COVER PAGE
COVER PAGE - shares | 3 Months Ended | |
Mar. 31, 2022 | May 02, 2022 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2022 | |
Document Transition Report | false | |
Entity File Number | 001-35371 | |
Entity Registrant Name | Civitas Resources, Inc. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 61-1630631 | |
Entity Address, Address Line One | 555 17th Street, | |
Entity Address, Address Line Two | Suite 3700 | |
Entity Address, City or Town | Denver, | |
Entity Address, State or Province | CO | |
Entity Address, Postal Zip Code | 80202 | |
City Area Code | 303 | |
Local Phone Number | 293-9100 | |
Title of 12(b) Security | Common Stock, par value $0.01 per share | |
Trading Symbol | CIVI | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding (in shares) | 84,967,471 | |
Entity Central Index Key | 0001509589 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2022 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Period Focus | Q1 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Current assets: | ||
Cash and cash equivalents | $ 154,349 | $ 254,454 |
Accounts receivable, net: | ||
Oil, natural gas, and NGL sales | 410,418 | 362,262 |
Joint interest and other | 72,888 | 66,390 |
Prepaid expenses and other | 21,891 | 21,052 |
Inventory of oilfield equipment | 14,557 | 12,386 |
Derivative assets | 0 | 3,393 |
Total current assets | 674,103 | 719,937 |
Property and equipment (successful efforts method): | ||
Proved properties | 5,983,892 | 5,457,213 |
Less: accumulated depreciation, depletion, and amortization | (608,898) | (430,201) |
Total proved properties, net | 5,374,994 | 5,027,012 |
Unproved properties | 671,538 | 688,895 |
Wells in progress | 213,153 | 177,296 |
Other property and equipment, net of accumulated depreciation of $5,403 in 2022 and $4,742 in 2021 | 51,046 | 51,639 |
Total property and equipment, net | 6,310,731 | 5,944,842 |
Right-of-use assets | 36,054 | 39,885 |
Deferred income tax assets | 0 | 22,284 |
Other noncurrent assets | 12,859 | 14,085 |
Total assets | 7,033,747 | 6,741,033 |
Current liabilities: | ||
Accounts payable and accrued expenses | 296,433 | 246,188 |
Production taxes payable | 188,962 | 144,408 |
Oil and natural gas revenue distribution payable | 422,854 | 466,233 |
Lease liability | 18,588 | 18,873 |
Derivative liability | 384,694 | 219,804 |
Asset retirement obligations | 24,000 | 24,000 |
Total current liabilities | 1,335,531 | 1,119,506 |
Long-term liabilities: | ||
Senior notes | 492,123 | 491,710 |
Lease liability | 17,920 | 21,398 |
Ad valorem taxes | 296,773 | 232,147 |
Derivative liability | 46,111 | 19,959 |
Deferred income tax liabilities | 5,805 | 0 |
Asset retirement obligations | 201,951 | 201,315 |
Total liabilities | 2,396,214 | 2,086,035 |
Commitments and contingencies (Note 6) | ||
Stockholders’ equity: | ||
Preferred stock, $.01 par value, 25,000,000 shares authorized, none outstanding | 0 | 0 |
Common stock, $.01 par value, 225,000,000 shares authorized, 84,941,558 and 84,572,846 issued and outstanding as of March 31, 2022 and December 31, 2021, respectively | 4,916 | 4,912 |
Additional paid-in capital | 4,194,444 | 4,199,108 |
Retained earnings | 438,173 | 450,978 |
Total stockholders’ equity | 4,637,533 | 4,654,998 |
Total liabilities and stockholders’ equity | $ 7,033,747 | $ 6,741,033 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Statement of Financial Position [Abstract] | ||
Other property and equipment, accumulated depreciation | $ 5,403 | $ 4,742 |
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 25,000,000 | 25,000,000 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 225,000,000 | 225,000,000 |
Common stock, shares issued (in shares) | 84,941,558 | 84,572,846 |
Common stock, shares outstanding (in shares) | 84,941,558 | 84,572,846 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) (UNAUDITED) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Operating net revenues: | ||
Oil, natural gas, and NGL sales | $ 817,810 | $ 74,159 |
Operating expenses: | ||
Lease operating expense | 36,019 | 5,731 |
Severance and ad valorem taxes | 63,304 | 4,604 |
Exploration | 528 | 96 |
Depreciation, depletion, and amortization | 184,860 | 18,823 |
Abandonment and impairment of unproved properties | 17,975 | 0 |
Unused commitments | 776 | 0 |
Merger transaction costs | 20,534 | 3,295 |
General and administrative expense (including $8,090 and $1,612, respectively, of stock-based compensation) | 35,720 | 9,251 |
Total operating expenses | 415,831 | 50,672 |
Other income (expense): | ||
Derivative loss | (295,493) | (23,419) |
Interest expense | (9,066) | (419) |
Gain on property transactions, net | 16,797 | 0 |
Other income | 783 | 188 |
Total other expense | (286,979) | (23,650) |
Income (loss) from operations before income taxes | 115,000 | (163) |
Income tax benefit (expense) | (23,361) | 44 |
Net income (loss) | 91,639 | (119) |
Comprehensive income (loss) | $ 91,639 | $ (119) |
Net income (loss) per common share: | ||
Basic (in dollars per share) | $ 1.08 | $ (0.01) |
Diluted (in dollars per share) | $ 1.07 | $ (0.01) |
Weighted-average common shares outstanding | ||
Basic (in shares) | 84,840 | 20,839 |
Diluted (in shares) | 85,326 | 20,839 |
Midstream operating expense | ||
Operating expenses: | ||
Operating expenses | $ 5,712 | $ 3,905 |
Gathering, transportation, and processing | ||
Operating expenses: | ||
Operating expenses | $ 50,403 | $ 4,967 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) (UNAUDITED) (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Income Statement [Abstract] | ||
General and administrative, stock compensation | $ 8,090 | $ 1,612 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (UNAUDITED) - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-In Capital | Retained Earnings |
Balance at beginning of period (in shares) at Dec. 31, 2020 | 20,839,227 | |||
Balance at beginning of period at Dec. 31, 2020 | $ 1,045,252 | $ 4,282 | $ 707,209 | $ 333,761 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Restricted common stock issued (in shares) | 109 | |||
Stock used for tax withholdings (in shares) | (38) | |||
Exercise of stock options (in shares) | 429 | |||
Exercise of stock options | 15 | 15 | ||
Stock-based compensation | 1,612 | 1,612 | ||
Net income (loss) | (119) | (119) | ||
Balance at end of period (in shares) at Mar. 31, 2021 | 20,839,727 | |||
Balance at end of period at Mar. 31, 2021 | 1,046,760 | $ 4,282 | 708,836 | 333,642 |
Balance at beginning of period (in shares) at Dec. 31, 2021 | 84,572,846 | |||
Balance at beginning of period at Dec. 31, 2021 | 4,654,998 | $ 4,912 | 4,199,108 | 450,978 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Restricted common stock issued (in shares) | 579,229 | |||
Restricted common stock issued | 6 | $ 6 | ||
Stock used for tax withholdings (in shares) | (215,811) | |||
Stock used for tax withholdings | (12,934) | $ (2) | (12,932) | |
Exercise of stock options (in shares) | 5,294 | |||
Exercise of stock options | 178 | 178 | ||
Stock-based compensation | 8,090 | 8,090 | ||
Cash dividends, $1.2125 per share | (104,444) | (104,444) | ||
Net income (loss) | 91,639 | 91,639 | ||
Balance at end of period (in shares) at Mar. 31, 2022 | 84,941,558 | |||
Balance at end of period at Mar. 31, 2022 | $ 4,637,533 | $ 4,916 | $ 4,194,444 | $ 438,173 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (UNAUDITED) (Parenthetical) | 3 Months Ended |
Mar. 31, 2022$ / shares | |
Statement of Stockholders' Equity [Abstract] | |
Cash dividends (in dollars per share) | $ 1.2125 |
CONDENSED CONSOLIDATED STATEM_5
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | ||
Cash flows from operating activities: | |||
Net income (loss) | $ 91,639 | $ (119) | |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||
Depreciation, depletion, and amortization | 184,860 | 18,823 | |
Deferred income tax expense (benefit) | 23,361 | (44) | |
Abandonment and impairment of unproved properties | 17,975 | 0 | |
Stock-based compensation | 8,090 | 1,612 | |
Amortization of deferred financing costs | 1,078 | 93 | |
Derivative loss | 295,493 | 23,419 | |
Derivative cash settlements loss | (166,578) | (3,791) | |
Gain on property transactions, net | (16,797) | 0 | |
Other | 68 | (84) | |
Changes in current assets and liabilities: | |||
Accounts receivable, net | 11,906 | (5,718) | |
Prepaid expenses and other assets | (2,398) | 106 | |
Accounts payable and accrued liabilities | 88,975 | 9,073 | |
Settlement of asset retirement obligations | (5,131) | (406) | |
Net cash provided by operating activities | 532,541 | 42,964 | |
Cash flows from investing activities: | |||
Acquisition of oil and natural gas properties | (300,087) | (180) | |
Cash acquired | 44,310 | 0 | |
Exploration and development of oil and natural gas properties | (260,667) | (28,730) | |
Additions to other property and equipment | (68) | (38) | |
Other | 212 | 0 | |
Net cash used in investing activities | (516,300) | (28,948) | |
Cash flows from financing activities: | |||
Proceeds from exercise of stock options | 178 | 15 | |
Dividends paid | (103,596) | 0 | |
Payment of employee tax withholdings in exchange for the return of common stock | (12,928) | 0 | |
Deferred financing costs | 0 | (58) | |
Other | 0 | (21) | |
Net cash used in financing activities | (116,346) | (64) | |
Net change in cash, cash equivalents, and restricted cash | (100,105) | 13,952 | |
Cash, cash equivalents, and restricted cash: | |||
Beginning of period | 254,556 | 24,845 | |
End of period | [1] | 154,451 | 38,797 |
Supplemental cash flow disclosure: | |||
Cash paid for interest | (774) | (318) | |
Cash paid for income taxes | (6,300) | 0 | |
Changes in working capital related to drilling expenditures | $ (28,015) | $ 4,371 | |
[1] | (1) Includes $0.1 million of restricted cash and consists of funds for road maintenance and repairs that is presented in other noncurrent assets within the accompanying unaudited condensed consolidated balance sheets (“balance sheets”) as of both March 31, 2022 and March 31, 2021. |
CONDENSED CONSOLIDATED STATEM_6
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (Parenthetical) - USD ($) $ in Millions | Mar. 31, 2022 | Mar. 31, 2021 |
Statement of Cash Flows [Abstract] | ||
Restricted cash included in other noncurrent assets | $ 0.1 | $ 0.1 |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended |
Mar. 31, 2022 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Description of Operations When we use the terms “Civitas,” the “Company,” “we,” “us,” or “our,” we are referring to Civitas Resources, Inc. and its consolidated subsidiaries unless the context otherwise requires. Effective November 1, 2021, Bonanza Creek Energy, Inc. changed its name to Civitas Resources, Inc. Civitas is an independent Denver-based exploration and production company focused on the acquisition, development, and production of oil and associated liquids-rich natural gas in the Rocky Mountain region, primarily in the Wattenberg Field of the DJ Basin. Basis of Presentation The accompanying unaudited condensed consolidated financial statements include the accounts of the Company and have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information, the instructions to Quarterly Report on Form 10-Q, and Regulation S-X. Accordingly, pursuant to such rules and regulations, certain notes and other financial information included in audited financial statements have been condensed or omitted. In the opinion of management, all adjustments, consisting of normal recurring adjustments considered necessary for a fair presentation of interim financial information, have been included. All significant intercompany balances and transactions have been eliminated in consolidation. The December 31, 2021 unaudited condensed consolidated balance sheet data has been derived from the audited consolidated financial statements contained in our Annual Report on Form 10-K for the year ended December 31, 2021 (“ 2021 Form 10-K ”), but does not include all disclosures, including notes required by GAAP. As such, this quarterly report should be read in conjunction with the audited consolidated financial statements and related notes included in our 2021 Form 10-K . In connection with the preparation of the unaudited condensed consolidated financial statements, the Company evaluated subsequent events after the balance sheet date of March 31, 2022, through the filing date of this report. The results of operations for the three months ended March 31, 2022 are not necessarily indicative of the results that may be expected for the full year or any other future period. Significant Accounting Policies The significant accounting policies followed by the Company are set forth in Note 1 - Summary of Significant Accounting Policies in the 2021 Form 10-K and are supplemented by the notes to the unaudited condensed consolidated financial statements included in this report. Recently Issued and Adopted Accounting Standards In March 2020, the FASB issued Update No. 2020-04, Reference Rate Reform (Topic 848), which provides temporary optional guidance to companies impacted by the transition away from the LIBOR. The amendment provides certain expedients and exceptions to applying GAAP in order to lessen the potential accounting burden when contracts, hedging relationships, and other transactions that reference LIBOR as a benchmark rate are modified. Further, in January 2021, the FASB issued Update No. 2021-01, Reference Rate Reform (Topic 848), which clarifies the scope of Topic 848 so that derivatives affected by the discounting transition are explicitly eligible for certain optional expedients and exceptions in Topic 848. These amendments are effective upon issuance and expire on December 31, 2022. The Company is currently assessing the impact of the LIBOR transition on the Company's condensed consolidated financial statements. |
ACQUISITIONS AND DIVESTITURES
ACQUISITIONS AND DIVESTITURES | 3 Months Ended |
Mar. 31, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
ACQUISITIONS AND DIVESTITURES | ACQUISITIONS AND DIVESTITURES All mergers and acquisitions disclosed were accounted for under the acquisition method of accounting for business combinations. Accordingly, we conducted assessments of the net assets acquired and recognized amounts for identifiable assets acquired and liabilities assumed at their estimated acquisition date fair values, while transaction and integration costs associated with the acquisition were expensed as incurred. The fair value measurements of assets acquired and liabilities assumed were based on inputs that are not observable in the market, and therefore represent Level 3 inputs. The fair values of crude oil and natural gas properties and asset retirement obligations were measured using valuation techniques that convert future cash flows to a single discounted amount. Significant inputs to the valuation of proved oil and natural gas properties include estimates of reserves, future operating and development costs, future commodity prices, estimated future cash flows, and a market-based weighted-average cost of capital. These inputs required significant judgments and estimates by management at the time of the valuation. HighPoint Merger On April 1, 2021, Civitas completed its previously announced acquisition of HighPoint Resources Corporation, a Delaware corporation (“HighPoint”), pursuant to the terms of HighPoint’s prepackaged plan of reorganization under Chapter 11 of the United States Bankruptcy Code (the “Prepackaged Plan”), which was confirmed by the U.S. Bankruptcy Court for the District of Delaware on March 18, 2021 pursuant to a confirmation order, and went effective on April 1, 2021 (the “HighPoint Merger”). The Prepackaged Plan implemented the merger and restructuring transactions in accordance with the Agreement and Plan of Merger, dated as of November 9, 2020 (the “HighPoint Merger Agreement”), by and among Civitas, HighPoint and Boron Merger Sub, Inc., a wholly-owned subsidiary of Civitas (“Merger Sub”). Pursuant to the Prepackaged Plan and the HighPoint Merger Agreement, at the effective time of the HighPoint Merger (the “HighPoint Effective Time”) and the effective date under the Prepackaged Plan, Merger Sub merged with and into HighPoint, with HighPoint continuing as the surviving corporation and wholly-owned subsidiary of Civitas. At the HighPoint Effective Time, each eligible share of common stock, par value $0.001 per share, of HighPoint (“HighPoint Common Stock”) issued and outstanding immediately prior to the HighPoint Effective Time was automatically converted into the right to receive 0.11464 shares of common stock, par value $0.01 per share, of Civitas (“Civitas Common Stock”), with cash paid in lieu of the issuance of any fractional shares. As a result, Civitas issued 487,952 shares of Civitas Common Stock to former HighPoint stockholders. Concurrently with the HighPoint Merger and pursuant to the Prepackaged Plan, and in exchange for the $625.0 million in aggregate principal amount outstanding of 7.0% Senior Notes due 2022 of HighPoint Operating Corporation (“HighPoint OpCo”) and 8.75% Senior Notes due 2025 of HighPoint OpCo (collectively, the “HighPoint Senior Notes”), Civitas issued to all holders of HighPoint Senior Notes an aggregate of (i) 9,314,214 shares of Civitas Common Stock and (ii) $100.0 million aggregate principal amount of 7.5% Senior Notes due 2026 (“7.5% Senior Notes”). Please refer to Note 5 - Long-term Debt for further discussion of the 7.5% Senior Notes. Immediately after the HighPoint Effective Time, in connection with the HighPoint Merger, Civitas entered into the Second Amendment, dated April 1, 2021, to the Credit Facility. Please refer to Note 5 - Long-Term Debt for further discussion. The following tables present the HighPoint Merger consideration and purchase price allocation of the assets acquired and the liabilities assumed in the HighPoint Merger: Merger Consideration (in thousands, except per share amount) Shares of Civitas Common Stock issued to existing holders of HighPoint Common Stock (1) 488 Shares of Civitas Common Stock issued to existing holders of HighPoint Senior Notes 9,314 Total additional shares of Civitas Common Stock issued as merger consideration 9,802 Closing price per share of Civitas Common Stock (2) $ 38.25 Merger consideration paid in shares of Civitas Common Stock $ 374,933 Aggregate principal amount of the 7.5% Senior Notes 100,000 Total merger consideration $ 474,933 _________________________ (1) Based on the number of shares of HighPoint Common Stock issued and outstanding as of April 1, 2021 and the conversion ratio of 0.11464 per share of Civitas Common Stock. (2) Based on the closing stock price of Civitas Common Stock on April 1, 2021. Purchase Price Allocation (in thousands) Assets Acquired Cash and cash equivalents $ 49,827 Accounts receivable - oil and natural gas sales 26,343 Accounts receivable - joint interest and other 9,161 Prepaid expenses and other 3,608 Inventory of oilfield equipment 4,688 Proved properties 539,820 Other property and equipment, net of accumulated depreciation 2,769 Right-of-use assets 4,010 Deferred income tax assets 110,513 Other noncurrent assets 797 Total assets acquired $ 751,536 Liabilities Assumed Accounts payable and accrued expenses $ 51,088 Oil and natural gas revenue distribution payable 20,786 Lease liability 4,010 Derivative liability 18,500 Current portion of long-term debt 154,000 Ad valorem taxes 3,746 Asset retirement obligations 24,473 Total liabilities assumed 276,603 Net assets acquired $ 474,933 The valuation of proved oil and natural gas properties for the HighPoint Merger applied a market-based weighted-average cost of capital rate of approximately 13%. Extraction Merger On November 1, 2021, Civitas completed its merger with Extraction Oil & Gas, Inc., a Delaware corporation (“Extraction”), pursuant to the terms of the related Agreement and Plan of Merger (the “Extraction Merger Agreement”) (the “Extraction Merger”). Pursuant to the Extraction Merger Agreement, at the effective time of the Extraction Merger of November 1, 2021 (the “Extraction Merger Effective Time”), (i) Raptor Eagle Merger Sub merged with and into Extraction, with Extraction continuing its existence as the surviving corporation as a wholly owned subsidiary of Civitas following the Extraction Merger (the “Extraction Surviving Corporation”), (ii) each share of common stock, par value $0.01 per share, of Extraction (the “Extraction Common Stock”) issued and outstanding as of immediately prior to the Extraction Merger Effective Time was converted into the right to receive 1.1711 shares of Civitas Common Stock for each share of Extraction Common Stock (the “Extraction Exchange Ratio”). Additionally, pursuant to the Extraction Merger Agreement, at the Extraction Merger Effective Time, each award of restricted stock units (including those subject to performance-based vesting conditions) issued pursuant to Extraction’s 2021 Long Term Incentive Plan (the “Extraction Equity Plan”) that was outstanding immediately prior to the Extraction Merger Effective Time and that by its terms did not settle by reason of the occurrence of the closing of the Extraction Merger (each, an “Extraction RSU Award”) was assumed by Civitas and converted into a number of restricted stock units with respect to shares of Civitas Common Stock (such restricted stock unit, a “Converted RSU”) equal to the product of the number of Extraction Common Stock subject to the Extraction RSU Award immediately prior to the Extraction Merger Effective Time multiplied by the Extraction Exchange Ratio, effective as of the Extraction Merger Effective Time. As of the Extraction Merger Effective Time, each Converted RSU continued to be governed by the same terms and conditions that were applicable to the corresponding Extraction RSU Award immediately prior to the Extraction Merger Effective Time. In addition, Converted RSUs subject to performance-based vesting conditions held by certain Extraction executives provide that, in the event such individual’s employment is terminated for death, disability, by Civitas for any reason other individual for good reason, in each case, on or within twelve months following the Extraction Merger Effective Time, the portion of such individual’s Converted RSUs subject to performance-based vesting conditions shall, effective as of such individual’s termination date, immediately vest in full based on deemed achievement of any applicable performance goals at the maximum level of performance. Further, effective as of immediately prior to the Extraction Merger Effective Time, each award of deferred stock units granted under the Extraction Equity Plan and held by a member of the Extraction board who was not a designee of Extraction for appointment to Civitas’ board of directors ("Board") as of the Extraction Merger Effective Time immediately vested in full. Additionally, at the Extraction Merger Effective Time, in accordance with the terms of (i) the Extraction Tranche A warrants to purchase Extraction Common Stock, issued pursuant to that certain Warrant Agreement by and between Extraction and American Stock Transfer & Trust Company, LLC, as warrant agent (“AST”), dated as of January 20, 2021 (the “Tranche A Warrants”), and (ii) the Extraction Tranche B warrants to purchase Extraction Common Stock, issued pursuant to that certain Warrant Agreement by and between Extraction and AST, as warrant agent, dated as of January 20, 2021 (the “Tranche B Warrants,” and, together with the Tranche A Warrants, the “Extraction Warrants”), that were issued and outstanding immediately prior to the Extraction Merger Effective Time, were cancelled and Civitas executed a replacement warrant agreement for the Tranche A Warrants and a replacement warrant agreement for the Tranche B Warrants (each, a "Replacement Warrant Agreement") and issued to each holder of the Extraction Warrants a replacement warrant (each, a “Replacement Warrant”) that is exercisable for a number of shares of Civitas Common Stock equal to the number of shares of Civitas Common Stock that would have been issued or paid to a holder of the number of shares of Extraction Common Stock into which such Extraction Warrant was exercisable immediately prior to the Extraction Merger Effective Time. Each Replacement Warrant has an exercise price as set forth in the applicable Replacement Warrant Agreement, subject to adjustment as set forth therein. The Replacement Warrants may be exercised, in whole or in part, at any time or from time to time on or before 5:00 p.m., New York time, on (i) January 20, 2025, in the case of the Replacement Warrants for the Tranche A Warrants, or (ii) January 20, 2026, in the case of the Replacement Warrants for the Tranche B Warrants. The number of shares of Civitas Common Stock for which a Replacement Warrant is exercisable, and the exercise price of such Replacement Warrant, are subject to customary adjustments from time to time upon the occurrence of certain events, including the payment of in-kind dividends or distributions, splits, subdivisions or combinations of shares of Civitas Common Stock. A holder of a Replacement Warrant, in its capacity as such, is not entitled to any rights whatsoever as a stockholder of Civitas, except to the extent expressly provided in the applicable Replacement Warrant Agreement. 3.4 million Tranche A Replacement Warrants and 1.7 million Tranche B Replacement Warrants were issued. The following tables present the merger consideration and preliminary purchase price allocation of the assets acquired and the liabilities assumed in the Extraction Merger: Merger Consideration (in thousands, except per share amount) Shares of Civitas Common Stock issued as merger consideration (1) 31,095 Closing price per share of Civitas Common Stock (2) $ 56.10 Merger consideration paid in shares of Civitas Common Stock $ 1,744,431 Unvested restricted stock compensation expense as merger consideration $ 19,338 Unvested performance restricted stock compensation expense allocated as merger consideration 2,897 Total merger consideration $ 22,235 Tranche A Warrants issued as merger consideration $ 52,164 Tranche B Warrants issued as merger consideration 25,299 Total warrant merger consideration $ 77,463 Total merger consideration $ 1,844,129 _________________________ (1) Based on the number of shares of Extraction Common Stock issued and outstanding as of November 1, 2021 and the conversion ratio of 1.1711 per share of Civitas Common Stock. (2) Based on the closing stock price of Civitas Common Stock on November 1, 2021. Preliminary Purchase Price Allocation (in thousands) Assets Acquired Cash and cash equivalents $ 106,360 Accounts receivable - oil and natural gas sales 119,585 Accounts receivable - joint interest and other 33,054 Prepaid expenses and other 3,044 Inventory of oilfield equipment 9,291 Derivative assets 5,834 Proved properties 1,876,014 Unproved properties 193,400 Other property and equipment, net of accumulated depreciation 40,068 Right-of-use assets 6,883 Deferred income tax assets 49,194 Other noncurrent assets 4,248 Total assets acquired $ 2,446,975 Liabilities Assumed Accounts payable and accrued expenses $ 90,353 Production taxes payable 63,572 Oil and natural gas revenue distribution payable 170,002 Income tax payable 14,000 Lease liability 6,883 Derivative liability 100,474 Ad valorem taxes 87,071 Asset retirement obligations 68,741 Other noncurrent liabilities 1,750 Total liabilities assumed 602,846 Net assets acquired $ 1,844,129 The valuation of proved oil and natural gas properties for the Extraction Merger applied a market-based weighted-average cost of capital rate of approximately 10%. The purchase price allocation is preliminary, and Civitas is continuing to assess the fair values of certain of the Extraction assets acquired and liabilities assumed. In particular, assets and liabilities subject to potential adjustment, in amounts that could be material to the pro forma financial statements, include, but are not limited to, proved properties, unproved properties, and accounts payable and accrued expenses related to our continued assessment over the application of lease contracts and related deductions. We cannot reasonably estimate the impact of such conclusions as there is still a high level of uncertainty regarding the underlying terms and application. Crestone Peak Merger On November 1, 2021, Civitas completed its acquisition of CPPIB Crestone Peak Resources America Inc., a Delaware corporation (“Crestone Peak”), pursuant to the terms of the related Agreement and Plan of Merger (the “Crestone Merger Agreement”) (the “Crestone Peak Merger”). Pursuant to the Crestone Merger Agreement, at the effective time of the Crestone Peak Merger of November 1, 2021, (i) Merger Sub 1 merged with and into Crestone Peak (the “Merger Sub 1 Merger”), with Crestone Peak continuing its existence as the surviving corporation as a wholly owned subsidiary of Civitas following the Merger Sub 1 Merger (the “Crestone Surviving Corporation”), and (ii) subsequently, the Crestone Surviving Corporation merged with and into Merger Sub 2 (the “Merger Sub 2 Merger” and together with the Merger Sub 1 Merger, the “Crestone Peak Merger”), with Merger Sub 2 continuing its existence as the surviving entity as a wholly owned subsidiary of Civitas (the “Crestone Surviving Entity”). Pursuant to the Crestone Merger Agreement, at the effective time of the Merger Sub 1 Merger (the “Merger Sub 1 Merger Effective Time”), the shares of Crestone Peak common stock, par value $0.01 per share (“Crestone Peak Common Stock”) (excluding shares of Crestone Peak Common Stock held by Crestone Peak as treasury shares or by Civitas or Merger Sub 1 immediately prior to the Merger Sub 1 Merger Effective Time), issued and outstanding as of immediately prior to the Merger Sub 1 Merger Effective Time were converted into the right to collectively receive 22.5 million shares of Civitas Common Stock (the “Crestone Peak Merger Consideration”). In addition, at the effective time of the Merger Sub 2 Merger (the “Merger Sub 2 Merger Effective Time”), each share of common stock of the Crestone Surviving Corporation issued and outstanding as of immediately prior to the Merger Sub 2 Merger Effective Time was automatically cancelled and each unit of Merger Sub 2 issued and outstanding immediately prior to the Merger Sub 2 Merger Effective Time remained issued and outstanding and represents the only outstanding units of the Crestone Surviving Entity immediately following the Merger Sub 2 Merger. The following tables present the Crestone Peak Merger Consideration and preliminary purchase price allocation of the assets acquired and the liabilities assumed in the Crestone Peak Merger: Merger Consideration (in thousands, except per share amount) Shares of Civitas Common Stock issued as merger consideration 22,500 Closing price per share of Civitas Common Stock (1) $ 56.10 Merger consideration paid in shares of Civitas Common Stock $ 1,262,250 _________________________ (1) Based on the closing stock price of Civitas Common Stock on November 1, 2021. Preliminary Purchase Price Allocation (in thousands) Assets Acquired Cash and cash equivalents $ 67,505 Accounts receivable - oil and natural gas sales 81,340 Accounts receivable - joint interest and other 9,917 Prepaid expenses and other 2,929 Inventory of oilfield equipment 11,951 Proved properties 1,797,814 Unproved properties 453,321 Other property and equipment, net of accumulated depreciation 7,980 Right-of-use assets 7,934 Total assets acquired $ 2,440,691 Liabilities Assumed Accounts payable and accrued expenses $ 134,791 Production taxes payable 52,435 Oil and natural gas revenue distribution payable 83,950 Lease liability 7,934 Derivative liability 338,383 Credit facility 280,000 Ad valorem taxes 66,913 Deferred income tax liabilities 125,086 Asset retirement obligations 88,949 Total liabilities assumed 1,178,441 Net assets acquired $ 1,262,250 The valuation of proved oil and natural gas properties for the Crestone Peak Merger applied a market-based weighted-average cost of capital rate of approximately 10%. The purchase price allocation is preliminary, and Civitas is continuing to assess the fair values of certain of the Crestone Peak assets acquired and liabilities assumed. In particular, assets and liabilities subject to potential adjustment, in amounts that could be material to the pro forma financial statements, include, but are not limited to, proved properties, unproved properties, and accounts payable and accrued expenses related to our continued assessment over the application of lease contracts and related deductions. We cannot reasonably estimate the impact of such conclusions as there is still a high level of uncertainty regarding the underlying terms and application. Revenue and earnings of the acquiree There were no revenue and earnings included in our statement of operations during the three months ended March 31, 2021 related to the HighPoint, Extraction, and Crestone Peak Mergers as all mergers were completed after the three months ended March 31, 2021. Supplemental pro forma financial information The following unaudited pro forma financial information (in thousands, except per share amounts) represents a summary of the condensed consolidated results of operations for the three months ended March 31, 2021, assuming the HighPoint, Extraction, and Crestone Peak mergers had been completed as of January 1, 2020. The pro forma financial information includes certain non-recurring pro forma adjustments that were directly attributable to the business combinations. The pro forma financial information is not necessarily indicative of the results of operations that would have been achieved if the mergers had been effective as of this date, or of future results. Three Months Ended March 31, 2021 As reported HighPoint (1) Extraction (2) Crestone Peak (2) Civitas Pro Forma Combined Total revenue $ 74,159 $ 72,019 $ 292,484 $ 126,654 $ 565,316 Net income (loss) (119) (46,434) 983,201 (78,552) 858,096 Net income (loss) per common share - basic $ (0.01) $ 10.19 Net income (loss) per common share - diluted $ (0.01) $ 10.14 _________________________ (1) Based on a closing date of April 1, 2021. (2) Based on a closing date of November 1, 2021. Bison Acquisition On March 1, 2022, the Company completed the acquisition of privately held DJ Basin operator Bison Oil & Gas II, LLC (“Bison”) for merger consideration of approximately $279.7 million (the “Bison Acquisition”). Net assets acquired under the preliminary purchase price allocation were $294.2 million and consequently resulted in a bargain purchase gain of $14.5 million. Because of the immateriality of the Bison Acquisition, the related revenue and earnings, supplemental pro forma financial information, and detailed purchase price allocation are not disclosed. Merger transaction costs Merger transaction costs of $20.5 million and $3.3 million related to the aforementioned mergers and acquisitions were accounted for separately from the assets acquired and liabilities assumed and are included in merger transaction costs in the accompanying unaudited condensed consolidated statements of operations and comprehensive income (“statements of operations”) for the three months ended March 31, 2022 and 2021, respectively. Merger transaction costs include $7.6 million and zero of severance payments for the three months ended March 31, 2022 and 2021, respectively. |
REVENUE RECOGNITION
REVENUE RECOGNITION | 3 Months Ended |
Mar. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | |
REVENUE RECOGNITION | REVENUE RECOGNITION Oil, natural gas, and natural gas liquid (“NGL”) sales revenue presented within the accompanying statements of operations is reflective of the revenue generated from contracts with customers. Revenue attributable to each identified revenue stream is disaggregated below (in thousands): Three Months Ended March 31, 2022 2021 Operating net revenues: Oil sales $ 549,502 $ 50,064 Natural gas sales 113,161 13,132 NGL sales 155,147 10,963 Oil, natural gas, and NGL sales $ 817,810 $ 74,159 The Company recognizes revenue from the sale of produced oil, natural gas, and NGL at the point in time when control of produced oil, natural gas, or NGL volumes transfer to the purchaser, which may differ depending on the applicable contractual terms. The Company considers the transfer of control to have occurred when the purchaser has the ability to direct the use of, and obtain substantially all of the remaining benefits from, the oil, natural gas, or NGL production. Transfer of control dictates the presentation of gathering, transportation, and processing expenses within the accompanying statements of operations. Gathering, transportation, and processing expenses incurred by the Company prior to the transfer of control are recorded gross within the gathering, transportation, and processing line item on the accompanying statements of operations. Conversely, gathering, transportation, and processing expenses incurred by the Company subsequent to the transfer of control are recorded net within the oil, natural gas, and NGL sales line item on the accompanying statements of operations. Please refer to Note 1 - Summary of Significant Accounting Policies in the 2021 Form 10-K for more information regarding the types of contracts under which oil, gas, and NGL sales revenue is generated. The Company records revenue in the month production is delivered and control is transferred to the purchaser. However, settlement statements and payment may not be received for 30 to 60 days after the date production is delivered and control is transferred. Until such time settlement statements and payment are received, the Company records a revenue accrual based on, amongst other factors, an estimate of the volumes delivered at estimated prices as determined by the applicable contractual terms. The Company records the differences between its estimates and the actual amounts received for product sales in the month in which payment is received from the purchaser. For the three months ended March 31, 2022, revenue recognized in the reporting period related to performance obligations satisfied in prior reporting periods was insignificant. At March 31, 2022 and December 31, 2021, the Company's receivables from contracts with customers were $410.4 million and $362.3 million, respectively. |
ACCOUNTS PAYABLE AND ACCRUED EX
ACCOUNTS PAYABLE AND ACCRUED EXPENSES | 3 Months Ended |
Mar. 31, 2022 | |
Payables and Accruals [Abstract] | |
ACCOUNTS PAYABLE AND ACCRUED EXPENSES | ACCOUNTS PAYABLE AND ACCRUED EXPENSES Accounts payable and accrued expenses contain the following as of the dates indicated (in thousands): March 31, 2022 December 31, 2021 Accounts payable trade $ 29,425 $ 19,623 Accrued drilling and completion costs 101,415 129,430 Accrued lease operating expense and gathering, transportation, and processing 53,597 19,077 Accrued general and administrative expense 12,873 21,163 Accrued merger transaction costs 3,206 1,475 Accrued oil and NGL hedging 65,418 26,601 Accrued interest expense 13,516 6,303 Accrued settlement 15,541 20,791 Other accrued expenses 1,442 1,725 Total accounts payable and accrued expenses $ 296,433 $ 246,188 |
LONG-TERM DEBT
LONG-TERM DEBT | 3 Months Ended |
Mar. 31, 2022 | |
Debt Disclosure [Abstract] | |
LONG-TERM DEBT | LONG-TERM DEBT 5.0% Senior Notes On October 13, 2021, the Company issued $400.0 million aggregate principal amount of 5.0% Senior Notes due 2026 (the “5.0% Senior Notes”) pursuant to an indenture (the “5.0% Indenture”), among Civitas Resources, Wells Fargo Bank, National Association, as trustee, and the guarantors party thereto. The Company used the net proceeds and cash on hand to repay all borrowings under the Credit Facility (as defined below), all borrowings outstanding under the Crestone Peak credit facility, and for general corporate purposes. Interest accrues at the rate of 5.0% per annum and is payable semiannually in arrears on April 15 and October 15 of each year, which payments commenced on April 15, 2022. The 5.0% Indenture contains covenants that limit, among other things, the Company’s ability to: (i) incur or guarantee additional indebtedness; (ii) create liens securing indebtedness; (iii) pay dividends on or redeem or repurchase stock or subordinated debt; (iv) make specified types of investments and acquisitions; (v) enter into or permit to exist contractual limits on the ability of the Company’s subsidiaries to pay dividends to Civitas Resources; (vi) enter into transactions with affiliates; and (vii) sell assets or merge with other companies. These covenants are subject to a number of important limitations and exceptions. The Company was in compliance with all covenants under the 5.0% Indenture as of March 31, 2022, and through the filing of this report. In addition, certain of these covenants will be terminated before the 5.0% Senior Notes mature if at any time no default or event of default exists under the 5.0% Indenture and the 5.0% Senior Notes receive an investment-grade rating from at least two ratings agencies. The 5.0% Indenture also contains customary events of default. At any time prior to October 15, 2023, the Company may redeem the 5.0% Senior Notes, in whole or in part, at a redemption price equal to the sum of (i) the principal amount thereof, plus (ii) the “make-whole” premium at the redemption date, plus (iii) accrued and unpaid interest, if any. On or after October 15, 2023, the Company may redeem all or part of the 5.0% Senior Notes at redemption prices (expressed as percentages of the principal amount redeemed) equal to (i) 102.5% for the twelve-month period beginning on October 15, 2023; (ii) 101.25% for the twelve-month period beginning on October 15, 2024; and (iii) 100.0% for the twelve-month period beginning October 15, 2025 and at any time thereafter, plus accrued and unpaid interest, if any. The Company may redeem up to 35% of the aggregate principal amount of the 5.0% Senior Notes at any time prior to October 15, 2023 with an amount not to exceed the net cash proceeds from certain equity offerings at a redemption price equal to 105.0% of the principal amount of the 5.0% Senior Notes redeemed, plus accrued and unpaid interest, if any, provided, however, that (i) at least 65.0% of the aggregate principal amount of the 5.0% Senior Notes originally issued on the issue date (but excluding 5.0% Senior Notes held by the Company) remains outstanding immediately after the occurrence of such redemption (unless all such 5.0% Senior Notes are redeemed substantially concurrently) and (ii) the redemption occurs within 180 days after the date of the closing of such equity offering. The 5.0% Senior Notes are fully and unconditionally guaranteed on a senior unsecured basis by all of Civitas' existing subsidiaries. 7.5% Senior Notes In conjunction with the HighPoint Merger, the Company issued $100.0 million aggregate principal amount of 7.5% Senior Notes due 2026 (the “7.5% Senior Notes”) pursuant to an indenture, dated April 1, 2021 (the “7.5% Indenture”), by and among Civitas Resources, U.S. Bank National Association , as trustee, and the guarantors party thereto. Interest accrues at the rate of 7.5% per annum is payable semiannually in arrears on April 30 and October 31 of each year. The 7.5% Indenture contains covenants that limit, among other things, the Company’s ability to: (i) incur additional indebtedness and issue preferred stock; (ii) pay dividends or make other distributions in respect of the Company's common stock; (iii) make other restricted payments and investments; (iv) create liens; (v) restrict distributions or other payments from Civitas' restricted subsidiaries; (vi) sell assets, including capital stock of restricted subsidiaries; (vii) merge or consolidate with other entities; and (viii) enter into transactions with affiliates. These covenants are subject to a number of important limitations and exceptions. The Company was in compliance with all covenants under the 7.5% Indenture as of March 31, 2022, and through the filing of this report. In addition, certain of these covenants will be suspended before the 7.5% Senior Notes mature if at any time no default or event of default exists under the 7.5% Indenture and the 7.5% Senior Notes receive an investment grade rating from at least two ratings agencies. The 7.5% Indenture also contains customary events of default. The 7.5% Senior Notes are redeemable at the Company’s option (an “Optional Redemption”), in whole or in part, prior to April 30, 2022 at a redemption price equal to 107.5% of the aggregate principal to be redeemed, plus unpaid accrued interest, if any, through the Optional Redemption date. On or after April 30, 2022, the Optional Redemption price will be equal to 100.0% of the aggregate principal amount of the 7.5% Senior Notes to be redeemed, plus accrued and unpaid interest, if any, through the Optional Redemption date. The 7.5% Senior Notes are fully and unconditionally guaranteed on a senior unsecured basis by all of Civitas' existing subsidiaries. On May 1, 2022 (the “Redemption Date”), the Company exercised its Optional Redemption of all of the issued and outstanding 7.5% Senior Notes. The 7.5% Senior Notes were redeemed at 100.0% of their aggregate principal amount, plus accrued and unpaid interest thereon to the Redemption Date. The 7.5% Senior Notes and 5.0% Senior Notes are recorded net of unamortized deferred financing costs within the Senior notes line item on the accompanying balance sheets. There were no discounts or premiums associated with the either issuance. The tables below present the related carrying values as of March 31, 2022 and December 31, 2021 (in thousands): As of March 31, 2022 Principal Amount Unamortized Deferred Financing Costs Net Amount 7.5% Senior Notes $ 100,000 $ — $ 100,000 5.0% Senior Notes $ 400,000 $ 7,877 $ 392,123 As of December 31, 2021 Principal Amount Unamortized Deferred Financing Costs Net Amount 7.5% Senior Notes $ 100,000 $ — $ 100,000 5.0% Senior Notes $ 400,000 $ 8,290 $ 391,710 Credit Facility In December 2018, the Company entered into a reserve-based revolving facility, as the borrower, with JPMorgan Chase Bank, N.A. (“JPMorgan”), as the administrative agent, and a syndicate of financial institutions (the “Lender Syndicate”), as lenders, that mature on December 7, 2023 (with all subsequent amendments as defined below, the “Credit Facility”). The Credit Facility contains customary representations and affirmative covenants. The Credit Facility also contains customary negative covenants, which, among other things, and subject to certain exceptions, include restrictions on (i) liens, (ii) indebtedness, guarantees and other obligations, (iii) restrictions in agreements on liens and distributions, (iv) mergers or consolidations, (v) asset sales, (vi) restricted payments, (vii) investments, (viii) affiliate transactions, (ix) change of business, (x) foreign operations or subsidiaries, (xi) name changes, (xii) use of proceeds, letters of credit, (xiii) gas imbalances, (xiv) hedging transactions, (xv) additional subsidiaries, (xvi) changes in fiscal year or fiscal quarter, (xvii) operating leases, (xviii) prepayments of certain debt and other obligations, (xix) sales or discounts of receivables, (xx) dividend payment thresholds, and (xi) cash balances. In addition, the Company is subject to certain financial covenants under the Credit Facility, as tested on the last day of each fiscal quarter, including, without limitation, (a) a maximum ratio of the Company's consolidated indebtedness (subject to certain exclusions) to earnings before interest, income taxes, depreciation, depletion, and amortization, exploration expense, and other non-cash charges and (b) a current ratio, as defined in the agreement, inclusive of the unused commitments then available to be borrowed, to not be less than 1.00 to 1. The Company was in compliance with all covenants under the Credit Facility as of March 31, 2022, and through the filing of this report. Under the terms of the Credit Facility, as amended in June 2020 (the “First Amendment”), borrowings bore interest at a per annum rate equal to, at the option of the Company, either (i) a LIBOR, subject to a 0% LIBOR floor plus a margin of 2.00% to 3.00%, based on the utilization of the Credit Facility (the “Eurodollar Rate”) or (ii) a fluctuating interest rate per annum equal to the greatest of (a) the rate of interest publicly announced by JPMorgan as its prime rate, (b) the rate of interest published by the Federal Reserve Bank of New York as the federal funds effective rate, (c) the rate of interest published by the Federal Reserve Bank of New York as the overnight bank funding rate, or (d) a LIBOR offered rate for a one-month interest period, subject to a 0% LIBOR floor plus a margin of 1.00% to 2.00%, based on the utilization of the Credit Facility (the “Reference Rate”). Interest on borrowings that bear interest at the Eurodollar Rate shall be payable on the last day of the applicable interest period selected by the Company, which shall be one, two, three, or six months, and interest on borrowings that bear interest at the Reference Rate shall be payable quarterly in arrears. On April 1, 2021, in conjunction with the HighPoint Merger, the Company entered into the Second Amendment to the Credit Facility (the “Second Amendment”) to, among other things: (i) increase the aggregate maximum commitment amount from $750.0 million to $1.0 billion; (ii) increase the available borrowing base from $260.0 million to $500.0 million; (iii) increase the Eurodollar Rate margin to 3.00% to 4.00%; (iv) increase the Reference Rate margin to 2.00% to 3.00%; (v) increase (A) the LIBOR floor from 0% to .50% and (B) the alternate base rate floor from 0% to 1.50%; (vi) decrease for any fiscal quarter ending on or after April 1, 2021, the maximum permitted net leverage ratio from 3.50 to 3.0; and (viii) amend certain other covenants and provisions. On November 1, 2021, the Company, JPMorgan, and the Lender Syndicate entered into an Amended and Restated Credit Agreement (the “Amended and Restated Credit Agreement”), having an aggregate maximum commitment amount of $2.0 billion. The Amended and Restated Credit Agreement, among other things: (i) increased the aggregate elected commitments to from $400.0 million to $800.0 million, (ii) increased the available borrowing base from $500.0 million to $1.0 billion, (iii) extended the maturity date of the Amended and Restated Credit Agreement to November 1, 2025 and (iv) amended the borrowing base adjustment provisions such that, between borrowing base determinations, downward adjustments related to the incurrence of certain permitted indebtedness will only occur if either (A) such indebtedness exceeds $500.0 million and the Company’s pro-forma leverage ratio is less than or equal to 1.50 to 1, or (B) the Company's pro-forma leverage ratio is greater than 1.50 to 1. Under the Amended and Restated Credit Agreement, the Credit Facility is guaranteed by all restricted domestic subsidiaries of the Company, and is secured by first priority security interests on substantially all assets, including a mortgage on at least 90% of the total value of the proved oil and natural gas properties evaluated in the most recently delivered reserve reports prior to the amendment effective date, including any engineering reports relating to the oil and natural gas properties of the Extraction Surviving Corporation, the Crestone Surviving Entity, their respective subsidiaries, of each of the Company, all restricted domestic subsidiaries of the Company, the Extraction Surviving Corporation and the Crestone Surviving Entity, in each case, subject to customary exceptions. On December 21, 2021, the Company, JPMorgan, and the Lender Syndicate, entered into a First Amendment to Amended and Restated Credit Agreement. Pursuant to the First Amendment to Amended and Restated Credit Agreement, the parties agreed that the minimum hedging covenant with respect to projected oil and gas production will not apply if the Company’s leverage ratio is less than 1.00 to 1 as of the applicable quarterly test date, until the next such test date. On April 20, 2022, the Company, JPMorgan, and the Lender Syndicate, entered into a Second Amendment to the Amended and Restated Credit Agreement. Pursuant to the Second Amendment to the Amended and Restated Credit Agreement, and as part of the regularly scheduled, semi-annual borrowing base redetermination, the Company's borrowing base was increased from $1.0 billion to $1.7 billion, and the aggregate elected commitment amount was increased from $800.0 million to 1.0 billion. The borrowing base increase was primarily driven by the increased value of the Company’s estimated proved reserves at December 31, 2021. The next scheduled borrowing base redetermination date is set to occur in October 2022. The following table presents the outstanding balance, total amount of letters of credit outstanding, and available borrowing capacity under the Credit Facility as of the dates indicated (in thousands): May 4, 2022 March 31, 2022 December 31, 2021 Revolving credit facility $ — $ — $ — Letters of credit 12,393 12,393 21,656 Available borrowing capacity 987,607 787,607 778,344 Total aggregate elected commitments $ 1,000,000 $ 800,000 $ 800,000 In connection with the Second Amendment and the Amended and Restated Credit Agreement, the Company capitalized a total of approximately $3.9 million and $6.8 million, respectively, in deferred financing costs. Of the total post-amortization net capitalized amounts, (i) $6.9 million and $7.5 million are presented within the other noncurrent assets line item on the accompanying balance sheets as of March 31, 2022 and December 31, 2021, respectively, and (ii) $2.7 million is presented within the prepaid expenses and other line item on the accompanying balance sheets at both March 31, 2022 and December 31, 2021. Interest Expense For the three months ended March 31, 2022 and 2021, the Company incurred interest expense of $9.1 million and $0.4 million, respectively. No interest was capitalized during the three months ended March 31, 2022 and 2021. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 3 Months Ended |
Mar. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Legal Proceedings From time to time, the Company is involved in various commercial and regulatory claims, litigation, and other legal proceedings that arise in the ordinary course of its business. The Company assesses these claims in an effort to determine the degree of probability and range of possible loss for potential accrual in its consolidated financial statements. In accordance with authoritative accounting guidance, an accrual is recorded for a loss contingency when its occurrence is probable and damages can be reasonably estimated based on the most likely anticipated outcome or the minimum amount within a range of possible outcomes. Because legal proceedings are inherently unpredictable and unfavorable resolutions could occur, assessing contingencies is highly subjective and requires judgments about uncertain future events. When evaluating contingencies, the Company may be unable to provide a meaningful estimate due to a number of factors, including the procedural status of the matter in question, the presence of complex or novel legal theories, and/or the ongoing discovery and development of information important to the matters. The Company regularly reviews contingencies to determine the adequacy of its accruals and related disclosures. No claims have been made, nor is the Company aware of any material uninsured liability which the Company may have, as it relates to any environmental cleanup, restoration, or the violation of any rules or regulations. Upon closing of the HighPoint, Extraction, and Crestone Peak Mergers, the Company assumed all obligations, whether asserted or unasserted, of HighPoint, Extraction, and Crestone Peak. As of the filing date of this report, there were no probable, material pending, or overtly threatened legal actions against the Company of which it was aware, other than the following: Boulder County. As of the date of this filing, there is ongoing litigation between Boulder County and Extraction which has been previously disclosed as having the potential to prevent oil and gas operations for the development minerals contained within Boulder County, Colorado. As noted below, this matter remains pending, but the substantive issues have been fully addressed by the appellate court in the Company’s favor and the Company is awaiting a dismissal from the trial court. Boulder County initiated suit in District Court for Boulder County, Colorado in case no. 2018CV030925. The action was primarily a contract case, where the relevant contracts are the conservation easement (“CE”) over the Blue Paintbrush location, Extraction’s Surface Use Agreement (“SUA”) for the Blue Paintbrush location, and the leases that Boulder owns within the Blue Paintbrush drilling and spacing unit. Boulder sought invalidation of these leases in the litigation. Boulder argued that the lease underlying the CE only authorize the extraction of minerals underneath the CE property. Boulder took issue with the planned 32 wells for the location and argued that only the number of wells necessary to extract the minerals underlying the CE property should be allowed. Boulder also argued that Extraction induced a breach of the CE by contracting with the CE property owner for the SUA. Boulder argued that the terms of the SUA violate the CE because the SUA allows for development in excess of that allowed under the underlying lease. Boulder’s argument was based on its assertion that the lease underlying the CE property only allows for the extraction of minerals underneath the CE property. Boulder’s remaining claims asserted that Extraction breached the terms of leases Boulder owns in the drilling and spacing unit by establishing the Blue Paintbrush drilling and spacing unit. Specifically, Boulder’s leases within the Blue Paintbrush drilling and spacing unit have a clause that states that a unit must be the “minimum size tract on which a well may be drilled under the laws, rules, or regulations in force at the time of such pooling or unitization.” Boulder argued that no drilling and spacing unit including acreage covered by these leases can be greater than 80 acres because Colorado Oil and Gas Conservation Commission ("COGCC") Order 407 established 80-acre drilling and spacing units for the Codell and COGCC Order 407-87 established 80-acre drilling and spacing unit for the Niobrara. On September 25, 2018, Extraction prevailed before the district court on all issues. The district court’s order was appealed, was fully briefed on appeal, and was argued before the Colorado Court of Appeals on December 14, 2021 - Board of County Commissioners of Boulder County v. 8 North and Extraction Oil & Gas , Case No. 2019CA001896 (Colorado Court of Appeals) . On March 3, 2022, the Colorado Court of Appeals issued a unanimous opinion rejecting Boulder County's claims. Under the Colorado Rules of Appellate Procedure, Boulder County had forty-two days to petition the Colorado Supreme Court for certiorari. This date passed, and on April 25, 2022, the Court of Appeals issued a mandate affirming the judgment of the District Court of Boulder County. There are no outstanding issues for consideration by the trial court, and the Company is authorized to rely upon the Colorado Court of Appeals mandate. Enforcement. Disclosure of certain environmental matters is required when a governmental authority is a party to the proceedings and the proceedings involve potential monetary sanctions that the Company believes could exceed $0.3 million. The Company has received Notices of Alleged Violations (“NOAV”) from the COGCC alleging violations of various Colorado statutes and COGCC regulations governing oil and gas operations. The Company has further received notices from the Colorado Air Pollution Control Division. The Company continues to engage in discussions regarding resolution of the alleged violations. As of March 31, 2022 and December 31, 2021, the Company has accrued approximately $1.0 million associated with the NOAVs and Colorado Air Pollution Control Division notices, as they are probable and reasonably estimable. Commitments Firm Transportation Agreements. The Company is party to one firm pipeline transportation contract to provide a guaranteed outlet for production on an oil pipeline system. The contract requires the Company to pay minimum volume transportation charges on 8,500 gross barrels per day through April 2022 and 12,500 barrels per day thereafter through April 2025, regardless of the amount of pipeline capacity utilized by the Company. The aggregate financial commitment fee over the remaining term was $44.7 million as of March 31, 2022. The Company expects to utilize most, if not all, of the firm capacity on the oil pipeline system. Minimum Volume Agreement - Oil. The Company is party to a purchase agreement to deliver fixed and determinable quantities of crude oil. This agreement includes defined volume commitments over a term ending in 2023. Under the terms of the agreement, the Company is required to make periodic deficiency payments for any shortfalls in delivering minimum gross volume commitments, which are set in six-month periods. The minimum gross volume commitment will increase approximately 3% each year for the remainder of the contract, to a maximum of approximately 16,000 gross barrels per day. The aggregate financial commitment fee over the remaining term is $31.7 million as of March 31, 2022. Upon notifying the purchaser at least twelve months prior to the expiration date of the agreement, the Company may elect to extend the term of the agreement for up to three Minimum Volume Agreement - Gas and Other. The Company is party to a long-term gas gathering and processing agreement (the “Gathering Agreement”) with a third-party midstream provider over a term ending in 2029 with an annual minimum volume commitment of 13.0 billion cubic feet of natural gas (“Bcf”). The Gathering Agreement also includes a commitment to sell take-in-kind NGLs from other processing agreements of 7,500 barrels a day through year seven of the Gathering Agreement with the ability to roll forward up to a 10% shortfall in a given month to the subsequent month. The aggregate financial commitment fee over the remaining term is $145.5 million as of March 31, 2022. The Company has not and does not expect to incur any deficiency payments. Additionally, the Company is also party to a gas gathering and processing agreement with several third-party producers and a third-party midstream provider to deliver to two different plants over terms that end in August 2025 and July 2026. The Company’s share of these commitments requires an incremental 51.5 and 20.6 MMcf per day, respectively, over a baseline volume of 65 MMcf per day for a period of seven years following the in-service dates of the plants. The Company may be required to pay a shortfall fee for any incremental volume deficiencies under these commitments. These contractual obligations can be reduced by the Company’s proportionate share of the collective volumes delivered to the plants by other incremental third-party volumes available to the midstream provider that are in excess of the total commitments. Because of the third-party producer reduction provision, we believe that the aggregate financial commitment fee over the remaining term is zero as of March 31, 2022. The Company has not and does not expect to incur any deficiency payments. The Company is also party to two additional agreements that require the Company to pay a fee associated with the minimum volumes regardless of the amount delivered. The aggregate financial commitment fee over the remaining term for these contracts was $12.5 million as of March 31, 2022. The minimum annual payments under the these agreements for the next five years as of March 31, 2022 are presented below (in thousands): Firm Transportation Minimum Volume (1) Remainder of 2022 $ 10,616 $ 42,589 2023 14,600 32,241 2024 14,640 22,298 2025 4,800 20,400 2026 — 19,553 2027 and thereafter — 52,716 Total $ 44,656 $ 189,797 ___________________________ (1) The above calculation is based on the minimum volume commitment schedule (as defined in the relevant agreement) and applicable differential fees. Other commitments. The Company is party to a drilling commitment agreement with a third-party midstream provider such that the Company is required to drill a total of 106 horizontal wells, whereby a minimum number of wells out of the total must be drilled by a deadline occurring every two years over a period ending December 31, 2026. The drilling commitment agreement provides for, among other things, a number of specifications such as minimum consecutive days of production, well performance, and lateral length. Wells operated by others can satisfy this commitment, subject to limitations. If the Company were to fail to complete the wells by the applicable deadline, it would be in breach of the agreement and the third-party midstream provider could attempt to assert damages against Civitas and its affiliates. As of the date of filing, the Company cannot reasonably estimate how much, if any, damages will be paid. Refer to Note 13 - Leases |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 3 Months Ended |
Mar. 31, 2022 | |
Share-based Payment Arrangement [Abstract] | |
STOCK-BASED COMPENSATION | STOCK-BASED COMPENSATION Long Term Incentive Plans In April 2017, the Company adopted the 2017 Long Term Incentive Plan (“2017 LTIP”), which provides for the issuance of restricted stock units, performance stock units, and stock options, and reserved 2,467,430 shares of common stock. In June 2021, the Company adopted the 2021 Long Term Incentive Plan (“2021 LTIP”), which reserved an incremental 700,000 shares of common stock to those previously reserved under the 2017 LTIP. Finally, pursuant to the Extraction Merger Agreement, Civitas assumed the Extraction Equity Plan, which reserved 3,305,080 shares of common stock now issuable by Civitas. The 2017 LTIP, 2021 LTIP, and Extraction Equity Plan are collectively referred to herein as the “LTIP”. In November 2021, the Company adopted a non-employee director compensation program (the “Director Compensation Program”), which provides that non-employee directors will receive grants of deferred stock units (“DSUs”). In connection with the adoption of the Director Compensation Program, the Company adopted a First Amendment to the 2021 LTIP that, among other things, allows the Company to determine whether dividend rights granted pursuant to the LTIP should be reinvested, paid currently or paid in accordance with the terms of an associated award. The Company records compensation expense associated with the issuance of awards under the LTIP based on the fair value of the awards as of the date of grant within general and administrative expense. The following table outlines the compensation expense recorded by type of award (in thousands): Three Months Ended March 31, 2022 2021 Restricted and deferred stock units $ 5,265 $ 1,321 Performance stock units 2,825 291 Total stock-based compensation $ 8,090 $ 1,612 As of March 31, 2022, unrecognized compensation expense related to the awards granted under the LTIP will be amortized through the relevant periods as follows (in thousands): Unrecognized Compensation Expense Final Year of Recognition Restricted and deferred stock units $ 21,532 2025 Performance stock units 15,685 2024 Total unrecognized stock-based compensation $ 37,217 Restricted Stock Units (“RSUs”) and Deferred Stock Units The Company typically grants RSUs to officers, directors, and employees and DSUs to directors as part of its LTIP. Each RSU and DSU represents a right to receive one share of the Company's common stock upon settlement of the award at the end of the specified vesting period. RSUs generally vest and settle either over a (i) one-year vesting period, with the entire grant vesting and settling on the anniversary date or (ii) three-year vesting period, with one-third of the total grant vesting and settling on each anniversary date. DSUs generally vest in quarterly installments over a one-year period following the grant date. DSUs are settled in shares of the Company's common stock upon the director’s separation of service from the Board. The Company records compensation expense associated with the issuance of RSUs and DSUs on a straight-line basis over the vesting period based on the fair value of the awards as of the date of grant within general and administrative expense. The fair value of RSUs and DSUs is equal to the closing price of the Company’s common stock on the date of the grant. A summary of the status and activity of non-vested RSUs and DSUs for the three months ended March 31, 2022 is presented below: RSUs and DSUs Weighted-Average Grant-Date Fair Value Non-vested, beginning of year 815,062 $ 42.18 Granted 388,937 45.92 Vested (444,556) 48.25 Forfeited (9,745) 40.71 Non-vested, end of year 749,698 $ 40.54 The fair value of the RSUs and DSUs granted under the LTIP during the three months ended March 31, 2022 was $17.9 million. Performance Stock Units (“PSUs”) The Company grants PSUs to officers as part of its LTIP. The number of shares of the Company’s common stock issued to settle PSUs ranges from zero to two times the number of PSUs granted and is determined based on performance achievement against certain criteria over a three-year performance period. PSUs generally vest and settle on the third anniversary of the date of the grant. Performance achievement is determined based on one to two criteria. The first criterion is based on either, or a combination of, the Company’s absolute and relative total shareholder return (“TSR”) over the performance period. Absolute TSR is determined based upon the performance of the Company's common stock over the performance period relative to the price of the Company's common stock at the grant date. For awards with a relative TSR component, the Company's absolute TSR is compared with the absolute TSRs of a group of peer companies over the performance period. The absolute TSR for the Company and each of the peer companies is determined by dividing (A) (i) the volume-weighted average share price for the last 30 trading days of the performance period, minus (ii) the volume-weighted average share price for the 30 trading days preceding the beginning of the performance period, plus (iii) dividends paid by (B) the volume-weighted average share price for the 30 trading days preceding the beginning of the performance period. The second criterion, if applicable, is based on the Company's annual return on average capital employed (“ROCE”) for each year during the three-year performance period. The total number of PSUs granted under the LTIP was split as follows for the relevant grant years: 2022 2021 2020 TSR 100 % 100 % 67 % ROCE — % — % 33 % As the 2020 PSUs depend on a performance-based settlement criterion, compensation expense may be adjusted in future periods as the number of units expected to vest increases or decreases based on the Company’s expected ROCE performance. Of the grant-date fair value, the portion of the PSUs tied to TSR performance required a stochastic process method using a Brownian Motion simulation. A stochastic process is a mathematically defined equation that can create a series of outcomes over time. These outcomes are not deterministic in nature, which means that by iterating the equations multiple times, different results will be obtained for those iterations. In the case of the PSUs tied to TSR performance, the Company could not predict with certainty the path its stock price or the stock prices of its peers would take over the performance period. By using a stochastic simulation, the Company created multiple prospective stock pathways, statistically analyzed these simulations, and ultimately made inferences regarding the most likely path the stock price would take. As such, because future stock prices are stochastic, or probabilistic with some direction in nature, the stochastic method, specifically the Brownian Motion Model, was deemed an appropriate method by which to determine the fair value of the portion of the PSUs tied to TSR performance. Significant assumptions used in this simulation include the Company’s expected volatility, risk-free interest rate based on U.S. Treasury yield curve rates with maturities consistent with the performance period, as well as the volatilities for each of the Company’s peers. A summary of the status and activity of non-vested PSUs for the three months ended March 31, 2022 is presented below: PSUs (1) Weighted-Average Grant-Date Fair Value Non-vested, beginning of year 319,367 $ 57.58 Granted 129,676 56.43 Vested (91,523) 32.49 Expired (41,955) 22.77 Non-vested, end of year 315,565 $ 69.01 ___________________________ (1) The number of awards assumes that the associated performance condition is met at the target amount (multiplier of one). 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 performance condition. The fair value of the PSUs granted under the LTIP during the three months ended March 31, 2022 was $7.3 million. The PSUs tied to TSR performance granted in 2019 vested as of December 31, 2021 and were released during the three months ended March 31, 2022 with a 200% distribution of shares to the recipients. The PSUs tied to ROCE performance granted in 2019 expired, with zero distribution of shares to the recipients. Stock Options The LTIP allows for the issuance of stock options to the Company's employees at the sole discretion of the Board. Options expire ten years from the grant date unless otherwise determined by the Board. Compensation expense on the stock options is recognized as general and administrative expense over the vesting period of the award. Stock options are valued using a Black-Scholes Model where expected volatility is based on an average historical volatility of a peer group selected by management over a period consistent with the expected life assumption on the grant date, the risk-free rate of return is based on the U.S. Treasury constant maturity yield on the grant date with a remaining term equal to the expected term of the awards, and the Company’s expected life of stock option awards is derived from the midpoint of the average vesting time and contractual term of the awards. A summary of the status and activity of non-vested stock options for the three months ended March 31, 2022 is presented below: Stock Options Weighted- Weighted-Average Remaining Contractual Term (in years) Aggregate Intrinsic Value (in thousands) Outstanding, beginning of year 25,549 $ 34.36 Exercised (5,294) 34.36 Forfeited (111) 34.36 Outstanding, end of year 20,144 $ 34.36 5.1 $ 511 Options outstanding and exercisable 20,144 $ 34.36 5.1 $ 511 The aggregate intrinsic value of options exercised during the three months ended March 31, 2022 was $0.1 million. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 3 Months Ended |
Mar. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | FAIR VALUE MEASUREMENTS The Company follows authoritative accounting guidance for measuring the fair value of assets and liabilities in its financial statements. This guidance defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Further, this guidance establishes a hierarchy for inputs used in measuring fair value 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. The fair value hierarchy is broken down into three levels based on the reliability of the inputs as follows: Level 1: Quoted prices in active markets for identical assets or liabilities Level 2: Quoted prices in active markets for similar assets and liabilities, quoted prices for identical or similar instruments in markets that are not active, and model-derived valuations whose inputs are observable or whose significant value drivers are observable Level 3: Significant inputs to the valuation model are unobservable Financial and non-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. Derivatives The Company uses Level 2 inputs to measure the fair value of oil, gas, and NGL commodity price derivatives. The fair value of the Company's commodity price derivatives is estimated using industry-standard models that contemplate various inputs including, but not limited to, the contractual price of the underlying position, current market prices, forward commodity price curves, volatility factors, time value of money, and the credit risk of both the Company and its counterparties. We validate our fair value estimate by corroborating the original source of inputs, monitoring changes in valuation methods and assumptions, and reviewing counterparty mark-to-market statements and other supporting documentation. Refer to Note 9 - Derivatives for more information regarding the Company’s derivative instruments. The following tables present the Company’s financial assets and liabilities that were accounted for at fair value on a recurring basis as of March 31, 2022 and December 31, 2021 and their classification within the fair value hierarchy (in thousands): As of March 31, 2022 Level 1 Level 2 Level 3 Derivative assets $ — $ — $ — Derivative liabilities $ — $ 430,805 $ — As of December 31, 2021 Level 1 Level 2 Level 3 Derivative assets $ — $ 3,393 $ — Derivative liabilities $ — $ 239,763 $ — Long-Term Debt The 7.5% Senior Notes and 5.0% Senior Notes are recorded at cost, net of any unamortized deferred financing costs. As of March 31, 2022, the fair values for the 7.5% Senior Notes and 5.0% Senior Notes were $100.3 million and $396.4 million, respectively. These fair values are based on quoted market prices, and as such, are designated as Level 1 within the fair value hierarchy. The recorded value of the Credit Facility approximates its fair value as it bears interest at a floating rate that approximates a current market rate. Please refer to Note 5 - Long-Term Debt for additional information. Warrants As discussed in Note 2 - Acquisitions and Divestitures , the Company issued warrants in connection with the Extraction Merger. The warrants issued are indexed to the Company’s common stock and are required to be net share settled via a cashless exercise. The Company evaluated the warrants under authoritative accounting guidance and determined that they should be classified as equity instruments. The Company's share price traded below the exercise price of the replacement warrants and therefore were not exercisable during the three months ended March 31, 2022. The fair value of the warrants on the issuance date was determined using Level 3 inputs including, but not limited to, volatility, risk-free rate, and dividend yield under the Cox-Ross-Rubinstein binomial option pricing model. The warrants were included as a component of merger consideration and are recorded within additional paid-in capital on the accompanying balance sheets at a fair value of $77.5 million, with no recurring fair value measurement required. There have been no changes to the initial carrying amount of the warrants since issuance. Acquisitions and Impairments of Proved Properties We utilize the acquisition method to account for acquisitions of businesses. Pursuant to this method, we allocate the cost of the acquisition, or purchase price, to assets acquired and liabilities assumed based on fair values as of the acquisition date. Proved and unproved properties are valued based on a discounted cash flow approach utilizing Level 3 inputs, including, amongst other things, reserve quantities and classification, pace of drilling plans, future commodity prices, future development and lease operating costs, and discount rates using a market-based weighted average cost of capital determined at the time of the acquisition. When estimating the fair value of unproved properties, additional risk-weighting adjustments are applied to probable and possible reserves. Net derivative liabilities assumed are valued based on Level 2 inputs similar to the Company's other commodity price derivatives. Whenever events or circumstances indicate that the carrying value of proved properties may not be recoverable, the Company uses Level 3 inputs to measure and record impairment at fair value. There were no proved oil and gas property impairments during the three months ended March 31, 2022 and 2021. Impairments of Unproved Properties |
DERIVATIVES
DERIVATIVES | 3 Months Ended |
Mar. 31, 2022 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
DERIVATIVES | DERIVATIVES The Company periodically enters into commodity derivative contracts to mitigate a portion of its exposure to potentially adverse market changes in commodity prices for its expected future oil, natural gas, and NGL production and the associated impact on cash flows. The Company's commodity derivative contracts consist of swap and collar arrangements as well as roll differential swaps. As of March 31, 2022, all derivative counterparties were members of the Credit Facility lender group and all commodity derivative contracts are entered into for other-than-trading purposes. The Company does not designate its commodity derivative contracts as hedging instruments. In a typical swap arrangement, if the agreed upon published third-party index price (“index price”) is lower than the fixed contract price at the time of settlement, the Company receives the difference between the index price and the fixed contract price. If the index price is higher than the fixed contact price at the time of settlement, the Company pays the difference between the index price and the fixed contract price. A typical collar arrangement effectively establishes a floor and ceiling price on contracted volumes through the use of a short call and a long put (“two-way collar”). When the index price is above the ceiling price at the time of settlement, the Company pays the difference between the index price and the ceiling price. When the index price is below the floor price at the time of settlement, the Company receives the difference between the index price and floor price. When the index price is between the floor price and ceiling price, no payment or receipt occurs. A minority of our collar arrangements combine a two-way collar with a short put that holds an exercise price below the floor price (“three-way collar”). In these arrangements, when the index price is below the floor price at the time of settlement, the Company receives the difference between the index price and the floor price, capped at the difference between the floor price and the exercise price of the short put. The Company has also entered into crude oil swap contracts to fix the differential in pricing between the NYMEX calendar month average and the physical crude oil delivery month (“Roll Differential”) in which the Company pays the periodic variable Roll Differential and receives a weighted-average fixed price differential. The weighted-average differential represents the amount of reduction to NYMEX WTI prices for the notional volumes covered by the swap contracts. As of March 31, 2022, the Company had entered into the following commodity price derivative contracts: Contract Period Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 - Q4 2023 2024 Oil Derivatives (volumes in Bbls/day and prices in $/Bbls) Swaps NYMEX WTI Volumes 11,300 10,507 9,538 457 392 479 Weighted-Average Contract Price $ 49.56 $ 47.00 $ 46.84 $ 45.42 $ 46.59 $ 53.96 Two-Way Collars NYMEX WTI Volumes 9,775 8,296 7,393 1,054 — — Weighted-Average Ceiling Price $ 65.66 $ 68.43 $ 69.63 $ 72.70 $ — $ — Weighted-Average Floor Price $ 38.75 $ 40.66 $ 40.97 $ 40.00 $ — $ — Three-Way Collars NYMEX WTI Volumes 3,642 2,241 1,738 1,721 1,303 143 Weighted-Average Ceiling Price $ 59.54 $ 58.03 $ 57.78 $ 58.75 $ 57.26 $ 56.25 Weighted-Average Floor Price $ 48.96 $ 48.59 $ 48.42 $ 49.31 $ 48.32 $ 45.00 Weighted-Average Sold Put Price $ 38.96 $ 38.59 $ 38.42 $ 39.25 $ 38.01 $ 35.00 Roll Differential Swaps (1) NYMEX WTI Volumes 2,000 2,000 2,000 — — — Weighted-Average Contract Price $ 0.22 $ 0.22 $ 0.22 $ — $ — $ — Natural Gas Derivatives (volumes in MMBtu/day and prices in $/MMBtu) Swaps NYMEX HH Volumes 55,618 54,952 54,783 44,641 43,883 22,309 Weighted-Average Contract Price $ 2.76 $ 2.76 $ 2.76 $ 2.51 $ 2.51 $ 2.57 CIG Volumes 10,000 10,000 10,000 — — — Weighted-Average Contract Price $ 2.13 $ 2.13 $ 2.13 $ — $ — $ — Two-Way Collars NYMEX HH Volumes 63,113 81,018 79,148 9,558 1,736 1,033 Weighted-Average Ceiling Price $ 3.49 $ 3.68 $ 3.69 $ 3.23 $ 2.91 $ 3.05 Weighted-Average Floor Price $ 2.50 $ 2.59 $ 2.60 $ 2.03 $ 2.32 $ 2.38 CIG Volumes 20,000 — — — — — Weighted-Average Ceiling Price $ 2.75 $ — $ — $ — $ — $ — Weighted-Average Floor Price $ 2.15 $ — $ — $ — $ — $ — Three-Way Collars NYMEX HH Volumes 148 136 127 899 167 303 Weighted-Average Ceiling Price $ 2.74 $ 2.74 $ 2.74 $ 3.19 $ 3.33 $ 3.49 Weighted-Average Floor Price $ 2.50 $ 2.50 $ 2.50 $ 2.50 $ 2.50 $ 2.50 Weighted-Average Sold Put Price $ 2.00 $ 2.00 $ 2.00 $ 2.00 $ 2.00 $ 2.00 NGL Derivatives (volumes in Bbls/day and prices in $/Bbl) Swaps OPIS Basket Volumes 4,000 4,000 4,000 — — — Weighted-Average Contract Price $ 20.22 $ 20.22 $ 20.22 $ — $ — $ — ______________________________ (1) The weighted-average differential represents the amount of reduction to NYMEX WTI prices for the notional volumes covered by the swap contracts. The Company did not enter into any commodity price derivative contracts subsequent to March 31, 2022 through the filing of this report. Derivative Assets and Liabilities Fair Value The Company’s commodity price derivatives are measured at fair value and are included in the accompanying balance sheets as derivative assets and liabilities. The following table contains a summary of all the Company’s derivative positions reported on the accompanying balance sheets as well as a reconciliation between the gross assets and liabilities and the potential effects of master netting arrangements on the fair value of the Company’s commodity derivative contracts as of March 31, 2022 and December 31, 2021 (in thousands): March 31, 2022 December 31, 2021 Derivative Assets: Commodity contracts - current $ — $ 3,393 Commodity contracts - noncurrent — — Total derivative assets — 3,393 Amounts not offset in the accompanying balance sheets — (3,393) Total derivative assets, net $ — $ — Derivative Liabilities: Commodity contracts - current $ (384,694) $ (219,804) Commodity contracts - long-term (46,111) (19,959) Total derivative liabilities (430,805) (239,763) Amounts not offset in the accompanying balance sheets — 3,393 Total derivative liabilities, net $ (430,805) $ (236,370) The following table summarizes the components of the derivative loss presented on the accompanying statements of operations for the periods below (in thousands): Three Months Ended March 31, 2022 2021 Derivative cash settlement loss: Oil contracts $ (125,162) $ (2,822) Gas contracts (28,784) (969) NGL contracts (12,632) — Total derivative cash settlement loss (166,578) (3,791) Change in fair value loss (128,915) (19,628) Total derivative loss $ (295,493) $ (23,419) |
ASSET RETIREMENT OBLIGATIONS
ASSET RETIREMENT OBLIGATIONS | 3 Months Ended |
Mar. 31, 2022 | |
Asset Retirement Obligation Disclosure [Abstract] | |
ASSET RETIREMENT OBLIGATIONS | ASSET RETIREMENT OBLIGATIONS The Company recognizes an estimated liability for future costs associated with the abandonment of its oil and gas properties, including facilities requiring decommissioning. A liability for the fair value of an asset retirement obligation and corresponding increase to the carrying value of the related long-lived asset are recorded at the time a well is drilled or acquired, or a facility is constructed. The increase in carrying value is included in the proved oil and gas properties line item in the accompanying balance sheets. The Company depletes the amount added to proved oil and gas property costs and recognizes expense in connection with the accretion of the discounted liability over the remaining estimated economic lives of the respective long-lived assets. Cash paid to settle asset retirement obligations is included in the cash flows from operating activities section of the accompanying statements of cash flows. The Company’s estimated asset retirement obligation liability is based on historical experience plugging and abandoning wells, estimated economic lives, estimated plugging and abandonment cost, and regulatory requirements. The liability is discounted using the credit-adjusted risk-free rate estimated at the time the liability is incurred or revised. A roll-forward of the Company's asset retirement obligation is as follows (in thousands): Amount Balance as of December 31, 2021 $ 225,315 Additional liabilities incurred 1,748 Accretion expense 4,019 Liabilities settled (5,131) Balance as of March 31, 2022 $ 225,951 Current portion 24,000 Long-term portion $ 201,951 |
EARNINGS PER SHARE
EARNINGS PER SHARE | 3 Months Ended |
Mar. 31, 2022 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE | EARNINGS PER SHARE Earnings per basic and diluted share are calculated under the treasury stock method. Basic net income (loss) per common share is calculated by dividing net income (loss) by the basic weighted-average common shares outstanding for the respective period. Diluted net income (loss) per common share is calculated by dividing net income (loss) by the diluted weighted-average common shares outstanding, which includes the effect of potentially dilutive securities. Potentially dilutive securities for this calculation consist of unvested RSUs, DSUs, PSUs as well as outstanding in-the-money stock options and warrants. When the Company recognizes a loss from continuing operations, all potentially dilutive shares are anti-dilutive and are consequently excluded from the calculation of diluted earnings per share. The Company issues RSUs and DSUs, which represent the right to receive, upon vesting, one share of the Company's common stock. The number of potentially dilutive shares related to unvested RSUs and DSUs is based on the number of shares, if any, that would be issuable at the end of the respective reporting period, assuming that date was the end of the vesting period. The Company issues PSUs, which represent the right to receive, upon settlement of the PSUs, a number of shares of the Company's common stock that ranges from zero to two times the number of PSUs granted on the award date. The number of potentially dilutive shares related to PSUs is based on the number of shares, if any, that would be issuable at the end of the respective reporting period, assuming that date was the end of the performance period applicable to such PSUs. The Company has also issued stock options and warrants, which both represent the right to purchase the Company's common stock at a specified exercise price. The number of potentially dilutive shares related to the stock options and warrants is based on the number of shares, if any, that would be exercisable at the end of the respective reporting period, assuming the date was the end of such stock options' or warrants' term. Stock options and warrants are only dilutive when the average price of the common stock during the period exceeds the exercise price. Please refer to Note 7 - Stock-Based Compensation for additional discussion. The following table sets forth the calculations of basic and diluted net income (loss) per common share (in thousands, except per share amounts): Three Months Ended March 31, 2022 2021 Net income (loss) $ 91,639 $ (119) Basic net income (loss) per common share $ 1.08 $ (0.01) Diluted net income (loss) per common share $ 1.07 $ (0.01) Weighted-average shares outstanding - basic 84,840 20,839 Add: dilutive effect of contingent stock awards 486 — Weighted-average shares outstanding - diluted 85,326 20,839 There were 18,436 and 807,782 shares that were anti-dilutive for the three months ended March 31, 2022 and 2021, respectively. The exercise price of the Company's warrants was in excess of the Company's stock price during the three months ended March 31, 2022 |
INCOME TAXES
INCOME TAXES | 3 Months Ended |
Mar. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES Deferred tax assets and liabilities are measured by applying the provisions of enacted tax laws to determine the amount of taxes payable or refundable currently or in future years related to cumulative temporary differences between the tax basis of assets and liabilities and amounts reported in the accompanying balance sheets. The tax effect of the net change in the cumulative temporary differences during each period in the deferred tax assets and liabilities determines the periodic provision for deferred taxes. The following table outlines the Federal net operating loss (“NOL”) carryforwards acquired and deferred tax assets and liabilities recorded as a result of the mergers that closed in 2021 (in millions): HighPoint Merger Extraction Merger Crestone Peak Merger Federal NOL carryforwards $ 219.0 $ 479.9 $ 555.7 Deferred tax asset (liability) $ 110.5 $ 49.2 $ (125.1) Valuation allowance (48.1) — — Net $ 62.4 $ 49.2 $ (125.1) The Company assesses the recoverability of its deferred tax assets each period by considering whether it is more likely than not that all or a portion of the deferred tax assets will be realized. In making such determination, the Company considers all available (both positive and negative) evidence, including future reversals of temporary differences, tax-planning strategies, projected future taxable income, and results of operations. As a result of the HighPoint Merger, the Company recorded a valuation allowance of $48.1 million during 2021 against certain acquired net operating losses and other tax attributes due to the limitation on realizability caused by the change of ownership provisions of Section 382 of the Code. The net deferred tax liability as of March 31, 2022 was $5.8 million, and the net deferred tax asset as of December 31, 2021 was $22.3 million. The Company will continue to monitor facts and circumstances in the reassessment of the likelihood that the deferred tax assets will be realized. Federal income tax expense differs from the amount that would be provided by applying the statutory United States federal income tax rate of 21% to income before income taxes primarily due to the effect of state income taxes, equity-based compensation, and other permanent differences including bargain purchase gain. During the three months ended March 31, 2022 and 2021, the Company recorded income tax expense of $23.4 million and income tax benefit of less than $0.1 million, respectively. The Company had no unrecognized tax benefits as of March 31, 2022 and December 31, 2021. The Company's management does not believe that there are any new items or changes in facts or judgments that would impact the Company's tax position taken thus far in 2022. |
LEASES
LEASES | 3 Months Ended |
Mar. 31, 2022 | |
Leases [Abstract] | |
LEASES | LEASES The Company’s right-of-use assets and lease liabilities are recognized on the accompanying balance sheets based on the present value of the expected lease payments over the lease term. The following table summarizes the asset classes of the Company's operating leases (in thousands): March 31, 2022 December 31, 2021 Operating Leases Field equipment (1) $ 26,470 $ 29,312 Corporate leases 8,666 9,484 Vehicles 918 1,089 Total right-of-use asset $ 36,054 $ 39,885 Field equipment (1) $ 26,470 $ 29,312 Corporate leases 9,120 9,870 Vehicles 918 1,089 Total lease liability $ 36,508 $ 40,271 ____________________________ (1) Includes compressors, certain natural gas processing equipment, and other field equipment. The Company incurred gross short-term lease costs of $9.0 million and less than $0.1 million for the three months ended March 31, 2022 and 2021, respectively. A portion of these costs may have been or will be billed to other working interest owners, and the Company's net share of these costs, once paid, are capitalized to property and equipment or recognized as expense. Future commitments by year for the Company's leases with a lease term of one year or more as of March 31, 2022 are presented in the table below. Such commitments are reflected at undiscounted values and are reconciled to the discounted present value recognized on the accompanying balance sheets as follows (in thousands): Operating Leases Remainder of 2022 $ 15,271 2023 13,389 2024 5,333 2025 1,695 2026 1,195 Thereafter 1,586 Total lease payments 38,469 Less: imputed interest (1,961) Total lease liability $ 36,508 |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended |
Mar. 31, 2022 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited condensed consolidated financial statements include the accounts of the Company and have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information, the instructions to Quarterly Report on Form 10-Q, and Regulation S-X. Accordingly, pursuant to such rules and regulations, certain notes and other financial information included in audited financial statements have been condensed or omitted. In the opinion of management, all adjustments, consisting of normal recurring adjustments considered necessary for a fair presentation of interim financial information, have been included. All significant intercompany balances and transactions have been eliminated in consolidation. The December 31, 2021 unaudited condensed consolidated balance sheet data has been derived from the audited consolidated financial statements contained in our Annual Report on Form 10-K for the year ended December 31, 2021 (“ 2021 Form 10-K ”), but does not include all disclosures, including notes required by GAAP. As such, this quarterly report should be read in conjunction with the audited consolidated financial statements and related notes included in our 2021 Form 10-K . In connection with the preparation of the unaudited condensed consolidated financial statements, the Company evaluated subsequent events after the balance sheet date of March 31, 2022, through the filing date of this report. The results of operations for the three months ended March 31, 2022 are not necessarily indicative of the results that may be expected for the full year or any other future period. Significant Accounting Policies The significant accounting policies followed by the Company are set forth in Note 1 - Summary of Significant Accounting Policies in the 2021 Form 10-K and are supplemented by the notes to the unaudited condensed consolidated financial statements included in this report. |
Recently Issued and Adopted Accounting Standards | Recently Issued and Adopted Accounting Standards In March 2020, the FASB issued Update No. 2020-04, Reference Rate Reform (Topic 848), which provides temporary optional guidance to companies impacted by the transition away from the LIBOR. The amendment provides certain expedients and exceptions to applying GAAP in order to lessen the potential accounting burden when contracts, hedging relationships, and other transactions that reference LIBOR as a benchmark rate are modified. Further, in January 2021, the FASB issued Update No. 2021-01, Reference Rate Reform (Topic 848), which clarifies the scope of Topic 848 so that derivatives affected by the discounting transition are explicitly eligible for certain optional expedients and exceptions in Topic 848. These amendments are effective upon issuance and expire on December 31, 2022. The Company is currently assessing the impact of the LIBOR transition on the Company's condensed consolidated financial statements. |
Revenue Recognition | The Company recognizes revenue from the sale of produced oil, natural gas, and NGL at the point in time when control of produced oil, natural gas, or NGL volumes transfer to the purchaser, which may differ depending on the applicable contractual terms. The Company considers the transfer of control to have occurred when the purchaser has the ability to direct the use of, and obtain substantially all of the remaining benefits from, the oil, natural gas, or NGL production. Transfer of control dictates the presentation of gathering, transportation, and processing expenses within the accompanying statements of operations. Gathering, transportation, and processing expenses incurred by the Company prior to the transfer of control are recorded gross within the gathering, transportation, and processing line item on the accompanying statements of operations. Conversely, gathering, transportation, and processing expenses incurred by the Company subsequent to the transfer of control are recorded net within the oil, natural gas, and NGL sales line item on the accompanying statements of operations. Please refer to Note 1 - Summary of Significant Accounting Policies in the 2021 Form 10-K for more information regarding the types of contracts under which oil, gas, and NGL sales revenue is generated. |
ACQUISITIONS AND DIVESTITURES (
ACQUISITIONS AND DIVESTITURES (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
Schedule of Merger Consideration and Preliminary Purchase Price Allocations | The following tables present the HighPoint Merger consideration and purchase price allocation of the assets acquired and the liabilities assumed in the HighPoint Merger: Merger Consideration (in thousands, except per share amount) Shares of Civitas Common Stock issued to existing holders of HighPoint Common Stock (1) 488 Shares of Civitas Common Stock issued to existing holders of HighPoint Senior Notes 9,314 Total additional shares of Civitas Common Stock issued as merger consideration 9,802 Closing price per share of Civitas Common Stock (2) $ 38.25 Merger consideration paid in shares of Civitas Common Stock $ 374,933 Aggregate principal amount of the 7.5% Senior Notes 100,000 Total merger consideration $ 474,933 _________________________ (1) Based on the number of shares of HighPoint Common Stock issued and outstanding as of April 1, 2021 and the conversion ratio of 0.11464 per share of Civitas Common Stock. (2) Based on the closing stock price of Civitas Common Stock on April 1, 2021. Purchase Price Allocation (in thousands) Assets Acquired Cash and cash equivalents $ 49,827 Accounts receivable - oil and natural gas sales 26,343 Accounts receivable - joint interest and other 9,161 Prepaid expenses and other 3,608 Inventory of oilfield equipment 4,688 Proved properties 539,820 Other property and equipment, net of accumulated depreciation 2,769 Right-of-use assets 4,010 Deferred income tax assets 110,513 Other noncurrent assets 797 Total assets acquired $ 751,536 Liabilities Assumed Accounts payable and accrued expenses $ 51,088 Oil and natural gas revenue distribution payable 20,786 Lease liability 4,010 Derivative liability 18,500 Current portion of long-term debt 154,000 Ad valorem taxes 3,746 Asset retirement obligations 24,473 Total liabilities assumed 276,603 Net assets acquired $ 474,933 Merger Consideration (in thousands, except per share amount) Shares of Civitas Common Stock issued as merger consideration (1) 31,095 Closing price per share of Civitas Common Stock (2) $ 56.10 Merger consideration paid in shares of Civitas Common Stock $ 1,744,431 Unvested restricted stock compensation expense as merger consideration $ 19,338 Unvested performance restricted stock compensation expense allocated as merger consideration 2,897 Total merger consideration $ 22,235 Tranche A Warrants issued as merger consideration $ 52,164 Tranche B Warrants issued as merger consideration 25,299 Total warrant merger consideration $ 77,463 Total merger consideration $ 1,844,129 _________________________ (1) Based on the number of shares of Extraction Common Stock issued and outstanding as of November 1, 2021 and the conversion ratio of 1.1711 per share of Civitas Common Stock. (2) Based on the closing stock price of Civitas Common Stock on November 1, 2021. Preliminary Purchase Price Allocation (in thousands) Assets Acquired Cash and cash equivalents $ 106,360 Accounts receivable - oil and natural gas sales 119,585 Accounts receivable - joint interest and other 33,054 Prepaid expenses and other 3,044 Inventory of oilfield equipment 9,291 Derivative assets 5,834 Proved properties 1,876,014 Unproved properties 193,400 Other property and equipment, net of accumulated depreciation 40,068 Right-of-use assets 6,883 Deferred income tax assets 49,194 Other noncurrent assets 4,248 Total assets acquired $ 2,446,975 Liabilities Assumed Accounts payable and accrued expenses $ 90,353 Production taxes payable 63,572 Oil and natural gas revenue distribution payable 170,002 Income tax payable 14,000 Lease liability 6,883 Derivative liability 100,474 Ad valorem taxes 87,071 Asset retirement obligations 68,741 Other noncurrent liabilities 1,750 Total liabilities assumed 602,846 Net assets acquired $ 1,844,129 The following tables present the Crestone Peak Merger Consideration and preliminary purchase price allocation of the assets acquired and the liabilities assumed in the Crestone Peak Merger: Merger Consideration (in thousands, except per share amount) Shares of Civitas Common Stock issued as merger consideration 22,500 Closing price per share of Civitas Common Stock (1) $ 56.10 Merger consideration paid in shares of Civitas Common Stock $ 1,262,250 _________________________ (1) Based on the closing stock price of Civitas Common Stock on November 1, 2021. Preliminary Purchase Price Allocation (in thousands) Assets Acquired Cash and cash equivalents $ 67,505 Accounts receivable - oil and natural gas sales 81,340 Accounts receivable - joint interest and other 9,917 Prepaid expenses and other 2,929 Inventory of oilfield equipment 11,951 Proved properties 1,797,814 Unproved properties 453,321 Other property and equipment, net of accumulated depreciation 7,980 Right-of-use assets 7,934 Total assets acquired $ 2,440,691 Liabilities Assumed Accounts payable and accrued expenses $ 134,791 Production taxes payable 52,435 Oil and natural gas revenue distribution payable 83,950 Lease liability 7,934 Derivative liability 338,383 Credit facility 280,000 Ad valorem taxes 66,913 Deferred income tax liabilities 125,086 Asset retirement obligations 88,949 Total liabilities assumed 1,178,441 Net assets acquired $ 1,262,250 |
Schedule of Pro Forma Financial Information | The following unaudited pro forma financial information (in thousands, except per share amounts) represents a summary of the condensed consolidated results of operations for the three months ended March 31, 2021, assuming the HighPoint, Extraction, and Crestone Peak mergers had been completed as of January 1, 2020. The pro forma financial information includes certain non-recurring pro forma adjustments that were directly attributable to the business combinations. The pro forma financial information is not necessarily indicative of the results of operations that would have been achieved if the mergers had been effective as of this date, or of future results. Three Months Ended March 31, 2021 As reported HighPoint (1) Extraction (2) Crestone Peak (2) Civitas Pro Forma Combined Total revenue $ 74,159 $ 72,019 $ 292,484 $ 126,654 $ 565,316 Net income (loss) (119) (46,434) 983,201 (78,552) 858,096 Net income (loss) per common share - basic $ (0.01) $ 10.19 Net income (loss) per common share - diluted $ (0.01) $ 10.14 _________________________ (1) Based on a closing date of April 1, 2021. (2) Based on a closing date of November 1, 2021. |
REVENUE RECOGNITION (Tables)
REVENUE RECOGNITION (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Revenue by Revenue Stream | Revenue attributable to each identified revenue stream is disaggregated below (in thousands): Three Months Ended March 31, 2022 2021 Operating net revenues: Oil sales $ 549,502 $ 50,064 Natural gas sales 113,161 13,132 NGL sales 155,147 10,963 Oil, natural gas, and NGL sales $ 817,810 $ 74,159 |
ACCOUNTS PAYABLE AND ACCRUED _2
ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Payables and Accruals [Abstract] | |
Schedule of Accounts Payable and Accrued Expenses | Accounts payable and accrued expenses contain the following as of the dates indicated (in thousands): March 31, 2022 December 31, 2021 Accounts payable trade $ 29,425 $ 19,623 Accrued drilling and completion costs 101,415 129,430 Accrued lease operating expense and gathering, transportation, and processing 53,597 19,077 Accrued general and administrative expense 12,873 21,163 Accrued merger transaction costs 3,206 1,475 Accrued oil and NGL hedging 65,418 26,601 Accrued interest expense 13,516 6,303 Accrued settlement 15,541 20,791 Other accrued expenses 1,442 1,725 Total accounts payable and accrued expenses $ 296,433 $ 246,188 |
LONG-TERM DEBT (Tables)
LONG-TERM DEBT (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt Instruments | The tables below present the related carrying values as of March 31, 2022 and December 31, 2021 (in thousands): As of March 31, 2022 Principal Amount Unamortized Deferred Financing Costs Net Amount 7.5% Senior Notes $ 100,000 $ — $ 100,000 5.0% Senior Notes $ 400,000 $ 7,877 $ 392,123 As of December 31, 2021 Principal Amount Unamortized Deferred Financing Costs Net Amount 7.5% Senior Notes $ 100,000 $ — $ 100,000 5.0% Senior Notes $ 400,000 $ 8,290 $ 391,710 The following table presents the outstanding balance, total amount of letters of credit outstanding, and available borrowing capacity under the Credit Facility as of the dates indicated (in thousands): May 4, 2022 March 31, 2022 December 31, 2021 Revolving credit facility $ — $ — $ — Letters of credit 12,393 12,393 21,656 Available borrowing capacity 987,607 787,607 778,344 Total aggregate elected commitments $ 1,000,000 $ 800,000 $ 800,000 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Annual Minimum Commitment Payments | The minimum annual payments under the these agreements for the next five years as of March 31, 2022 are presented below (in thousands): Firm Transportation Minimum Volume (1) Remainder of 2022 $ 10,616 $ 42,589 2023 14,600 32,241 2024 14,640 22,298 2025 4,800 20,400 2026 — 19,553 2027 and thereafter — 52,716 Total $ 44,656 $ 189,797 ___________________________ (1) The above calculation is based on the minimum volume commitment schedule (as defined in the relevant agreement) and applicable differential fees. |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Share-based Payment Arrangement [Abstract] | |
Summary of Share-Based Compensation Expense | The following table outlines the compensation expense recorded by type of award (in thousands): Three Months Ended March 31, 2022 2021 Restricted and deferred stock units $ 5,265 $ 1,321 Performance stock units 2,825 291 Total stock-based compensation $ 8,090 $ 1,612 |
Summary of Unrecognized Compensation Expense and Vesting Criterion | As of March 31, 2022, unrecognized compensation expense related to the awards granted under the LTIP will be amortized through the relevant periods as follows (in thousands): Unrecognized Compensation Expense Final Year of Recognition Restricted and deferred stock units $ 21,532 2025 Performance stock units 15,685 2024 Total unrecognized stock-based compensation $ 37,217 The total number of PSUs granted under the LTIP was split as follows for the relevant grant years: 2022 2021 2020 TSR 100 % 100 % 67 % ROCE — % — % 33 % |
Summary of the Status and Activity of Non-Vested RSUs, DSUs, and Options | A summary of the status and activity of non-vested RSUs and DSUs for the three months ended March 31, 2022 is presented below: RSUs and DSUs Weighted-Average Grant-Date Fair Value Non-vested, beginning of year 815,062 $ 42.18 Granted 388,937 45.92 Vested (444,556) 48.25 Forfeited (9,745) 40.71 Non-vested, end of year 749,698 $ 40.54 A summary of the status and activity of non-vested stock options for the three months ended March 31, 2022 is presented below: Stock Options Weighted- Weighted-Average Remaining Contractual Term (in years) Aggregate Intrinsic Value (in thousands) Outstanding, beginning of year 25,549 $ 34.36 Exercised (5,294) 34.36 Forfeited (111) 34.36 Outstanding, end of year 20,144 $ 34.36 5.1 $ 511 Options outstanding and exercisable 20,144 $ 34.36 5.1 $ 511 |
Summary of the Status and Activity of PSUs | A summary of the status and activity of non-vested PSUs for the three months ended March 31, 2022 is presented below: PSUs (1) Weighted-Average Grant-Date Fair Value Non-vested, beginning of year 319,367 $ 57.58 Granted 129,676 56.43 Vested (91,523) 32.49 Expired (41,955) 22.77 Non-vested, end of year 315,565 $ 69.01 ___________________________ (1) The number of awards assumes that the associated performance condition is met at the target amount (multiplier of one). 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 performance condition. |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
Schedule of Financial Assets and Liabilities at Fair Value on Recurring Basis | The following tables present the Company’s financial assets and liabilities that were accounted for at fair value on a recurring basis as of March 31, 2022 and December 31, 2021 and their classification within the fair value hierarchy (in thousands): As of March 31, 2022 Level 1 Level 2 Level 3 Derivative assets $ — $ — $ — Derivative liabilities $ — $ 430,805 $ — As of December 31, 2021 Level 1 Level 2 Level 3 Derivative assets $ — $ 3,393 $ — Derivative liabilities $ — $ 239,763 $ — |
DERIVATIVES (Tables)
DERIVATIVES (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Commodity Derivatives | As of March 31, 2022, the Company had entered into the following commodity price derivative contracts: Contract Period Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 - Q4 2023 2024 Oil Derivatives (volumes in Bbls/day and prices in $/Bbls) Swaps NYMEX WTI Volumes 11,300 10,507 9,538 457 392 479 Weighted-Average Contract Price $ 49.56 $ 47.00 $ 46.84 $ 45.42 $ 46.59 $ 53.96 Two-Way Collars NYMEX WTI Volumes 9,775 8,296 7,393 1,054 — — Weighted-Average Ceiling Price $ 65.66 $ 68.43 $ 69.63 $ 72.70 $ — $ — Weighted-Average Floor Price $ 38.75 $ 40.66 $ 40.97 $ 40.00 $ — $ — Three-Way Collars NYMEX WTI Volumes 3,642 2,241 1,738 1,721 1,303 143 Weighted-Average Ceiling Price $ 59.54 $ 58.03 $ 57.78 $ 58.75 $ 57.26 $ 56.25 Weighted-Average Floor Price $ 48.96 $ 48.59 $ 48.42 $ 49.31 $ 48.32 $ 45.00 Weighted-Average Sold Put Price $ 38.96 $ 38.59 $ 38.42 $ 39.25 $ 38.01 $ 35.00 Roll Differential Swaps (1) NYMEX WTI Volumes 2,000 2,000 2,000 — — — Weighted-Average Contract Price $ 0.22 $ 0.22 $ 0.22 $ — $ — $ — Natural Gas Derivatives (volumes in MMBtu/day and prices in $/MMBtu) Swaps NYMEX HH Volumes 55,618 54,952 54,783 44,641 43,883 22,309 Weighted-Average Contract Price $ 2.76 $ 2.76 $ 2.76 $ 2.51 $ 2.51 $ 2.57 CIG Volumes 10,000 10,000 10,000 — — — Weighted-Average Contract Price $ 2.13 $ 2.13 $ 2.13 $ — $ — $ — Two-Way Collars NYMEX HH Volumes 63,113 81,018 79,148 9,558 1,736 1,033 Weighted-Average Ceiling Price $ 3.49 $ 3.68 $ 3.69 $ 3.23 $ 2.91 $ 3.05 Weighted-Average Floor Price $ 2.50 $ 2.59 $ 2.60 $ 2.03 $ 2.32 $ 2.38 CIG Volumes 20,000 — — — — — Weighted-Average Ceiling Price $ 2.75 $ — $ — $ — $ — $ — Weighted-Average Floor Price $ 2.15 $ — $ — $ — $ — $ — Three-Way Collars NYMEX HH Volumes 148 136 127 899 167 303 Weighted-Average Ceiling Price $ 2.74 $ 2.74 $ 2.74 $ 3.19 $ 3.33 $ 3.49 Weighted-Average Floor Price $ 2.50 $ 2.50 $ 2.50 $ 2.50 $ 2.50 $ 2.50 Weighted-Average Sold Put Price $ 2.00 $ 2.00 $ 2.00 $ 2.00 $ 2.00 $ 2.00 NGL Derivatives (volumes in Bbls/day and prices in $/Bbl) Swaps OPIS Basket Volumes 4,000 4,000 4,000 — — — Weighted-Average Contract Price $ 20.22 $ 20.22 $ 20.22 $ — $ — $ — ______________________________ (1) The weighted-average differential represents the amount of reduction to NYMEX WTI prices for the notional volumes covered by the swap contracts. |
Summary of all the Company's Derivative Positions | The following table contains a summary of all the Company’s derivative positions reported on the accompanying balance sheets as well as a reconciliation between the gross assets and liabilities and the potential effects of master netting arrangements on the fair value of the Company’s commodity derivative contracts as of March 31, 2022 and December 31, 2021 (in thousands): March 31, 2022 December 31, 2021 Derivative Assets: Commodity contracts - current $ — $ 3,393 Commodity contracts - noncurrent — — Total derivative assets — 3,393 Amounts not offset in the accompanying balance sheets — (3,393) Total derivative assets, net $ — $ — Derivative Liabilities: Commodity contracts - current $ (384,694) $ (219,804) Commodity contracts - long-term (46,111) (19,959) Total derivative liabilities (430,805) (239,763) Amounts not offset in the accompanying balance sheets — 3,393 Total derivative liabilities, net $ (430,805) $ (236,370) |
Summary of the Components of the Derivative Gain (Loss) | The following table summarizes the components of the derivative loss presented on the accompanying statements of operations for the periods below (in thousands): Three Months Ended March 31, 2022 2021 Derivative cash settlement loss: Oil contracts $ (125,162) $ (2,822) Gas contracts (28,784) (969) NGL contracts (12,632) — Total derivative cash settlement loss (166,578) (3,791) Change in fair value loss (128,915) (19,628) Total derivative loss $ (295,493) $ (23,419) |
ASSET RETIREMENT OBLIGATIONS (T
ASSET RETIREMENT OBLIGATIONS (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Asset Retirement Obligation Disclosure [Abstract] | |
Schedule of Asset Retirement Obligation Changes | A roll-forward of the Company's asset retirement obligation is as follows (in thousands): Amount Balance as of December 31, 2021 $ 225,315 Additional liabilities incurred 1,748 Accretion expense 4,019 Liabilities settled (5,131) Balance as of March 31, 2022 $ 225,951 Current portion 24,000 Long-term portion $ 201,951 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share | The following table sets forth the calculations of basic and diluted net income (loss) per common share (in thousands, except per share amounts): Three Months Ended March 31, 2022 2021 Net income (loss) $ 91,639 $ (119) Basic net income (loss) per common share $ 1.08 $ (0.01) Diluted net income (loss) per common share $ 1.07 $ (0.01) Weighted-average shares outstanding - basic 84,840 20,839 Add: dilutive effect of contingent stock awards 486 — Weighted-average shares outstanding - diluted 85,326 20,839 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Schedule of Net Operating Loss Carryforwards and Deferred Tax Assets and Liabilities Acquired | The following table outlines the Federal net operating loss (“NOL”) carryforwards acquired and deferred tax assets and liabilities recorded as a result of the mergers that closed in 2021 (in millions): HighPoint Merger Extraction Merger Crestone Peak Merger Federal NOL carryforwards $ 219.0 $ 479.9 $ 555.7 Deferred tax asset (liability) $ 110.5 $ 49.2 $ (125.1) Valuation allowance (48.1) — — Net $ 62.4 $ 49.2 $ (125.1) |
LEASES (Tables)
LEASES (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Leases [Abstract] | |
Schedule of Balance Sheet Activity, Asset Classes | The following table summarizes the asset classes of the Company's operating leases (in thousands): March 31, 2022 December 31, 2021 Operating Leases Field equipment (1) $ 26,470 $ 29,312 Corporate leases 8,666 9,484 Vehicles 918 1,089 Total right-of-use asset $ 36,054 $ 39,885 Field equipment (1) $ 26,470 $ 29,312 Corporate leases 9,120 9,870 Vehicles 918 1,089 Total lease liability $ 36,508 $ 40,271 ____________________________ (1) Includes compressors, certain natural gas processing equipment, and other field equipment. |
Schedule of Future Minimum Commitments for Operating Leases | Future commitments by year for the Company's leases with a lease term of one year or more as of March 31, 2022 are presented in the table below. Such commitments are reflected at undiscounted values and are reconciled to the discounted present value recognized on the accompanying balance sheets as follows (in thousands): Operating Leases Remainder of 2022 $ 15,271 2023 13,389 2024 5,333 2025 1,695 2026 1,195 Thereafter 1,586 Total lease payments 38,469 Less: imputed interest (1,961) Total lease liability $ 36,508 |
ACQUISITIONS AND DIVESTITURES -
ACQUISITIONS AND DIVESTITURES - Narrative (Details) | Mar. 01, 2022USD ($) | Nov. 01, 2021USD ($)$ / sharesshares | Apr. 01, 2021USD ($)$ / sharesshares | Mar. 31, 2022USD ($)$ / shares | Mar. 31, 2021USD ($) | Dec. 31, 2021$ / shares |
Business Acquisition [Line Items] | ||||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.01 | $ 0.01 | ||||
Merger transaction costs | $ 20,534,000 | $ 3,295,000 | ||||
Severance payments | $ 7,600,000 | $ 0 | ||||
HighPoint | ||||||
Business Acquisition [Line Items] | ||||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.01 | |||||
Exchange ratio | 0.11464 | |||||
Common stock, shares issued (in shares) | shares | 9,802,000 | |||||
Aggregate principal amount | $ 100,000,000 | |||||
Merger consideration | 474,933,000 | |||||
Net assets acquired | $ 474,933,000 | |||||
HighPoint | Measurement Input, Discount Rate | Valuation Technique, Discounted Cash Flow | ||||||
Business Acquisition [Line Items] | ||||||
Proved oil and gas properties, measurement input | 0.13 | |||||
HighPoint | Former HighPoint Stockholders | ||||||
Business Acquisition [Line Items] | ||||||
Common stock, shares issued (in shares) | shares | 487,952 | |||||
HighPoint | Holders of HighPoint Senior Notes | ||||||
Business Acquisition [Line Items] | ||||||
Common stock, shares issued (in shares) | shares | 9,314,214 | |||||
HighPoint | Senior Notes | Senior Notes Due 2026, 7.50% | ||||||
Business Acquisition [Line Items] | ||||||
Aggregate principal amount | $ 100,000,000 | |||||
Interest rate (as a percent) | 7.50% | 7.50% | 7.50% | |||
HighPoint | HighPoint Resources Corporation | ||||||
Business Acquisition [Line Items] | ||||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.001 | |||||
HighPoint | HighPoint Operating Company | Senior Notes | Senior Notes Due 2022 and Senior Notes Due 2025 | ||||||
Business Acquisition [Line Items] | ||||||
Aggregate principal amount | $ 625,000,000 | |||||
HighPoint | HighPoint Operating Company | Senior Notes | Senior Notes Due 2022 | ||||||
Business Acquisition [Line Items] | ||||||
Interest rate (as a percent) | 7.00% | |||||
HighPoint | HighPoint Operating Company | Senior Notes | Senior Notes Due 2025 | ||||||
Business Acquisition [Line Items] | ||||||
Interest rate (as a percent) | 8.75% | |||||
Extraction | ||||||
Business Acquisition [Line Items] | ||||||
Exchange ratio | 1.1711 | |||||
Merger consideration | $ 1,844,129,000 | |||||
Net assets acquired | $ 1,844,129,000 | |||||
Extraction | Measurement Input, Discount Rate | Valuation Technique, Discounted Cash Flow | ||||||
Business Acquisition [Line Items] | ||||||
Proved oil and gas properties, measurement input | 0.10 | |||||
Extraction | Tranche A Warrants | ||||||
Business Acquisition [Line Items] | ||||||
Warrants issued (in shares) | shares | 3,400,000 | |||||
Extraction | Tranche B Warrants | ||||||
Business Acquisition [Line Items] | ||||||
Warrants issued (in shares) | shares | 1,700,000 | |||||
Extraction | Extraction Oil & Gas, Inc. | ||||||
Business Acquisition [Line Items] | ||||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.01 | |||||
Crestone Peak | ||||||
Business Acquisition [Line Items] | ||||||
Exchange ratio, collective number of shares | shares | 22,500,000 | |||||
Net assets acquired | $ 1,262,250,000 | |||||
Crestone Peak | Measurement Input, Discount Rate | Valuation Technique, Discounted Cash Flow | ||||||
Business Acquisition [Line Items] | ||||||
Proved oil and gas properties, measurement input | 0.10 | |||||
Crestone Peak | Crestone Peak Resources America Inc. | ||||||
Business Acquisition [Line Items] | ||||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.01 | |||||
Bison | ||||||
Business Acquisition [Line Items] | ||||||
Merger consideration | $ 279,700,000 | |||||
Net assets acquired | 294,200,000 | |||||
Bargain purchase gain | $ 14,500,000 |
ACQUISITIONS AND DIVESTITURES_2
ACQUISITIONS AND DIVESTITURES - Merger Consideration (Details) $ / shares in Units, $ in Thousands | Nov. 01, 2021USD ($)$ / sharesshares | Apr. 01, 2021USD ($)$ / sharesshares | Mar. 31, 2022 | Dec. 31, 2021 |
HighPoint | ||||
Business Acquisition [Line Items] | ||||
Common stock, shares issued (in shares) | shares | 9,802,000 | |||
Closing price per share of Civitas Common Stock (in dollars per share) | $ / shares | $ 38.25 | |||
Merger consideration paid in shares of Civitas Common Stock | $ 374,933 | |||
Aggregate principal amount of the 7.5% Senior Notes | 100,000 | |||
Total merger consideration | $ 474,933 | |||
Exchange ratio | 0.11464 | |||
HighPoint | Senior Notes Due 2026, 7.50% | Senior Notes | ||||
Business Acquisition [Line Items] | ||||
Interest rate (as a percent) | 7.50% | 7.50% | 7.50% | |
HighPoint | Existing holders of HighPoint Common Stock | ||||
Business Acquisition [Line Items] | ||||
Common stock, shares issued (in shares) | shares | 488,000 | |||
HighPoint | Existing holders of HighPoint Senior Notes | ||||
Business Acquisition [Line Items] | ||||
Common stock, shares issued (in shares) | shares | 9,314,214 | |||
Extraction | ||||
Business Acquisition [Line Items] | ||||
Total merger consideration | $ 1,844,129 | |||
Exchange ratio | 1.1711 | |||
Extraction | Common Stock | ||||
Business Acquisition [Line Items] | ||||
Common stock, shares issued (in shares) | shares | 31,095,000 | |||
Closing price per share of Civitas Common Stock (in dollars per share) | $ / shares | $ 56.10 | |||
Merger consideration paid in shares of Civitas Common Stock | $ 1,744,431 | |||
Extraction | Restricted Stock and Performance Restricted Stock as Share-Based Compensation, of Acquiree | ||||
Business Acquisition [Line Items] | ||||
Merger consideration paid in shares of Civitas Common Stock | 22,235 | |||
Extraction | Restricted Stock as Share-Based Compensation, of Acquiree | ||||
Business Acquisition [Line Items] | ||||
Merger consideration paid in shares of Civitas Common Stock | 19,338 | |||
Extraction | Performance Restricted Stock as Share-Based Compensation, of Acquiree | ||||
Business Acquisition [Line Items] | ||||
Merger consideration paid in shares of Civitas Common Stock | 2,897 | |||
Extraction | Tranche A and Tranche B Warrants | ||||
Business Acquisition [Line Items] | ||||
Merger consideration paid in shares of Civitas Common Stock | 77,463 | |||
Extraction | Tranche A Warrants | ||||
Business Acquisition [Line Items] | ||||
Merger consideration paid in shares of Civitas Common Stock | 52,164 | |||
Extraction | Tranche B Warrants | ||||
Business Acquisition [Line Items] | ||||
Merger consideration paid in shares of Civitas Common Stock | $ 25,299 | |||
Crestone Peak | Common Stock | ||||
Business Acquisition [Line Items] | ||||
Common stock, shares issued (in shares) | shares | 22,500,000 | |||
Closing price per share of Civitas Common Stock (in dollars per share) | $ / shares | $ 56.10 | |||
Merger consideration paid in shares of Civitas Common Stock | $ 1,262,250 |
ACQUISITIONS AND DIVESTITURES_3
ACQUISITIONS AND DIVESTITURES - Purchase Price Allocation (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Nov. 01, 2021 | Apr. 01, 2021 |
HighPoint | |||
Assets Acquired | |||
Cash and cash equivalents | $ 49,827 | ||
Accounts receivable - oil and natural gas sales | 26,343 | ||
Accounts receivable - joint interest and other | 9,161 | ||
Prepaid expenses and other | 3,608 | ||
Inventory of oilfield equipment | 4,688 | ||
Proved properties | 539,820 | ||
Other property and equipment, net of accumulated depreciation | 2,769 | ||
Right-of-use assets | 4,010 | ||
Deferred income tax assets | $ 110,500 | 110,513 | |
Other noncurrent assets | 797 | ||
Total assets acquired | 751,536 | ||
Liabilities Assumed | |||
Accounts payable and accrued expenses | 51,088 | ||
Oil and natural gas revenue distribution payable | 20,786 | ||
Lease liability | 4,010 | ||
Derivative liability | 18,500 | ||
Current portion of long-term debt | 154,000 | ||
Ad valorem taxes | 3,746 | ||
Asset retirement obligations | 24,473 | ||
Total liabilities assumed | 276,603 | ||
Net assets acquired | $ 474,933 | ||
Extraction | |||
Assets Acquired | |||
Cash and cash equivalents | $ 106,360 | ||
Accounts receivable - oil and natural gas sales | 119,585 | ||
Accounts receivable - joint interest and other | 33,054 | ||
Prepaid expenses and other | 3,044 | ||
Inventory of oilfield equipment | 9,291 | ||
Derivative assets | 5,834 | ||
Proved properties | 1,876,014 | ||
Unproved properties | 193,400 | ||
Other property and equipment, net of accumulated depreciation | 40,068 | ||
Right-of-use assets | 6,883 | ||
Deferred income tax assets | 49,200 | 49,194 | |
Other noncurrent assets | 4,248 | ||
Total assets acquired | 2,446,975 | ||
Liabilities Assumed | |||
Accounts payable and accrued expenses | 90,353 | ||
Production taxes payable | 63,572 | ||
Oil and natural gas revenue distribution payable | 170,002 | ||
Income tax payable | 14,000 | ||
Lease liability | 6,883 | ||
Derivative liability | 100,474 | ||
Ad valorem taxes | 87,071 | ||
Asset retirement obligations | 68,741 | ||
Other noncurrent liabilities | 1,750 | ||
Total liabilities assumed | 602,846 | ||
Net assets acquired | 1,844,129 | ||
Crestone Peak | |||
Assets Acquired | |||
Cash and cash equivalents | 67,505 | ||
Accounts receivable - oil and natural gas sales | 81,340 | ||
Accounts receivable - joint interest and other | 9,917 | ||
Prepaid expenses and other | 2,929 | ||
Inventory of oilfield equipment | 11,951 | ||
Proved properties | 1,797,814 | ||
Unproved properties | 453,321 | ||
Other property and equipment, net of accumulated depreciation | 7,980 | ||
Right-of-use assets | 7,934 | ||
Total assets acquired | 2,440,691 | ||
Liabilities Assumed | |||
Accounts payable and accrued expenses | 134,791 | ||
Production taxes payable | 52,435 | ||
Oil and natural gas revenue distribution payable | 83,950 | ||
Lease liability | 7,934 | ||
Derivative liability | 338,383 | ||
Credit facility | 280,000 | ||
Ad valorem taxes | 66,913 | ||
Deferred income tax liabilities | $ 125,100 | 125,086 | |
Asset retirement obligations | 88,949 | ||
Total liabilities assumed | 1,178,441 | ||
Net assets acquired | $ 1,262,250 |
ACQUISITIONS AND DIVESTITURES_4
ACQUISITIONS AND DIVESTITURES - Pro Forma Information (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
As reported | ||
Total revenue | $ 817,810 | $ 74,159 |
Net income (loss) | $ 91,639 | $ (119) |
Net income (loss) per common share - basic (in dollars per share) | $ 1.08 | $ (0.01) |
Net income (loss) per common share - diluted (in dollars per share) | $ 1.07 | $ (0.01) |
Total revenue | $ 565,316 | |
Net income (loss) | $ 858,096 | |
Net income (loss) per common share - basic (in dollars per share) | $ 10.19 | |
Net income (loss) per common share - diluted (in dollars per share) | $ 10.14 | |
HighPoint | ||
As reported | ||
Total revenue | $ 72,019 | |
Net income (loss) | (46,434) | |
Extraction | ||
As reported | ||
Total revenue | 292,484 | |
Net income (loss) | 983,201 | |
Crestone Peak | ||
As reported | ||
Total revenue | 126,654 | |
Net income (loss) | $ (78,552) |
REVENUE RECOGNITION - Schedule
REVENUE RECOGNITION - Schedule of Revenue by Revenue Stream (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Disaggregation of Revenue [Line Items] | ||
Oil, natural gas, and NGL sales | $ 817,810 | $ 74,159 |
Oil sales | ||
Disaggregation of Revenue [Line Items] | ||
Oil, natural gas, and NGL sales | 549,502 | 50,064 |
Natural gas sales | ||
Disaggregation of Revenue [Line Items] | ||
Oil, natural gas, and NGL sales | 113,161 | 13,132 |
NGL sales | ||
Disaggregation of Revenue [Line Items] | ||
Oil, natural gas, and NGL sales | $ 155,147 | $ 10,963 |
REVENUE RECOGNITION - Narrative
REVENUE RECOGNITION - Narrative (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Revenue from Contract with Customer [Abstract] | ||
Receivable from contracts with customers | $ 410,418 | $ 362,262 |
ACCOUNTS PAYABLE AND ACCRUED _3
ACCOUNTS PAYABLE AND ACCRUED EXPENSES - Accounts Payable and Accrued Expenses (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Payables and Accruals [Abstract] | ||
Accounts payable trade | $ 29,425 | $ 19,623 |
Accrued drilling and completion costs | 101,415 | 129,430 |
Accrued lease operating expense and gathering, transportation, and processing | 53,597 | 19,077 |
Accrued general and administrative expense | 12,873 | 21,163 |
Accrued merger transaction costs | 3,206 | 1,475 |
Accrued oil and NGL hedging | 65,418 | 26,601 |
Accrued interest expense | 13,516 | 6,303 |
Accrued settlement | 15,541 | 20,791 |
Other accrued expenses | 1,442 | 1,725 |
Total accounts payable and accrued expenses | $ 296,433 | $ 246,188 |
LONG-TERM DEBT - Narrative (Det
LONG-TERM DEBT - Narrative (Details) | May 01, 2022 | Nov. 01, 2021USD ($) | Oct. 13, 2021USD ($)agency | Apr. 01, 2021USD ($)agency | Mar. 31, 2021 | Jun. 30, 2020 | Mar. 31, 2022USD ($) | Mar. 31, 2021USD ($) | Apr. 20, 2022USD ($) | Apr. 19, 2022USD ($) | Dec. 31, 2021USD ($) | Dec. 21, 2021 | Jun. 30, 2021USD ($) |
LONG-TERM DEBT | |||||||||||||
Interest expense | $ 9,100,000 | $ 400,000 | |||||||||||
Capitalized interest | $ 0 | ||||||||||||
Revolving credit facility | |||||||||||||
LONG-TERM DEBT | |||||||||||||
Minimum current ratio covenant | 1 | ||||||||||||
Revolving credit facility | LIBOR | Minimum | |||||||||||||
LONG-TERM DEBT | |||||||||||||
Basis spread on variable rate | 0.00% | ||||||||||||
Revolving credit facility | Eurodollar | Minimum | |||||||||||||
LONG-TERM DEBT | |||||||||||||
Basis spread on variable rate | 2.00% | ||||||||||||
Revolving credit facility | Eurodollar | Maximum | |||||||||||||
LONG-TERM DEBT | |||||||||||||
Basis spread on variable rate | 3.00% | ||||||||||||
Revolving credit facility | Reference Rate | Minimum | |||||||||||||
LONG-TERM DEBT | |||||||||||||
Basis spread on variable rate | 1.00% | ||||||||||||
Revolving credit facility | Reference Rate | Maximum | |||||||||||||
LONG-TERM DEBT | |||||||||||||
Basis spread on variable rate | 2.00% | ||||||||||||
Amended Credit Agreement | Revolving credit facility | |||||||||||||
LONG-TERM DEBT | |||||||||||||
Maximum borrowing capacity | $ 2,000,000,000 | ||||||||||||
Elected commitments | $ 800,000,000 | $ 400,000,000 | |||||||||||
Maximum pro-forma leverage ratio, criteria one, if circumstances met | 1.50 | 1 | |||||||||||
Minimum pro-forma leverage ratio, criteria two, if circumstances met | 1.50 | ||||||||||||
Covenant, minimum percentage of mortgage on total value of certain proved oil and gas properties | 90.00% | ||||||||||||
Amended Credit Agreement | Revolving credit facility | Subsequent Event | |||||||||||||
LONG-TERM DEBT | |||||||||||||
Elected commitments | $ 1,000,000,000 | $ 800,000,000 | |||||||||||
Amended Credit Agreement | HighPoint | Revolving credit facility | |||||||||||||
LONG-TERM DEBT | |||||||||||||
Maximum borrowing capacity | 1,000,000,000 | $ 750,000,000 | |||||||||||
Borrowing base amount | $ 1,000,000,000 | $ 500,000,000 | $ 260,000,000 | ||||||||||
Maximum net leverage ratio | 3 | 3.50 | |||||||||||
Borrowing requirement, maximum cash balance | $ 500,000,000 | ||||||||||||
Unamortized deferred financing costs | 3,900,000 | $ 6,800,000 | |||||||||||
Amended Credit Agreement | HighPoint | Revolving credit facility | Subsequent Event | |||||||||||||
LONG-TERM DEBT | |||||||||||||
Borrowing base amount | $ 1,700,000,000 | $ 1,000,000,000 | |||||||||||
Amended Credit Agreement | HighPoint | Revolving credit facility | Other Noncurrent Assets | |||||||||||||
LONG-TERM DEBT | |||||||||||||
Unamortized deferred financing costs | 6,900,000 | 7,500,000 | |||||||||||
Amended Credit Agreement | HighPoint | Revolving credit facility | Prepaid Expenses and Other Current Assets | |||||||||||||
LONG-TERM DEBT | |||||||||||||
Unamortized deferred financing costs | $ 2,700,000 | $ 2,700,000 | |||||||||||
Amended Credit Agreement | HighPoint | Revolving credit facility | LIBOR | Minimum | |||||||||||||
LONG-TERM DEBT | |||||||||||||
Basis spread on variable rate | 0.50% | 0.00% | |||||||||||
Amended Credit Agreement | HighPoint | Revolving credit facility | Eurodollar | |||||||||||||
LONG-TERM DEBT | |||||||||||||
Basis spread on variable rate | 4.00% | 3.00% | |||||||||||
Amended Credit Agreement | HighPoint | Revolving credit facility | Reference Rate | |||||||||||||
LONG-TERM DEBT | |||||||||||||
Basis spread on variable rate | 3.00% | 2.00% | |||||||||||
Amended Credit Agreement | HighPoint | Revolving credit facility | Base Rate | Minimum | |||||||||||||
LONG-TERM DEBT | |||||||||||||
Basis spread on variable rate | 0.00% | ||||||||||||
Amended Credit Agreement | HighPoint | Revolving credit facility | Base Rate | Maximum | |||||||||||||
LONG-TERM DEBT | |||||||||||||
Basis spread on variable rate | 1.50% | ||||||||||||
Senior Notes | Senior Notes Due 2026, 5.0% | |||||||||||||
LONG-TERM DEBT | |||||||||||||
Interest rate (as a percent) | 5.00% | 5.00% | 5.00% | ||||||||||
Aggregate principal amount | $ 400,000,000 | ||||||||||||
Covenant, investment-grade rating, number of ratings agencies (at least) | agency | 2 | ||||||||||||
Unamortized deferred financing costs | $ 7,877,000 | $ 8,290,000 | |||||||||||
Senior Notes | Senior Notes Due 2026, 5.0%, Indenture | |||||||||||||
LONG-TERM DEBT | |||||||||||||
Interest rate (as a percent) | 5.00% | ||||||||||||
Senior Notes | Senior Notes Due 2026, 7.50% | HighPoint | |||||||||||||
LONG-TERM DEBT | |||||||||||||
Interest rate (as a percent) | 7.50% | 7.50% | 7.50% | ||||||||||
Aggregate principal amount | $ 100,000,000 | ||||||||||||
Unamortized deferred financing costs | $ 0 | $ 0 | |||||||||||
Senior Notes | Senior Notes Due 2026, 7.50% | HighPoint | Subsequent Event | |||||||||||||
LONG-TERM DEBT | |||||||||||||
Interest rate (as a percent) | 7.50% | ||||||||||||
Senior Notes | Senior Notes Due 2026, 7.50%, Indenture | |||||||||||||
LONG-TERM DEBT | |||||||||||||
Covenant, investment-grade rating, number of ratings agencies (at least) | agency | 2 | ||||||||||||
Senior Notes | Senior Notes Due 2026, 7.50%, Indenture | HighPoint | |||||||||||||
LONG-TERM DEBT | |||||||||||||
Interest rate (as a percent) | 7.50% | ||||||||||||
Senior Notes | Debt Instrument, Redemption, Period One | Senior Notes Due 2026, 5.0% | |||||||||||||
LONG-TERM DEBT | |||||||||||||
Percentage of principal amount redeemed (up to) | 35.00% | ||||||||||||
Redemption period, after date of closing of equity offering | 180 days | ||||||||||||
Senior Notes | Debt Instrument, Redemption, Period One | Senior Notes Due 2026, 7.50% | HighPoint | |||||||||||||
LONG-TERM DEBT | |||||||||||||
Redemption price, percentage | 107.50% | ||||||||||||
Senior Notes | Debt Instrument, Redemption, Period Two | Senior Notes Due 2026, 5.0% | |||||||||||||
LONG-TERM DEBT | |||||||||||||
Redemption price, percentage | 102.50% | ||||||||||||
Percentage of principal amount not redeemed | 65.00% | ||||||||||||
Senior Notes | Debt Instrument, Redemption, Period Two | Senior Notes Due 2026, 7.50% | HighPoint | |||||||||||||
LONG-TERM DEBT | |||||||||||||
Redemption price, percentage | 100.00% | ||||||||||||
Senior Notes | Debt Instrument, Redemption, Period Two | Senior Notes Due 2026, 7.50% | HighPoint | Subsequent Event | |||||||||||||
LONG-TERM DEBT | |||||||||||||
Redemption price, percentage | 100.00% | ||||||||||||
Senior Notes | Debt Instrument, Redemption, Period Three | Senior Notes Due 2026, 5.0% | |||||||||||||
LONG-TERM DEBT | |||||||||||||
Redemption price, percentage | 101.25% | ||||||||||||
Senior Notes | Debt Instrument, Redemption, Period Four | Senior Notes Due 2026, 5.0% | |||||||||||||
LONG-TERM DEBT | |||||||||||||
Redemption price, percentage | 100.00% | ||||||||||||
Senior Notes | Debt Instrument, Redemption, Period Five | Senior Notes Due 2026, 5.0% | |||||||||||||
LONG-TERM DEBT | |||||||||||||
Redemption price, percentage | 105.00% |
LONG-TERM DEBT - Schedule of Ca
LONG-TERM DEBT - Schedule of Carrying Values (Details) - Senior Notes - USD ($) | Mar. 31, 2022 | Dec. 31, 2021 | Oct. 13, 2021 | Apr. 01, 2021 |
Senior Notes Due 2026, 7.50% | HighPoint | ||||
LONG-TERM DEBT | ||||
Principal Amount | $ 100,000,000 | $ 100,000,000 | ||
Unamortized Deferred Financing Costs | 0 | 0 | ||
Net Amount | $ 100,000,000 | $ 100,000,000 | ||
Interest rate (as a percent) | 7.50% | 7.50% | 7.50% | |
Senior Notes Due 2026, 5.0% | ||||
LONG-TERM DEBT | ||||
Principal Amount | $ 400,000,000 | $ 400,000,000 | ||
Unamortized Deferred Financing Costs | 7,877,000 | 8,290,000 | ||
Net Amount | $ 392,123,000 | $ 391,710,000 | ||
Interest rate (as a percent) | 5.00% | 5.00% | 5.00% |
LONG-TERM DEBT - Schedule of De
LONG-TERM DEBT - Schedule of Debt Outstanding and Borrowing Capacity (Details) - Line of Credit - USD ($) $ in Thousands | May 04, 2022 | Mar. 31, 2022 | Dec. 31, 2021 |
Revolving credit facility and Letters of credit | |||
LONG-TERM DEBT | |||
Available borrowing capacity | $ 787,607 | $ 778,344 | |
Total aggregate elected commitments | 800,000 | 800,000 | |
Revolving credit facility and Letters of credit | Subsequent Event | |||
LONG-TERM DEBT | |||
Available borrowing capacity | $ 987,607 | ||
Total aggregate elected commitments | 1,000,000 | ||
Revolving credit facility | |||
LONG-TERM DEBT | |||
Credit facility outstanding | 0 | 0 | |
Revolving credit facility | Subsequent Event | |||
LONG-TERM DEBT | |||
Credit facility outstanding | 0 | ||
Letters of credit | |||
LONG-TERM DEBT | |||
Credit facility outstanding | $ 12,393 | $ 21,656 | |
Letters of credit | Subsequent Event | |||
LONG-TERM DEBT | |||
Credit facility outstanding | $ 12,393 |
COMMITMENTS AND CONTINGENCIES -
COMMITMENTS AND CONTINGENCIES - Narrative (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | |||
Mar. 31, 2022USD ($)aclaimbbl / dcontractwellhorizontal_wellplantbblMMcfBcf | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021USD ($) | Dec. 31, 2020 | |
Loss Contingencies [Line Items] | |||||
Number of claims | claim | 0 | ||||
Firm Transportation | |||||
Loss Contingencies [Line Items] | |||||
Financial commitment | $ 44,656 | ||||
Crude Oil | Crude Oil Commitment | |||||
Loss Contingencies [Line Items] | |||||
Optional extended term (up to) | 3 years | ||||
Natural Gas And Fresh Water | Natural Gas and Fresh Water Commitment | |||||
Loss Contingencies [Line Items] | |||||
Financial commitment | $ 0 | ||||
NGL Crude Logistics | Crude Oil | Crude Oil Commitment | |||||
Loss Contingencies [Line Items] | |||||
Financial commitment | $ 31,700 | ||||
Periodic deficiency payment, incremental payment period | 6 months | ||||
Purchase commitment, volume required annual increase | 3.00% | 3.00% | |||
Maximum volume requirement | bbl | 16,000 | ||||
Notification period, prior to agreement expiration date, optional extended term (at least) | 12 months | ||||
NGL Crude Logistics | Scenario, Forecast | Crude Oil | Crude Oil Commitment | |||||
Loss Contingencies [Line Items] | |||||
Purchase commitment, volume required annual increase | 3.00% | 3.00% | |||
Third-Party Midstream Provider | |||||
Loss Contingencies [Line Items] | |||||
Horizontal well drilling, number of wells required to be drilled | horizontal_well | 106 | ||||
Horizontal well drilling, minimum number of wells required to be drilled, period ending December 31, 2026 | 2 years | ||||
Third-Party Midstream Provider | Gas contracts | Natural Gas Commitment and Take-In-Kind Natural Gas Liquids Commitment | |||||
Loss Contingencies [Line Items] | |||||
Financial commitment | $ 145,500 | ||||
Third-Party Midstream Provider | Gas contracts | Natural Gas Commitment | |||||
Loss Contingencies [Line Items] | |||||
Annual minimum volume requirement | Bcf | 13 | ||||
Third-Party Midstream Provider | Gas contracts | Take-In-Kind Natural Gas Liquids Commitment | |||||
Loss Contingencies [Line Items] | |||||
Daily sales commitment requirement, through year seven | bbl | 7,500 | ||||
Monthly roll forward shortfall requirement, percent (up to) | 10.00% | ||||
Third-Party Producers And A Third-Party Midstream Provider | Gas contracts | Natural Gas Commitment | |||||
Loss Contingencies [Line Items] | |||||
Number of different plants | plant | 2 | ||||
Daily baseline volume requirement | MMcf | 65 | ||||
Daily baseline volume requirement, term | 7 years | ||||
Third-Party Producers And A Third-Party Midstream Provider | Gas contracts | Natural Gas Commitment | Minimum | |||||
Loss Contingencies [Line Items] | |||||
Daily incremental volume requirement | MMcf | 51.5 | ||||
Third-Party Producers And A Third-Party Midstream Provider | Gas contracts | Natural Gas Commitment | Maximum | |||||
Loss Contingencies [Line Items] | |||||
Daily incremental volume requirement | MMcf | 20.6 | ||||
Water Suppliers | Natural Gas And Fresh Water | Natural Gas and Fresh Water Commitment | |||||
Loss Contingencies [Line Items] | |||||
Number of contracts | contract | 2 | ||||
Financial commitment | $ 12,500 | ||||
HighPoint | Pipeline Transportation Commitment | |||||
Loss Contingencies [Line Items] | |||||
Number of contracts | contract | 1 | ||||
Minimum volume transportation charges, gross barrels per day requirement through April 2022 | bbl / d | 8,500 | ||||
Minimum volume transportation charges, gross barrels per day requirement thereafter through April 2025 | bbl / d | 12,500 | ||||
Financial commitment | $ 44,700 | ||||
Board of County Commissioners of Boulder County Litigation | Pending Litigation | Extraction | |||||
Loss Contingencies [Line Items] | |||||
Number of planned wells | well | 32 | ||||
Drilling and spacing units, maximum acres | a | 80 | ||||
Sterling Energy Investments LLC Versus HighPoint Operating Corporation Litigation | Pending Litigation | HighPoint | |||||
Loss Contingencies [Line Items] | |||||
Accrued litigation liability | $ 1,000 | $ 1,000 |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES - Schedule of Purchase Obligations (Details) $ in Thousands | Mar. 31, 2022USD ($) |
Firm Transportation | |
Long-term Purchase Commitment [Line Items] | |
Remainder of 2022 | $ 10,616 |
2023 | 14,600 |
2024 | 14,640 |
2025 | 4,800 |
2026 | 0 |
2027 and thereafter | 0 |
Total | 44,656 |
NGL contracts | |
Long-term Purchase Commitment [Line Items] | |
Remainder of 2022 | 42,589 |
2023 | 32,241 |
2024 | 22,298 |
2025 | 20,400 |
2026 | 19,553 |
2027 and thereafter | 52,716 |
Total | $ 189,797 |
STOCK-BASED COMPENSATION - Narr
STOCK-BASED COMPENSATION - Narrative (Details) $ in Thousands | Nov. 01, 2021USD ($)shares | Mar. 31, 2022USD ($)performance_criteriashares | Jun. 30, 2021shares | Apr. 30, 2017shares |
Extraction | Restricted Stock as Share-Based Compensation, of Acquiree | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Fair value allocated to consideration transferred | $ | $ 19,338 | |||
Extraction | Performance Restricted Stock as Share-Based Compensation, of Acquiree | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Fair value allocated to consideration transferred | $ | $ 2,897 | |||
LTIP | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Aggregate intrinsic value, options exercised | $ | $ 100 | |||
LTIP | Restricted Stock Units (RSUs) and Deferred Stock Units (DSUs) | Non-executive Board Members | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Fair value of units granted | $ | $ 17,900 | |||
LTIP | Restricted Stock Units (RSUs) | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of shares released upon vesting (in shares) | 1 | |||
LTIP | Restricted Stock Units (RSUs) | Vesting Period One | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting period | 1 year | |||
LTIP | Restricted Stock Units (RSUs) | Vesting Period Two | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting period | 3 years | |||
LTIP | Restricted Stock Units (RSUs) | Vesting Period Two, Anniversary One | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting percent of shares | 33.00% | |||
LTIP | Restricted Stock Units (RSUs) | Vesting Period Two, Anniversary Two | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting percent of shares | 33.00% | |||
LTIP | Restricted Stock Units (RSUs) | Vesting Period Two, Anniversary Three | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting percent of shares | 33.00% | |||
LTIP | Deferred Stock Units (DSUs) | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of shares released upon vesting (in shares) | 1 | |||
LTIP | Deferred Stock Units (DSUs) | Vesting Period One | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting period | 1 year | |||
LTIP | Stock options | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Expiration period | 10 years | |||
LTIP | Performance Stock Units (PSUs) | Minimum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Ratio at which award holders get common stock of the company | 0 | |||
LTIP | Performance Stock Units (PSUs) | Maximum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Ratio at which award holders get common stock of the company | 2 | |||
LTIP | Performance Stock Units (PSUs) | Officers | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting period | 3 years | |||
Fair value of units granted | $ | $ 7,300 | |||
Number of trading days | 30 days | |||
LTIP | Performance Stock Units (PSUs) | Officers | Minimum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Ratio at which award holders get common stock of the company | 0 | |||
Performance achievement, number of criteria | performance_criteria | 1 | |||
LTIP | Performance Stock Units (PSUs) | Officers | Maximum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Ratio at which award holders get common stock of the company | 2 | |||
Performance achievement, number of criteria | performance_criteria | 2 | |||
LTIP | Performance Stock Units (PSUs), TSR | Officers | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Distribution of shares to recipients (as a percentage) | 200.00% | |||
LTIP | ROCE | Officers | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Distribution of shares to recipients (in shares) | 0 | |||
2017 LTIP | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Shares reserved for future issuance (in shares) | 2,467,430 | |||
2021 LTIP | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Shares reserved for future issuance (in shares) | 700,000 | |||
Extraction Equity Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Shares reserved for future issuance (in shares) | 3,305,080 | |||
Extraction Equity Plan | Performance Stock Units (PSUs) | Officers | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Performance achievement, number of criteria | performance_criteria | 1 |
STOCK-BASED COMPENSATION - Sche
STOCK-BASED COMPENSATION - Schedule of Expenses (Details) - LTIP - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total stock-based compensation | $ 8,090 | $ 1,612 |
Restricted and deferred stock units | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total stock-based compensation | 5,265 | 1,321 |
Performance stock units | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total stock-based compensation | $ 2,825 | $ 291 |
STOCK-BASED COMPENSATION - Unre
STOCK-BASED COMPENSATION - Unrecognized Compensation Expense (Details) - LTIP $ in Thousands | Mar. 31, 2022USD ($) |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Total unrecognized stock-based compensation | $ 37,217 |
Restricted and deferred stock units | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Total unrecognized stock-based compensation | 21,532 |
Performance stock units | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Total unrecognized stock-based compensation | $ 15,685 |
STOCK-BASED COMPENSATION - Acti
STOCK-BASED COMPENSATION - Activity of Non-Option Awards (Details) - LTIP | 3 Months Ended |
Mar. 31, 2022$ / sharesshares | |
RSUs and DSUs | |
Stock Units | |
Non-vested, beginning of year (in shares) | shares | 815,062 |
Granted (in shares) | shares | 388,937 |
Vested (in shares) | shares | (444,556) |
Forfeited (in shares) | shares | (9,745) |
Non-vested, end of year (in shares) | shares | 749,698 |
Weighted-Average Grant-Date Fair Value | |
Non-vested, beginning of year (in dollars per share) | $ / shares | $ 42.18 |
Granted (in dollars per share) | $ / shares | 45.92 |
Vested (in dollars per share) | $ / shares | 48.25 |
Forfeited (in dollars per share) | $ / shares | 40.71 |
Non-vested, end of year (in dollars per share) | $ / shares | $ 40.54 |
PSUs | |
Stock Units | |
Non-vested, beginning of year (in shares) | shares | 319,367 |
Granted (in shares) | shares | 129,676 |
Vested (in shares) | shares | (91,523) |
Expired (in shares) | shares | (41,955) |
Non-vested, end of year (in shares) | shares | 315,565 |
Weighted-Average Grant-Date Fair Value | |
Non-vested, beginning of year (in dollars per share) | $ / shares | $ 57.58 |
Granted (in dollars per share) | $ / shares | 56.43 |
Vested (in dollars per share) | $ / shares | 32.49 |
Expired (in dollars per share) | $ / shares | 22.77 |
Non-vested, end of year (in dollars per share) | $ / shares | $ 69.01 |
Target amount multiplier | 1 |
PSUs | Minimum | |
Weighted-Average Grant-Date Fair Value | |
Ratio at which award holders get common stock of the company | 0 |
PSUs | Maximum | |
Weighted-Average Grant-Date Fair Value | |
Ratio at which award holders get common stock of the company | 2 |
STOCK-BASED COMPENSATION - Othe
STOCK-BASED COMPENSATION - Other Than Options Split Criteria (Details) - LTIP - Officers | 3 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Mar. 31, 2020 | |
TSR | 2022 | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total number of dual-criteria PSUs granted, percent | 100.00% | ||
TSR | 2021 | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total number of dual-criteria PSUs granted, percent | 100.00% | ||
TSR | 2020 | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total number of dual-criteria PSUs granted, percent | 67.00% | ||
ROCE | 2022 | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total number of dual-criteria PSUs granted, percent | 0.00% | ||
ROCE | 2021 | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total number of dual-criteria PSUs granted, percent | 0.00% | ||
ROCE | 2020 | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total number of dual-criteria PSUs granted, percent | 33.00% |
STOCK-BASED COMPENSATION - Ac_2
STOCK-BASED COMPENSATION - Activity of Stock Options (Details) - LTIP | 3 Months Ended |
Mar. 31, 2022USD ($)$ / sharesshares | |
Stock Options | |
Outstanding, beginning of year (shares) | shares | 25,549 |
Exercised (shares) | shares | (5,294) |
Forfeited (shares) | shares | (111) |
Outstanding, end of year (shares) | shares | 20,144 |
Options outstanding and exercisable (shares) | shares | 20,144 |
Weighted- Average Exercise Price | |
Outstanding, beginning of year (in dollars per share) | $ / shares | $ 34.36 |
Exercised (in dollars per share) | $ / shares | 34.36 |
Forfeited (in dollars per share) | $ / shares | 34.36 |
Outstanding, end of year (in dollars per share) | $ / shares | 34.36 |
Options outstanding and exercisable (in dollars per share) | $ / shares | $ 34.36 |
Additional Information | |
Weighted-Average Remaining Contractual Term (in years) | 5 years 1 month 6 days |
Options outstanding and exercisable, Weighted-Average Remaining Contractual Term (in years) | 5 years 1 month 6 days |
Aggregate Intrinsic Value (in thousands) | $ | $ 511,000 |
Options outstanding and exercisable, Aggregate Intrinsic Value (in thousands) | $ | $ 511,000 |
FAIR VALUE MEASUREMENTS - Sched
FAIR VALUE MEASUREMENTS - Schedule of Non-financial Assets and Liabilities (Details) - Estimate of Fair Value Measurement - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Level 1 | ||
Financial assets and liabilities accounted for at fair value | ||
Derivative assets | $ 0 | $ 0 |
Derivative liabilities | 0 | 0 |
Level 2 | ||
Financial assets and liabilities accounted for at fair value | ||
Derivative assets | 0 | 3,393 |
Derivative liabilities | 430,805 | 239,763 |
Level 3 | ||
Financial assets and liabilities accounted for at fair value | ||
Derivative assets | 0 | 0 |
Derivative liabilities | $ 0 | $ 0 |
FAIR VALUE MEASUREMENTS - Narra
FAIR VALUE MEASUREMENTS - Narrative (Details) - USD ($) | Nov. 01, 2021 | Apr. 01, 2021 | Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | Oct. 13, 2021 |
Financial assets and liabilities accounted for at fair value | ||||||
Proved oil and gas property impairments | $ 0 | $ 0 | ||||
Abandonment and impairment of unproved properties | $ 17,975,000 | $ 0 | ||||
Senior Notes Due 2026, 5.0% | Senior Notes | ||||||
Financial assets and liabilities accounted for at fair value | ||||||
Interest rate (as a percent) | 5.00% | 5.00% | 5.00% | |||
Senior Notes Due 2026, 5.0% | Senior Notes | Level 1 | ||||||
Financial assets and liabilities accounted for at fair value | ||||||
Long-term debt, fair value | $ 396,400,000 | |||||
HighPoint | ||||||
Financial assets and liabilities accounted for at fair value | ||||||
Fair value allocated to consideration transferred | $ 374,933,000 | |||||
HighPoint | Senior Notes Due 2026, 7.50% | Senior Notes | ||||||
Financial assets and liabilities accounted for at fair value | ||||||
Interest rate (as a percent) | 7.50% | 7.50% | 7.50% | |||
HighPoint | Senior Notes Due 2026, 7.50% | Senior Notes | Level 1 | ||||||
Financial assets and liabilities accounted for at fair value | ||||||
Long-term debt, fair value | $ 100,300,000 | |||||
Extraction | Tranche A and Tranche B Warrants | ||||||
Financial assets and liabilities accounted for at fair value | ||||||
Fair value allocated to consideration transferred | $ 77,463,000 |
DERIVATIVES - Commodity Derivat
DERIVATIVES - Commodity Derivatives (Details) - Subsequent Event - Scenario, Forecast | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Mar. 31, 2023MMBTU$ / bbl$ / MMBTUbbl | Dec. 31, 2022MMBTU$ / bbl$ / MMBTUbbl | Sep. 30, 2022MMBTU$ / bbl$ / MMBTUbbl | Jun. 30, 2022MMBTU$ / bbl$ / MMBTUbbl | Dec. 31, 2023MMBTU$ / bbl$ / MMBTUbbl | Dec. 31, 2024MMBTU$ / bbl$ / MMBTUbbl | |
Oil Derivatives (volumes in Bbls/day and prices in $/Bbls) | Swaps | ||||||
Derivative [Line Items] | ||||||
NYMEX WTI Volumes and OPIS Basket Volumes (in unit per day) | bbl | 457 | 9,538 | 10,507 | 11,300 | 392 | 479 |
Weighted-Average Contract Price (in dollars per unit) | $ / bbl | 45.42 | 46.84 | 47 | 49.56 | 46.59 | 53.96 |
Oil Derivatives (volumes in Bbls/day and prices in $/Bbls) | Two-Way Collars | ||||||
Derivative [Line Items] | ||||||
NYMEX WTI Volumes and OPIS Basket Volumes (in unit per day) | bbl | 1,054 | 7,393 | 8,296 | 9,775 | ||
Weighted-Average Ceiling Price (in dollars per unit) | $ / bbl | 72.70 | 69.63 | 68.43 | 65.66 | ||
Weighted-Average Floor Price (in dollars per unit) | $ / bbl | 40 | 40.97 | 40.66 | 38.75 | ||
Oil Derivatives (volumes in Bbls/day and prices in $/Bbls) | Three-Way Collars | ||||||
Derivative [Line Items] | ||||||
NYMEX WTI Volumes and OPIS Basket Volumes (in unit per day) | bbl | 1,721 | 1,738 | 2,241 | 3,642 | 1,303 | 143 |
Weighted-Average Ceiling Price (in dollars per unit) | $ / bbl | 58.75 | 57.78 | 58.03 | 59.54 | 57.26 | 56.25 |
Weighted-Average Floor Price (in dollars per unit) | $ / bbl | 49.31 | 48.42 | 48.59 | 48.96 | 48.32 | 45 |
Weighted-Average Sold Put Price (in dollars per unit) | $ / bbl | 39.25 | 38.42 | 38.59 | 38.96 | 38.01 | 35 |
Oil Derivatives (volumes in Bbls/day and prices in $/Bbls) | Roll Differential Swaps | ||||||
Derivative [Line Items] | ||||||
NYMEX WTI Volumes and OPIS Basket Volumes (in unit per day) | bbl | 2,000 | 2,000 | 2,000 | |||
Weighted-Average Contract Price (in dollars per unit) | $ / bbl | 0.22 | 0.22 | 0.22 | |||
Natural Gas Derivatives (volumes in MMBtu/day and prices in $/MMBtu) | Swaps | ||||||
Derivative [Line Items] | ||||||
Weighted-Average Contract Price (in dollars per unit) | 2.51 | 2.76 | 2.76 | 2.76 | 2.51 | 2.57 |
NYMEX HH Volumes and CIG Volumes (in unit per day) | MMBTU | 44,641 | 54,783 | 54,952 | 55,618 | 43,883 | 22,309 |
Natural Gas Derivatives (volumes in MMBtu/day and prices in $/MMBtu) | Two-Way Collars | ||||||
Derivative [Line Items] | ||||||
Weighted-Average Ceiling Price (in dollars per unit) | 3.23 | 3.69 | 3.68 | 3.49 | 2.91 | 3.05 |
Weighted-Average Floor Price (in dollars per unit) | 2.03 | 2.60 | 2.59 | 2.50 | 2.32 | 2.38 |
NYMEX HH Volumes and CIG Volumes (in unit per day) | MMBTU | 9,558 | 79,148 | 81,018 | 63,113 | 1,736 | 1,033 |
Natural Gas Derivatives (volumes in MMBtu/day and prices in $/MMBtu) | Three-Way Collars | ||||||
Derivative [Line Items] | ||||||
Weighted-Average Ceiling Price (in dollars per unit) | 3.19 | 2.74 | 2.74 | 2.74 | 3.33 | 3.49 |
Weighted-Average Floor Price (in dollars per unit) | 2.50 | 2.50 | 2.50 | 2.50 | 2.50 | 2.50 |
Weighted-Average Sold Put Price (in dollars per unit) | 2 | 2 | 2 | 2 | 2 | 2 |
NYMEX HH Volumes and CIG Volumes (in unit per day) | MMBTU | 899 | 127 | 136 | 148 | 167 | 303 |
Natural Gas (CIG) | Swaps | ||||||
Derivative [Line Items] | ||||||
Weighted-Average Contract Price (in dollars per unit) | 2.13 | 2.13 | 2.13 | |||
NYMEX HH Volumes and CIG Volumes (in unit per day) | MMBTU | 10,000 | 10,000 | 10,000 | |||
Natural Gas (CIG) | Two-Way Collars | ||||||
Derivative [Line Items] | ||||||
Weighted-Average Ceiling Price (in dollars per unit) | 2.75 | |||||
Weighted-Average Floor Price (in dollars per unit) | 2.15 | |||||
NYMEX HH Volumes and CIG Volumes (in unit per day) | MMBTU | 20,000 | |||||
NGL Derivatives (volumes in Bbls/day and prices in $/Bbl) | Swaps | ||||||
Derivative [Line Items] | ||||||
NYMEX WTI Volumes and OPIS Basket Volumes (in unit per day) | bbl | 4,000 | 4,000 | 4,000 | |||
Weighted-Average Contract Price (in dollars per unit) | $ / bbl | 20.22 | 20.22 | 20.22 |
DERIVATIVES - Derivative Positi
DERIVATIVES - Derivative Positions (Details) - Commodity - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Derivative Assets: | ||
Total derivative assets | $ 0 | $ 3,393 |
Amounts not offset in the accompanying balance sheets | 0 | (3,393) |
Total derivative assets, net | 0 | 0 |
Derivative Liabilities: | ||
Total derivative liabilities | (430,805) | (239,763) |
Amounts not offset in the accompanying balance sheets | 0 | 3,393 |
Total derivative liabilities, net | (430,805) | (236,370) |
Commodity contracts - current | ||
Derivative Assets: | ||
Total derivative assets | 0 | 3,393 |
Commodity contracts - noncurrent | ||
Derivative Assets: | ||
Total derivative assets | 0 | 0 |
Commodity contracts - current | ||
Derivative Liabilities: | ||
Total derivative liabilities | (384,694) | (219,804) |
Commodity contracts - long-term | ||
Derivative Liabilities: | ||
Total derivative liabilities | $ (46,111) | $ (19,959) |
DERIVATIVES - Derivative Loss (
DERIVATIVES - Derivative Loss (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Components of the derivative gain (loss) | ||
Total derivative loss | $ (295,493) | $ (23,419) |
Commodity derivative | ||
Components of the derivative gain (loss) | ||
Total derivative cash settlement loss | (166,578) | (3,791) |
Change in fair value loss | (128,915) | (19,628) |
Total derivative loss | (295,493) | (23,419) |
Commodity derivative | Oil contracts | ||
Components of the derivative gain (loss) | ||
Total derivative cash settlement loss | (125,162) | (2,822) |
Commodity derivative | Gas contracts | ||
Components of the derivative gain (loss) | ||
Total derivative cash settlement loss | (28,784) | (969) |
Commodity derivative | NGL contracts | ||
Components of the derivative gain (loss) | ||
Total derivative cash settlement loss | $ (12,632) | $ 0 |
ASSET RETIREMENT OBLIGATIONS -
ASSET RETIREMENT OBLIGATIONS - Schedule of Roll-Forward Activity (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Dec. 31, 2021 | |
Change in asset retirement obligations | ||
Balance as of December 31, 2021 | $ 225,315 | |
Additional liabilities incurred | 1,748 | |
Accretion expense | 4,019 | |
Liabilities settled | (5,131) | |
Balance as of March 31, 2022 | 225,951 | |
Current portion | 24,000 | $ 24,000 |
Long-term portion | $ 201,951 | $ 201,315 |
EARNINGS PER SHARE - Narrative
EARNINGS PER SHARE - Narrative (Details) | 3 Months Ended | |
Mar. 31, 2022shares | Mar. 31, 2021shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Antidilutive securities excluded from EPS calculation (in shares) | 18,436 | 807,782 |
LTIP | Restricted Stock Units (RSUs) | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of shares released upon vesting (in shares) | 1 | |
LTIP | Deferred Stock Units (DSUs) | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of shares released upon vesting (in shares) | 1 | |
LTIP | Minimum | Performance stock units | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Ratio at which award holders get common stock of the company | 0 | |
LTIP | Maximum | Performance stock units | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Ratio at which award holders get common stock of the company | 2 |
EARNINGS PER SHARE - Schedule o
EARNINGS PER SHARE - Schedule of Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Earnings Per Share [Abstract] | ||
Net income (loss) | $ 91,639 | $ (119) |
Basic net income (loss) per common share (in dollars per share) | $ 1.08 | $ (0.01) |
Diluted net income (loss) per common share (in dollars per share) | $ 1.07 | $ (0.01) |
Weighted-average shares outstanding - basic (in shares) | 84,840 | 20,839 |
Add: dilutive effect of contingent stock awards (in shares) | 486 | 0 |
Weighted-average shares outstanding - diluted (in shares) | 85,326 | 20,839 |
INCOME TAXES - Net Operating Lo
INCOME TAXES - Net Operating Loss Carryforwards and Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Nov. 01, 2021 | Apr. 01, 2021 |
HighPoint Merger | |||
Tax Credit Carryforward [Line Items] | |||
Federal NOL carryforwards | $ 219,000 | ||
Deferred tax asset | 110,500 | $ 110,513 | |
Valuation allowance | (48,100) | ||
Net | 62,400 | ||
Extraction Merger | |||
Tax Credit Carryforward [Line Items] | |||
Federal NOL carryforwards | 479,900 | ||
Deferred tax asset | 49,200 | $ 49,194 | |
Valuation allowance | 0 | ||
Net | 49,200 | ||
Crestone Peak Merger | |||
Tax Credit Carryforward [Line Items] | |||
Federal NOL carryforwards | 555,700 | ||
Deferred tax liability | (125,100) | $ (125,086) | |
Valuation allowance | 0 | ||
Net | $ (125,100) |
INCOME TAXES - Narrative (Detai
INCOME TAXES - Narrative (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | |
Tax Credit Carryforward [Line Items] | |||
Net deferred tax liability | $ 5,805,000 | $ 0 | |
Net deferred tax asset | 0 | 22,284,000 | |
Income tax expense (benefit) | 23,361,000 | $ (44,000) | |
Unrecognized tax benefits | $ 0 | 0 | |
HighPoint | |||
Tax Credit Carryforward [Line Items] | |||
Deferred tax assets, valuation allowance | $ 48,100,000 |
LEASES - Assets and Liabilities
LEASES - Assets and Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Operating Leases | ||
Total right-of-use asset | $ 36,054 | $ 39,885 |
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible Enumeration] | Right-of-use assets | Right-of-use assets |
Total lease liability | $ 36,508 | $ 40,271 |
Field equipment | ||
Operating Leases | ||
Total right-of-use asset | 26,470 | 29,312 |
Total lease liability | 26,470 | 29,312 |
Corporate leases | ||
Operating Leases | ||
Total right-of-use asset | 8,666 | 9,484 |
Total lease liability | 9,120 | 9,870 |
Vehicles | ||
Operating Leases | ||
Total right-of-use asset | 918 | 1,089 |
Total lease liability | $ 918 | $ 1,089 |
LEASES - Narrative (Details)
LEASES - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Leases [Abstract] | ||
Short-term lease costs | $ 9 | $ 0.1 |
LEASES - Lease Maturities (Deta
LEASES - Lease Maturities (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Operating Leases | ||
Remainder of 2020 | $ 15,271 | |
2023 | 13,389 | |
2024 | 5,333 | |
2025 | 1,695 | |
2026 | 1,195 | |
Thereafter | 1,586 | |
Total lease payments | 38,469 | |
Less: imputed interest | (1,961) | |
Total lease liability | $ 36,508 | $ 40,271 |