approximate $7.9 million reduction to our production taxes, which increased our operating income for the three months ended March 31, 2019 by a corresponding amount, or $0.03 per basic and diluted common share. |
Property and Equipment
Property and Equipment | 6 Months Ended |
Jun. 30, 2019 | |
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 Oil and gas properties, full cost method: June 30, 2019 December 31, 2018 Costs of proved properties: Producing and non-producing $ 2,732,288 $ 2,385,958 Less, accumulated depletion and full cost ceiling impairments (956,613 ) (840,513 ) Subtotal, proved properties, net 1,775,675 1,545,445 Costs of wells in progress 175,400 227,262 Costs of unproved properties and land, not subject to depletion: Lease acquisition and other costs 658,283 731,058 Land 9,395 9,395 Subtotal, unproved properties and land 667,678 740,453 Costs of other property and equipment: Other property and equipment 10,020 9,642 Less, accumulated depreciation (5,139 ) (4,102 ) Subtotal, other property and equipment, net 4,881 5,540 Total property and equipment, net $ 2,623,634 $ 2,518,700 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 June 30, 2019 and December 31, 2018 , 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 June 30, Six Months Ended June 30, 2019 2018 2019 2018 Capitalized overhead $ 3,483 $ 3,280 $ 7,150 $ 6,393 |
Depletion, depreciation, and ac
Depletion, depreciation, and accretion ("DDA") | 6 Months Ended |
Jun. 30, 2019 | |
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 June 30, Six Months Ended June 30, 2019 2018 2019 2018 Depletion of oil and gas properties $ 56,597 $ 40,927 $ 116,025 $ 77,029 Depreciation and accretion 1,430 950 2,920 1,929 Total DD&A Expense $ 58,027 $ 41,877 $ 118,945 $ 78,958 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 | 6 Months Ended |
Jun. 30, 2019 | |
Asset Retirement Obligation Disclosure [Abstract] | |
Asset Retirement Obligations | Asset Retirement Obligations 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): Six Months Ended June 30, 2019 Asset retirement obligations, December 31, 2018 $ 51,746 Obligations incurred with development activities 1,278 Accretion expense 1,779 Obligations discharged with asset retirements and divestitures (5,586 ) Asset retirement obligation, June 30, 2019 $ 49,217 Less, current portion (10,608 ) Long-term portion $ 38,609 |
Revolving Credit Facility
Revolving Credit Facility | 6 Months Ended |
Jun. 30, 2019 | |
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 June 30, 2019 , the terms of the Revolver provided for up to $1.5 billion in borrowings, an aggregate elected commitment of $550 million , and a borrowing base limitation of $700 million . As of June 30, 2019 and December 31, 2018 , the outstanding principal balance was $165.0 million and $195.0 million , respectively. At June 30, 2019 and December 31, 2018 , the Company had no letters of credit issued. The average annual interest rate for borrowings during the six months ended June 30, 2019 was 4.4% . 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. The next semi-annual redetermination is scheduled for November 2019 . 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, limit our overall commodity derivative positions, and require the Company to maintain compliance with certain financial and liquidity ratio covenants. As of June 30, 2019 , 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 | 6 Months Ended |
Jun. 30, 2019 | |
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% . Interest is payable on June 1 and December 1 of each year. The 2025 Senior Notes were issued pursuant to an indenture dated as of November 29, 2017. The associated expenses and underwriting discounts and commissions are amortized using the effective interest method at an effective interest rate of 6.6% . 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. As of June 30, 2019 , none of the Company's subsidiaries met the criteria in the Indenture to be considered a guarantor of the 2025 Senior Notes. A s of June 30, 2019 , the most recent compliance date, the C ompany was in compliance with the Indenture covenants and expects to remain in compliance throughout the next 12-month period. |
Commodity Derivative Instrument
Commodity Derivative Instruments | 6 Months Ended |
Jun. 30, 2019 | |
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 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 June 30, 2019 are summarized below: Settlement Period Derivative Instrument Volumes (Bbls per day) Weighted-Average Floor Price Weighted-Average Ceiling Price Crude Oil - NYMEX WTI July 1, 2019 - Dec 31, 2019 Collar 16,000 $ 55.00 $ 70.65 Settlement Period Derivative Instrument Volumes (MMBtu per day) Weighted-Average Weighted-Average Ceiling Price Natural Gas - NYMEX Henry Hub July 1, 2019 - Dec 31, 2019 Collar 30,000 $ 3.00 $ 3.50 Settlement Period Derivative Instrument Volumes (MMBtu per day) Fixed Basis Difference Natural Gas - CIG Rocky Mountain July 1, 2019 - Dec 31, 2019 Swap 30,000 $ (0.75 ) Settlement Period Derivative Instrument Volumes Weighted-Average Fixed Price Propane - Mont Belvieu July 1, 2019 - Dec 31, 2019 Swap 2,000 $ 37.52 Offsetting of Derivative Assets and Liabilities As of June 30, 2019 and December 31, 2018 , 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 of the Company’s derivative contracts (in thousands): As of June 30, 2019 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 $ 15,749 $ (3,688 ) $ 12,061 Commodity derivative contracts Noncurrent assets — — — Commodity derivative contracts Current liabilities 3,688 (3,688 ) — Commodity derivative contracts Noncurrent liabilities $ — $ — $ — As of December 31, 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 $ 39,485 $ (4,579 ) $ 34,906 Commodity derivative contracts Noncurrent assets — — — Commodity derivative contracts Current liabilities 4,579 (4,579 ) — 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 June 30, Six Months Ended June 30, 2019 2018 2019 2018 Realized gain (loss) on commodity derivatives $ 3,304 $ (5,883 ) $ 8,217 $ (7,955 ) Unrealized gain (loss) on commodity derivatives 4,981 (8,411 ) (22,845 ) (12,120 ) Total gain (loss) $ 8,285 $ (14,294 ) $ (14,628 ) $ (20,075 ) Realized gains and losses represent the monthly settlement of derivative contracts at their scheduled maturity date, net of the premiums attributable to settled commodity contracts. The following table summarizes derivative realized gains and losses during the periods presented (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2019 2018 2019 2018 Monthly settlement $ 3,962 $ (5,883 ) $ 9,194 $ (7,955 ) Premiums paid (658 ) — (977 ) — Total realized gain (loss) $ 3,304 $ (5,883 ) $ 8,217 $ (7,955 ) Credit-Related Contingent Features As of June 30, 2019 , all of the counterparties to the Company's derivative instruments were members of the Company’s credit facility syndicate. The Company’s obligations under the Revolver and its derivative contracts are secured by liens on substantially all of the Company’s producing oil and gas properties. |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Jun. 30, 2019 | |
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 measurement includes asset retirement obligations. 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 reclamation 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 reclamation. 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 Note 4 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 June 30, 2019 Level 1 Level 2 Level 3 Total Financial assets and liabilities: Commodity derivative asset $ — $ 12,061 $ — $ 12,061 Commodity derivative liability $ — $ — $ — $ — Fair Value Measurements at December 31, 2018 Level 1 Level 2 Level 3 Total Financial assets and liabilities: Commodity derivative asset $ — $ 34,906 $ — $ 34,906 Commodity derivative liability $ — $ — $ — $ — 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 June 30, 2019 , 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 $499.1 million at June 30, 2019 . The Company determined the fair value of its notes payable at June 30, 2019 by using observable market-based information for these debt instruments. The Company has classified the notes payable as Level 1. |
Interest Expense
Interest Expense | 6 Months Ended |
Jun. 30, 2019 | |
Interest and Debt Expense [Abstract] | |
Interest Expense | Interest Expense The components of interest expense are (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2019 2018 2019 2018 Revolving credit facility $ 2,132 $ 85 $ 4,305 $ 85 Notes payable 8,594 8,594 17,188 17,188 Amortization of issuance costs and other 851 1,113 1,648 2,000 Less: interest capitalized (11,577 ) (9,792 ) (23,141 ) (19,273 ) Interest expense, net of amounts capitalized $ — $ — $ — $ — |
Stock-Based Compensation
Stock-Based Compensation | 6 Months Ended |
Jun. 30, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Stock-Based Compensation | Stock-Based Compensation As of June 30, 2019 , there were 10,500,000 common shares authorized for grant under the 2015 Equity Incentive Plan, of which 1,164,414 shares were available for future grant. The shares available for future grant exclude 1,973,768 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 June 30, Six Months Ended June 30, 2019 2018 2019 2018 Stock options $ 795 $ 1,195 $ 1,822 $ 2,398 Performance-vested stock units 1,258 1,173 2,329 2,029 Restricted stock units and stock bonus shares 1,766 1,400 4,081 2,736 Total stock-based compensation $ 3,819 $ 3,768 $ 8,232 $ 7,163 Less: stock-based compensation capitalized (677 ) (622 ) (1,407 ) (1,221 ) Total stock-based compensation expense $ 3,142 $ 3,146 $ 6,825 $ 5,942 Stock options No stock options were granted during the three and six months ended June 30, 2019 or 2018 . The following table summarizes activity for stock options for the period presented: Number of Shares Weighted-Average Exercise Price Weighted-Average Remaining Contractual Life Aggregate Intrinsic Value (thousands) Outstanding, December 31, 2018 4,652,634 $ 10.06 6.4 years $ 49 Granted — — Exercised — — — Expired (12,000 ) 11.81 Forfeited (48,800 ) 7.46 Outstanding, June 30, 2019 4,591,834 $ 10.09 5.9 years $ 58 Outstanding, Exercisable at June 30, 2019 3,771,134 $ 10.30 5.7 years $ 58 The following table summarizes information about issued and outstanding stock options as of June 30, 2019 : 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 3.1 years 35,000 $ 3.31 3.1 years $5.00 - $6.99 683,000 6.29 5.8 years 433,600 6.25 5.1 years $7.00 - $10.99 1,360,334 9.42 5.9 years 997,934 9.40 5.8 years $11.00 - $13.46 2,513,500 11.57 5.9 years 2,304,600 11.56 5.9 years Total 4,591,834 $ 10.09 5.9 years 3,771,134 $ 10.30 5.7 years The estimated unrecognized compensation cost from stock options not vested as of June 30, 2019 , which will be recognized ratably over the remaining vesting period, is as follows: Unrecognized compensation (in thousands) $ 2,484 Remaining vesting period 1.5 years Restricted stock units and stock bonus awards The following table summarizes activity for restricted stock units and stock bonus awards for the six months ended June 30, 2019 : Number of Shares Weighted-Average Grant-Date Fair Value Not vested, December 31, 2018 1,639,918 $ 8.07 Granted 1,535,984 4.87 Vested (582,615 ) 8.62 Forfeited (50,378 ) 6.40 Not vested, June 30, 2019 2,542,909 $ 6.04 The estimated unrecognized compensation cost from restricted stock units and stock bonus awards not vested as of June 30, 2019 , which will be recognized ratably over the remaining vesting period, is as follows: Unrecognized compensation cost (in thousands) $ 12,065 Remaining vesting period 2.2 years Performance-vested stock units The Company has granted three 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. For the years prior to 2019, the PSUs will be settled in shares of the Company’s common stock. For PSUs granted in 2019, if the PSUs vested are in an amount equal to or less than the target amount, they will be settled in shares of the Company's common stock. If the PSUs vested are in an amount greater than the target amount, then at the discretion of the Board of Directors, the value of the vested amount of PSUs in excess of the value of the PSU target amount may be paid wholly or partially in cash. All PSUs are settled at 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 June 30, 2019 , 274,898 Goal-Based PSUs had been awarded to certain executives. Relative Total Shareholder Return ("Relative TSR") PSUs - The vesting criterion for the Relative TSR PSUs is based on a comparison of the Company’s total shareholder return ("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. Absolute Total Shareholder Return ("Absolute TSR") PSUs - The vesting criterion for the Absolute TSR PSUs is based on a comparison of the Company’s TSR for the measurement period compared to the TSR goals outlined in the award. 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: Six Months Ended June 30, 2019 2018 Weighted-average expected term 2.9 years 2.8 years Weighted-average expected volatility 48 % 52 % Weighted-average risk-free rate 2.49 % 2.41 % As of June 30, 2019 , unrecognized compensation cost for TSR PSUs was $7.7 million and will be amortized through 2021. The following table summarizes activity for TSR PSUs for the six months ended June 30, 2019 : Number of Units 1 Weighted-Average Grant-Date Fair Value Not vested, December 31, 2018 780,028 $ 11.73 Granted 918,842 5.74 Vested — — Forfeited — — Not vested, June 30, 2019 1,698,870 $ 8.49 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. |
Weighted-Average Shares Outstan
Weighted-Average Shares Outstanding | 6 Months Ended |
Jun. 30, 2019 | |
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 June 30, Six Months Ended June 30, 2019 2018 2019 2018 Weighted-average shares outstanding — basic 243,404,917 242,255,724 243,348,141 242,005,211 Potentially dilutive common shares from: Stock options 13,719 421,316 12,611 387,634 TSR PSUs 1 277,364 1,372,019 209,431 1,223,542 Restricted stock units and stock bonus shares 434,245 415,717 139,732 338,286 Weighted-average shares outstanding — diluted 244,130,245 244,464,776 243,709,915 243,954,673 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 June 30, Six Months Ended June 30, 2019 2018 2019 2018 Potentially dilutive common shares from: Stock options 1 4,556,834 3,353,700 4,556,834 3,564,617 TSR PSUs 1,2 773,954 — 1,233,375 — Goal-Based PSUs 2,3 274,898 281,872 274,898 281,872 Restricted stock units and stock bonus shares 1 695,353 2,772 704,948 10,005 Total 6,301,039 3,638,344 6,770,055 3,856,494 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. |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2019 | |
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. The effective combined U.S. federal and state income tax rates for the three and six months ended June 30, 2019 were 25% and 26% , respectively. For the three and six months ended June 30, 2018 , the effective tax rates were 6% and 7% , respectively. The effective tax rates for the three and six months ended June 30, 2019 differed from the statutory rate primarily due to state income taxes, non-deductible expenses, and tax deficiencies recognized in connection with the vesting of stock awards. The 2018 rates differed from the statutory rates due primarily to the release of valuation allowances previously recorded against deferred tax assets. As of June 30, 2019 , 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. No significant uncertain tax positions were identified as of any date on or before June 30, 2019 . The Company’s policy is to recognize interest and penalties related to uncertain tax benefits in income tax expense. As of June 30, 2019 , 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 June 30, 2019 , the Company believes it will be able to generate sufficient future positive 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. In addition to the future positive net income, the temporary deferred tax liabilities exceed the deferred tax assets, resulting in the ability to utilize all deferred tax assets to offset future taxable income resulting from the reversal of the deferred tax liabilities. |
Revenue from Contracts with Cus
Revenue from Contracts with Customers | 6 Months Ended |
Jun. 30, 2019 | |
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 June 30, Six Months Ended June 30, Revenues (in thousands): 2019 2018 2019 2018 Oil $ 132,098 $ 114,857 $ 279,178 $ 231,061 Natural Gas and NGLs 30,504 32,230 72,879 63,259 $ 162,602 $ 147,087 $ 352,057 $ 294,320 |
Leases
Leases | 6 Months Ended |
Jun. 30, 2019 | |
Leases [Abstract] | |
Leases | Leases The Company evaluates contractual arrangements at inception to determine if the agreement is a lease or contains an identifiable lease component as defined by ASC 842. When evaluating contracts to determine appropriate classification and recognition under ASC 842, significant judgment may be necessary to determine, among other criteria, if an embedded leasing arrangement exists, the length of the term, classification as either an operating or financing lease, whether renewal or termination options are reasonably certain to be exercised, and future lease payments to be included in the initial measurement of the ROU asset. Certain assumptions and judgments made by the Company when evaluating contracts that meet the definition of a lease under ASC 842 include: • Discount Rate - Unless implicitly defined, the Company will determine the present value of future lease payments using an estimated incremental secured borrowing rate based on a yield curve analysis that factors in certain assumptions, including the term of the lease and credit rating of the Company at lease commencement. • Lease Term - The Company evaluates each contract containing a lease arrangement at inception to determine the length of the lease term when recognizing a ROU asset and corresponding lease liability . When determining the lease term, options available to extend or early terminate the arrangement are evaluated and included when it is reasonably certain these options will be exercised. There are no available options to extend that the Company is reasonably certain to exercise. Currently, the Company has operating leases for asset classes that include office space, drilling rigs, and equipment rentals primarily used in development and field operations. The Company has financing leases for vehicles. We have provided a residual value guarantee for our vehicle leases. Certain leases also contain optional extension periods that allow for lease terms to be extended for up to an additional 5 years . Costs associated with the Company’s operating leases are either expensed or capitalized depending on how the underlying asset is utilized. For example, costs associated with drilling rigs are capitalized as part of the development of the Company’s oil and gas properties. Refer to the Company’s 2018 Form 10-K for additional information on its accounting policies for oil and gas development and producing activities. When calculating the Company’s ROU asset and liability, the Company considers all the necessary payments made or that are expected to be made upon commencement of the lease. Excluded from the initial measurement are certain variable lease payments. The Company’s total lease costs were as follows (in thousands): Three Months Ended June 30, 2019 Six Months Ended June 30, 2019 Finance lease cost: Amortization of ROU assets $ 63 $ 123 Interest on lease liabilities 7 15 Operating lease cost 1,173 1,777 Short-term lease cost 1 27,783 69,846 Total Lease Cost $ 29,026 $ 71,761 1 Costs associated with short-term lease agreements relate primarily to operational activities where underlying lease terms are less than or equal to one year. These costs primarily include drilling activities and field equipment rentals. It is expected that this amount will fluctuate primarily with the number of drilling rigs that the Company is operating under short-term agreements. Other information related to the Company’s leases is as follows (in thousands, except lease terms and discount rates): Three Months Ended June 30, 2019 Six Months Ended June 30, 2019 Cash paid for amounts included in the measurement of lease liabilities Operating cash flows from operating leases $ 1,173 $ 1,777 Financing cash flows from finance leases 47 105 ROU assets obtained in exchange for new finance lease liabilities 43 138 ROU assets obtained in exchange for new operating lease liabilities 4,006 8,538 As of Weighted-average remaining lease term - finance leases 3.0 years Weighted-average remaining lease term - operating leases 2.0 years Weighted-average discount rate - finance leases 4.75 % Weighted-average discount rate - operating leases 4.75 % As of June 30, 2019 and through the date of issuance of these financial statements, the Company has no material lease arrangements which are scheduled to commence in the future. Maturities for the Company’s operating and finance lease liabilities included on the accompanying condensed balance sheets as of June 30, 2019 were as follows (in thousands): Year Finance Leases Operating Leases 2019 $ 94 $ 2,471 2020 188 4,684 2021 215 1,550 2022 185 500 2023 25 — Thereafter — — Total lease payments $ 707 $ 9,205 Less imputed interest (57 ) (420 ) Total lease liability $ 650 $ 8,785 As of December 31, 2018, minimum future contractual payments were as follows (in thousands): Year Rig Contracts Capital Leases Operating Leases 2019 $ 11,102 $ 183 $ 896 2020 — 186 916 2021 — 204 913 2022 — 167 500 2023 — — — Thereafter — — — Amounts recorded on the Company’s accompanying condensed balance sheets were as follows (in thousands): As of June 30, 2019 Financing Leases Operating Leases Other property and equipment, net $ 755 $ — Other assets — 7,161 Accounts payable and accrued expenses 161 4,629 Other liabilities 489 4,156 $ 650 $ 8,785 |
Leases | Leases The Company evaluates contractual arrangements at inception to determine if the agreement is a lease or contains an identifiable lease component as defined by ASC 842. When evaluating contracts to determine appropriate classification and recognition under ASC 842, significant judgment may be necessary to determine, among other criteria, if an embedded leasing arrangement exists, the length of the term, classification as either an operating or financing lease, whether renewal or termination options are reasonably certain to be exercised, and future lease payments to be included in the initial measurement of the ROU asset. Certain assumptions and judgments made by the Company when evaluating contracts that meet the definition of a lease under ASC 842 include: • Discount Rate - Unless implicitly defined, the Company will determine the present value of future lease payments using an estimated incremental secured borrowing rate based on a yield curve analysis that factors in certain assumptions, including the term of the lease and credit rating of the Company at lease commencement. • Lease Term - The Company evaluates each contract containing a lease arrangement at inception to determine the length of the lease term when recognizing a ROU asset and corresponding lease liability . When determining the lease term, options available to extend or early terminate the arrangement are evaluated and included when it is reasonably certain these options will be exercised. There are no available options to extend that the Company is reasonably certain to exercise. Currently, the Company has operating leases for asset classes that include office space, drilling rigs, and equipment rentals primarily used in development and field operations. The Company has financing leases for vehicles. We have provided a residual value guarantee for our vehicle leases. Certain leases also contain optional extension periods that allow for lease terms to be extended for up to an additional 5 years . Costs associated with the Company’s operating leases are either expensed or capitalized depending on how the underlying asset is utilized. For example, costs associated with drilling rigs are capitalized as part of the development of the Company’s oil and gas properties. Refer to the Company’s 2018 Form 10-K for additional information on its accounting policies for oil and gas development and producing activities. When calculating the Company’s ROU asset and liability, the Company considers all the necessary payments made or that are expected to be made upon commencement of the lease. Excluded from the initial measurement are certain variable lease payments. The Company’s total lease costs were as follows (in thousands): Three Months Ended June 30, 2019 Six Months Ended June 30, 2019 Finance lease cost: Amortization of ROU assets $ 63 $ 123 Interest on lease liabilities 7 15 Operating lease cost 1,173 1,777 Short-term lease cost 1 27,783 69,846 Total Lease Cost $ 29,026 $ 71,761 1 Costs associated with short-term lease agreements relate primarily to operational activities where underlying lease terms are less than or equal to one year. These costs primarily include drilling activities and field equipment rentals. It is expected that this amount will fluctuate primarily with the number of drilling rigs that the Company is operating under short-term agreements. Other information related to the Company’s leases is as follows (in thousands, except lease terms and discount rates): Three Months Ended June 30, 2019 Six Months Ended June 30, 2019 Cash paid for amounts included in the measurement of lease liabilities Operating cash flows from operating leases $ 1,173 $ 1,777 Financing cash flows from finance leases 47 105 ROU assets obtained in exchange for new finance lease liabilities 43 138 ROU assets obtained in exchange for new operating lease liabilities 4,006 8,538 As of Weighted-average remaining lease term - finance leases 3.0 years Weighted-average remaining lease term - operating leases 2.0 years Weighted-average discount rate - finance leases 4.75 % Weighted-average discount rate - operating leases 4.75 % As of June 30, 2019 and through the date of issuance of these financial statements, the Company has no material lease arrangements which are scheduled to commence in the future. Maturities for the Company’s operating and finance lease liabilities included on the accompanying condensed balance sheets as of June 30, 2019 were as follows (in thousands): Year Finance Leases Operating Leases 2019 $ 94 $ 2,471 2020 188 4,684 2021 215 1,550 2022 185 500 2023 25 — Thereafter — — Total lease payments $ 707 $ 9,205 Less imputed interest (57 ) (420 ) Total lease liability $ 650 $ 8,785 As of December 31, 2018, minimum future contractual payments were as follows (in thousands): Year Rig Contracts Capital Leases Operating Leases 2019 $ 11,102 $ 183 $ 896 2020 — 186 916 2021 — 204 913 2022 — 167 500 2023 — — — Thereafter — — — Amounts recorded on the Company’s accompanying condensed balance sheets were as follows (in thousands): As of June 30, 2019 Financing Leases Operating Leases Other property and equipment, net $ 755 $ — Other assets — 7,161 Accounts payable and accrued expenses 161 4,629 Other liabilities 489 4,156 $ 650 $ 8,785 |
Other Commitments and Contingen
Other Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Other Commitments and Contingencies | Other Commitments and Contingencies Oil Commitments The Company has entered into firm sales agreements for its oil production with four counterparties. Deliveries under the sales agreements have commenced. 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, excluding the contingent commitment described below, are as follows: Year ending December 31, 2019 Oil (MBbls) Remainder of 2019 2,605 2020 4,003 2021 1,672 Total 8,280 During the second quarter of 2019 , 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. However, this cannot be guaranteed. In the third quarter of 2019, the Company entered into an agreement for the transportation of additional oil production. Under this new agreement, which is a collaboration with several other parties, our baseline volume commitment is for 15,000 Bbls per day for a seven year term. Deliveries under this sales agreement are expected to commence in the third quarter of 2019, but the initial obligation may be reduced as the existing pipeline is currently under allocation. If we are unable to fulfill all of our minimum volume commitment and such commitment is not sufficiently reduced by offsetting production delivered by other parties, we may be required to pay demand charges on any unfulfilled capacity. Natural Gas Commitments In collaboration with several other producers and DCP Midstream, LP ("DCP Midstream"), we entered into two facilities expansion agreements with DCP Midstream, LP ("DCP Midstream") to expand and improve its natural gas gathering pipelines and processing facilities. DCP Midstream completed and turned on line the first of the two 200 MMcf per day plants in August 2018. The second plant is currently being commissioned and is expected to be placed fully into service during the third quarter of 2019. We are bound to the volume requirements in these agreements on the first day of the calendar month following the actual in-service date of the relevant plant. Both agreements require baseline volume commitments, consisting of our gross wellhead volume delivered in November 2016 to DCP Midstream, and incremental wellhead volume commitments of 46.4 MMcf per day and 43.8 MMcf per day for the first and second agreements, respectively, for 7 years. 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 second quarter of 2019 , 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. We are also required for the first three years of the contracts to guarantee a certain target profit margin to DCP Midstream on these incremental volumes. Payments made to date for such quantities have not been significant. 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. |
Supplemental Schedule of Inform
Supplemental Schedule of Information to the Condensed Consolidated Statements of Cash Flows | 6 Months Ended |
Jun. 30, 2019 | |
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): Six Months Ended June 30, Supplemental cash flow information: 2019 2018 Interest paid $ 21,139 $ 17,448 Non-cash investing and financing activities: Accrued well costs as of period end $ 52,531 $ 75,705 Asset retirement obligations incurred with development activities 1,278 473 Asset retirement obligations assumed with acquisitions — 5 Obligations discharged with asset retirements and divestitures $ (5,586 ) $ (5,964 ) Net changes in operating assets and liabilities: Accounts receivable $ 33,541 $ 2,797 Accounts payable and accrued expenses (685 ) (42 ) Revenue payable (1,208 ) 5,377 Production taxes payable (13,849 ) 8,199 Other 634 88 Changes in operating assets and liabilities $ 18,433 $ 16,419 |
Organization and Summary of S_2
Organization and Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2019 | |
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 significant 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, 2018 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, 2018 as filed with the SEC on February 20, 2019. 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, 2018 . 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 February 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standard Update ("ASU") No. 2016-02, Leases (Topic 842), followed by other related ASUs that provided targeted improvements and additional practical expedient options (collectively “ASC 842”). ASC 842 requires lessees to recognize right-of-use (“ROU”) assets and lease payment liabilities on the balance sheet for leases representing the Company’s right to use the underlying assets over the lease term. Each lease that is recognized on the balance sheet will be classified as either finance or operating, with such classification affecting the pattern and classification of expense recognition in the consolidated statements of operations and presentation within the statements of cash flows. The Company adopted ASC 842 on January 1, 2019 using the modified retrospective method. The Company elected as part of its adoption to also use the optional transition methodology whereby previously reported periods continue to be reported in accordance with historical accounting guidance for leases that were in effect for those prior periods. Policy elections and practical expedients that the Company has implemented as part of adopting ASC 842 include (a) excluding from the balance sheet leases with terms that are less than or equal to one year, (b) for all existing asset classes that contain both lease and non-lease components, combining these components together and accounting for them as a single lease component, (c) the package of practical expedients, which among other things allows the Company to avoid reassessing contracts that commenced prior to adoption that were properly evaluated under legacy GAAP, and (d) excluding land easements, which were not accounted for under the previous leasing guidance, that existed or expired before adoption of ASC 842. The scope of ASC 842 does not apply to leases used in the exploration or use of minerals, oil, and natural gas. The Company's adoption of ASC 842 resulted in an increase in other assets, accounts payable and accrued expenses, and other liabilities line items on the accompanying condensed consolidated balance sheets as a result of the additional ROU assets and related lease liabilities. Upon adoption on January 1, 2019, the Company recognized approximately $2.4 million in ROU assets and $4.3 million in liabilities for its operating leases. There was no cumulative effect to retained earnings upon the adoption of this guidance. See Note 14 for the new disclosures required by ASC 842. Recently Issued Accounting Pronouncements: 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) | 6 Months Ended |
Jun. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Cash and Cash Equivalents | 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 June 30, Six Months Ended June 30, Major Customers 2019 2018 2019 2018 Company A 28% * 26% * Company B 20% 17% 21% 17% Company C 16% 32% 18% 17% Company D 11% 19% 10% 33% Company E * 21% * 17% * less than 10% |
Schedule of Customers With Balances Greater Than 10% of Total Receivables | 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 June 30, Six Months Ended June 30, Major Customers 2019 2018 2019 2018 Company A 28% * 26% * Company B 20% 17% 21% 17% Company C 16% 32% 18% 17% Company D 11% 19% 10% 33% Company E * 21% * 17% * less than 10% 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 June 30, 2019 December 31, 2018 Company A 18% 15% Company B 15% 12% Company C 13% * Company D 11% 13% Company E 11% 12% * less than 10% |
Property and Equipment (Tables)
Property and Equipment (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
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 Oil and gas properties, full cost method: June 30, 2019 December 31, 2018 Costs of proved properties: Producing and non-producing $ 2,732,288 $ 2,385,958 Less, accumulated depletion and full cost ceiling impairments (956,613 ) (840,513 ) Subtotal, proved properties, net 1,775,675 1,545,445 Costs of wells in progress 175,400 227,262 Costs of unproved properties and land, not subject to depletion: Lease acquisition and other costs 658,283 731,058 Land 9,395 9,395 Subtotal, unproved properties and land 667,678 740,453 Costs of other property and equipment: Other property and equipment 10,020 9,642 Less, accumulated depreciation (5,139 ) (4,102 ) Subtotal, other property and equipment, net 4,881 5,540 Total property and equipment, net $ 2,623,634 $ 2,518,700 |
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 June 30, Six Months Ended June 30, 2019 2018 2019 2018 Capitalized overhead $ 3,483 $ 3,280 $ 7,150 $ 6,393 |
Depletion, depreciation, and _2
Depletion, depreciation, and accretion ("DDA") (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Other Costs and Disclosures [Abstract] | |
Schedule of Depletion, Depreciation and Amortization | DD&A consisted of the following (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2019 2018 2019 2018 Depletion of oil and gas properties $ 56,597 $ 40,927 $ 116,025 $ 77,029 Depreciation and accretion 1,430 950 2,920 1,929 Total DD&A Expense $ 58,027 $ 41,877 $ 118,945 $ 78,958 |
Asset Retirement Obligations (T
Asset Retirement Obligations (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
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): Six Months Ended June 30, 2019 Asset retirement obligations, December 31, 2018 $ 51,746 Obligations incurred with development activities 1,278 Accretion expense 1,779 Obligations discharged with asset retirements and divestitures (5,586 ) Asset retirement obligation, June 30, 2019 $ 49,217 Less, current portion (10,608 ) Long-term portion $ 38,609 |
Commodity Derivative Instrume_2
Commodity Derivative Instruments (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Commodity Derivative Contracts | The Company’s commodity derivative contracts as of June 30, 2019 are summarized below: Settlement Period Derivative Instrument Volumes (Bbls per day) Weighted-Average Floor Price Weighted-Average Ceiling Price Crude Oil - NYMEX WTI July 1, 2019 - Dec 31, 2019 Collar 16,000 $ 55.00 $ 70.65 Settlement Period Derivative Instrument Volumes (MMBtu per day) Weighted-Average Weighted-Average Ceiling Price Natural Gas - NYMEX Henry Hub July 1, 2019 - Dec 31, 2019 Collar 30,000 $ 3.00 $ 3.50 Settlement Period Derivative Instrument Volumes (MMBtu per day) Fixed Basis Difference Natural Gas - CIG Rocky Mountain July 1, 2019 - Dec 31, 2019 Swap 30,000 $ (0.75 ) Settlement Period Derivative Instrument Volumes Weighted-Average Fixed Price Propane - Mont Belvieu July 1, 2019 - Dec 31, 2019 Swap 2,000 $ 37.52 |
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 of the Company’s derivative contracts (in thousands): As of June 30, 2019 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 $ 15,749 $ (3,688 ) $ 12,061 Commodity derivative contracts Noncurrent assets — — — Commodity derivative contracts Current liabilities 3,688 (3,688 ) — Commodity derivative contracts Noncurrent liabilities $ — $ — $ — As of December 31, 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 $ 39,485 $ (4,579 ) $ 34,906 Commodity derivative contracts Noncurrent assets — — — Commodity derivative contracts Current liabilities 4,579 (4,579 ) — 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 June 30, Six Months Ended June 30, 2019 2018 2019 2018 Realized gain (loss) on commodity derivatives $ 3,304 $ (5,883 ) $ 8,217 $ (7,955 ) Unrealized gain (loss) on commodity derivatives 4,981 (8,411 ) (22,845 ) (12,120 ) Total gain (loss) $ 8,285 $ (14,294 ) $ (14,628 ) $ (20,075 ) |
Schedule of Hedge Realized Gains (Losses) | The following table summarizes derivative realized gains and losses during the periods presented (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2019 2018 2019 2018 Monthly settlement $ 3,962 $ (5,883 ) $ 9,194 $ (7,955 ) Premiums paid (658 ) — (977 ) — Total realized gain (loss) $ 3,304 $ (5,883 ) $ 8,217 $ (7,955 ) |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
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 June 30, 2019 Level 1 Level 2 Level 3 Total Financial assets and liabilities: Commodity derivative asset $ — $ 12,061 $ — $ 12,061 Commodity derivative liability $ — $ — $ — $ — Fair Value Measurements at December 31, 2018 Level 1 Level 2 Level 3 Total Financial assets and liabilities: Commodity derivative asset $ — $ 34,906 $ — $ 34,906 Commodity derivative liability $ — $ — $ — $ — |
Interest Expense (Tables)
Interest Expense (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Interest and Debt Expense [Abstract] | |
Schedule of the Components of Interest Expense | The components of interest expense are (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2019 2018 2019 2018 Revolving credit facility $ 2,132 $ 85 $ 4,305 $ 85 Notes payable 8,594 8,594 17,188 17,188 Amortization of issuance costs and other 851 1,113 1,648 2,000 Less: interest capitalized (11,577 ) (9,792 ) (23,141 ) (19,273 ) Interest expense, net of amounts capitalized $ — $ — $ — $ — |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of Stock-based Compensation Expense Recognized | The amount of stock-based compensation was as follows (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2019 2018 2019 2018 Stock options $ 795 $ 1,195 $ 1,822 $ 2,398 Performance-vested stock units 1,258 1,173 2,329 2,029 Restricted stock units and stock bonus shares 1,766 1,400 4,081 2,736 Total stock-based compensation $ 3,819 $ 3,768 $ 8,232 $ 7,163 Less: stock-based compensation capitalized (677 ) (622 ) (1,407 ) (1,221 ) Total stock-based compensation expense $ 3,142 $ 3,146 $ 6,825 $ 5,942 |
Summary of Stock Option Activity Under Stock Option | The following table summarizes activity for stock options for the period presented: Number of Shares Weighted-Average Exercise Price Weighted-Average Remaining Contractual Life Aggregate Intrinsic Value (thousands) Outstanding, December 31, 2018 4,652,634 $ 10.06 6.4 years $ 49 Granted — — Exercised — — — Expired (12,000 ) 11.81 Forfeited (48,800 ) 7.46 Outstanding, June 30, 2019 4,591,834 $ 10.09 5.9 years $ 58 Outstanding, Exercisable at June 30, 2019 3,771,134 $ 10.30 5.7 years $ 58 |
Schedule of Issued and Outstanding Stock Options | The following table summarizes information about issued and outstanding stock options as of June 30, 2019 : 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 3.1 years 35,000 $ 3.31 3.1 years $5.00 - $6.99 683,000 6.29 5.8 years 433,600 6.25 5.1 years $7.00 - $10.99 1,360,334 9.42 5.9 years 997,934 9.40 5.8 years $11.00 - $13.46 2,513,500 11.57 5.9 years 2,304,600 11.56 5.9 years Total 4,591,834 $ 10.09 5.9 years 3,771,134 $ 10.30 5.7 years |
Schedule of Unrecognized Compensation Cost | The estimated unrecognized compensation cost from stock options not vested as of June 30, 2019 , which will be recognized ratably over the remaining vesting period, is as follows: Unrecognized compensation (in thousands) $ 2,484 Remaining vesting period 1.5 years The estimated unrecognized compensation cost from restricted stock units and stock bonus awards not vested as of June 30, 2019 , which will be recognized ratably over the remaining vesting period, is as follows: Unrecognized compensation cost (in thousands) $ 12,065 Remaining vesting period 2.2 years |
Summary of Restricted Stock Awards | The following table summarizes activity for restricted stock units and stock bonus awards for the six months ended June 30, 2019 : Number of Shares Weighted-Average Grant-Date Fair Value Not vested, December 31, 2018 1,639,918 $ 8.07 Granted 1,535,984 4.87 Vested (582,615 ) 8.62 Forfeited (50,378 ) 6.40 Not vested, June 30, 2019 2,542,909 $ 6.04 |
Schedule of assumptions used in valuation | The assumptions used in valuing the TSR PSUs granted were as follows: Six Months Ended June 30, 2019 2018 Weighted-average expected term 2.9 years 2.8 years Weighted-average expected volatility 48 % 52 % Weighted-average risk-free rate 2.49 % 2.41 % |
Schedule of Performance Share Units | The following table summarizes activity for TSR PSUs for the six months ended June 30, 2019 : Number of Units 1 Weighted-Average Grant-Date Fair Value Not vested, December 31, 2018 780,028 $ 11.73 Granted 918,842 5.74 Vested — — Forfeited — — Not vested, June 30, 2019 1,698,870 $ 8.49 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. |
Weighted-Average Shares Outst_2
Weighted-Average Shares Outstanding (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
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 June 30, Six Months Ended June 30, 2019 2018 2019 2018 Weighted-average shares outstanding — basic 243,404,917 242,255,724 243,348,141 242,005,211 Potentially dilutive common shares from: Stock options 13,719 421,316 12,611 387,634 TSR PSUs 1 277,364 1,372,019 209,431 1,223,542 Restricted stock units and stock bonus shares 434,245 415,717 139,732 338,286 Weighted-average shares outstanding — diluted 244,130,245 244,464,776 243,709,915 243,954,673 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 June 30, Six Months Ended June 30, 2019 2018 2019 2018 Potentially dilutive common shares from: Stock options 1 4,556,834 3,353,700 4,556,834 3,564,617 TSR PSUs 1,2 773,954 — 1,233,375 — Goal-Based PSUs 2,3 274,898 281,872 274,898 281,872 Restricted stock units and stock bonus shares 1 695,353 2,772 704,948 10,005 Total 6,301,039 3,638,344 6,770,055 3,856,494 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. |
Revenue from Contracts with C_2
Revenue from Contracts with Customers (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Oil and Gas revenues | Three Months Ended June 30, Six Months Ended June 30, Revenues (in thousands): 2019 2018 2019 2018 Oil $ 132,098 $ 114,857 $ 279,178 $ 231,061 Natural Gas and NGLs 30,504 32,230 72,879 63,259 $ 162,602 $ 147,087 $ 352,057 $ 294,320 |
Leases (Tables)
Leases (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Leases [Abstract] | |
Lease, Cost | The Company’s total lease costs were as follows (in thousands): Three Months Ended June 30, 2019 Six Months Ended June 30, 2019 Finance lease cost: Amortization of ROU assets $ 63 $ 123 Interest on lease liabilities 7 15 Operating lease cost 1,173 1,777 Short-term lease cost 1 27,783 69,846 Total Lease Cost $ 29,026 $ 71,761 1 Costs associated with short-term lease agreements relate primarily to operational activities where underlying lease terms are less than or equal to one year. These costs primarily include drilling activities and field equipment rentals. It is expected that this amount will fluctuate primarily with the number of drilling rigs that the Company is operating under short-term agreements. Other information related to the Company’s leases is as follows (in thousands, except lease terms and discount rates): Three Months Ended June 30, 2019 Six Months Ended June 30, 2019 Cash paid for amounts included in the measurement of lease liabilities Operating cash flows from operating leases $ 1,173 $ 1,777 Financing cash flows from finance leases 47 105 ROU assets obtained in exchange for new finance lease liabilities 43 138 ROU assets obtained in exchange for new operating lease liabilities 4,006 8,538 As of Weighted-average remaining lease term - finance leases 3.0 years Weighted-average remaining lease term - operating leases 2.0 years Weighted-average discount rate - finance leases 4.75 % Weighted-average discount rate - operating leases 4.75 % |
Finance Lease, Liability, Maturity | Maturities for the Company’s operating and finance lease liabilities included on the accompanying condensed balance sheets as of June 30, 2019 were as follows (in thousands): Year Finance Leases Operating Leases 2019 $ 94 $ 2,471 2020 188 4,684 2021 215 1,550 2022 185 500 2023 25 — Thereafter — — Total lease payments $ 707 $ 9,205 Less imputed interest (57 ) (420 ) Total lease liability $ 650 $ 8,785 |
Lessee, Operating Lease, Liability, Maturity | Maturities for the Company’s operating and finance lease liabilities included on the accompanying condensed balance sheets as of June 30, 2019 were as follows (in thousands): Year Finance Leases Operating Leases 2019 $ 94 $ 2,471 2020 188 4,684 2021 215 1,550 2022 185 500 2023 25 — Thereafter — — Total lease payments $ 707 $ 9,205 Less imputed interest (57 ) (420 ) Total lease liability $ 650 $ 8,785 |
Schedule of Future Minimum Lease Payments for Capital Leases | As of December 31, 2018, minimum future contractual payments were as follows (in thousands): Year Rig Contracts Capital Leases Operating Leases 2019 $ 11,102 $ 183 $ 896 2020 — 186 916 2021 — 204 913 2022 — 167 500 2023 — — — Thereafter — — — |
Schedule of Future Minimum Rental Payments for Operating Leases | As of December 31, 2018, minimum future contractual payments were as follows (in thousands): Year Rig Contracts Capital Leases Operating Leases 2019 $ 11,102 $ 183 $ 896 2020 — 186 916 2021 — 204 913 2022 — 167 500 2023 — — — Thereafter — — — |
Assets and Liabilities, Lessee | Amounts recorded on the Company’s accompanying condensed balance sheets were as follows (in thousands): As of June 30, 2019 Financing Leases Operating Leases Other property and equipment, net $ 755 $ — Other assets — 7,161 Accounts payable and accrued expenses 161 4,629 Other liabilities 489 4,156 $ 650 $ 8,785 |
Other Commitments and Conting_2
Other Commitments and Contingencies (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Fiscal Year Maturity Schedule of Contractual Obligations | Our commitments, excluding the contingent commitment described below, are as follows: Year ending December 31, 2019 Oil (MBbls) Remainder of 2019 2,605 2020 4,003 2021 1,672 Total 8,280 |
Supplemental Schedule of Info_2
Supplemental Schedule of Information to the Condensed Consolidated Statements of Cash Flows (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
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): Six Months Ended June 30, Supplemental cash flow information: 2019 2018 Interest paid $ 21,139 $ 17,448 Non-cash investing and financing activities: Accrued well costs as of period end $ 52,531 $ 75,705 Asset retirement obligations incurred with development activities 1,278 473 Asset retirement obligations assumed with acquisitions — 5 Obligations discharged with asset retirements and divestitures $ (5,586 ) $ (5,964 ) Net changes in operating assets and liabilities: Accounts receivable $ 33,541 $ 2,797 Accounts payable and accrued expenses (685 ) (42 ) Revenue payable (1,208 ) 5,377 Production taxes payable (13,849 ) 8,199 Other 634 88 Changes in operating assets and liabilities $ 18,433 $ 16,419 |
Organization and Summary of S_4
Organization and Summary of Significant Accounting Policies - Narrative (Details) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2019USD ($) | Mar. 31, 2019USD ($)$ / shares | Jun. 30, 2018USD ($) | Jun. 30, 2019USD ($)segment | Jun. 30, 2018USD ($) | Jan. 01, 2019USD ($) | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Number of segments | segment | 1 | |||||
Operating lease, liability | $ 8,785 | $ 8,785 | ||||
Operating income increase | $ 64,253 | $ 67,254 | $ 154,821 | $ 144,612 | ||
Accrued Production Taxes | ||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Operating income increase | $ 7,900 | |||||
Earnings per share, basic and diluted (in dollars per share) | $ / shares | $ 0.03 | |||||
ASC 842 | ||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Operating lease, right-of-use asset | $ 2,400 | |||||
Operating lease, liability | $ 4,300 |
Organization and Summary of S_5
Organization and Summary of Significant Accounting Policies - Concentration Risk (Details) - Customer Concentration Risk | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 | |
Revenue from contract with customer | Company A | |||||
Concentration Risk [Line Items] | |||||
Risk percentage | 28.00% | 26.00% | |||
Revenue from contract with customer | Company B | |||||
Concentration Risk [Line Items] | |||||
Risk percentage | 20.00% | 17.00% | 21.00% | 17.00% | |
Revenue from contract with customer | Company C | |||||
Concentration Risk [Line Items] | |||||
Risk percentage | 16.00% | 32.00% | 18.00% | 17.00% | |
Revenue from contract with customer | Company D | |||||
Concentration Risk [Line Items] | |||||
Risk percentage | 11.00% | 19.00% | 10.00% | 33.00% | |
Revenue from contract with customer | Company E | |||||
Concentration Risk [Line Items] | |||||
Risk percentage | 21.00% | 17.00% | |||
Accounts receivable | Company A | |||||
Concentration Risk [Line Items] | |||||
Risk percentage | 18.00% | 15.00% | |||
Accounts receivable | Company B | |||||
Concentration Risk [Line Items] | |||||
Risk percentage | 15.00% | 12.00% | |||
Accounts receivable | Company C | |||||
Concentration Risk [Line Items] | |||||
Risk percentage | 13.00% | ||||
Accounts receivable | Company D | |||||
Concentration Risk [Line Items] | |||||
Risk percentage | 11.00% | 13.00% | |||
Accounts receivable | Company E | |||||
Concentration Risk [Line Items] | |||||
Risk percentage | 11.00% | 12.00% |
Property and Equipment (Schedul
Property and Equipment (Schedule of Capitalized Costs) (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Costs of proved properties: | ||
Producing and non-producing | $ 2,732,288 | $ 2,385,958 |
Less, accumulated depletion and full cost ceiling impairments | (956,613) | (840,513) |
Subtotal, proved properties, net | 1,775,675 | 1,545,445 |
Costs of wells in progress | 175,400 | 227,262 |
Costs of unproved properties and land, not subject to depletion: | ||
Subtotal, unproved properties and land | 667,678 | 740,453 |
Costs of other property and equipment: | ||
Other property and equipment | 10,020 | 9,642 |
Less, accumulated depreciation | (5,139) | (4,102) |
Subtotal, other property and equipment, net | 4,881 | 5,540 |
Total property and equipment, net | 2,623,634 | 2,518,700 |
Land | ||
Costs of unproved properties and land, not subject to depletion: | ||
Cumulative acquisition costs | 9,395 | 9,395 |
Lease acquisition and other costs | ||
Costs of unproved properties and land, not subject to depletion: | ||
Cumulative acquisition costs | $ 658,283 | $ 731,058 |
Property and Equipment (Narrati
Property and Equipment (Narrative) (Details) - USD ($) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2019 | Dec. 31, 2018 | |
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 | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Property, Plant and Equipment [Abstract] | ||||
Capitalized overhead | $ 3,483 | $ 3,280 | $ 7,150 | $ 6,393 |
Depletion, depreciation, and _3
Depletion, depreciation, and accretion ("DDA") (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Other Costs and Disclosures [Abstract] | ||||
Depletion of oil and gas properties | $ 56,597 | $ 40,927 | $ 116,025 | $ 77,029 |
Depreciation and accretion | 1,430 | 950 | 2,920 | 1,929 |
Total DD&A Expense | $ 58,027 | $ 41,877 | $ 118,945 | $ 78,958 |
Asset Retirement Obligations (S
Asset Retirement Obligations (Schedule of Asset Retirement Obligations) (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2019 | Dec. 31, 2018 | |
Asset Retirement Obligation, Roll Forward Analysis [Roll Forward] | ||
Beginning asset retirement obligations, December 31, 2018 | $ 51,746 | |
Obligations incurred with development activities | 1,278 | |
Accretion expense | 1,779 | |
Obligations discharged with asset retirements and divestitures | (5,586) | |
Ending asset retirement obligation, June 30, 2019 | 49,217 | |
Less, current portion | (10,608) | $ (11,694) |
Long-term portion | $ 38,609 | $ 40,052 |
Revolving Credit Facility (Deta
Revolving Credit Facility (Details) - USD ($) | 6 Months Ended | ||
Jun. 30, 2019 | Dec. 31, 2018 | Apr. 02, 2018 | |
Line of Credit Facility [Line Items] | |||
Amount outstanding | $ 165,000,000 | $ 195,000,000 | |
Line of Credit | Swingline Facility | |||
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 | 550,000,000 | ||
Borrowing base | $ 700,000,000 | ||
Average interest rate | 4.40% | ||
Line of Credit | Letter of Credit | |||
Line of Credit Facility [Line Items] | |||
Amount outstanding | $ 0 | $ 0 |
Notes Payable (Details)
Notes Payable (Details) - Notes payable - 6.25% Senior Notes Due 2025 | Nov. 30, 2017USD ($) |
Debt Instrument [Line Items] | |
Debt instrument principal amount | $ 550,000,000 |
Debt instrument stated interest rate (percent) | 6.25% |
Effective interest rate (percent) | 6.60% |
Commodity Derivative Instrume_3
Commodity Derivative Instruments (Schedule of Commodity Derivative Contracts) (Details) | 3 Months Ended |
Jun. 30, 2019bbl / dMMBTU / d$ / bbl$ / MMBTU | |
Collar | Crude Oil | |
Derivatives, Fair Value [Line Items] | |
Volume (in BBls per day) | bbl / d | 16,000 |
Weighted-Average Floor Price (in USD per unit) | $ / bbl | 55 |
Ceiling Price | $ / bbl | 70.65 |
Collar | Natural Gas | |
Derivatives, Fair Value [Line Items] | |
Volumes | MMBTU / d | 30,000 |
Weighted-Average Floor Price (in USD per unit) | $ / MMBTU | 3 |
Ceiling Price | $ / MMBTU | 3.50 |
Swap | Natural Gas | |
Derivatives, Fair Value [Line Items] | |
Volumes | MMBTU / d | 30,000 |
Fixed Basis Difference (in USD per MMBTU) | $ / MMBTU | (0.75) |
Swap | Propane | |
Derivatives, Fair Value [Line Items] | |
Volumes | bbl / d | 2,000 |
Average Fixed Price (in USD per barrel) | $ / bbl | 37.52 |
Commodity Derivative Instrume_4
Commodity Derivative Instruments (Schedule of Fair Value of Derivatives) (Details) - Commodity derivative contracts - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Current assets | ||
Derivatives, Fair Value [Line Items] | ||
Derivative asset, Gross Amount Recognized | $ 15,749 | $ 39,485 |
Derivative asset, Gross Amounts Offset in the Balance Sheet | (3,688) | (4,579) |
Derivative asset, Net | 12,061 | 34,906 |
Noncurrent assets | ||
Derivatives, Fair Value [Line Items] | ||
Derivative asset, Gross Amount Recognized | 0 | 0 |
Derivative asset, Gross Amounts Offset in the Balance Sheet | 0 | 0 |
Derivative asset, Net | 0 | 0 |
Current liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Derivative liability, Gross Amount Recognized | 3,688 | 4,579 |
Derivative liability, Gross Amounts Offset in the Balance Sheet | (3,688) | (4,579) |
Derivative liability, Net | 0 | 0 |
Noncurrent liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Derivative liability, Gross Amount Recognized | 0 | 0 |
Derivative liability, Gross Amounts Offset in the Balance Sheet | 0 | 0 |
Derivative liability, Net | $ 0 | $ 0 |
Commodity Derivative Instrume_5
Commodity Derivative Instruments (Schedule of Gain (Loss) Recognized in Statements of Operations) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||||
Realized gain (loss) on commodity derivatives | $ 3,304 | $ (5,883) | $ 8,217 | $ (7,955) |
Unrealized gain (loss) on commodity derivatives | 4,981 | (8,411) | (22,845) | (12,120) |
Total gain (loss) | $ 8,285 | $ (14,294) | $ (14,628) | $ (20,075) |
Commodity Derivative Instrume_6
Commodity Derivative Instruments (Derivative Gains (Losses) Realized) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||||
Monthly settlement | $ 3,962 | $ (5,883) | $ 9,194 | $ (7,955) |
Premiums paid | (658) | 0 | (977) | 0 |
Total realized gain (loss) | $ 3,304 | $ (5,883) | $ 8,217 | $ (7,955) |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Level 1 | Estimate of Fair Value Measurement | ||
Financial assets and liabilities: | ||
Fair value of notes payable | $ 499,100 | |
Recurring | ||
Financial assets and liabilities: | ||
Commodity derivative asset | 12,061 | $ 34,906 |
Financial assets and liabilities: | ||
Commodity derivative liability | 0 | 0 |
Recurring | Level 1 | ||
Financial assets and liabilities: | ||
Commodity derivative asset | 0 | 0 |
Financial assets and liabilities: | ||
Commodity derivative liability | 0 | 0 |
Recurring | Level 2 | ||
Financial assets and liabilities: | ||
Commodity derivative asset | 12,061 | 34,906 |
Financial assets and liabilities: | ||
Commodity derivative liability | 0 | 0 |
Recurring | Level 3 | ||
Financial assets and liabilities: | ||
Commodity derivative asset | 0 | 0 |
Financial assets and liabilities: | ||
Commodity derivative liability | $ 0 | $ 0 |
Interest Expense (Details)
Interest Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Debt Instrument [Line Items] | ||||
Amortization of issuance costs and other | $ 851 | $ 1,113 | $ 1,648 | $ 2,000 |
Less: interest capitalized | (11,577) | (9,792) | (23,141) | (19,273) |
Interest expense, net of amounts capitalized | 0 | 0 | 0 | 0 |
Notes payable | ||||
Debt Instrument [Line Items] | ||||
Interest from debt | 8,594 | 8,594 | 17,188 | 17,188 |
Revolving credit facility | Line of credit | ||||
Debt Instrument [Line Items] | ||||
Interest from debt | $ 2,132 | $ 85 | $ 4,305 | $ 85 |
Stock-Based Compensation (Narra
Stock-Based Compensation (Narrative) (Details) $ in Millions | 6 Months Ended |
Jun. 30, 2019USD ($)award_typeshares | |
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) | 1,164,414 |
Shares reserved for future vestings (in shares) | 1,973,768 |
Performance-vested stock units | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Types of PSUs | award_type | 3 |
Vesting period (in years) | 3 years |
Corporate goal PSU's awarded (in shares) | 274,898 |
Unrecognized compensation | $ | $ 7.7 |
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% |
Stock-Based Compensation (Stock
Stock-Based Compensation (Stock Based Compensation Expense) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Total stock-based compensation | $ 3,819 | $ 3,768 | $ 8,232 | $ 7,163 |
Less: stock-based compensation capitalized | (677) | (622) | (1,407) | (1,221) |
Total stock-based compensation expensed | 3,142 | 3,146 | 6,825 | 5,942 |
Stock options | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Total stock-based compensation | 795 | 1,195 | 1,822 | 2,398 |
Performance-vested stock units | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Total stock-based compensation | 1,258 | 1,173 | 2,329 | 2,029 |
Restricted stock units and stock bonus shares | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Total stock-based compensation | $ 1,766 | $ 1,400 | $ 4,081 | $ 2,736 |
Stock-Based Compensation (Sto_2
Stock-Based Compensation (Stock Option Activity) (Details) - USD ($) $ / shares in Units, $ in Thousands | 6 Months Ended | 12 Months Ended |
Jun. 30, 2019 | Dec. 31, 2018 | |
Number of Shares | ||
Outstanding, Beginning balance (in shares) | 4,652,634 | |
Granted (in shares) | 0 | |
Exercised (in shares) | 0 | |
Expired (in shares) | (12,000) | |
Forfeited (in shares) | (48,800) | |
Outstanding, Ending balance (in shares) | 4,591,834 | 4,652,634 |
Outstanding, Exercisable at end of period (in shares) | 3,771,134 | |
Weighted-Average Exercise Price | ||
Beginning balance (in dollars per share) | $ 10.06 | |
Granted (in dollars per share) | 0 | |
Exercised (in dollars per share) | 0 | |
Expired (in dollars per share) | 11.81 | |
Forfeited (in dollars per share) | 7.46 | |
Ending balance (in dollars per share) | 10.09 | $ 10.06 |
Outstanding (in dollars per share) | $ 10.30 | |
Weighted-Average Remaining Contractual Life | ||
Weighted-Average Remaining Contractual Life | 5 years 10 months 24 days | 6 years 4 months 24 days |
Outstanding, Exercisable | 5 years 8 months 12 days | |
Aggregate Intrinsic Value (thousands) | ||
Aggregate intrinsic value | $ 58 | $ 49 |
Exercised | 0 | |
Outstanding, Exercisable at end of period | $ 58 |
Stock-Based Compensation (Issue
Stock-Based Compensation (Issued and Outstanding Options) (Details) - $ / shares | 6 Months Ended | 12 Months Ended |
Jun. 30, 2019 | Dec. 31, 2018 | |
Outstanding Options | ||
Options (in shares) | 4,591,834 | |
Weighted average exercise price per share (in dollars per share) | $ 10.09 | $ 10.06 |
Weighted-Average Remaining Contractual Life | 5 years 10 months 24 days | 6 years 4 months 24 days |
Exercisable Options | ||
Options (in shares) | 3,771,134 | |
Weighted average exercise price per share (in dollars per share) | $ 10.30 | |
Weighted-Average Remaining Contractual Life | 5 years 8 months 12 days | |
Under $5.00 | ||
Outstanding Options | ||
Options (in shares) | 35,000 | |
Weighted average exercise price per share (in dollars per share) | $ 3.31 | |
Weighted-Average Remaining Contractual Life | 3 years 1 month 6 days | |
Exercisable Options | ||
Options (in shares) | 35,000 | |
Weighted average exercise price per share (in dollars per share) | $ 3.31 | |
Weighted-Average Remaining Contractual Life | 3 years 1 month 6 days | |
Exercise price range maximum (in dollars per share) | $ 5 | |
$5.00 - $6.99 | ||
Outstanding Options | ||
Options (in shares) | 683,000 | |
Weighted average exercise price per share (in dollars per share) | $ 6.29 | |
Weighted-Average Remaining Contractual Life | 5 years 9 months 18 days | |
Exercisable Options | ||
Options (in shares) | 433,600 | |
Weighted average exercise price per share (in dollars per share) | $ 6.25 | |
Weighted-Average Remaining Contractual Life | 5 years 1 month 6 days | |
Exercise price range minimum (in dollars per share) | $ 5 | |
Exercise price range maximum (in dollars per share) | $ 6.99 | |
$7.00 - $10.99 | ||
Outstanding Options | ||
Options (in shares) | 1,360,334 | |
Weighted average exercise price per share (in dollars per share) | $ 9.42 | |
Weighted-Average Remaining Contractual Life | 5 years 10 months 24 days | |
Exercisable Options | ||
Options (in shares) | 997,934 | |
Weighted average exercise price per share (in dollars per share) | $ 9.40 | |
Weighted-Average Remaining Contractual Life | 5 years 9 months 18 days | |
Exercise price range minimum (in dollars per share) | $ 7 | |
Exercise price range maximum (in dollars per share) | $ 10.99 | |
$11.00 - $13.46 | ||
Outstanding Options | ||
Options (in shares) | 2,513,500 | |
Weighted average exercise price per share (in dollars per share) | $ 11.57 | |
Weighted-Average Remaining Contractual Life | 5 years 10 months 24 days | |
Exercisable Options | ||
Options (in shares) | 2,304,600 | |
Weighted average exercise price per share (in dollars per share) | $ 11.56 | |
Weighted-Average Remaining Contractual Life | 5 years 10 months 24 days | |
Exercise price range minimum (in dollars per share) | $ 11 | |
Exercise price range maximum (in dollars per share) | $ 13.46 |
Stock-Based Compensation (Unrec
Stock-Based Compensation (Unrecognized Compensation Costs ) (Details) $ in Thousands | 6 Months Ended |
Jun. 30, 2019USD ($) | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized compensation | $ 2,484 |
Stock options | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Remaining vesting period | 1 year 6 months |
Restricted Stock | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Remaining vesting period | 2 years 2 months 12 days |
Unrecognized compensation cost | $ 12,065 |
Stock-Based Compensation (Restr
Stock-Based Compensation (Restricted Stock and Performance Stock Unit Activity) (Details) | 6 Months Ended |
Jun. 30, 2019$ / sharesshares | |
Restricted Stock | |
Number of Shares | |
Not vested, beginning balance (in shares) | shares | 1,639,918 |
Granted (in shares) | shares | 1,535,984 |
Vested (in shares) | shares | (582,615) |
Forfeited (in shares) | shares | (50,378) |
Not vested, ending balance (in shares) | shares | 2,542,909 |
Weighted-Average Grant-Date Fair Value | |
Not vested, beginning balance (in dollars per share) | $ / shares | $ 8.07 |
Granted (in dollars per share) | $ / shares | 4.87 |
Vested (in dollars per share) | $ / shares | 8.62 |
Forfeited (in dollars per share) | $ / shares | 6.40 |
Not vested, ending balance (in dollars per share) | $ / shares | $ 6.04 |
Performance-vested stock units | |
Number of Shares | |
Not vested, beginning balance (in shares) | shares | 780,028 |
Granted (in shares) | shares | 918,842 |
Vested (in shares) | shares | 0 |
Forfeited (in shares) | shares | 0 |
Not vested, ending balance (in shares) | shares | 1,698,870 |
Weighted-Average Grant-Date Fair Value | |
Not vested, beginning balance (in dollars per share) | $ / shares | $ 11.73 |
Granted (in dollars per share) | $ / shares | 5.74 |
Vested (in dollars per share) | $ / shares | 0 |
Forfeited (in dollars per share) | $ / shares | 0 |
Not vested, ending balance (in dollars per share) | $ / shares | $ 8.49 |
Performance-vested stock units | Minimum | |
Weighted-Average Grant-Date Fair Value | |
Award vesting rights (percent) | 0.00% |
Performance-vested stock units | Maximum | |
Weighted-Average Grant-Date Fair Value | |
Award vesting rights (percent) | 200.00% |
Stock-Based Compensation (Sto_3
Stock-Based Compensation (Stock Option Assumptions) (Details) - Performance-vested stock units | 6 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Weighted-average expected term | 2 years 10 months 24 days | 2 years 9 months 18 days |
Weighted-average expected volatility | 48.00% | 52.00% |
Weighted-average risk-free rate | 2.49% | 2.41% |
Weighted-Average Shares Outst_3
Weighted-Average Shares Outstanding (Details) - shares | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Weighted-average shares outstanding - basic (in shares) | 243,404,917 | 242,255,724 | 243,348,141 | 242,005,211 |
Potentially dilutive common shares from: | ||||
Stock options (in shares) | 13,719 | 421,316 | 12,611 | 387,634 |
TSR PSUs (in shares) | 277,364 | 1,372,019 | 209,431 | 1,223,542 |
Restricted stock units and stock bonus shares (in shares) | 434,245 | 415,717 | 139,732 | 338,286 |
Weighted-average shares outstanding - diluted (in shares) | 244,130,245 | 244,464,776 | 243,709,915 | 243,954,673 |
Total potentially dilutive common shares (in shares) | 6,301,039 | 3,638,344 | 6,770,055 | 3,856,494 |
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 (in shares) | ||||
Potentially dilutive common shares from: | ||||
Total potentially dilutive common shares (in shares) | 4,556,834 | 3,353,700 | 4,556,834 | 3,564,617 |
Performance-vested stock units | ||||
Potentially dilutive common shares from: | ||||
Total potentially dilutive common shares (in shares) | 773,954 | 0 | 1,233,375 | 0 |
Corporate Goals PSUs (in shares) | ||||
Potentially dilutive common shares from: | ||||
Total potentially dilutive common shares (in shares) | 274,898 | 281,872 | 274,898 | 281,872 |
Restricted stock units and stock bonus shares | ||||
Potentially dilutive common shares from: | ||||
Total potentially dilutive common shares (in shares) | 695,353 | 2,772 | 704,948 | 10,005 |
Income Taxes (Narrative) (Detai
Income Taxes (Narrative) (Details) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Income Tax Disclosure [Abstract] | ||||
Effective rate expressed as a percentage | 25.00% | 6.00% | 26.00% | 7.00% |
Revenue from Contracts with C_3
Revenue from Contracts with Customers (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Disaggregation of Revenue [Line Items] | ||||
Oil, natural gas, and NGL revenues | $ 162,602 | $ 147,087 | $ 352,057 | $ 294,320 |
Oil | ||||
Disaggregation of Revenue [Line Items] | ||||
Oil, natural gas, and NGL revenues | 132,098 | 114,857 | 279,178 | 231,061 |
Natural Gas and NGLs | ||||
Disaggregation of Revenue [Line Items] | ||||
Oil, natural gas, and NGL revenues | $ 30,504 | $ 32,230 | $ 72,879 | $ 63,259 |
Leases - Components of Lease Ex
Leases - Components of Lease Expense (Details) $ in Thousands | 3 Months Ended | 6 Months Ended |
Jun. 30, 2019USD ($) | Jun. 30, 2019USD ($) | |
Leases [Abstract] | ||
Lessee, operating lease, renewal term | 5 years | 5 years |
Finance lease cost: | ||
Amortization of ROU assets | $ 63 | $ 123 |
Interest on lease liabilities | 7 | 15 |
Operating lease cost | 1,173 | 1,777 |
Short-term lease cost | 27,783 | 69,846 |
Total Lease Cost | $ 29,026 | $ 71,761 |
Leases - Other Information Rela
Leases - Other Information Related to Leases (Details) $ in Thousands | 3 Months Ended | 6 Months Ended |
Jun. 30, 2019USD ($) | Jun. 30, 2019USD ($) | |
Cash paid for amounts included in the measurement of lease liabilities | ||
Operating cash flows from operating leases | $ 1,173 | $ 1,777 |
Financing cash flows from finance leases | 47 | 105 |
ROU assets obtained in exchange for new finance lease liabilities | 43 | 138 |
ROU assets obtained in exchange for new operating lease liabilities | $ 4,006 | $ 8,538 |
Weighted-average remaining lease term - finance leases | 3 years | 3 years |
Weighted-average remaining lease term - operating leases | 2 years | 2 years |
Weighted-average discount rate - finance leases | 4.75% | 4.75% |
Weighted-average discount rate - operating leases | 4.75% | 4.75% |
Leases - Maturities of Operatin
Leases - Maturities of Operating and Finance Lease Liabilities (Details) $ in Thousands | Jun. 30, 2019USD ($) |
Finance Leases | |
2019 | $ 94 |
2020 | 188 |
2021 | 215 |
2022 | 185 |
2023 | 25 |
Thereafter | 0 |
Total lease payments | 707 |
Less imputed interest | (57) |
Total lease liability | 650 |
Operating Leases | |
2019 | 2,471 |
2020 | 4,684 |
2021 | 1,550 |
2022 | 500 |
2023 | 0 |
Thereafter | 0 |
Total lease payments | 9,205 |
Less imputed interest | (420) |
Total lease liability | $ 8,785 |
Leases - Future Minimum Contrac
Leases - Future Minimum Contractual Lease Payments (Details) $ in Thousands | Dec. 31, 2018USD ($) |
Operating Leases | |
2019 | $ 896 |
2020 | 916 |
2021 | 913 |
2022 | 500 |
2023 | 0 |
Thereafter | 0 |
Capital Leases | |
2019 | 183 |
2020 | 186 |
2021 | 204 |
2022 | 167 |
2023 | 0 |
Thereafter | 0 |
Rig Contracts | |
Operating Leases | |
2019 | 11,102 |
2020 | 0 |
2021 | 0 |
2022 | 0 |
2023 | 0 |
Thereafter | $ 0 |
Leases - Balance Sheet Informat
Leases - Balance Sheet Information (Details) $ in Thousands | Jun. 30, 2019USD ($) |
Lessee, Lease, Description [Line Items] | |
Finance lease, liability | $ 650 |
Operating lease, liability | 8,785 |
Other property and equipment, net | |
Lessee, Lease, Description [Line Items] | |
Finance lease, liability | 755 |
Operating lease, liability | 0 |
Other assets | |
Lessee, Lease, Description [Line Items] | |
Finance lease, liability | 0 |
Operating lease, liability | 7,161 |
Accounts payable and accrued expenses | |
Lessee, Lease, Description [Line Items] | |
Finance lease, liability | 161 |
Operating lease, liability | 4,629 |
Other liabilities | |
Lessee, Lease, Description [Line Items] | |
Finance lease, liability | 489 |
Operating lease, liability | $ 4,156 |
Other Commitments and Conting_3
Other Commitments and Contingencies (Narrative) (Details) bbl in Thousands | 1 Months Ended | 3 Months Ended | 6 Months Ended |
Aug. 31, 2018Mcf | Sep. 30, 2019bbl | Jun. 30, 2019counterpartyagreementMMcf | |
Long-term Purchase Commitment [Line Items] | |||
Transport agreement number of counterparties | counterparty | 4 | ||
Number of facilities expansion agreements | agreement | 2 | ||
Length of contractual obligation, first agreement | 7 years | ||
Agreement One | |||
Long-term Purchase Commitment [Line Items] | |||
New processing plant capacity energy (in mmcfe) | Mcf | 200,000 | ||
Volume commitment from contractual obligation, first agreement (in mmcfe) | 46,400 | ||
Agreement Two | |||
Long-term Purchase Commitment [Line Items] | |||
Volume commitment from contractual obligation, first agreement (in mmcfe) | 43,800 | ||
Forecast | |||
Long-term Purchase Commitment [Line Items] | |||
Volume commitment from sales agreement (in Bbls) | bbl | 15 | ||
Contractual obligation, sales agreement, term | 7 years |
Other Commitments and Conting_4
Other Commitments and Contingencies (Volume Commitments) (Details) bbl in Thousands | Jun. 30, 2019bbl |
Commitments and Contingencies Disclosure [Abstract] | |
Remainder of 2019 (in MBbls) | 2,605 |
2020 (in MBbls) | 4,003 |
2021 (in MBbls) | 1,672 |
Total (in MBbls) | 8,280 |
Supplemental Schedule of Info_3
Supplemental Schedule of Information to the Condensed Consolidated Statements of Cash Flows (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Supplemental cash flow information: | ||
Interest paid | $ 21,139 | $ 17,448 |
Non-cash investing and financing activities: | ||
Accrued well costs as of period end | 52,531 | 75,705 |
Asset retirement obligations incurred with development activities | 1,278 | 473 |
Asset retirement obligations assumed with acquisitions | 0 | 5 |
Obligations discharged with asset retirements and divestitures | (5,586) | (5,964) |
Net changes in operating assets and liabilities: | ||
Accounts receivable | 33,541 | 2,797 |
Accounts payable and accrued expenses | (685) | (42) |
Revenue payable | (1,208) | 5,377 |
Production taxes payable | (13,849) | 8,199 |
Other | 634 | 88 |
Changes in operating assets and liabilities | $ 18,433 | $ 16,419 |