Document and Entity Information
Document and Entity Information | 6 Months Ended |
Jun. 30, 2015 | |
Document and Entity Information | |
Entity Registrant Name | Midstates Petroleum Company, Inc. |
Entity Central Index Key | 1,533,924 |
Document Type | S4 |
Document Period End Date | Jun. 30, 2015 |
Amendment Flag | false |
Entity Filer Category | Accelerated Filer |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jun. 30, 2015 | Dec. 31, 2014 | Jun. 30, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
CURRENT ASSETS: | ||||||
Cash and cash equivalents | $ 151,037 | $ 11,557 | $ 29,660 | $ 33,163 | $ 18,878 | $ 7,344 |
Accounts receivable: | ||||||
Oil and gas sales | 67,338 | 69,161 | 102,483 | |||
Joint interest billing | 19,484 | 42,407 | 42,631 | |||
Other | 16,758 | 22,193 | 1,090 | |||
Commodity derivative contracts | 35,858 | 126,709 | 700 | |||
Other current assets | 2,388 | 1,098 | 693 | |||
Total current assets | 292,863 | 273,125 | 192,597 | |||
PROPERTY AND EQUIPMENT: | ||||||
Oil and gas properties, on the basis of full cost accounting | 3,558,960 | 3,442,681 | 3,060,661 | |||
Other property and equipment | 14,734 | 13,454 | 11,113 | |||
Less accumulated depreciation, depletion, amortization and impairment | (2,119,458) | (1,333,019) | (976,880) | |||
Net property and equipment | 1,454,236 | 2,123,116 | 2,094,894 | |||
OTHER ASSETS: | ||||||
Deferred income taxes | 9,579 | 35,821 | ||||
Other noncurrent assets | 39,560 | 43,731 | 54,597 | |||
Total other assets | 49,139 | 79,552 | 54,616 | |||
TOTAL | 1,796,238 | 2,475,793 | 2,342,107 | |||
CURRENT LIABILITIES: | ||||||
Accounts payable | 8,818 | 22,783 | 21,493 | |||
Accrued liabilities | 155,221 | 183,831 | 204,381 | |||
Commodity derivative contracts | 1,867 | 27,880 | ||||
Deferred income taxes | 9,579 | 44,862 | ||||
Total current liabilities | 175,485 | 251,476 | 253,754 | |||
LONG-TERM LIABILITIES: | ||||||
Asset retirement obligations | 17,737 | 21,599 | 20,382 | 26,308 | 15,245 | 7,627 |
Long-term debt | 1,924,412 | 1,735,150 | 1,701,150 | |||
Other long-term liabilities | 1,401 | 1,706 | 1,954 | |||
Total long-term liabilities | $ 1,943,550 | $ 1,758,455 | $ 1,748,354 | |||
COMMITMENTS AND CONTINGENCIES (Note 15) | ||||||
STOCKHOLDERS' EQUITY (DEFICIT) | ||||||
Preferred stock | ||||||
Common stock, $0.01 par value, 100,000,000 shares authorized; 7,257,007 shares issued and 7,164,968 shares outstanding at June 30, 2015 and 7,049,173 shares issued and 6,995,705 shares outstanding at December 31, 2014 | $ 73 | $ 70 | $ 69 | |||
Treasury stock | (3,021) | (2,592) | (664) | |||
Additional paid-in-capital | 886,284 | 882,528 | 871,667 | |||
Retained deficit | (1,206,136) | (414,147) | (531,076) | |||
Total stockholders' (deficit) equity | (322,797) | 465,862 | 257,583 | 339,999 | 677,469 | $ 285,502 |
TOTAL | 1,796,238 | 2,475,793 | 2,342,107 | |||
Series A Preferred Stock | ||||||
STOCKHOLDERS' EQUITY (DEFICIT) | ||||||
Preferred stock | 3 | 3 | 3 | |||
Total stockholders' (deficit) equity | $ 3 | $ 3 | $ 3 | $ 3 | $ 3 |
CONDENSED CONSOLIDATED BALANCE3
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2015 | Dec. 31, 2014 | |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 7,257,007 | 7,049,173 |
Common stock, shares outstanding | 7,164,968 | 6,995,705 |
Preferred Stock | ||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 49,675,000 | 49,675,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Series A Preferred Stock | ||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred Stock, Liquidation Preference | $ 403,320 | $ 387,808 |
Preferred stock, cumulative dividends (as a percent) | 8.00% | 8.00% |
Preferred stock, shares issued | 325,000 | 325,000 |
Preferred stock, shares outstanding | 325,000 | 325,000 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended |
Jun. 30, 2015 | Jun. 30, 2015 | |
REVENUES : | ||
Oil sales | $ 67,498 | $ 126,755 |
Natural gas liquid sales | 10,239 | 21,249 |
Natural gas sales | 15,995 | 35,167 |
Gains (losses) on commodity derivative contracts - net | (19,293) | 2,079 |
Other | 315 | 678 |
Total revenues | 74,754 | 185,928 |
EXPENSES : | ||
Lease operating and workover | 21,758 | 45,020 |
Gathering and transportation | 3,931 | 7,369 |
Severance and other taxes | 2,505 | 6,069 |
Asset retirement accretion | 390 | 835 |
Depreciation, depletion, and amortization | 55,255 | 113,683 |
Impairment in carrying value of oil and gas properties | 498,389 | 673,056 |
General and administrative | 11,461 | 23,115 |
Acquisition and transaction costs | 251 | 251 |
Debt restructuring costs | 34,398 | 36,141 |
Other | 73 | |
Total expenses | 628,338 | 905,612 |
OPERATING INCOME (LOSS) | (553,584) | (719,684) |
OTHER INCOME (EXPENSE): | ||
Interest income | 27 | 36 |
Interest expense - net of amounts capitalized | (44,880) | (81,382) |
Total other expense | (44,853) | (81,346) |
LOSS BEFORE TAXES | (598,437) | (801,030) |
Income tax benefit | 9,041 | |
NET LOSS | (598,437) | (791,989) |
Preferred stock dividend | (669) | (800) |
NET LOSS ATTRIBUTABLE TO COMMON SHAREHOLDERS | $ (599,106) | $ (792,789) |
Basic and diluted net loss per share attributable to common shareholders | $ (88.44) | $ (117.45) |
Basic and diluted weighted average number of common shares outstanding | 6,774 | 6,750 |
CONDENSED CONSOLIDATED STATEME5
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY - USD ($) $ in Thousands | Common Stock | Treasury Stock | Additional Paid-in-Capital | Retained Deficit |
Balance at Dec. 31, 2011 | $ (36,994) | |||
Increase (Decrease) in Stockholders' Equity | ||||
Share-based compensation | $ 1 | $ 2,650 | ||
Net loss | (150,097) | |||
Balance at Dec. 31, 2012 | 67 | 864,490 | (187,091) | |
Increase (Decrease) in Stockholders' Equity | ||||
Share-based compensation | 2 | 7,177 | ||
Acquisition of treasury stock | $ (664) | |||
Net loss | (343,985) | |||
Balance at Dec. 31, 2013 | 69 | (664) | 871,667 | (531,076) |
Increase (Decrease) in Stockholders' Equity | ||||
Share-based compensation | 2 | 4,816 | ||
Acquisition of treasury stock | (1,491) | |||
Net loss | (85,743) | |||
Balance at Jun. 30, 2014 | 71 | (2,155) | 876,483 | (616,819) |
Balance at Dec. 31, 2013 | 69 | (664) | 871,667 | (531,076) |
Increase (Decrease) in Stockholders' Equity | ||||
Share-based compensation | 1 | 10,861 | ||
Acquisition of treasury stock | (1,928) | |||
Net loss | 116,929 | |||
Balance at Dec. 31, 2014 | 70 | (2,592) | 882,528 | (414,147) |
Increase (Decrease) in Stockholders' Equity | ||||
Share-based compensation | 3 | 3,756 | ||
Acquisition of treasury stock | (429) | |||
Net loss | (791,989) | |||
Balance at Jun. 30, 2015 | $ 73 | $ (3,021) | $ 886,284 | $ (1,206,136) |
CONDENSED CONSOLIDATED STATEME6
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS $ in Thousands | 6 Months Ended |
Jun. 30, 2015USD ($) | |
CASH FLOWS FROM OPERATING ACTIVITIES: | |
Net loss | $ (791,989) |
Adjustments to reconcile net loss to net cash provided by operating activities: | |
Losses (gains) on commodity derivative contracts - net | (2,079) |
Net cash received (paid) for commodity derivative contracts not designated as hedging instruments | 94,797 |
Asset retirement accretion | 835 |
Depreciation, depletion, and amortization | 113,683 |
Impairment in carrying value of oil and gas properties | 673,056 |
Share-based compensation, net of amounts capitalized to oil and gas properties | 2,897 |
Deferred income taxes | (9,041) |
Amortization of deferred financing costs | 8,356 |
Paid-in-kind interest expense | 1,187 |
Amortization of deferred gain on debt restructuring | (1,775) |
Transaction costs for debt restructuring | 34,398 |
Change in operating assets and liabilities: | |
Accounts receivable - oil and gas sales | 139 |
Accounts receivable - JIB and other | 22,617 |
Other current and noncurrent assets | (1,275) |
Accounts payable | (2,793) |
Accrued liabilities | (4,058) |
Other | (305) |
Net cash provided by operating activities | 138,650 |
CASH FLOWS FROM INVESTING ACTIVITIES: | |
Investment in property and equipment | (190,278) |
Proceeds from the sale of oil and gas properties | 40,284 |
Net cash used in investing activities | (149,994) |
CASH FLOWS FROM FINANCING ACTIVITIES: | |
Proceeds from second lien notes | 625,000 |
Proceeds from revolving credit facility | 33,000 |
Repayment of revolving credit facility | (468,150) |
Deferred financing costs | (4,199) |
Transaction costs for debt restructuring | (34,398) |
Acquisition of treasury stock | (429) |
Net cash provided by (used in) financing activities | 150,824 |
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | 139,480 |
Cash and cash equivalents, beginning of period | 11,557 |
Cash and cash equivalents, end of period | 151,037 |
SUPPLEMENTAL INFORMATION: | |
Non-cash investment in property and equipment | 61,728 |
Non-cash exchange of third lien notes for 2020 senior notes and 2021 senior notes | 524,121 |
Cash paid for interest, net of capitalized interest of $2.1 million and $8.0 million, respectively | $ 71,569 |
CONDENSED CONSOLIDATED STATEME7
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) - USD ($) $ in Millions | 6 Months Ended | 12 Months Ended | |||
Jun. 30, 2015 | Jun. 30, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||
Capitalized interest | $ 2.1 | $ 8 | $ 12.4 | $ 32.2 | $ 11.2 |
Organization and Business
Organization and Business | 6 Months Ended | 12 Months Ended |
Jun. 30, 2015 | Dec. 31, 2014 | |
Organization and Business | ||
Organization and Business | 1. Organization and Business Midstates Petroleum Company, Inc., through its wholly owned subsidiary Midstates Petroleum Company LLC, engages in the business of drilling for, and production of, oil, natural gas liquids ("NGLs") and natural gas. Midstates Petroleum Company, Inc. was incorporated pursuant to the laws of the State of Delaware on October 25, 2011 to become a holding company for Midstates Petroleum Company LLC ("Midstates Sub"), which was previously a wholly owned subsidiary of Midstates Petroleum Holdings LLC ("Holdings LLC"). The terms "Company," "we," "us," "our," and similar terms refer to Midstates Petroleum Company, Inc. and its subsidiary, unless the context indicates otherwise. The Company has oil and gas operations and properties in Oklahoma, Texas and Louisiana. The Company operated oil and natural gas properties as one reportable segment engaged in the exploration, development and production of oil, natural gas liquids and natural gas. The Company's management evaluates performance based on one reportable segment as all our operations are located in the United States and therefore we maintain one cost center. | 1. Organization and Business Midstates Petroleum Company, Inc., through its wholly-owned subsidiary Midstates Petroleum Company LLC, engages in the business of drilling for, and production of, oil, natural gas liquids ("NGL") and natural gas. Midstates Petroleum Company, Inc. was incorporated pursuant to the laws of the State of Delaware on October 25, 2011 to become a holding company for Midstates Petroleum Company LLC ("Midstates Sub"), which was previously a wholly-owned subsidiary of Midstates Petroleum Holdings LLC ("Holdings LLC"). Pursuant to the terms of a corporate reorganization that was completed in connection with the closing of Midstates Petroleum Company, Inc.'s initial public offering, all of the interests in Midstates Petroleum Holdings LLC were exchanged for newly issued common shares of Midstates Petroleum Company, Inc., and as a result, Midstates Petroleum Company LLC became a wholly-owned subsidiary of Midstates Petroleum Company, Inc. and Midstates Petroleum Holdings LLC ceased to exist as a separate entity. The terms "Company," "we," "us," "our," and similar terms when used in the present tense, prospectively or for historical periods since April 25, 2012, refer to Midstates Petroleum Company, Inc. and its subsidiary, and for historical periods prior to April 25, 2012, refer to Midstates Petroleum Holdings LLC and its subsidiary, unless the context indicates otherwise. The term "Holdings LLC" refers solely to Midstates Petroleum Holdings LLC prior to the corporate reorganization. On April 25, 2012, the Company completed its initial public offering of common stock pursuant to a registration statement on Form S-1 (File 333-177966), as amended and declared effective by the SEC on April 19, 2012. Pursuant to the registration statement, the Company registered the offer and sale of 2,760,000 shares of $0.01 par value common stock, which included 600,000 shares of stock sold by the selling shareholders and 360,000 shares of common stock sold by the selling shareholders pursuant to an option granted to the underwriters to cover over-allotments. The Company's sale of the shares in its initial public offering closed on April 25, 2012 and its initial public offering terminated upon completion of the closing. The proceeds of the Company's initial public offering, based on the public offering price of $130.00 per share, were approximately $358.8 million. After subtracting underwriting discounts and commissions of $21.5 million and the net proceeds to the selling stockholders of $117.3 million, the Company received net proceeds of approximately $220.0 million from the registration and sale of 1,800,000 common shares (or $213.6 million net of offering expenses paid directly by the Company). The Company used $67.1 million of the net proceeds to redeem convertible preferred units in Holdings LLC, including interest and other charges, and $99.0 million to pay down a portion of the borrowings under its revolving credit facility. The Company used the remaining $47.5 million to fund the execution of its growth strategy through its drilling program. The Company did not receive any of the proceeds from the sale of the 960,000 shares by the selling stockholders. Immediately after the initial public offering and exercise of the over-allotment option granted to the underwriters, First Reserve Midstates Interholding LP and its affiliates owned approximately 41.4% of the Company's outstanding common stock. On October 1, 2012, the Company closed on the acquisition of all of Eagle Energy Production, LLC's producing properties as well as its developed and undeveloped acreage primarily in the Mississippian Lime liquids play in Oklahoma and Kansas for $325 million in cash and 325,000 shares of the Company's Series A Preferred Stock with an initial liquidation preference value of $1,000 per share (the "Eagle Property Acquisition"). The Company funded the cash portion of the Eagle Property Acquisition purchase price with a portion of the net proceeds from the private placement of $600 million in aggregate principal amount of 10.75% senior unsecured notes due 2020, which also closed on October 1, 2012 ("2020 Senior Notes"). On May 31, 2013, the Company closed on the acquisition of producing properties and undeveloped acreage in the Anadarko Basin in Texas and Oklahoma from Panther Energy Company, LLC and its partners for approximately $618 million in cash (the "Anadarko Basin Acquisition"), before customary post-closing adjustments. The Company funded the purchase price with a portion of the net proceeds from the private placement of $700 million in aggregate principal amount of 9.25% senior unsecured notes due 2021, which also closed on May 31, 2013 ("2021 Senior Notes"). On March 5, 2014, the Company executed a Purchase and Sale Agreement ("PSA") to sell all of its ownership interest in developed and undeveloped acreage in the Pine Prairie field area of Evangeline Parish, Louisiana to a private buyer for net proceeds of $147.7 million in cash (the "Pine Prairie Disposition"). Acreage subject to the transaction did not include acreage and production in the western part of Louisiana in Beauregard or Calcasieu Parishes or other undeveloped acreage held outside the Pine Prairie field. The sale closed on May 1, 2014. At December 31, 2014, the Company has oil and gas operations and properties in Oklahoma, Texas and Louisiana and operated the oil and natural gas properties as one reportable segment engaged in the exploration, development and production of oil, natural gas liquids and natural gas. The Company's management evaluated performance based on one reportable segment as there were not significantly different economic or operational environments within its oil and natural gas properties. All pro forma and per share information presented in the accompanying consolidated financial statements have been adjusted to reflect the effects of the Company's initial public offering. |
Liquidity and Capital Resources
Liquidity and Capital Resources | 6 Months Ended | 12 Months Ended |
Jun. 30, 2015 | Dec. 31, 2014 | |
Liquidity and Capital Resources | ||
Liquidity and Capital Resources | 2. Liquidity and Capital Resources As a result of substantial declines in oil, natural gas liquids and natural gas prices during the latter half of 2014 and continuing into 2015, we expect lower operating cash flows than previously experienced and if commodity prices continue to remain low, our liquidity will be impacted as current hedging contracts expire. During the three and six months ended June 30, 2015, the Company received cash payments on settled derivative contracts of $42.2 million and $94.8 million, respectively. The weighted average fixed price of the Company's derivatives for the second half of 2015 are lower than the weighted average fixed price for the first half of 2015, and the Company currently has no derivatives for any period subsequent to 2015. As such, the cash payments received during the first half of 2015 could significantly decrease in the second half of 2015, and such cash payments will not be received in 2016 and future periods due to the expiration of our hedging contracts. The interest payment obligations of the Company are substantial and the uncertainty associated with the Company's ability to meet commitments as they come due or to repay outstanding debt raises substantial doubt about the Company's ability to continue as a going concern. The Company received a going concern qualification from its independent registered public accounting firm for the year ended December 31, 2014, but obtained a waiver to the reserve based revolving credit facility ("the Credit Facility") waiving any default as a result of receiving such qualification. The accompanying financial statements do not include any adjustments that might result from the uncertainty associated with the Company's ability to meet obligations as they come due. As a result of the commodity price decline and the Company's substantial debt burden, the Company took steps to increase its liquidity and amended certain debt covenants. On April 21, 2015, the Company closed on the sale of certain of its oil and gas properties in Beauregard and Calcasieu Parishes, Louisiana (the "Dequincy Divestiture"), for approximately $44.0 million, before customary post-closing adjustments. The net proceeds from the Dequincy Divestiture were retained for general corporate purposes. On May 21, 2015, the Company sold $625.0 million of 10.0% Second Lien Senior Secured Notes due 2020 (the "Second Lien Notes") and utilized the proceeds to repay the outstanding balance of the Credit Facility of approximately $468.2 million, with the remainder to be utilized for general corporate purposes. Further, the Company exchanged approximately $504.121 million of 12.0% Third Lien Senior Secured Notes due 2020 (the "Third Lien Notes") for approximately $279.8 million of 10.75% Senior Unsecured Notes due 2020 (the "2020 Senior Notes") and $350.3 million of 9.25% Senior Unsecured Notes due 2021 (the "2021 Senior Notes" together with the 2020 Senior Notes, the "Unsecured Notes"), representing an exchange at 80.0% of the exchanged Unsecured Notes' par value. Additionally, on June 2, 2015, the Company exchanged approximately $20.0 million of Third Lien Notes for approximately $26.6 million of 2020 Senior Notes and $2.0 million of 2021 Senior Notes, representing an exchange at 70.0% of the exchanged Unsecured Notes' par value. The Company also entered into a Seventh Amendment to the Credit Facility ("Seventh Amendment") which provided that upon completion of the Second Lien Notes and Third Lien Notes exchange, the borrowing base of the Credit Facility would be reduced to $252.4 million. The Seventh Amendment also provided additional covenant flexibility. For further information regarding the Second Lien Notes, Third Lien Notes and updates to the Company's debt covenants, see "—Note 10. Long-Term Debt." The Dequincy Divestiture, the issuance of the Second Lien Notes and the exchange of the Third Lien Notes increased the Company's cash balance, increased the amount of borrowings available under the Credit Facility and as a result, increased the liquidity of the Company. | 2. Liquidity and Capital Resources As of December 31, 2014, the Company had available cash of approximately $11 million and availability under the reserve based revolving credit facility (the "Credit Facility") of approximately $90 million. If there is a downward revision in estimates of proved reserves, the borrowing base for the revolving credit facility may be reduced, and as a result, available liquidity will be reduced. As of December 31, 2014, payments due on contractual obligations during the next twelve months are approximately $150 million. This includes approximately $130 million of interest payments on the senior notes and other operating expenses such as fixed drilling commitments and operating leases. The Company expects it will need to complete certain transactions, including management of debt capital structure and potential asset sales, to have sufficient liquidity to satisfy these obligations in the long-term. The liquidity outlook has changed since December 31, 2014 primarily as a result of the substantial decrease in oil and gas prices. This has resulted in lower operating cash flows than expected and if commodity prices remain low compared to recent historical prices, will result in future significantly lower levels of operating cash flows as current hedging contracts expire. As a result of the commodity price decline and the Company's substantial debt burden, the Company believes that forecasted cash and available credit capacity are not expected to be sufficient to meet commitments as they come due over the next twelve months and that the Company will not be able to remain in compliance with current debt covenants unless able to successfully increase liquidity. Additionally, the terms of the Credit Facility and the indentures governing the senior notes require that some or all of the proceeds from certain asset sales be used to permanently reduce outstanding debt which could substantially reduce the amount of proceeds retained, and the covenants in these debt instruments impose limitations on the amount and type of additional indebtedness the Company can incur, which may significantly reduce the ability to obtain liquidity through the incurrence of additional indebtedness. Furthermore, the ability to refinance any of the existing indebtedness on commercially reasonably terms may be materially and adversely impacted by the current conditions in the energy industry and the Company's financial condition. The Company is currently pursuing a number of actions including (i) actively managing the debt capital structure, (ii) selling additional assets, (iii) minimizing capital expenditures, (iv) obtaining waivers or amendments from lenders, (v) effectively managing working capital and (vi) improving cash flows from operations. There can be no assurance that sufficient liquidity can be raised from one or more of these actions or that these actions can be consummated within the period needed to meet certain obligations. The interest payment obligations are substantial, and the Company will be required to pay approximately $32 million in interest on the 2020 Senior Notes on each of April 1 and October 1 and approximately $32 million in interest on the 2021 Senior Notes on each of June 1 and December 1. The Company has obtained a waiver to the Credit Facility waiving any default as a result of delivering an auditors' opinion in connection with the 2014 financial statements that includes a going concern qualification. As the Company pursues the actions mentioned above to increase liquidity, it may need to negotiate additional waivers or amendments to the Credit Facility or indentures to facilitate those actions. There can be no assurance that the lenders or the holders of the senior notes will agree to any amendment or waiver on acceptable terms and if a default occurs, a failure to do so may provide the lenders the opportunity to accelerate the outstanding debt under these facilities and it would be classified as a current liability on the balance sheet. The uncertainty associated with the ability to meet commitments as they come due or to repay outstanding debt raises substantial doubt about the ability to continue as a going concern. The accompanying financial statements do not include any adjustments related to the recoverability and classification of recorded assets or the amounts and classification of liabilities that might result from the uncertainty associated with the ability to meet obligations as they come due. As of December 31, 2014, the ratio of net consolidated indebtedness to EBITDA was 3.7:1.0 and the ratio of current assets to current liabilities was 1.1:1.0. If liquidity concerns are not addressed in the near-term, the Company may breach the leverage covenant of our Credit Facility, in the third quarter of 2015 which currently requires a maximum ratio of net consolidated indebtedness to EBITDA of 4.0:1.0 beginning with the quarter ended March 31, 2015. As of December 31, 2014, the Company was in compliance with the financial ratio covenants included in the Credit Facility. If oil, NGL, natural gas prices remain weak or deteriorate, the borrowing base under the Credit Facility may be reduced. Any reduction in the borrowing base will reduce our available liquidity, and, if the reduction results in the outstanding amount under the facility exceeding the borrowing base, the Company will be required to repay the deficiency within 30 days or in six monthly installments thereafter, at the Company's election. The Company may not have the financial resources to make any mandatory deficiency principal repayments, which could result in an event of default under the Credit Facility. The debt facilities contain significant cross default and/or cross acceleration provisions where a default under the Credit Facility or one of the indentures could enable the lenders of the other debt to also declare events of default and accelerate repayment of the obligations under those debt instruments. In general, these cross default/cross acceleration provisions are as follows: • The Credit Facility allows the lenders to declare an event of default if there is an event of default on other indebtedness and that default: (i) is the result of the failure to make any payment when due in respect of other indebtedness having an aggregate principal amount of at least 5% of the then effective borrowing base and such failure continues after the applicable grace or notice period; or (ii) is the result of a failure to perform any condition, covenant or other event and such failure permits the holders of such other indebtedness to cause the acceleration of such other indebtedness. • The indentures governing the senior notes allow the lenders to declare an event of default if there is an event of default on other indebtedness and that default: (i) is caused by a failure to make any payment of principal prior to the expiration of the grace period following the final maturity date of such indebtedness; or (ii) results in the acceleration of such indebtedness prior to its stated maturity, and, in each case, the principal amount of any such indebtedness, together with the principal amount of any other indebtedness with respect to which an event described herein has occurred, aggregates $50.0 million or more. In March 2015, the Company received a waiver related to the requirement that an unqualified auditors' opinion without an explanatory paragraph in relation to going concern accompany the 2014 financial statements. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended | 12 Months Ended |
Jun. 30, 2015 | Dec. 31, 2014 | |
Summary of Significant Accounting Policies | ||
Summary of Significant Accounting Policies | 3. Summary of Significant Accounting Policies These interim financial statements are unaudited and have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC") regarding interim financial reporting. Certain disclosures have been condensed or omitted from these financial statements. Accordingly, they do not include all of the information and notes required by accounting principles generally accepted in the United States of America ("GAAP") for complete consolidated financial statements, and should be read in conjunction with the audited consolidated financial statements and notes thereto for the year ended December 31, 2014 included herein. All intercompany transactions have been eliminated in consolidation. In the opinion of the Company's management, the accompanying unaudited condensed consolidated financial statements include all adjustments, consisting of normal recurring adjustments, necessary to fairly present the financial position as of, and the results of operations for, all periods presented. In preparing the accompanying condensed consolidated financial statements, management has made certain estimates and assumptions that affect reported amounts in the condensed consolidated financial statements and disclosures of contingencies. Actual results may differ from those estimates. The results for interim periods are not necessarily indicative of annual results. On August 3, 2015, the Company completed a 1-for-10 reverse stock split of its outstanding common stock. To effect the reverse stock split, the Company filed a Certificate of Amendment to the Company's Restated Certificate of Incorporation, which provides for the reverse stock split and for the corresponding reduction in the Company's authorized capital stock to 100 million shares of common stock, $0.01 par value per share, following the reverse stock split. The condensed consolidated financial statements and notes to the condensed consolidated financial statements included in this document give retrospective effect to the reverse stock split for all periods presented. In May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update 2014-09, "Revenue from Contracts with Customers (Topic 606)" ("ASU 2014-09"). ASU 2014-09 provides guidance concerning the recognition and measurement of revenue from contracts with customers. The objective of ASU 2014-09 is to increase the usefulness of information in the financial statements regarding the nature, timing and uncertainty of revenues. ASU 2014-09 requires an entity to (i) identify the contract(s) with a customer, (ii) identify the performance obligations in the contract(s), (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations in the contract(s), and (v) recognize revenue when, or as, the entity satisfies a performance obligation. ASU 2014-09 will be effective for the Company beginning on January 1, 2018, including interim periods within that reporting period, considering the one year deferral approved by the FASB on July 9, 2015. The standard permits the use of either the retrospective or cumulative effect transition method. Early adoption is permitted. The Company has not selected a transition method and is evaluating the impact this standard will have on its consolidated financial statements and related disclosures. In April 2015, the FASB issued Accounting Standards Update 2015-03, "Interest—Imputation of Interest: Simplifying the Presentation of Debt Issuance Costs (Topic 835)". The update requires debt issuance costs related to a recognized debt liability be presented on the balance sheet as a direct deduction from the carrying amount of that debt liability. The standard should be applied retrospectively and is effective for the Company beginning on January 1, 2016. The Company does not believe the adoption of this guidance will have a material impact on its financial position, results of operations or cash flows. In the first quarter of 2015, the Company determined that it had incorrectly presented non-cash accrued capital expenditures in its Statements of Cash Flows since December 31, 2012. Management concluded the misstatement is immaterial to previously issued financial statements; however, the Company has corrected the cash flow presentation in the accompanying Condensed Consolidated Statement of Cash Flows for the six months ended June 30, 2014. There was no impact of the misstatement on the Condensed Consolidated Balance Sheet as of December 31, 2014, or on the Condensed Consolidated Statement of Operations for the three or six months ended June 30, 2014. The impact of the correction is shown in the following table (in thousands): For the Six Months Statement of Cash Flows As Previously As Restated Change in operating assets and liabilities: accounts receivable—JIB and other 1,929 (1,557 ) Net cash provided by operating activities 177,047 173,561 Investment in property and equipment (279,033 ) (275,547 ) Net cash used in investing activities (131,514 ) (128,028 ) | 3. Summary of Significant Accounting Policies The accompanying consolidated financial statements of the Company have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC") and have been prepared in accordance with generally accepted accounting principles in the United States of America ("GAAP"). All intercompany transactions have been eliminated in consolidation. The consolidated financial statements as of and for the year ended December 31, 2014 include the results of the Pine Prairie field from January 1, 2014 through May 1, 2014, the date of disposition. The consolidated financial statements as of and for the year ended December 31, 2013 include the results from the Anadarko Basin Acquisition beginning May 31, 2013. The consolidated financial statements as of and for the year ended December 31, 2012 include the results from the Eagle Property Acquisition beginning October 1, 2012. On August 3, 2015, the Company completed a 1-for-10 reverse stock split of its outstanding common stock. To effect the reverse stock split, the Company filed a Certificate of Amendment to the Company's Restated Certificate of Incorporation, which provides for the reverse stock split and for the corresponding reduction in the Company's authorized capital stock to 100 million shares of common stock, $0.01 par value per share, following the reverse stock split. The conversion prices for the Series A Preferred Stock were automatically adjusted to reflect the reverse stock split. The consolidated financial statements and notes to the consolidated financial statements included in this document give retrospective effect to the reverse stock split for all periods presented. In the first quarter of 2015, the Company determined that it had incorrectly presented non-cash accrued capital expenditures in its Statements of Cash Flows since December 31, 2012. Management concluded the misstatement was immaterial to previously issued financial statements; however, the Company has elected to correct the cash flow presentation in the accompanying Consolidated Statement of Cash Flows for the years ended December 31, 2014, 2013 and 2012, as shown in the table below. There is no impact to the Consolidated Balance Sheets as of December 31, 2014 and 2013, or the Consolidated Statements of Operations for the years ended December 31, 2014, 2013 and 2012. For the Twelve Months Ended December 31, 2014 2013 2012 Statement of Cash Flows As As As As As As (in thousands) Change in operating assets and liabilities: accounts receivable—JIB and other (13,603 ) (18,897 ) (28,488 ) (18,002 ) (11,019 ) (3,249 ) Net cash provided by operating activities 356,838 351,544 227,102 237,588 137,249 145,019 Investment in property and equipment (561,691 ) (556,397 ) (573,734 ) (584,220 ) (422,332 ) (430,102 ) Net cash used in investing activities (409,558 ) (404,264 ) (1,193,846 ) (1,204,332 ) (773,608 ) (781,378 ) The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates include, but are not limited to, the amount of recoverable oil and natural gas reserves; future cash flows from oil and natural gas properties; the fair value of commodity derivative contracts; the fair value of share-based compensation; and the valuation of future asset retirement obligations. The Company considers all short-term investments with an original maturity of three months or less to be cash equivalents. Accounts receivable are stated at the historical carrying amount net of allowance for uncollectible accounts. The carrying amount of the Company's accounts receivable approximate fair value because of the short-term nature of the instruments. The Company accrues a reserve on a receivable when, based on the judgment of management, it is probable that a receivable will not be collected and the amount of any reserve may be reasonably estimated. As of December 31, 2014 and 2013, the Company had no allowance for doubtful accounts. The Company's financial instruments consist of cash and cash equivalents, receivables, payables, debt, and commodity derivative contracts. Commodity derivative contracts are recorded at fair value (see Note 4). Based upon recent amendments to the Company's Credit Facility, the Company believes the carrying amount of the related floating-rate debt approximates fair value due to the variable nature of the interest rate and the current secured financing terms available to the Company. See fair value discussion of Senior Notes and Series A Preferred Shares issued in October 2012 in Notes 9 and 10, respectively. The carrying amount of the Company's other financial instruments approximate fair value because of the short term nature of the items or variable pricing. Derivative financial instruments are recorded in the consolidated balance sheets as either an asset or liability measured at estimated fair value. Changes in the derivative's fair value are recognized currently in earnings as gains and losses in the period of change. The gains or losses are recorded in "Gains (losses) on commodity derivative contracts—net." The related cash flow impact is reflected within cash flows from operating activities. At December 31, 2014 and 2013, other noncurrent assets consisted of the following: At December 31, 2014 2013 (in thousands) Deferred financing costs 37,807 44,706 Field equipment inventory 5,713 9,682 Other 211 209 ​ ​ ​ ​ ​ ​ ​ Other noncurrent assets 43,731 54,597 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ During the year ended December 31, 2014, the Company has recorded approximately $5.9 million in adjustments to field equipment inventory, either as a result of physical inventory counts, disposals or market adjustments; this is offset by additional inventory added during the period of approximately $1.8 million. For the years ended December 31, 2014 and 2013, the Company recorded $4.1 million and $0.6 million, respectively, of losses on sale of, or market value adjustments to, field equipment inventory. The Company uses the full-cost method of accounting for its exploration and development activities. Under this method of accounting, the cost of both successful and unsuccessful exploration and development activities are capitalized as property and equipment. This includes any internal costs that are directly related to exploration and development activities, but does not include any costs related to production, general corporate overhead or similar activities. Proceeds from the sale or disposition of oil and gas properties are accounted for as a reduction to capitalized costs unless a significant portion of the Company's reserve quantities are sold that results in a significant alteration of the relationship between capitalized costs and remaining proved reserves, in which case a gain or loss is generally recognized in income. Oil and gas unevaluated properties and properties under development include costs that are not being depleted or amortized. These costs represent investments in unproved properties. The Company excludes these costs until proved reserves are found, until it is determined that the costs are impaired or until major development projects are placed in service, at which time the costs are moved into oil and natural gas properties subject to amortization. All unproved property costs are reviewed at least annually to determine if impairment has occurred. Based on current pricing and current drilling plans, we impaired the remaining Anadarko Basin unevaluated property to the full cost pool during the fourth quarter of 2014. Proved oil, NGLs and natural gas reserves utilized in the preparation of the consolidated financial statements are estimated in accordance with the rules established by the SEC and the Financial Accounting Standards Board (FASB), which require that reserve estimates be prepared under existing economic and operating conditions using a 12-month average price with no provision for price and cost escalations in future years except by contractual arrangements. Reserve estimates are inherently imprecise. Accordingly, the estimates are expected to change as more current information becomes available. The Company depletes its oil and gas properties using the units-of-production method. Capitalized costs of oil and natural gas properties subject to amortization are depleted over proved reserves. It is possible that, because of changes in market conditions or the inherent imprecision of reserve estimates, the estimates of future cash inflows, future gross revenues, the amount of oil and natural gas reserves, the remaining estimated lives of oil and natural gas properties, or any combination of the above may be increased or reduced. Increases in recoverable economic volumes generally reduce per unit depletion rates while decreases in recoverable economic volumes generally increase per unit depletion rates. The Company performs a full-cost ceiling test on a quarterly basis. The test establishes a limit (ceiling) on the book value of oil and gas properties. The capitalized costs of proved oil and gas properties, net of accumulated depreciation, depletion and amortization (DD&A) and the related deferred income taxes, may not exceed this "ceiling." The ceiling limitation is equal to the sum of: (i) the present value of estimated future net revenues from the projected production of proved oil and gas reserves, excluding future cash outflows associated with settling asset retirement obligations accrued on the balance sheet, calculated using the average oil and natural gas sales price received by the Company as of the first trading day of each month over the preceding twelve months (such prices are held constant throughout the life of the properties) and a discount factor of 10%; (ii) the cost of unproved and unevaluated properties excluded from the costs being amortized; (iii) the lower of cost or estimated fair value of unproved properties included in the costs being amortized; and (iv) related income tax effects. If capitalized costs exceed this ceiling, the excess is charged to expense in the accompanying consolidated statements of operations. For the year ended December 31, 2014, an impairment of oil and gas properties of $83.5 million, after tax, was recorded. For the year ended December 31, 2013, capitalized costs exceeded the ceiling and an impairment of oil and gas properties of $319.6 million, after tax, was recorded. The most significant factors affecting the impairment related to the transfer of unevaluated property costs to the full cost pool and negative reserve revisions in certain areas. During 2014, the Company transferred $59.2 million of Mississippian unevaluated property costs to the full cost pool. These costs were attributable to leases that either expired during 2014, were determined to not be prospective, or that were assigned proved reserves to previously unproved acreage as a result of the Company's development drilling activities. The Company also transferred $128.2 million of Anadarko Basin and $16.5 million of Gulf Coast unevaluated property costs based up on our lack of plans for further evaluation or development of those leases in the current commodity price environment. During 2013, the Company transferred $61.2 million of Gulf Coast unevaluated property costs to the full cost pool based upon our lack of future plans for further evaluation or development of those leases and $168.4 million of Mississippian unevaluated property costs attributable to leases that expired during 2013 or that were assigned to proved reserves as a result of the Company's drilling activities. The Company also transferred $89.6 million of Anadarko Basin unevaluated costs due primarily to lease expirations and development drilling. The negative reserve revisions in our Gulf Coast area were mainly attributable to variability in well performance, our decision during the second quarter of 2013 to halt further development in our West Gordon field and unfavorable cost revisions. See Note 6. DD&A of oil and gas properties is calculated using the Units of Production Method (UOP). The UOP calculation, in its simplest terms, multiplies the percentage of estimated proved reserves produced by the cost of those reserves. The result is to recognize expense at the same pace that the reserves are estimated to be depleting. The amortization base in the UOP calculation includes the sum of proved property costs net of accumulated DD&A, estimated future development costs (future costs to access and develop proved reserves) and asset retirement costs that are not already included in oil and gas property, less related salvage value. Interest from external borrowings is capitalized on unevaluated properties using the weighted-average cost of outstanding borrowings until the project is substantially complete and ready for its intended use, which for oil and gas assets is at the first production from the field. Capitalized interest is depleted over the useful lives of the assets in the same manner as the depletion of the underlying assets. The Company paid cash interest of $141.9 million, $104.3 million, and $7.2 million for the years ended December 31, 2014, 2013 and 2012, respectively. Other property and equipment consists of vehicles, furniture and fixtures, and computer hardware and software and are carried at cost. Depreciation is provided principally using the straight-line method over the estimated useful lives of the assets, which primarily range from three to seven years. Maintenance and repairs are charged to expense as incurred, while renewals and betterments are capitalized. At December 31, 2014 and 2013, accrued liabilities consisted of the following: At December 31 2014 2013 (in thousands) Accrued oil and gas capital expenditures 76,398 87,202 Accrued revenue and royalty distributions 51,292 64,370 Accrued lease operating and workover expense 10,113 8,279 Accrued interest 21,521 21,341 Accrued taxes 4,226 4,386 Other 20,281 18,803 ​ ​ ​ ​ ​ ​ ​ Accrued liabilities 183,831 204,381 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ The legal obligations associated with the retirement of long-lived assets are recognized at estimated fair value at the time that the obligation is incurred. Oil and gas producing companies incur such a liability upon acquiring or drilling a well. The Company estimates the fair value of an asset retirement obligation in the period in which the obligation is incurred and can be reliably measured. The corresponding asset retirement cost is capitalized by increasing the carrying amount of the related long-lived asset. The liability is accreted to its then present value each period, and the capitalized cost is depreciated over the useful life of the related asset. If the liability is settled for an amount other than the recorded amount, any adjustment is recorded in the full cost pool. See Note 8. We measure share-based compensation cost at fair value and generally recognize the corresponding compensation expense on a straight-line basis over the service period during which awards are expected to vest. We include share-based compensation expense, net of amounts capitalized to oil and gas properties, in "General and administrative expense" in our consolidated statements of operations. See Note 11. Oil, NGLs and natural gas revenues are recognized when production is sold to a purchaser at a fixed or determinable price, when delivery has occurred and title has transferred and collection of the revenues is reasonably assured. Cash received relating to future revenues is deferred and recognized when all revenue recognition criteria are met. The Company follows the sales method of accounting for oil and gas revenues, whereby revenue is recognized for all oil and gas sold to purchasers regardless of whether the sales are proportionate to the Company's ownership interest in the property. Production imbalances are recognized as a liability to the extent an imbalance on a specific property exceeds the Company's share of remaining proved oil and gas reserves. The Company had no significant imbalances at December 31, 2014 or 2013. Acquisition and transaction related costs are expensed as incurred and as services are received. Such costs include finders' fees; advisory, legal, accounting, valuation and other professional and consulting fees; and acquisition related general and administrative costs. Costs incurred in 2014 relate to the Pine Prairie Disposition, costs incurred in 2013 relate to the Anadarko Basis Acquisition, and costs incurred in 2012 relate to the Eagle Property Acquisition. See Note 7. Income taxes are provided for the tax effects of transactions reported in the financial statements and consist of taxes currently payable plus deferred income taxes related to certain income and expenses recognized in different periods for financial and income tax reporting purposes. Deferred income tax assets and liabilities represent the future tax return consequences of those differences, which will either be taxable or deductible when assets are recovered or liabilities are settled. Deferred income taxes also include tax credits and net operating losses that are available to offset future income taxes. Deferred income taxes are measured by applying currently enacted tax rates. The Company accounts for uncertainty in income taxes for tax positions taken or expected to be taken in a tax return. Only tax positions that meet the more-than-likely-than-not recognition threshold are recognized. Prior to its corporate reorganization (See Note 1), the Company was a limited liability company and not subject to federal income tax or state income tax (in most states). Accordingly, no provision for federal or state income taxes was recorded prior to the corporate reorganization as the Company's equity holders were responsible for income tax on the Company's profits. In connection with the closing of the Company's initial public offering, the Company merged into a corporation and became subject to federal and state income taxes. The Company's book and tax basis in assets and liabilities differed at the time of the corporate reorganization due primarily to different cost recovery periods utilized for book and tax purposes for the Company's oil and natural gas properties. See Note 12. Basic earnings (loss) per common share is calculated by dividing net income available to common shareholders by the weighted average number of common shares outstanding during each period. Diluted earnings (loss) per common share is calculated by dividing net income available to common shareholders by the weighted average number of diluted common shares outstanding, which includes the effect of potentially dilutive securities. Potentially dilutive securities for the diluted earnings per share calculations consist of unvested restricted stock awards and outstanding stock options (if any) using the treasury method, as well as the Company's Series A Preferred Stock using the if-converted method. In the computation of diluted earnings per share, excess tax benefits that would be created upon the assumed vesting of unvested restricted shares or the assumed exercise of stock options (i.e. hypothetical excess tax benefits) are included in the assumed proceeds component of the treasury share method to the extent that such excess tax benefits are more likely than not to be realized. When a loss from continuing operations exists, all potentially dilutive securities are anti-dilutive and are therefore excluded from the computation of diluted earnings per share. See Note 13. The Company reviewed recently issued accounting pronouncements that became effective during the twelve months ended December 31, 2014, and determined that none would have a material impact on the Company's consolidated financial statements with the exception of ASU 2014-09, "Revenue from Contracts with Customers "and ASU 2014-15, "Presentation of Financial Statements—Going Concern," (both effective for annual reporting periods beginning after December 15, 2016), which the Company is still evaluating. |
Fair Value Measurements of Fina
Fair Value Measurements of Financial Instruments | 6 Months Ended | 12 Months Ended |
Jun. 30, 2015 | Dec. 31, 2014 | |
Fair Value Measurements of Financial Instruments | ||
Fair Value Measurements of Financial Instruments | 4. Fair Value Measurements of Financial Instruments Commodity derivative contracts reflected in the condensed consolidated balance sheets are recorded at estimated fair value. At June 30, 2015 and December 31, 2014, all of the Company's commodity derivative contracts were with seven bank counterparties, and were classified as Level 2 in the fair value input hierarchy. Derivative instruments listed below are presented gross and consist of swaps that are carried at fair value. The Company records the net change in the fair value of these positions in "Gains (losses) on commodity derivative contracts—net" in the Company's unaudited condensed consolidated statements of operations. See "—Note 5. Risk Management and Derivative Instruments" for additional information on the Company's derivative instruments and balance sheet presentation. Fair Value Measurements at June 30, 2015 Quoted Prices Significant Significant Total (in thousands) Assets: Commodity derivative oil swaps — 27,708 — 27,708 Commodity derivative gas swaps — 9,152 — 9,152 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total assets — 36,860 — 36,860 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Liabilities: Commodity derivative oil swaps — 2,869 — 2,869 Commodity derivative gas swaps — — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total liabilities — 2,869 — 2,869 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fair Value Measurements at December 31, 2014 Quoted Prices Significant Significant Total (in thousands) Assets: Commodity derivative oil swaps — 106,450 — 106,450 Commodity derivative gas swaps — 20,259 — 20,259 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total assets — 126,709 — 126,709 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Liabilities: Commodity derivative oil swaps — — — — Commodity derivative gas swaps — — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total liabilities — — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ | 4. Fair Value Measurements of Financial Instruments The Company uses a valuation framework based upon inputs that market participants use in pricing an asset or liability, which are classified into two categories: observable inputs and unobservable inputs. Observable inputs represent market data obtained from independent sources; whereas, unobservable inputs reflect a company's own market assumptions, which are used if observable inputs are not reasonably available without undue cost and effort. These two types of inputs are further divided into the following fair value input hierarchy: Level 1—Inputs are unadjusted quoted prices in active markets for identical assets or liabilities at the measurement date. Level 2—Inputs, other than quoted prices included in Level 1, are observable for the asset or liability, either directly or indirectly. Level 2 inputs include quoted prices for similar instruments in active markets, and inputs other than quoted prices that are observable for the asset or liability. Fair value assets and liabilities that are generally included in this category are commodity derivative contracts with fair values based on inputs from actively quoted markets. The Company uses a discounted cash flow approach to estimate the fair values of its commodity derivative contracts, utilizing commodity futures price strips for the underlying commodities provided by a reputable third-party. Level 3—Inputs are unobservable for the asset or liability, and include situations where there is little, if any, market activity for the asset or liability. Assets and liabilities are classified based on the lowest level of input that is significant to the fair value measurement. The Company's assessment of the significance of a particular input to the fair value measurement requires judgment, and may affect the valuation of the fair value of assets and liabilities and their placement within the fair value hierarchy levels. Derivative Instruments—Commodity derivative contracts reflected in the consolidated balance sheets are recorded at estimated fair value. At December 31, 2014 and 2013, all of the Company's commodity derivative contracts were with seven counterparties, respectively, and are classified as Level 2. Fair Value Measurements at December 31, 2014 Quoted Prices Significant Significant Total (in thousands) Assets: Commodity derivative oil swaps — 106,450 — 106,450 Commodity derivative gas swaps — 20,259 — 20,259 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total assets — 126,709 — 126,709 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Liabilities: Commodity derivative oil swaps — — — — Commodity derivative NGL swaps — — — — Commodity derivative gas swaps — — — — Commodity derivative oil collars — — — — Commodity derivative gas collars — — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total liabilities — — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fair Value Measurements at December 31, 2013 Quoted Prices Significant Significant Total (in thousands) Assets: Commodity derivative NGL swaps — 469 — 469 Commodity derivative gas swaps — 488 — 488 Commodity derivative oil collars — 64 — 64 Commodity derivative gas collars — 751 — 751 Commodity derivative differential swaps — 806 — 806 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total assets — 2,578 — 2,578 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Liabilities: Commodity derivative oil swaps — 32,209 — 32,209 Commodity derivative NGL swaps — 74 — 74 Commodity derivative gas swaps — 809 — 809 Commodity derivative oil collars — 272 — 272 Commodity derivative gas collars — 26 — 26 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total liabilities — 33,390 — 33,390 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Derivative instruments listed above are presented gross and include collars and swaps that are carried at fair value. The Company records the net change in the fair value of these positions in "Gains (losses) on commodity derivative contracts—net" in the Company's consolidated statements of operations. See Note 5 for additional information on the Company's derivative instruments and balance sheet presentation. |
Risk Management and Derivative
Risk Management and Derivative Instruments | 6 Months Ended | 12 Months Ended |
Jun. 30, 2015 | Dec. 31, 2014 | |
Risk Management and Derivative Instruments | ||
Risk Management and Derivative Instruments | 5. Risk Management and Derivative Instruments The Company's production is exposed to fluctuations in crude oil, NGL and natural gas prices. The Company believes it is prudent to manage the variability in cash flows by entering into derivative financial instruments to economically hedge a portion of its crude oil, NGL and natural gas production. The Company utilizes various types of derivative financial instruments, including swaps and collars, to reduce fluctuations in cash flows resulting from changes in commodity prices. These derivative contracts are placed with major financial institutions that the Company believes are minimal credit risks. The oil, NGL and natural gas reference prices, upon which the commodity derivative contracts are based, reflect various market indices that management believes have a high degree of historical correlation with actual prices received by the Company for its crude oil, NGL and natural gas production. Inherent in the Company's portfolio of commodity derivative contracts are certain business risks, including market risk and credit risk. Market risk is the risk that the price of the commodity will change, either favorably or unfavorably, in response to changing market conditions. Credit risk is the risk of loss from nonperformance by the Company's counterparty to a contract. The Company does not require collateral from its counterparties but does attempt to minimize its credit risk associated with derivative instruments by entering into derivative instruments only with counterparties that are large financial institutions, which management believes present minimal credit risk. In addition, to mitigate its risk of loss due to default, the Company has entered into agreements with its counterparties on its derivative instruments that allow the Company to offset its asset position with its liability position in the event of default by the counterparty. Due to the netting arrangements, had the Company's counterparties failed to perform under existing commodity derivative contracts, the maximum loss at June 30, 2015 would have been approximately $35.9 million. As of June 30, 2015, the Company had the following open commodity derivative contract positions: Hedged Weighted-Average Oil (Bbls): WTI Swaps—2015 2,208,000 71.56 Natural Gas (MMBtu): Swaps—2015(1) 9,200,000 4.13 (1) Includes 1,550,000 MMBtus in natural gas swaps that priced during the period, but had not cash settled as of June 30, 2015. The following table summarizes the gross fair values of derivative instruments by the appropriate balance sheet classification; however, the derivative instruments are subject to netting arrangements and qualify for net presentation in the Company's unaudited condensed consolidated balance sheets at June 30, 2015 and December 31, 2014, respectively (in thousands): Type Balance Sheet Location(1) June 30, December 31, Oil Swaps Derivative financial instruments—Current Assets 27,708 106,450 Oil Swaps Derivative financial instruments—Current Liabilities (2,869 ) — Gas Swaps Derivative financial instruments—Current Assets 9,152 20,259 ​ ​ ​ ​ ​ ​ ​ ​ ​ Total derivative fair value at period end 33,991 126,709 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (1) The fair values of commodity derivative instruments reported in the Company's condensed consolidated balance sheets are subject to netting arrangements and qualify for net presentation. The following table summarizes the location and fair value amounts of all derivative instruments in the unaudited condensed consolidated balance sheets, as well as the gross recognized derivative assets, liabilities and amounts offset in the unaudited condensed consolidated balance sheets at June 30, 2015 and December 31, 2014, respectively (in thousands): June 30, 2015 Not Designated as Balance Sheet Classification Gross Gross Net Derivative assets: Commodity contracts Derivative financial instruments—current 36,860 1,002 35,858 Commodity contracts Derivative financial instruments—noncurrent — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 36,860 1,002 35,858 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Derivative liabilities: Commodity contracts Derivative financial instruments—current 2,869 1,002 1,867 Commodity contracts Derivative financial instruments—noncurrent — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2,869 1,002 1,867 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2014 Not Designated as Balance Sheet Classification Gross Gross Net Derivative assets: Commodity contracts Derivative financial instruments—current 126,709 126,709 Commodity contracts Derivative financial instruments—noncurrent — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 126,709 — 126,709 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Derivative liabilities: Commodity contracts Derivative financial instruments—current — — — Commodity contracts Derivative financial instruments—noncurrent — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ The Company does not designate its commodity derivative contracts as hedging instruments for financial reporting purposes. Accordingly, commodity derivative contracts are marked-to-market each quarter with the change in fair value during the periodic reporting period recognized currently as a gain or loss in "Gains (losses) on commodity derivative contracts—net" within revenues in the unaudited condensed consolidated statements of operations. The following table presents net cash received (paid) for commodity derivative contracts and unrealized net gains (losses) recorded by the Company related to the change in fair value of the derivative instruments in "Gains (losses) on commodity derivative contracts—net" for the periods presented: For the Three Months For the Six Months 2015 2014 2015 2014 (in thousands) (in thousands) Net cash received (paid) for commodity derivative contracts 42,189 (17,138 ) 94,797 (31,948 ) Unrealized net gains (losses) (61,482 ) (14,329 ) (92,718 ) (22,192 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Gains (losses) on commodity derivative contracts—net (19,293 ) (31,467 ) 2,079 (54,140 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ | 5. Risk Management and Derivative Instruments The Company's production is exposed to fluctuations in crude oil, NGLs and natural gas prices. The Company believes it is prudent to manage the variability in cash flows by entering into derivative financial instruments to economically hedge a portion of its crude oil, NGLs and natural gas production. The Company utilizes various types of derivative financial instruments, including swaps and collars, to manage fluctuations in cash flows resulting from changes in commodity prices. These derivative contracts are placed with major financial institutions that the Company believes are minimal credit risks. The oil, NGLs and gas reference prices, upon which the commodity derivative contracts are based, reflect various market indices that management believes have a high degree of historical correlation with actual prices received by the Company for its oil, NGLs and natural gas production. Inherent in the Company's portfolio of commodity derivative contracts are certain business risks, including market risk and credit risk. Market risk is the risk that the price of the commodity will change, either favorably or unfavorably, in response to changing market conditions. Credit risk is the risk of loss from nonperformance by the Company's counterparty to a contract. The Company does not require collateral from its counterparties but does attempt to minimize its credit risk associated with derivative instruments by entering into derivative instruments only with counterparties that are large financial institutions, which management believes present minimal credit risk. In addition, to mitigate its risk of loss due to default, the Company has entered into agreements with its counterparties on its derivative instruments that allow the Company to offset its asset position with its liability position in the event of default by the counterparty. Due to the netting arrangements, had the Company's counterparties failed to perform under existing commodity derivative contracts, the maximum loss at December 31, 2014 would have been approximately $126.7 million. As of December 31, 2014, the Company had the following open commodity positions: Hedged Volume Weighted-Average Oil (Bbls): WTI Swaps—2015 3,276,000 88.72 Natural Gas (MMBtu): Swaps—2015(1) 20,050,000 4.15 (1) Includes 2,170,000 MMBtu in natural gas swaps that priced during the period, but had not cash settled as of December 31, 2014. The following table summarizes the gross fair value of derivative instruments by the appropriate balance sheet classification, even when the derivative instruments are subject to netting arrangements and qualify for net presentation in the Company's consolidated balance sheets at December, 2014 and 2013, respectively (in thousands): Type Balance Sheet Location(1) December 31, December 31, Oil Swaps Derivative financial instruments—Current Assets 106,450 — Oil Swaps Derivative financial instruments—Current Liabilities — (28,871 ) Oil Swaps Derivative financial instruments—Non-Current Liabilities — (3,338 ) NGL Swaps Derivative financial instruments—Current Assets — 469 NGL Swaps Derivative financial instruments—Current Liabilities — (74 ) Gas Swaps Derivative financial instruments—Current Assets 20,259 469 Gas Swaps Derivative financial instruments—Non-Current Assets — 19 Gas Swaps Derivative financial instruments—Current Liabilities — (496 ) Gas Swaps Derivative financial instruments—Non-Current Liabilities — (313 ) Oil Collars Derivative financial instruments—Current Assets — 64 Oil Collars Derivative financial instruments—Current Liabilities — (272 ) Gas Collars Derivative financial instruments—Current Assets — 751 Gas Collars Derivative financial instruments—Current Liabilities — (26 ) Basis Differential Swaps Derivative financial instruments—Current Assets — 806 ​ ​ ​ ​ ​ ​ ​ ​ ​ Total derivative fair value at period end 126,709 (30,812 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (1) The fair values of commodity derivative instruments reported in the Company's consolidated balance sheets are subject to netting arrangements and qualify for net presentation. The following table summarizes the location and fair value amounts of all derivative instruments in the consolidated balance sheets, as well as the gross recognized derivative assets, liabilities and amounts offset in the consolidated balance sheets at December 31, 2014 and 2013, respectively (in thousands): December 31, 2014 Not Designated as ASC 815 Hedges: Balance Sheet Classification Gross Gross Net Recognized Derivative assets: Commodity contracts Derivative financial instruments—current 126,709 — 126,709 Commodity contracts Derivative financial instruments—noncurrent — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 126,709 — 126,709 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Derivative liabilities: Commodity contracts Derivative financial instruments—current — — — Commodity contracts Derivative financial instruments—noncurrent — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Not Designated as ASC 815 Hedges: Balance Sheet Classification Gross Gross Net Recognized Derivative assets: Commodity contracts Derivative financial instruments—current 2,559 1,859 700 Commodity contracts Derivative financial instruments—noncurrent 19 — 19 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2,578 1,859 719 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Derivative liabilities: Commodity contracts Derivative financial instruments—current 29,739 1,859 27,880 Commodity contracts Derivative financial instruments—noncurrent 3,651 — 3,651 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 33,390 1,859 31,531 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ The Company does not designate its commodity derivative contracts as hedging instruments for financial reporting purposes. Accordingly, commodity derivative contracts are marked-to-market each quarter with the change in fair value during the periodic reporting period recognized currently as a gain or loss in "Gains (losses) on commodity derivative contracts—net" within revenues in the consolidated statements of operations. Realized gains and losses represent the actual settlements under commodity derivative contracts that require making a payment to or receiving a payment from the counterparty, as well as any deferred premiums payable to the counterparty upon contract settlement. During the year ended December 31, 2012, the Company paid deferred premiums of $3.3 million related to put options covering a total of 549,000 barrels of crude oil, respectively. No such payments for deferred premiums were made during 2014 or 2013. The following table presents realized net losses and unrealized net gains (losses) recorded by the Company in "Gains (losses) on commodity derivative contracts—net" related to the change in fair value of the commodity derivative instruments for the periods presented: Years Ended December 31, 2014 2013 2012 (in thousands) Realized net losses (18,332 ) (17,585 ) (15,825 ) Unrealized net gains (losses) 157,521 (26,699 ) 4,667 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Gains (losses) on commodity derivative contracts—net 139,189 (44,284 ) (11,158 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Property and Equipment
Property and Equipment | 6 Months Ended | 12 Months Ended |
Jun. 30, 2015 | Dec. 31, 2014 | |
Property and Equipment | ||
Property and Equipment | 6. Property and Equipment June 30, December 31, (in thousands) Oil and gas properties, on the basis of full-cost accounting: Proved properties 3,527,182 3,398,146 Unevaluated properties 31,778 44,535 Other property and equipment 14,734 13,454 Less accumulated depreciation, depletion, amortization and impairment (2,119,458 ) (1,333,019 ) ​ ​ ​ ​ ​ ​ ​ Net property and equipment 1,454,236 2,123,116 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ The Company capitalizes internal costs directly related to exploration and development activities to oil and gas properties. During the three and six months ended June 30, 2015 and 2014, the Company capitalized the following (in thousands): Three Months Six Months Ended 2015 2014 2015 2014 Internal costs capitalized to oil and gas properties(1) 2,613 3,325 4,915 6,449 (1) Inclusive of $0.4 million and $0.6 million of qualifying share-based compensation expense for the three months ended June 30, 2015 and 2014, respectively. For the six months ended June 30, 2015 and 2014, inclusive of $0.9 million and $1.2 million, respectively. The Company accounts for its oil and gas properties under the full cost method. Under the full cost method, proceeds from the sale or disposition of oil and gas properties are accounted for as a reduction to capitalized costs unless a significant portion of the Company's reserve quantities are sold such that it results in a significant alteration of the relationship between capitalized costs and remaining proved reserves, in which case a gain or loss is generally recognized in income. The Company performs a ceiling test on a quarterly basis. The test establishes a limit (ceiling) on the book value of oil and gas properties. The capitalized costs of oil and gas properties, net of accumulated DD&A and the related deferred income taxes, may not exceed this "ceiling." The ceiling limitation is equal to the sum of: (i) the present value of estimated future net revenues from the projected production of proved oil and gas reserves, excluding future cash outflows associated with settling asset retirement obligations ("ARO") accrued on the balance sheet, calculated using the average oil and natural gas sales price received by the Company as of the first trading day of each month over the preceding twelve months (such prices are held constant throughout the life of the properties) and a discount factor of 10%; (ii) the cost of unevaluated properties excluded from the costs being amortized; (iii) the lower of cost or estimated fair value of unproved properties included in the costs being amortized; and (iv) related income tax effects. If capitalized costs exceed this ceiling, the excess is charged to expense in the accompanying condensed consolidated statements of operations. At June 30, 2015, capitalized costs exceeded the ceiling and the Company recorded an impairment of oil and gas properties of $498.4 million. During the six months ended June 30, 2015 and 2014, the Company recorded impairments of oil and gas properties of $673.1 million and $86.5 million, respectively. Impairments at June 30, 2015 and March 31, 2015 were primarily due to continued low commodity prices, which resulted in a reduction of the discounted present value of the Company's proved oil and natural gas reserves. Depreciation, depletion and amortization is calculated using the Units of Production Method ("UOP"). The UOP calculation multiplies the percentage of estimated proved reserves produced by the cost of those reserves. The result is to recognize expense at the same pace that the reservoirs are estimated to be depleting. The amortization base in the UOP calculation includes the sum of proved property costs net of accumulated depreciation, depletion, amortization and impairment, estimated future development costs (future costs to access and develop proved reserves) and asset retirement costs that are not already included in oil and gas property, less related salvage value. The following table presents depletion expense related to oil and gas properties for the three and six months ended June 30, 2015 and 2014, respectively: Three Months Ended June 30, Six Months Ended June 30, 2015 2014 2015 2014 2015 2014 2015 2014 (in thousands) (per Boe) (in thousands) (per Boe) Depletion expense 54,359 70,323 17.63 24.22 111,964 136,527 18.18 24.76 Depreciation on other property 896 751 0.29 0.25 1,719 1,448 0.28 0.26 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Depreciation, depletion, and amortization 55,255 71,074 17.92 24.47 113,683 137,975 18.46 25.02 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Oil and gas unevaluated properties and properties under development include costs that are not being depleted or amortized. These costs represent investments in unproved properties. The Company excludes these costs until proved reserves are found, until it is determined that the costs are impaired or until major development projects are placed in service, at which time the costs are moved into oil and natural gas properties subject to amortization. All unproved property costs are reviewed at least quarterly to determine if impairment has occurred. Unevaluated property was $31.8 million and $44.5 million at June 30, 2015 and December 31, 2014, respectively. Other property and equipment consists of vehicles, furniture and fixtures, and computer hardware and software and are carried at cost. Depreciation is calculated principally using the straight-line method over the estimated useful lives of the assets, which range from five to seven years. Maintenance and repairs are charged to expense as incurred, while renewals and betterments are capitalized. On April 21, 2015, the Company closed on the sale of its ownership interest in developed and undeveloped acreage in the Dequincy area located in Beauregard and Calcasieu Parishes, Louisiana for $44.0 million to Pintail Oil and Gas LLC. The net proceeds of approximately $42.4 million, which was net of customary closing adjustments, was reflected as a reduction of oil and natural gas properties, with no gain or loss recognized. The proceeds from the sale have been and will continue to be used for general corporate purposes. | 6. Property and Equipment The Company's property and equipment as of December 31, 2014 and 2013 was as follows (in thousands): December 31, December 31, (in thousands) Oil and gas properties, on the basis of full-cost accounting: Proved properties 3,398,146 2,817,062 Unevaluated properties 44,535 243,599 Other property and equipment 13,454 11,113 Less accumulated depreciation, depletion, amortization and impairment (1,333,019 ) (976,880 ) ​ ​ ​ ​ ​ ​ ​ Net property and equipment 2,123,116 2,094,894 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the years ended December 31, 2014, 2013 and 2012, depletion expense related to oil and gas properties was $266.8 million, $248.2 million and $125.1 million, respectively and $22.75, $28.42 and $34.17 per barrel of oil equivalent ("Boe"), respectively. For the years ended December 31, 2014, 2013 and 2012, depreciation expense related to other property and equipment was $3.1 million, $2.2 million and $0.5 million, respectively. For the years ended December 31, 2014, 2013 and 2012, interest capitalized to unevaluated properties was $12.4 million, $32.2 million and $11.2 million, respectively. For the years ended December 31, 2014, 2013 and 2012, the Company capitalized $12.4 million, $8.4 million and $1.5 million, respectively, of internal costs to oil and gas properties, including $2.2 million, $1.4 million and $0.2 million, respectively, of qualifying share based compensation expense (see Note 11). |
Other Noncurrent Assets
Other Noncurrent Assets | 6 Months Ended |
Jun. 30, 2015 | |
Other Noncurrent Assets | |
Other Noncurrent Assets | 7. Other Noncurrent Assets At June 30, 2015 and December 31, 2014 other noncurrent assets consisted of the following: June 30,2015 December 31,2014 (in thousands) Deferred financing costs 33,483 37,807 Field inventory 5,911 5,713 Other 166 211 ​ ​ ​ ​ ​ ​ ​ Other noncurrent assets 39,560 43,731 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ During the three months ended June 30, 2015, approximately $4.6 million in deferred financing costs were impaired as a result of the Seventh Amendment to the Credit Facility. The Seventh Amendment is further discussed in "—Note 10. Long-Term Debt." |
Accrued Liabilities
Accrued Liabilities | 6 Months Ended |
Jun. 30, 2015 | |
Accrued Liabilities. | |
Accrued Liabilities | 8. Accrued Liabilities At June 30, 2015 and December 31, 2014 accrued liabilities consisted of the following: June 30, 2015 December 31, 2014 (in thousands) Accrued oil and gas capital expenditures 54,674 76,398 Accrued revenue and royalty distributions 44,411 51,292 Accrued lease operating and workover expense 17,250 10,113 Accrued interest 23,567 21,521 Accrued taxes 4,427 4,226 Other 10,892 20,281 ​ ​ ​ ​ ​ ​ ​ Accrued liabilities 155,221 183,831 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Asset Retirement Obligations
Asset Retirement Obligations | 6 Months Ended | 12 Months Ended |
Jun. 30, 2015 | Dec. 31, 2014 | |
Asset Retirement Obligations | ||
Asset Retirement Obligations | 9. Asset Retirement Obligations Asset Retirement Obligations ("AROs") represent the future abandonment costs of tangible assets, such as wells, service assets and other facilities. The fair value of the ARO at inception is capitalized as part of the carrying amount of the related long-lived assets. The following table reflects the changes in the Company's AROs for the periods indicated: Six Months Six Months (in thousands) Asset retirement obligations—beginning of period 21,599 26,308 Liabilities incurred 2 844 Revisions — — Liabilities settled — (47 ) Liabilities eliminated through asset sales (4,699 ) (7,652 ) Current period accretion expense 835 929 ​ ​ ​ ​ ​ ​ ​ Asset retirement obligations—end of period 17,737 20,382 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ | 8. Asset Retirement Obligations For the Company, asset retirement obligations represent the future abandonment costs of tangible assets, such as wells, service assets and other facilities. The fair value of the asset retirement obligation at inception is capitalized as part of the carrying amount of the related long-lived assets. Asset retirement obligations approximated $21.6 million and $26.3 million as of December 31, 2014 and 2013, respectively. The liability has been accreted to its present value as of December 31, 2014 and 2013. The Company evaluated its wells and determined a range of abandonment dates through 2079. At December 31, 2014, all asset retirement obligations represent long-term liabilities and are classified as such. The following table details the change in the asset retirement obligations for the years ended December 31, 2014, 2013 and 2012, respectively (in thousands): Year ended December 31, 2014 2013 2012 Asset retirement obligations at beginning of year 26,308 15,245 7,627 Liabilities incurred 996 2,535 3,044 Liabilities assumed in Anadarko Basin Acquisition — 6,296 — Liabilities assumed in Eagle Property Acquisition — — 2,662 Revisions 288 858 1,189 Liabilities settled (47 ) (61 ) — Liabilities eliminated through asset sale(1) (7,652 ) — — Current period accretion expense 1,706 1,435 723 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Asset retirement obligations at end of year 21,599 26,308 15,245 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (1) As a result of the Pine Prairie Disposition, AROs were reduced by approximately $7.7 million during the year ended December 31, 2014. See discussion of the Pine Prairie Disposition in Note 7. Revisions during the year ended December 31, 2014 were due primarily to an increase in estimated future abandonment costs based upon higher costs for oilfield services and materials in the Mississippian Lime and Anadarko areas. Revisions during the year ended December 31, 2013 were due to an increase in estimated future abandonment costs based upon higher oilfield service pricing. Revisions during the year ended December 31, 2012 were due to an increase in estimated future abandonment costs for our Gulf Coast wells based upon higher oilfield service pricing and a change in the Company's approach to site remediation based upon expected environmental and regulatory requirements. |
Long-Term Debt
Long-Term Debt | 6 Months Ended | 12 Months Ended |
Jun. 30, 2015 | Dec. 31, 2014 | |
Long-Term Debt | ||
Long-Term Debt | 10. Long-Term Debt The Company's long-term debt as of June 30, 2015 and December 31, 2014 is as follows (in thousands): December 31, Borrowings Repayments Exchanges Deferred Amortization PIK June 30, Credit Facility 435,150 33,000 (468,150 ) — — — — 2020 Senior Notes 600,000 — — (242,445 ) (63,930 ) — — 293,625 2021 Senior Notes 700,000 — — (281,676 ) (70,672 ) — — 347,652 Second Lien Notes — 625,000 — — 47,082 (896 ) — 671,186 Third Lien Notes — — — 524,121 87,520 (879 ) 1,187 611,949 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total debt 1,735,150 658,000 (468,150 ) — — (1,775 ) 1,187 1,924,412 Current maturities — — — — — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Long-term debt 1,735,150 658,000 (468,150 ) — — (1,775 ) 1,187 1,924,412 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ June 30, 2015 Unamortized June 30, 2015 Revolving Credit Facility — — 2020 Senior Notes 293,625 — 293,625 2021 Senior Notes 347,652 — 347,652 Second Lien Notes 671,186 (46,186 ) 625,000 Third Lien Notes 611,949 (86,641 ) 525,308 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total debt 1,924,412 (132,827 ) 1,791,585 Current maturities — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Long-term debt 1,924,412 (132,827 ) 1,791,585 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ On May 21, 2015, the Company issued $625.0 million of Second Lien Notes and utilized the proceeds to repay the outstanding balance of the Credit Facility in an amount of approximately $468.2 million, with the remainder to be utilized for general corporate purposes. Further, the Company exchanged approximately $504.121 million of Third Lien Notes for approximately $279.8 million of 2020 Senior Notes and $350.3 million of 2021 Senior Notes, representing an exchange at 80.0% of the exchanged Unsecured Notes' par value. Additionally, on June 2, 2015, the Company exchanged approximately $20.0 million of Third Lien Notes for approximately $26.6 million of 2020 Senior Notes and $2.0 million of 2021 Senior Notes, representing an exchange at 70.0% of the exchanged Unsecured Notes' par value. Approximately $63.9 million of the principal amount of 2020 Senior Notes and $70.7 million of the principal amount of 2021 Senior Notes were extinguished. Additionally, the Company and Midstates Sub entered into the Seventh Amendment to the Credit Facility which provided that upon completion of the offering of the Second Lien Notes and exchange of Third Lien Notes, the borrowing base of the Credit Facility would be reduced to $252.4 million. The Seventh Amendment also provided additional covenant flexibility. Further discussion regarding the Second Lien Notes, Third Lien Notes and Seventh Amendment can be found below. The exchanges of Third Lien Notes for the Unsecured Notes as well as the issuance of the Second Lien Notes were accounted for as a troubled debt restructuring. As the future cash flows of the modified debt instruments are greater than the carrying amount of the previous debt instruments, no gain was recognized. The amount of extinguished debt will be amortized and recognized as a reduction of interest expense over the remaining life of the Second Lien Notes and Third Lien Notes using the effective interest method. As a result, the Company's reported interest expense will be significantly less than the contractual interest payments throughout the term of Second Lien Notes and Third Lien Notes. All costs incurred, including restructuring costs as well as the direct issuance costs of the Second Lien Notes and Third Lien Notes, were expensed and are included within debt restructuring costs in our condensed consolidated statements of operations. The Company maintains a $750.0 million Credit Facility with a borrowing base of $252.4 million supported by the Company's Mississippian Lime and Anadarko Basin oil and gas assets. At June 30, 2015, the Company had no amounts drawn on the Credit Facility and had outstanding letters of credit obligations totaling $1.5 million. The Credit Facility matures on May 31, 2018 and borrowings thereunder are secured by substantially all of the Company's oil and natural gas properties and bear interest at LIBOR plus an applicable margin, depending upon the Company's borrowing base utilization, between 2.00% and 3.00% per annum. At June 30, 2015 and 2014, the weighted average interest rate was 2.9% and 2.8%, respectively. In addition to interest expense, the Credit Facility requires the payment of a commitment fee each quarter. The commitment fee is computed at the rate of either 0.375% or 0.500% per annum based on the average daily amount by which the borrowing base exceeds the outstanding borrowings during each quarter. The borrowing base under the Credit Facility is subject to semiannual redeterminations in April and October and up to one additional time per six month period following each scheduled borrowing base redetermination, as may be requested by the Company or the administrative agent, acting on behalf of lenders holding at least two-thirds of the outstanding loans and other obligations. Under the terms of the Credit Facility, the Company is required to repay any amount by which the principal balance of its outstanding loans and its letter of credit obligations exceed its redetermined borrowing base or grant liens on additional property having sufficient value to eliminate such excess. The Company is permitted to make such repayment in six equal successive monthly payments commencing 30 days following the administrative agent's notice regarding such borrowing base reduction. On March 24, 2015, the Company and Midstates Sub entered into a Sixth Amendment (the "Sixth Amendment") to the Credit Facility. The Sixth Amendment amended the required ratio of net consolidated indebtedness to EBITDA under the Credit Agreement for each of the fiscal quarters in 2015 from 4.0:1.0 to 4.5:1.0. Additionally, the Sixth Amendment amended the mortgage requirements under the Credit Facility to provide for an increase from 80% to 90% for the percentage of properties included in the borrowing base that are required to be subject to mortgages for the benefit of the lenders. On May 21, 2015, the Company and Midstates Sub entered into a Seventh Amendment (the "Seventh Amendment") to the Credit Facility. The Seventh Amendment provided that, with the completion of the offering of the Second Lien Notes and Third Lien Notes (both discussed below), the Company's borrowing base would be reduced to approximately $252.4 million. The Seventh Amendment also eliminated the required ratio of net consolidated indebtedness to EBITDA covenant and added a ratio of Total Senior Indebtedness (as defined therein) to EBITDA of not more than 1.0:1.0, which is further discussed below under "—Debt Covenants." The next scheduled redetermination of the borrowing base is October 2015. On October 1, 2012, the Company issued $600 million in aggregate principal amount of 2020 Senior Notes conducted pursuant to Rule 144A and Regulation S under the Securities Act of 1933, as amended (the "Securities Act"). In October 2013, these notes were exchanged for an equal principal amount of identical registered notes. The 2020 Senior Notes rank pari passu in right of payment with the 2021 Senior Notes, the Second Lien Notes and Third Lien Notes. The 2020 Senior Notes were co-issued on a joint and several basis by the Company and its wholly owned subsidiary, Midstates Sub. The Company does not have any operations or independent assets other than its 100% ownership interest in Midstates Sub and there are no other subsidiaries of the Company. The indenture governing the 2020 Senior Notes (the "2020 Senior Notes Indenture") does not create any restricted assets within Midstates Sub, nor does it impose any significant restrictions on the ability of Midstates Sub to pay dividends or make loans to the Company or limit the ability of the Company to advance loans to Midstates Sub. At any time prior to October 1, 2015, the Company may, under certain circumstances, redeem up to 35% of the aggregate principal amount of the 2020 Senior Notes with the net proceeds of a public or private equity offering at a redemption price of 110.75% of the principal amount of the 2020 Senior Notes, plus any accrued and unpaid interest up to the redemption date. In addition, at any time before October 1, 2016, the Company may redeem all or a part of the 2020 Senior Notes at a redemption price equal to 100% of the principal amount of 2020 Senior Notes redeemed plus the Applicable Premium (as defined in the 2020 Senior Notes Indenture) at the redemption date, plus any accrued and unpaid interest, if any, up to the redemption date. On or after October 1, 2016, the Company may redeem all or a part of the 2020 Senior Notes at varying redemption prices (expressed as percentages of principal amount) set forth in the 2020 Senior Notes Indenture plus accrued and unpaid interest, if any, on the 2020 Senior Notes redeemed, up to the redemption date. Upon the occurrence of certain change of control events, as defined in the 2020 Senior Notes Indenture, each holder of the 2020 Senior Notes will have the right to require that the Company repurchase all or a portion of such holder's 2020 Senior Notes in cash at a purchase price equal to 101% of the aggregate principal amount thereof plus any accrued and unpaid interest to the date of repurchase. On May 21, 2015 and June 2, 2015, a total of approximately $306.4 million of 2020 Senior Notes were exchanged for Third Lien Notes, as discussed above. The estimated fair value of the 2020 Senior Notes as of June 30, 2015 was $121.1 million (Level 2 in the fair value measurement hierarchy), based on quoted market prices for these same debt securities. On May 31, 2013, the Company issued $700 million in aggregate principal amount of 2021 Senior Notes. In October 2013, these notes were exchanged for an equal principal amount of identical registered notes. The 2021 Senior Notes rank pari passu in right of payment with the 2020 Senior Notes, Second Lien Notes and Third Lien Notes. The 2021 Senior Notes were co-issued on a joint and several basis by the Company and its wholly owned subsidiary, Midstates Sub. The indenture governing the 2021 Senior Notes (the "2021 Senior Notes Indenture") does not create any restricted assets within Midstates Sub, nor does it impose any significant restrictions on the ability of Midstates Sub to pay dividends or make loans to the Company or limit the ability of the Company to advance loans to Midstates Sub. Prior to June 1, 2016, the Company may, under certain circumstances, redeem up to 35% of the aggregate principal amount of the 2021 Senior Notes with the net proceeds of any equity offerings at a redemption price of 109.25% of the principal amount of the 2021 Senior Notes redeemed, plus any accrued and unpaid interest, if any, up to the redemption date. In addition, at any time before June 1, 2016, the Company may redeem all or a part of the 2021 Senior Notes at a redemption price equal to 100% of the principal amount of the 2021 Senior Notes redeemed plus the Applicable Premium (as defined in the 2021 Senior Notes Indenture) at the redemption date, plus any accrued and unpaid interest, if any, up to, the redemption date. On or after June 1, 2016, the Company may redeem all or a part of the 2021 Senior Notes at varying redemption prices (expressed as percentages of principal amount) set forth in the 2021 Senior Notes Indenture plus accrued and unpaid interest, if any, on the 2021 Senior Notes redeemed, up to, the redemption date. Upon the occurrence of certain change of control events, as defined in the 2021 Senior Notes Indenture, each holder of the 2021 Senior Notes will have the right to require that the Company repurchase all or a portion of such holder's 2021 Senior Notes in cash at a purchase price equal to 101% of the aggregate principal amount thereof plus any accrued and unpaid interest to the date of repurchase. On May 21, 2015 and June 2, 2015, a total of approximately $352.3 million of 2021 Senior Notes were exchanged for Third Lien Notes, as discussed above. The estimated fair value as of June 30, 2015 of the 2021 Senior Notes was $137.8 million (Level 2 in the fair value measurement hierarchy), based on quoted market prices for these same debt securities. On May 21, 2015, the Company and Midstates Sub issued and sold $625.0 million aggregate principal amount of Second Lien Notes in a private placement conducted pursuant to Rule 144A under the Securities Act. The Second Lien Notes mature on the earlier of June 1, 2020 or 12 months after the maturity date of the Company's Credit Facility (including any extension or refinancing of such facility). The Second Lien Notes have an interest rate of 10.0% and interest is payable semi-annually on June 1 and December 1 of each fiscal year. The Second Lien Notes are unconditionally guaranteed, jointly and severally, on a senior secured basis by each of the Company's future restricted subsidiaries (the "Guarantors") and will be initially secured by second-priority liens on substantially all of the Company's and Guarantors' assets that secure the Company's Credit Facility. On May 21, 2015, in connection with the offering of Second Lien Notes, the Company and Midstates Sub entered into a registration rights agreement with the initial purchasers of the Second Lien Notes pursuant to which the Company and Midstates Sub are obligated, within 270 days after the issuance of the Second Lien Notes, to file with the Securities and Exchange Commission under the Securities Act a registration statement with respect to an offer to exchange the Second Lien Notes for substantially identical registered new notes. The Company will be obligated to pay liquidated damages consisting of additional interest on the Second Lien Notes if, within the periods specified in the agreement, it does not file the exchange offer registration statement or if certain other events occur. The Second Lien Notes are senior secured obligations of the Company and rank effectively junior to its obligations under the Credit Facility, effectively senior to its existing and future unsecured indebtedness, effectively senior to the Company's Third Lien Notes and all future junior lien obligations, effectively junior to all existing and future secured indebtedness secured by assets not constituting collateral under the Second Lien Notes, pari passu with all of the Company's existing and future senior debt, structurally subordinated to all existing and future indebtedness of any non-Guarantor subsidiaries and senior to any existing or future subordinated debt. Upon the occurrence of certain change of control events, as defined in the indenture governing the Second Lien Notes, each holder of the Second Lien Notes will have the right to require that the Company repurchase all or a portion of such holder's 2020 Second Lien Notes in cash at a purchase price equal to 101% of the aggregate principal amount thereof plus any accrued and unpaid interest to the date of repurchase. The estimated fair value of the Second Lien Notes was $601.6 million as of June 30, 2015 (Level 2 in the fair value measurement hierarchy), based on quoted market prices for these same debt securities. On May 21, 2015 and June 2, 2015, the Company issued approximately $504.121 million and $20.0 million, respectively, in aggregate principal amount of Third Lien Notes in a private placement and in exchange for an aggregate $306.4 million of the 2020 Senior Notes and $352.3 million of the 2021 Senior Notes. The Third Lien Notes are unconditionally guaranteed, jointly and severally, on a senior secured basis by each of the Guarantors. The Third Lien Notes are secured by third-priority liens on substantially all of the Company's assets that secure the Credit Facility. The Third Lien Notes have an interest rate of 12.0%, consisting of cash interest of 10.0% and paid-in-kind interest of 2.0%, per annum and mature on the earlier of June 1, 2020 or 12 months after the maturity date of the Company's Credit Facility (including any extension or refinancing of such facility). Interest is payable semi-annually on June 1 and December 1 of each fiscal year. On May 21, 2015, in connection with the issuance of the Third Lien Notes, the Company entered into a registration rights agreement with the initial purchasers of the Third Lien Notes pursuant to which the Company is obligated, within 270 days after the issuance of the Third Lien Notes, to file with the Securities and Exchange Commission under the Securities Act a registration statement with respect to an offer to exchange the Third Lien Notes for substantially identical registered new notes. The Company will be obligated to pay liquidated damages consisting of additional interest on the Third Lien Notes if, within the periods specified in the agreement, it does not file the exchange offer registration statement or if certain other events occur. The Third Lien Notes are senior secured obligations of the Company and rank effectively junior to its obligations under the Credit Facility and Second Lien Notes to the extent of the value of the collateral securing such indebtedness, effectively senior to its existing and future unsecured indebtedness to the extent of the value of the collateral securing the Third Lien Notes, effectively senior to all future junior lien obligations that rank below a third-priority basis to the extent of the value of the collateral securing the Third Lien Notes, effectively junior to all existing and future secured indebtedness secured by assets not constituting collateral under the Third Lien Notes, pari passu to all of the Company's existing and future senior debt, structurally subordinated to all existing and future indebtedness of any non-Guarantor subsidiaries and senior in right of payment to any existing or future subordinated debt. Upon the occurrence of certain change of control events, as defined in the indenture governing the Third Lien Notes, each holder of the Third Lien Notes will have the right to require that the Company repurchase all or a portion of such holder's Third Lien Notes in cash at a purchase price equal to 101% of the aggregate principal amount thereof plus any accrued and unpaid interest to the date of repurchase. The estimated fair value of the Third Lien Notes was $420.3 million as of June 30, 2015 (Level 2 in the fair value measurement hierarchy), based on quoted market prices for these same debt securities. The indentures governing the 2020 Senior Notes, 2021 Senior Notes, Second Lien Notes and Third Lien Notes contain covenants that, among other things, restrict the Company's ability to: (i) incur additional indebtedness, guarantee indebtedness or issue certain preferred shares; (ii) make loans, investments and other restricted payments; (iii) pay dividends on or make other distributions in respect of, or repurchase or redeem, capital stock; (iv) create or incur certain liens; (v) sell, transfer or otherwise dispose of certain assets; (vi) enter into certain types of transactions with the Company's affiliates; (vii) consolidate, merge or sell substantially all of the Company's assets; (viii) prepay, redeem or repurchase certain debt; (ix) alter the business the Company conducts and (x) enter into agreements restricting the ability of the Company's current and any future subsidiaries to pay dividends. Additionally, the Credit Facility, as amended, contains, among other standard affirmative and negative covenants, financial covenants including a maximum ratio of Total Senior Indebtedness to EBITDA (as defined therein) of not more than 1.0:1.0 and a minimum current ratio (as defined therein) of not less than 1.0 to 1.0. The Credit Facility also limits the Company's ability to make any dividends, distributions or redemptions. The Company was in compliance with all debt covenants at June 30, 2015. The Company's debt facilities contain significant cross default and/or cross acceleration provisions where a default under the Credit Facility or one of the indentures could enable the lenders of the other debt to also declare events of default and accelerate repayment of the obligations under those debt instruments. In general, these cross default/cross acceleration provisions are as follows: • The Credit Facility allows the lenders to declare an event of default if there is an event of default on other indebtedness and that default: (i) is the result of the failure to make any payment when due in respect of other indebtedness having an aggregate principal amount of at least 5% of the then effective borrowing base and such failure continues after the applicable grace or notice period; or (ii) is the result of a failure to perform any condition, covenant or other event and such failure permits the holders of such other indebtedness to cause the acceleration of such other indebtedness. • The indentures governing the 2020 Senior Notes, 2021 Senior Notes, Second Lien Notes and Third Lien Notes allow the lenders to declare an event of default if there is an event of default on other indebtedness and that default: (i) is caused by a failure to make any payment of principal prior to the expiration of the grace period following the final maturity date of such indebtedness; or (ii) results in the acceleration of such indebtedness prior to its stated maturity, and, in each case, the principal amount of any such indebtedness, together with the principal amount of any other indebtedness with respect to which an event described herein has occurred, aggregates $50.0 million or more. | 9. Long-Term Debt The Company's long-term debt as of December 31, 2014 and 2013 is as follows: At December 31, 2014 2013 (in thousands) Revolving credit facility, due 2018 435,150 401,150 Senior notes, due 2020 600,000 600,000 Senior notes, due 2021 700,000 700,000 ​ ​ ​ ​ ​ ​ ​ Long-term debt 1,735,150 1,701,150 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of December 31, 2014, the Company's credit facility consisted of a $750 million Credit Facility with a borrowing base supported by the Company's Mississippian Lime and Anadarko Basin oil and gas assets. On September 30, 2014, the Company entered into an Assignment and Borrowing Base Increase Agreement that increased the borrowing base from $475 million to $525 million. At December 31, 2014, the Company had drawn $435.2 million on the Credit Facility and had outstanding letters of credit obligations totaling $1.4 million. The Credit Facility matures on May 31, 2018 and borrowings thereunder are secured by substantially all of the Company's oil and natural gas properties and bear interest at LIBOR plus an applicable margin, depending upon the Company's borrowing base utilization, between 2.00% and 3.00% per annum. At December 31, 2014 and December 31, 2013, the weighted average interest rate was 2.8% and 2.5%, respectively. In addition to interest expense, the Credit Facility requires the payment of a commitment fee each quarter. The commitment fee is computed at the rate of either 0.375% or 0.50% per annum based on the average daily amount by which the borrowing base exceeds the outstanding borrowings during each quarter. The borrowing base under the Credit Facility is subject to semiannual redeterminations in April and October and up to one additional time per six month period following each scheduled borrowing base redetermination, as may be requested by the Company or the administrative agent, acting on behalf of lenders holding at least two-thirds of the outstanding loans and other obligations. Under the terms of the Credit Facility, the Company is required to repay the amount by which the principal balance of its outstanding loans and its letter of credit obligations exceed its redetermined borrowing base. The Company is permitted to make such repayment in six equal successive monthly payments commencing 30 days following the administrative agent's notice regarding such borrowing base reduction. The Credit Facility, as amended, contains, among other standard affirmative and negative covenants, financial covenants including a maximum ratio of net debt to EBITDA (i.e. leverage ratio) and a minimum current ratio (as defined therein) of not less than 1.0 to 1.0. The Company is required to maintain a leverage ratio of not more than 4.75 to 1.00 for the quarter ended December 31, 2014, and currently 4.00 to 1.00 for each quarter thereafter. The Credit Facility also limits the Company's ability to make any dividends, distributions or redemptions. As of December 31, 2014, the Company was in compliance with the current ratio and the ratio of debt to EBITDA covenants as set forth in the Credit Facility. The Company's current ratio at December 31, 2014 was 1.1 to 1.0. At December 31, 2014, the Company's leverage ratio was 3.7 to 1.0. In March 2015, the Company received a waiver related to the requirement that an unqualified auditors' opinion without an explanatory paragraph in relation to going concern accompany the 2014 financial statements. Based upon the recent amendments to the Credit Facility, the Company believes its carrying amount at December 31, 2014 approximates its fair value (Level 2) due to the variable nature of the applicable interest rate and current financing terms available to the Company. On October 1, 2012, the Company issued $600 million in aggregate principal amount of 10.75% senior notes due 2020 (the "2020 Outstanding Notes") in a private placement conducted pursuant to Rule 144A and Regulation S under the Securities Act of 1933, as amended (the "Securities Act"). On October 29, 2013, substantially all of the 2020 Outstanding Notes were exchanged for an equal principal amount of registered 10.75% senior subordinated notes due 2020 pursuant to an effective registration statement on Form S-4 filed on August 30, 2013 under the Securities Act (the "2020 Exchange Notes"). The 2020 Exchange Notes are identical to the 2020 Outstanding Notes except that the 2020 Exchange Notes are registered under the Securities Act and do not have restrictions on transfer, registration rights or provisions for additional interest. As used herein, the term "2020 Senior Notes" refers to both the 2020 Outstanding Notes and the 2020 Exchange Notes. The 2020 Senior Notes were co-issued on a joint and several basis by the Company and its wholly owned subsidiary, Midstates Sub. The Company does not have any operations or independent assets other than its 100% ownership interest in Midstates Sub and there are no other subsidiaries of the Company. The 2020 Senior Notes Indenture does not create any restricted assets within Midstates Sub, nor does it impose any significant restrictions on the ability of Midstates Sub to pay dividends or make loans to the Company or limit the ability of the Company to advance loans to Midstates Sub. At any time prior to October 1, 2015, the Company may, under certain circumstances, redeem up to 35% of the aggregate principal amount of the 2020 Senior Notes with the net proceeds of a public or private equity offering at a redemption price of 110.75% of the principal amount of the 2020 Senior Notes, plus any accrued and unpaid interest up to the redemption date. In addition, at any time before October 1, 2016, the Company may redeem all or a part of the 2020 Senior Notes at a redemption price equal to 100% of the principal amount of 2020 Senior Notes redeemed plus the Applicable Premium (as defined in the Indenture) at the redemption date, plus any accrued and unpaid interest and Additional Interest (as defined in the Indenture), if any, up to, the redemption date. On or after October 1, 2016, the Company may redeem all or a part of the 2020 Senior Notes at varying redemption prices (expressed as percentages of principal amount) set forth in the Indenture plus accrued and unpaid interest and Additional Interest (as defined in the Indenture), if any, on the 2020 Senior Notes redeemed, up to, the redemption date. The Indenture contains covenants that, among other things, restrict the Company's ability to: (i) incur additional indebtedness, guarantee indebtedness or issue certain preferred shares; (ii) make loans, investments and other restricted payments; (iii) pay dividends on or make other distributions in respect of, or repurchase or redeem, capital stock; (iv) create or incur certain liens; (v) sell, transfer or otherwise dispose of certain assets; (vi) enter into certain types of transactions with the Company's affiliates; (vii) consolidate, merge or sell substantially all of the Company's assets; (viii) prepay, redeem or repurchase certain debt; (ix) alter the business the Company conducts and (x) enter into agreements restricting the ability of the Company's current and any future subsidiaries to pay dividends. Upon the occurrence of certain change of control events, as defined in the Indenture, each holder of the 2020 Senior Notes will have the right to require that the Company repurchase all or a portion of such holder's 2020 Senior Notes in cash at a purchase price equal to 101% of the aggregate principal amount thereof plus any accrued and unpaid interest to the date of repurchase. The estimated fair value of the 2020 Senior Notes was $327.0 million as of December 31, 2014 (Level 2 in the fair value measurement hierarchy due to the limited trading volume on the secondary market), based on quoted market prices for these same debt securities. The effective annual interest rate for the 2020 Senior Notes was approximately 11.1% for the years ended December 31, 2014 and 2013. On May 31, 2013, the Company issued $700 million in aggregate principal amount of 9.25% senior notes due 2021 (the "2021 Outstanding Notes") in a private placement conducted pursuant to Rule 144A and Regulation S under the Securities Act. On October 29, 2013, all of the 2021 Outstanding Notes were exchanged for an equal principal amount of registered 9.25% senior subordinated notes due 2021 pursuant to an effective registration statement on Form S-4 filed on August 30, 2013 under the Securities Act (the "2021 Exchange Notes"). The 2021 Exchange Notes are identical to the 2021 Outstanding Notes except that the 2021 Exchange Notes are registered under the Securities Act and do not have restrictions on transfer, registration rights or provisions for additional interest. As used herein, the term "2021 Senior Notes" refers to both the 2021 Outstanding Notes and the 2021 Exchange Notes. The proceeds from the offering of $700 million (net of the initial purchasers' discount and related offering expenses) were used to fund the Anadarko Basin Acquisition and the related expenses, to pay the expenses related to an amendment to the Company's revolving credit facility, to repay $34.3 million in outstanding borrowings under the Company's Credit Facility, and for general corporate purposes. The 2021 Senior Notes rank pari passu in right of payment with the 2020 Senior Notes. The 2021 Senior Notes were co-issued on a joint and several basis by the Company and its wholly owned subsidiary, Midstates Sub. The Company does not have any operations or independent assets other than its 100% ownership interest in Midstates Sub and there are no other subsidiaries of the Company. The 2021 Senior Notes indenture does not create any restricted assets within Midstates Sub, nor does it impose any significant restrictions on the ability of Midstates Sub to pay dividends or make loans to the Company or limit the ability of the Company to advance loans to Midstates Sub. Prior to June 1, 2016, the Company may, under certain circumstances, redeem up to 35% of the aggregate principal amount of the 2021 Senior Notes (less the amount of 2021 Senior Notes redeemed pursuant to the preceding paragraph) with the net proceeds of any Equity Offerings at a redemption price of 109.25% of the principal amount of the 2021 Senior Notes redeemed, plus any accrued and unpaid interest, if any, up to the redemption date. In addition, at any time before June 1, 2016, the Company may redeem all or a part of the 2021 Senior Notes at a redemption price equal to 100% of the principal amount of the 2021 Senior Notes redeemed plus the Applicable Premium (as defined in the Indenture) at the redemption date, plus any accrued and unpaid interest and Additional Interest (as defined in the 2021 Senior Notes Indenture), if any, up to, the redemption date. On or after October 1, 2016, the Company may redeem all or a part of the 2021 Senior Notes at varying redemption prices (expressed as percentages of principal amount) set forth in the 2021 Senior Notes Indenture plus accrued and unpaid interest and Additional Interest (as defined in the 2021 Senior Notes Indenture), if any, on the 2021 Senior Notes redeemed, up to, the redemption date. The terms of the covenants and change in control provisions in the 2021 Senior Notes Indenture are substantially identical to those of the 2020 Senior Notes discussed above. The estimated fair value of the 2021 Senior Notes was $357.0 million as of December 31, 2014 (Level 2 in the fair value measurement hierarchy due to the limited trading volume on the secondary market), based on quoted market prices for these same debt securities. The effective annual interest rate for the 2021 Senior Notes was approximately 9.6% and 9.5% for the years ended December 31, 2014 and 2013, respectively. |
Preferred Stock
Preferred Stock | 6 Months Ended | 12 Months Ended |
Jun. 30, 2015 | Dec. 31, 2014 | |
Preferred Stock. | ||
Preferred Stock | 11. Preferred Stock In connection with the Company's acquisition of its Mississippian Lime properties, on September 28, 2012, the Company designated 325,000 shares of Series A Mandatorily Convertible Preferred Stock (the "Series A Preferred Stock") with an initial liquidation preference of $1,000 per share and an 8% per annum dividend, payable semiannually at the Company's option in cash or through an increase in the liquidation preference. On March 30, 2015, the Company elected to pay the $13.0 million semi-annual dividend due on that date through an increase in the Series A Preferred Stock liquidation preference to $1,241 per share. Therefore, for the three months ended June 30, 2015, the $7.9 million Series A Preferred Stock dividend, which the Company paid through the adjustment to the liquidation preference, is based upon the estimated fair value of 71,893 common shares that would have been issued had the Series A Preferred Stock dividend for the three months been converted into common shares at a conversion price of $110.00 per share. On September 30, 2015, the Series A Preferred Stock converted into 3,738,424 shares of the Company's common stock at a conversion price of $110.00 per share. | 10. Preferred Stock/Units At December 31, 2014, the Company had 325,000 shares of Series A Mandatorily Convertible Preferred Stock (the "Series A Preferred Stock") issued and outstanding. In connection with the Eagle Property Acquisition, on September 28, 2012, the Company designated 325,000 shares of Series A Preferred Stock with an initial liquidation preference of $1,000 per share and an 8% per annum dividend, payable semiannually at the Company's option in cash or through an increase in the liquidation preference. The Series A Preferred Shares are convertible after October 1, 2013, in whole but not in part and at the option of the holders of a majority of the outstanding shares of Series A Preferred Stock, into a number shares of the Company's common stock calculated by dividing the then-current liquidation preference by the conversion price of $135.00 per share and, if not previously converted, are mandatorily convertible at September 30, 2015 into shares of the Company's common stock at a conversion price no greater than $135.00 per share and no less than $110.00 per share, with the ultimate conversion price dependent upon the volume weighted average price of the Company's common stock during the 15 trading days immediately prior to September 30, 2015. The Series A Preferred Stock was issued on October 1, 2012. On September 30, 2015, the Series A Preferred Stock converted into 3,738,424 shares of the Company's common stock at a conversion price of $110.00 per share. For the twelve months ended December 31, 2014, the $10.4 million Series A Preferred Stock dividend was based upon the estimated fair value of 265,979 common shares that would have been issued had the notional dividend amounts for the year of $29.3 million been converted into common shares at a conversion price of $110.00 per share. For the twelve months ended December 31, 2013, the $15.6 million Series A Preferred Stock dividend was based upon the estimated fair value of 245,912 common shares that would have been issued had the notional dividend amounts for the year of $27.1 million been converted into common shares at a conversion price of $110.00 per share. The following table summarizes changes in the number of Series A Preferred Stock shares since January 1, 2012: Series A Share count as of January 1, 2012 — Issuance of preferred stock as consideration in Eagle Property Acquisition 325,000 ​ ​ ​ ​ Share count as of December 31, 2012 325,000 ​ ​ ​ ​ Share count as of December 31, 2013 325,000 ​ ​ ​ ​ Share count as of December 31, 2014 325,000 In December 2011, Holdings LLC, FR Midstates Holdings LLC ("FR Midstates") and Midstates Petroleum Holdings, Inc. ("Petroleum Inc.") entered into an amended and restated limited liability company agreement, which was later amended in March 2012, to provide for the issuance of up to 65,000, or $65 million in aggregate value, of certain mandatorily redeemable convertible preferred units (the "Preferred Units") between December 15, 2011 and June 10, 2015. During the year ended December 31, 2012, Holdings LLC issued 65,000 Preferred Units to FR Midstates for aggregate cash proceeds of $65.0 million. On April 26, 2012, the Company used $67.1 million of the proceeds from its initial public offering to redeem the Preferred Units in full, including interest and other charges. As such, at December 31, 2012, the Preferred Units are no longer outstanding. The Company recorded $2.1 million related to interest expense associated with these Preferred Units for the year ended December 31, 2012. There was no related interest expense for the years ended December 31, 2014 or 2013. |
Equity and Share-Based Compensa
Equity and Share-Based Compensation | 6 Months Ended | 12 Months Ended |
Jun. 30, 2015 | Dec. 31, 2014 | |
Equity and Share-Based Compensation | ||
Equity and Share-Based Compensation | 12. Equity and Share-Based Compensation The following table summarizes changes in the number of outstanding shares since December 31, 2014: Number of Shares Common Stock Treasury Stock Share count as of December 31, 2014 7,049,173 (53,467 ) Grants of restricted stock 268,677 — Forfeitures of restricted stock (60,843 ) — Acquisition of treasury stock — (38,572 ) ​ ​ ​ ​ ​ ​ ​ Share count as of June 30, 2015 7,257,007 (92,039 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ The Company's 2012 LTIP (discussed below) allows for the recipients of restricted stock to surrender a portion of their shares upon vesting to satisfy Federal Income Tax ("FIT") withholding requirements. The Company then remits to the IRS the cash equivalent of the FIT withholding liability. Shares surrendered to the Company in this fashion have been treated as treasury shares acquired at a cost equivalent to the related tax liability. These shares are available for future issuance by the Company. At June 30, 2015, 1,099 incentive units were issued and outstanding. These incentive units were issued prior to the Company's initial public offering. In connection with the corporate reorganization that occurred immediately prior to the Company's initial public offering, these incentive units held in the Company were contributed to FR Midstates Interholding, LP ("FRMI") in exchange for incentive units in FRMI. Holders of FRMI incentive units will receive, out of proceeds otherwise distributable to FRMI, a percentage interest in the amounts distributed to FRMI in excess of certain multiples of FRMI's aggregate capital contributions and investment expenses ("FRMI Profits"). Although any future payments to the incentive unit holders will be made out of the proceeds otherwise distributable to FRMI and not by the Company, the Company will be required to record a non-cash compensation charge in the period any payment is made related to the FRMI incentive units. To date, no compensation expense related to the incentive units has been recognized by the Company, as any payout under the incentive units is not considered probable, and thus, the amount of FRMI Profits, if any, cannot be determined. On April 20, 2012, the Company established the 2012 Long Term Incentive Plan (the "2012 LTIP") and filed a Form S-8 with the SEC, registering 656,343 shares of common stock for future issuance under the terms of the 2012 LTIP. On May 27, 2014, the Company filed a Form S-8 with the SEC, increasing the number of shares available for future issuance under the terms of the 2012 LTIP to 863,843 shares of common stock. The 2012 LTIP provides a means for the Company to attract and retain employees, directors and consultants, and a method whereby employees, directors and consultants of the Company who contribute to its success can acquire and maintain stock ownership or awards, the value of which is tied to the performance of the Company, thereby strengthening their concern for the welfare of the Company and their desire to remain employed. The 2012 LTIP provides for the granting of Options (incentive and other), Restricted Stock Awards, Restricted Stock Units, Stock Appreciation Rights, Dividend Equivalents, Bonus Stock, Other Stock-Based Awards, Annual Incentive Awards, Performance Awards, or any combination of the foregoing (the "Awards"). Subject to certain limitations as defined in the 2012 LTIP, the terms of each Award are as determined by the Compensation Committee of the Board of Directors. As of June 30, 2015 a total of 863,843 common share Awards are authorized for issuance and shares of stock subject to an Award that expire, or are canceled, forfeited, exchanged, settled in cash or otherwise terminated, will again be available for future Awards under the 2012 LTIP. At June 30, 2015, the Company had 377,556 non-vested shares of restricted common stock to directors, management and employees outstanding pursuant to the 2012 LTIP. Shares granted under the LTIP generally vest ratably over a period of three years (one-third on each anniversary of the grant); however, beginning in 2013, shares granted under the 2012 LTIP to directors are subject to one-year cliff vesting. The fair value of restricted stock grants is based on the value of the Company's common stock on the date of grant. Compensation expense is recognized ratably over the requisite service period. The following table summarizes the Company's non-vested share award activity for the six months ended June 30, 2015: Shares Weighted Non-vested shares outstanding at December 31, 2014 306,201 52.76 Granted 268,677 12.29 Vested (136,479 ) 57.23 Forfeited (60,843 ) 47.06 ​ ​ ​ ​ ​ ​ ​ Non-vested shares outstanding at June 30, 2015 377,556 22.76 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Unrecognized expense, adjusted for estimated forfeitures, as of June 30, 2015 for all outstanding restricted stock awards was $6.4 million and will be recognized over a weighted average period of 1.8 years. At June 30, 2015, 170,271 shares remain available for issuance under the terms of the 2012 LTIP. | 11. Equity and Share-Based Compensation At December 31, 2014, the Company had 7,049,173 and 6,995,705 shares of its common stock issued and outstanding, respectively. On April 25, 2012, the Company completed its initial public offering of common stock pursuant to a registration statement on Form S-1 (File 333-177966), as amended and declared effective by the SEC on April 19, 2012. Pursuant to the registration statement, the Company registered the offer and sale of 2,760,000 shares of $0.01 par value common stock, which included 600,000 shares of stock sold by the selling shareholders and 360,000 shares of common stock sold by the selling stockholders pursuant to an option granted to the underwriters to cover over-allotments. After the corporate reorganization and the completion of its initial public offering discussed above, the Company is authorized to issue up to a total of 100,000,000 shares of its common stock with a par value of $0.01 per share, and 50,000,000 shares of its preferred stock with a par value of $0.01 per share. Holders of the Company's common shares are entitled to one vote for each share held of record on all matters submitted to a vote of stockholders and to receive ratably in proportion to the shares of common stock held by them any dividends declared from time to time by the board of directors. The common shares have no preferences or rights of conversion, exchange, pre-exemption or other subscription rights. With respect to preferred shares, the Company is authorized, without further stockholder approval, to establish and issue from time to time one or more classes or series of preferred stock with such powers, preferences, rights, qualifications, limitations and restrictions as determined by its board of directors. See discussion of Series A Preferred Shares in Note 10. The following table summarizes changes in the number of shares of common stock and treasury stock outstanding shares since January 1, 2012: Common Treasury Share count as of January 1, 2012 — — Issuance of common stock in pre IPO reorganization 4,763,435 — Proceeds from the sale of common stock to public 1,800,000 — Issuance of preferred stock as consideration in Eagle Property Acquisition — — Share based compensation grants of restricted stock 102,951 — Forfeitures of restricted stock (4,415 ) — ​ ​ ​ ​ ​ ​ ​ Share count as of December 31, 2012 6,661,971 — Grants of restricted stock 284,024 — Forfeitures of restricted stock (53,421 ) — Acquisition of treasury stock — (11,870 ) ​ ​ ​ ​ ​ ​ ​ Share count as of December 31, 2013 6,892,574 (11,870 ) Grants of restricted stock 344,748 — Forfeitures of restricted stock (188,149 ) — Acquisition of treasury stock — (41,597 ) ​ ​ ​ ​ ​ ​ ​ Share count as of December 31, 2014 7,049,173 (53,467 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ At December 31, 2014, 1,099 incentive units were issued and outstanding. In connection with the corporate reorganization that occurred immediately prior to our initial public offering, these incentive units held in the Company were contributed to FR Midstates Interholding, LP ("FRMI") in exchange for incentive units in FRMI. Holders of FRMI incentive units will receive, out of proceeds otherwise distributable to FRMI, a percentage interest in the amounts distributed to FRMI in excess of certain multiples of FRMI's aggregate capital contributions and investment expenses ("FRMI Profits"). Although any future payments to the incentive unit holders will be made out of the proceeds otherwise distributable to FRMI and not by the Company, the Company will be required to record a non-cash compensation charge in the period any payment is made related to the FRMI incentive units. To date, no compensation expense related to the incentive units has been recognized by the Company, as any payout under the incentive units is not considered probable, and thus, the amount of FRMI Profits, if any, cannot be determined. On April 20, 2012, the Company established the 2012 Long Term Incentive Plan (the "2012 LTIP") and filed a Form S-8 with the SEC, registering 656,343 shares of common stock for future issuance under the terms of the 2012 LTIP. On May 27, 2014, the Company filed a Form S-8 with the SEC, increasing the number of shares available for future issuance under the terms of the 2012 LTIP to 863,843 shares of common stock. The 2012 LTIP provides a means for the Company to attract and retain employees, directors and consultants, and a method whereby employees, directors and consultants of the Company who contribute to its success can acquire and maintain stock ownership or awards, the value of which is tied to the performance of the Company, thereby strengthening their concern for the welfare of the Company and their desire to remain employed. The 2012 LTIP provides for the granting of Options (Incentive and other), Restricted Stock Awards, Restricted Stock Units, Stock Appreciation Rights, Dividend Equivalents, Bonus Stock, Other Stock-Based Awards, Annual Incentive Awards, Performance Awards, or any combination of the foregoing (the "Awards"). Subject to certain limitations as defined in the 2012 LTIP, the terms of each Award are as determined by the Compensation Committee of the Board of Directors. As of December 31, 2014, a total of 863,843 common share Awards are authorized for issuance under the 2012 LTIP and shares of stock subject to an Award that expire, or are canceled, forfeited, exchanged, settled in cash or otherwise terminated, will again be available for future Awards under the 2012 LTIP. At December 31, 2014 the Company had 306,201 shares of restricted common stock outstanding pursuant to the 2012 LTIP. Shares granted under the LTIP generally vest ratably over a period of three years (one-third on each anniversary of the grant), however, beginning in 2013, shares granted under the 2012 LTIP to directors are subject to one-year cliff vesting. The fair value of restricted stock grants is based on the value of the Company's common stock on the date of grant. Compensation expense is recognized ratably over the requisite three year service period. The following table summarizes the Company's non-vested share award activity for the years ended December 31, 2014 and 2013: Shares Weighted Non-vested shares outstanding at December 31, 2012 98,535 126.13 Granted 284,024 68.22 Vested (32,772 ) 126.18 Forfeited (53,420 ) 86.46 ​ ​ ​ ​ ​ ​ ​ Non-vested shares outstanding at December 31, 2013 296,367 77.81 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Granted 344,748 46.61 Vested (146,764 ) 72.08 Forfeited (188,150 ) 65.83 ​ ​ ​ ​ ​ ​ ​ Non-vested shares outstanding at December 31, 2014 306,201 52.76 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Unrecognized expense as of December 31, 2014 for all outstanding restricted stock awards, adjusted for estimated forfeitures, was $10.9 million and will be recognized over a weighted average period of 1.97 years. At December 31, 2014, 378,105 shares remain available for issuance under the terms of the 2012 LTIP. The share-based compensation costs (net of amounts capitalized to oil and gas properties) recognized as general and administrative expense by the Company for the years ended December 31, 2014, 2013 and 2012 of $8.6 million, $5.7 million and $2.5 million, respectively, all relate to the 2012 LTIP. During the quarter ended December 31, 2014, the Company announced that its Houston office would be closing, resulting in accelerated vesting of restricted stock awards in the period for those employees subject to a severance agreement. Of the $8.6 million in share-based compensation for the twelve months ended December 31, 2014, approximately $2.9 million was related to the accelerated vesting for employees impacted by the office closure. For the years ended December 31, 2014 and 2013, the Company capitalized $2.2 million and $1.4 million, respectively, of qualifying share-based compensation costs to oil and gas properties. |
Income Taxes
Income Taxes | 6 Months Ended | 12 Months Ended |
Jun. 30, 2015 | Dec. 31, 2014 | |
Income Taxes | ||
Income Taxes | 13. Income Taxes The Company has recorded a tax benefit on its year-to-date pre-tax loss. The Company believes this methodology to be more appropriate at this time due to uncertainty in forecasting the annual effective tax rate (or benefit) on 2015 income (or loss) due to previously recorded property impairments and the effects of federal and state valuation allowance adjustments. For the six months ended June 30, 2015, the Company's effective tax rate was a benefit of approximately 1.1%. The Company's effective tax rate differs from the federal statutory rate of 35% due to the effect of state income taxes and changes in the valuation allowance. This year, the Company recorded $305.9 million in additional valuation allowance in light of the impairment of oil and gas properties bringing the total valuation allowance to $309.7 million at June 30, 2015. A valuation allowance has been recorded as management does not believe that it is more-likely-than-not that the NOLs are realizable except to the extent of future taxable income primarily related to the excess of book carrying value of properties over their respective tax bases. No other sources of future taxable income are considered in this judgment. The Company expects to incur a tax loss in the current year due to the flexibility in deducting or capitalizing current year intangible drilling costs; thus no current income taxes are anticipated to be paid. | 12. Income Taxes Prior to its corporate reorganization (See Note 1), the Company was a limited liability company and not subject to federal income tax or state income tax (in most states). Accordingly, no provision for federal or state income taxes was recorded prior to the corporate reorganization as the Company's equity holders were responsible for income tax on the Company's profits. In connection with the closing of the Company's initial public offering, the Company merged into a corporation and became subject to federal and state income taxes. The Company's book and tax basis in assets and liabilities differed at the time of the corporate reorganization due primarily to different cost recovery methodology utilized for book and tax purposes for the Company's oil and natural gas properties. In the quarter ended June 30, 2012, the Company recorded a one-time charge to income tax expense of $149.5 million to recognize this deferred tax liability related to the Company's change in tax status caused by the initial public offering. The Company incurred a tax net operating loss ("NOL") in the current year due principally to the ability to expense certain intangible drilling and development costs under current law. There is no tax refund available to the Company, nor is there any current federal income tax payable. In light of the impairment of oil and gas properties recorded in the year ended December 31, 2013, Management recorded a $45.7 million valuation allowance against the Company's federal and State of Louisiana NOLs for 2013. Management believed that the balance of the Company's NOLs were realizable only to the extent of future taxable income primarily related to the excess of book carrying value of properties over their respective tax bases. No other sources of future taxable income are considered in this judgment. During the year ended December 31, 2014, the Company recorded unrealized gains on commodity derivative contracts in the amount of $157.5 million, which resulted in pre-tax book income $123.3 million. This activity resulted in the full release of the federal valuation allowance of $39.9 million. The Company continues to report a net valuation allowance of $3.8 million for Louisiana state losses. The Company's NOLs were incurred in the tax years 2012 through 2014. U.S. federal and State of Oklahoma NOLs will generally be available for use through the tax years 2033 and 2034, respectively, and its State of Louisiana NOLs are generally available through 2023 and 2029, respectively. The State of Texas currently has no NOL carryover provision. The Company believes that Section 382 of the Internal Revenue Code of 1986, as amended, which relates to tax attribute limitations upon the 50% or greater change of ownership of an entity during any three-year look back period, will not have an adverse effect on future NOL usage. On September 13, 2013, the US Treasury and IRS issued final Tangible Property Regulations ("TPR") under IRC Section 162 and IRC Section 263(a). The regulations are effective for tax years beginning on or after January 1, 2014. Due to these changes, certain portions may require an accounting method change on a retroactive basis, thus requiring a IRC Section 481(a) adjustment related to fixed and real asset deferred taxes. The accounting rules under ASC 740 treat the release of the regulations as a change in tax law as of the date of issuance and require the Company to determine whether there will be an impact on its financial statements for the period ended December 31, 2014. Any such impact of the final tangible property regulations would affect temporary deferred taxes only and result in a balance sheet reclassification within non-current deferred taxes. The Company has analyzed the expected impact of the TPR on the Company and concluded that the expected impact is minimal. The Company will continue to monitor the impact of any future changes to the TPR on the Company prospectively. As of December 31, 2014, the Company has not recorded a reserve for any uncertain tax positions. No federal income tax payments are expected in the upcoming four quarterly reporting periods. The Company expects $0.6 million in Texas Margins Tax payments in 2015. Years Ended December 31, 2014 2013 2012 (in thousands) Current United States — — — State 809 — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total current 809 — — Deferred United States 3,863 (130,906 ) 137,496 State 1,723 (15,623 ) 20,390 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total deferred 5,586 (146,529 ) 157,886 Total income tax provision (benefit) 6,395 (146,529 ) 157,886 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ The Company's estimated income tax expense differs from the amount derived by applying the statutory federal rate to pretax income principally due the effect of the following items (in thousands): Years Ended December 31, 2014 2013 2012 (in thousands) Income before taxes 123,324 (490,514 ) 7,789 Statutory rate 35 % 35 % 35 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Income tax expense computed at statutory rate 43,164 (171,680 ) 2,726 Reconciling items: Non-deductible pre-IPO loss — — 4,561 State income taxes, net of federal benefit 4,398 (10,886 ) 1,053 Change in valuation allowance (42,134 ) 45,688 — Change in state rate (414 ) (10,500 ) — Other, net 1,381 849 57 Change in tax status(1) — — 149,489 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total income tax provision (benefit) 6,395 (146,529 ) 157,886 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (1) The change in tax status for the year ended December 31, 2012 is split between federal of $130.2 million and state of $19.3 million. Deferred income taxes primarily represent the net tax effect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The components of our deferred taxes are detailed in the table below (in thousands): Years Ended December, 31 2014 2013 Deferred tax assets—current Derivative instruments and other — 15,581 Less valuation allowance — (3,744 ) ​ ​ ​ ​ ​ ​ ​ Total deferred tax assets, current — 11,837 Deferred tax assets—noncurrent US tax loss carryforwards 75,604 151,872 State tax loss carryforwards 7,122 14,154 Employee benefit plans 2,193 1,539 Less valuation allowance (3,826 ) (41,944 ) ​ ​ ​ ​ ​ ​ ​ Total deferred tax assets, noncurrent 81,093 125,621 Deferred tax liabilities—current Derivative instruments and other 44,862 — ​ ​ ​ ​ ​ ​ ​ Total deferred tax liabilities—current 44,862 — Deferred tax liabilities—noncurrent Oil and gas properties and equipment 45,272 140,912 ​ ​ ​ ​ ​ ​ ​ Total deferred tax liabilities, noncurrent 45,272 140,912 Reflected in the accompanying balance sheet as: Net deferred tax asset, current — 11,837 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net deferred tax liability, current 44,862 — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net deferred tax asset, noncurrent 35,821 — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net deferred tax liability, noncurrent — 15,291 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Net Loss Per Share
Net Loss Per Share | 6 Months Ended | 12 Months Ended |
Jun. 30, 2015 | Dec. 31, 2014 | |
Net Loss Per Share | ||
Net Loss Per Share | 14. Net Loss Per Share The Company's Series A Preferred Stock has the nonforfeitable right to participate on an as converted basis at the conversion rate then in effect in any common stock dividends declared and as such, is considered a participating security. The Company's nonvested stock awards, which are granted as part of the 2012 LTIP, contain nonforfeitable rights to dividends and as such, are considered to be participating securities and, together with the Series A Preferred Stock, are included in the computation of basic and diluted loss per share, pursuant to the two-class method. In the calculation of basic loss per share attributable to common shareholders, participating securities are allocated earnings based on actual dividend distributions received plus a proportionate share of undistributed net income attributable to common shareholders, if any, after recognizing distributed earnings. The Company's participating securities do not participate in undistributed net losses because they are not contractually obligated to do so. The computation of diluted earnings per share attributable to common shareholders reflects the potential dilution that could occur if securities or other contracts to issue common shares that are dilutive were exercised or converted into common shares (or resulted in the issuance of common shares) and would then share in the earnings of the Company. During the periods in which the Company records a loss from continuing operations attributable to common shareholders, securities would not be dilutive to net loss per share and conversion into common shares is assumed to not occur. Diluted net income per share attributable to common shareholders is calculated under both the two-class method and the treasury stock method; the more dilutive of the two calculations is presented below. The following table (in thousands, except per share amounts) provides a reconciliation of net loss to preferred shareholders, common shareholders, and non-vested restricted shareholders for purposes of computing net loss per share for the three and six months ended June 30, 2015 and 2014, respectively: Three Months Ended Six Months Ended 2015 2014 2015 2014 Net loss (598,437 ) (2,098 ) (791,989 ) (85,743 ) Preferred Dividend(1) (669 ) (4,806 ) (800 ) (7,426 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net loss attributable to shareholders (599,106 ) (6,904 ) (792,789 ) (93,169 ) Participating securities—Series A Preferred Stock(2) — — — — Participating securities—Non-vested Restricted Stock(2) — — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net loss attributable to common shareholders (599,106 ) (6,904 ) (792,789 ) (93,169 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted average shares outstanding 6,774 6,645 6,750 6,622 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net loss per share (88.44 ) (1.04 ) (117.45 ) (14.07 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (1) Calculation of the preferred stock dividend is discussed in "—Note 11. Preferred Stock" (2) As these shares are participating securities that participate in earnings, but are not required to participate in losses, this calculation demonstrates that there is not an allocation of the loss to the non-vested restricted stockholders. The aggregate number of common shares outstanding at June 30, 2015 was 7,257,007 of which 377,556 were non-vested restricted shares. The aggregate number of shares of Series A Preferred Stock outstanding at June 30, 2015 was 325,000, each with a liquidation preference of $1,241 representing on an as-converted basis approximately 3,666,549 common shares based upon a conversion price of $110.00 per share, which have been excluded from the weighted average shares outstanding for EPS purposes for the three and six months ended June 30, 2015 due to their anti-dilutive effect. | 13. Earnings (Loss) Per Share The Company's Series A Preferred Stock issued in connection with the Eagle Property Acquisition has the nonforfeitable right to participate on an as converted basis at the conversion rate then in effect in any common stock dividends declared and as such, is considered a participating security. The Company's nonvested stock awards, which are granted as part of the 2012 LTIP, contain nonforfeitable rights to dividends and as such, are considered to be participating securities and, together with the Series A Preferred Stock, are included in the computation of basic and diluted earnings (loss) per share, pursuant to the two-class method. In the calculation of basic earnings (loss) per share attributable to common shareholders, participating securities are allocated earnings based on actual dividend distributions received plus a proportionate share of undistributed net income attributable to common shareholders, if any, after recognizing distributed earnings. The Company's participating securities do not participate in undistributed net losses because they are not contractually obligated to do so. The computation of diluted earnings per share attributable to common shareholders reflects the potential dilution that could occur if securities or other contracts to issue common shares that are dilutive were exercised or converted into common shares (or resulted in the issuance of common shares) and would then share in the earnings of the Company. During the periods in which the Company records a loss from continuing operations attributable to common shareholders, securities would not be dilutive to net loss per share and conversion into common shares is assumed to not occur. Diluted net income per share attributable to common shareholders is calculated under both the two-class method and the treasury stock method; the more dilutive of the two calculations is presented below. The following table (in thousands, except per share amounts) provides a reconciliation of net income (loss) to preferred shareholders, common shareholders, and participating securities for purposes of computing net income (loss) per share: At December 31, 2014 2013 2012 (in thousands) Net income (loss) 116,929 (343,985 ) (150,097 ) Preferred Dividend(1) (10,378 ) (15,589 ) (6,500 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income (loss) attributable to shareholders 106,551 (359,574 ) (156,597 ) Participating securities—Series A Preferred Stock (35,696 ) — — Participating securities—Non-vested Restricted Stock (3,584 ) — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income (loss) attributable to common shareholders 67,271 (359,574 ) (156,597 ) Weighted average shares outstanding 6,644 6,576 5,997 Basic and diluted net income (loss) per share 10.13 (54.70 ) (26.11 ) (1) Calculation of the preferred stock dividend is discussed in Note 10. (2) As these shares are participating securities that participate in earnings, but are not required to participate in losses, this calculation demonstrates that there is not an allocation of the loss to the non-vested restricted stockholders. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended | 12 Months Ended |
Jun. 30, 2015 | Dec. 31, 2014 | |
Commitments and Contingencies | ||
Commitments and Contingencies | 15. Commitments and Contingencies The Company is involved in various matters incidental to its operations and business that might give rise to a loss contingency. These matters may include legal and regulatory proceedings, commercial disputes, claims from royalty, working interest and surface owners, property damage and personal injury claims and environmental authorities or other matters. In addition, the Company may be subject to customary audits by governmental authorities regarding the payment and reporting of various taxes, governmental royalties and fees as well as compliance with unclaimed property (escheatment) requirements and other laws. Further, other parties with an interest in wells operated by the Company have the ability under various contractual agreements to perform audits of its joint interest billing practices. The Company vigorously defends itself in these matters. If the Company determines that an unfavorable outcome or loss of a particular matter is probable and the amount of the loss can be reasonably estimated, it accrues a liability for the contingent obligation. As new information becomes available or as a result of legal or administrative rulings in similar matters or a change in applicable law, the Company's conclusions regarding the probability of outcomes and the amount of estimated loss, if any, may change. The impact of subsequent changes to the Company's accruals could have a material effect on its results of operations. | 15. Commitments and Contingencies At December 31, 2014, contractual obligations for drilling contracts, long-term operating leases, seismic contracts and other contracts are as follows (in thousands): Total 2015(1) 2016 2017 2018 2019 and Drilling contracts 16,698 15,819 879 — — — Non-cancellable office lease commitments(2) 9,320 1,857 1,877 1,941 1,471 2,174 Seismic contracts 3,192 3,192 — — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net minimum commitments 29,210 20,868 2,756 1,941 1,471 2,174 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (1) In addition to the $20.9 million of minimum commitments noted above, the Company also has approximately $130 million of interest payments due on the senior notes during the year ended December 31, 2015, for estimated total obligations of approximately $150 million. (2) During the quarter ended December 31, 2014, the Company announced plans to relocate the headquarters from Houston, Texas to Tulsa, Oklahoma. At December 31, 2014, the Company still leased space in Houston (contractually through 2018) and of the $9.3 million total in office lease commitments, approximately $3.4 million related to the Houston leases. For the years ended December 31, 2014, 2013 and 2012, the Company expensed $2.3 million, $1.7 million and $1.1 million, respectively, for office rent. In addition to the commitments noted in the above table, the Company is party to a gas transportation, gathering and processing contract (as amended and effective June 1, 2013) in the Mississippian Lime region which includes certain minimum natural gas and NGL volume commitments. To the extent the Company does not deliver natural gas volumes in sufficient quantities to generate, when processed, the minimum levels of recovered NGLs, the Company would be required to reimburse the counterparty an amount equal to the sum of the monthly shortfall, if any, multiplied by a fee of roughly $0.08 to $0.125 per gallon (subject to annual escalation). The NGL volume commitments range from 2,800 Bbls to 5,780 Bbls per day for each monthly accounting period over the remaining term of the contract. Additionally, the Company is obligated to deliver a total of 38,100,000 MMBtu and 76,200,000 MMBtu during the first 30 months and 60 months of the contract, respectively. During the first 30 months, any shortfall in delivered volumes would result in a payment to the counterparty equal to the shortfall amount multiplied by a fee of approximately $0.36 per MMBtu. During the first 60 months, any shortfall in delivered volumes would result in a payment to the counterparty equal to the shortfall amount multiplied by a fee of approximately $0.36 per MMBtu, provided that the Company would receive volumetric credit for any deficiency payment made after the initial 30 months. The Company is currently delivering at least the minimum volumes required under these contractual provisions and does not expect to incur any future volumetric shortfall payments during the term of this contract. Commitments related to ARO's are not included in the table above; see Note 8 for discussion of those commitments. The Company is involved in disputes or legal actions arising in the ordinary course of its business. The Company may not be able to predict the timing or outcome of these or future claims and proceedings with certainty, and an unfavorable resolution of one or more of such matters could have a material adverse effect on our financial condition, results of operations or cash flows. Currently, it is not party to any legal proceedings that the Company believes, individually or in the aggregate, are reasonably expected to have a material adverse effect on its financial position, results of operations, or cash flows. |
Summary of Significant Accoun23
Summary of Significant Accounting Policies (Policies) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2015 | Dec. 31, 2014 | |
Summary of Significant Accounting Policies | ||
Basis of Presentation | Basis of Presentation These interim financial statements are unaudited and have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC") regarding interim financial reporting. Certain disclosures have been condensed or omitted from these financial statements. Accordingly, they do not include all of the information and notes required by accounting principles generally accepted in the United States of America ("GAAP") for complete consolidated financial statements, and should be read in conjunction with the audited consolidated financial statements and notes thereto for the year ended December 31, 2014 included herein. All intercompany transactions have been eliminated in consolidation. In the opinion of the Company's management, the accompanying unaudited condensed consolidated financial statements include all adjustments, consisting of normal recurring adjustments, necessary to fairly present the financial position as of, and the results of operations for, all periods presented. In preparing the accompanying condensed consolidated financial statements, management has made certain estimates and assumptions that affect reported amounts in the condensed consolidated financial statements and disclosures of contingencies. Actual results may differ from those estimates. The results for interim periods are not necessarily indicative of annual results. | Basis of Presentation The accompanying consolidated financial statements of the Company have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC") and have been prepared in accordance with generally accepted accounting principles in the United States of America ("GAAP"). All intercompany transactions have been eliminated in consolidation. The consolidated financial statements as of and for the year ended December 31, 2014 include the results of the Pine Prairie field from January 1, 2014 through May 1, 2014, the date of disposition. The consolidated financial statements as of and for the year ended December 31, 2013 include the results from the Anadarko Basin Acquisition beginning May 31, 2013. The consolidated financial statements as of and for the year ended December 31, 2012 include the results from the Eagle Property Acquisition beginning October 1, 2012. |
Reverse Stock Split | Reverse Stock Split On August 3, 2015, the Company completed a 1-for-10 reverse stock split of its outstanding common stock. To effect the reverse stock split, the Company filed a Certificate of Amendment to the Company's Restated Certificate of Incorporation, which provides for the reverse stock split and for the corresponding reduction in the Company's authorized capital stock to 100 million shares of common stock, $0.01 par value per share, following the reverse stock split. The condensed consolidated financial statements and notes to the condensed consolidated financial statements included in this document give retrospective effect to the reverse stock split for all periods presented. | |
Recently Issued Standards Not Yet Adopted | Recently Issued Standards Not Yet Adopted In May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update 2014-09, "Revenue from Contracts with Customers (Topic 606)" ("ASU 2014-09"). ASU 2014-09 provides guidance concerning the recognition and measurement of revenue from contracts with customers. The objective of ASU 2014-09 is to increase the usefulness of information in the financial statements regarding the nature, timing and uncertainty of revenues. ASU 2014-09 requires an entity to (i) identify the contract(s) with a customer, (ii) identify the performance obligations in the contract(s), (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations in the contract(s), and (v) recognize revenue when, or as, the entity satisfies a performance obligation. ASU 2014-09 will be effective for the Company beginning on January 1, 2018, including interim periods within that reporting period, considering the one year deferral approved by the FASB on July 9, 2015. The standard permits the use of either the retrospective or cumulative effect transition method. Early adoption is permitted. The Company has not selected a transition method and is evaluating the impact this standard will have on its consolidated financial statements and related disclosures. In April 2015, the FASB issued Accounting Standards Update 2015-03, "Interest—Imputation of Interest: Simplifying the Presentation of Debt Issuance Costs (Topic 835)". The update requires debt issuance costs related to a recognized debt liability be presented on the balance sheet as a direct deduction from the carrying amount of that debt liability. The standard should be applied retrospectively and is effective for the Company beginning on January 1, 2016. The Company does not believe the adoption of this guidance will have a material impact on its financial position, results of operations or cash flows. | Recent Accounting Pronouncements The Company reviewed recently issued accounting pronouncements that became effective during the twelve months ended December 31, 2014, and determined that none would have a material impact on the Company's consolidated financial statements with the exception of ASU 2014-09, "Revenue from Contracts with Customers "and ASU 2014-15, "Presentation of Financial Statements—Going Concern," (both effective for annual reporting periods beginning after December 15, 2016), which the Company is still evaluating. |
Correction of Operating and Investing Cash Flows | Correction of Operating and Investing Cash Flows for the Six Months Ended June 30, 2014 In the first quarter of 2015, the Company determined that it had incorrectly presented non-cash accrued capital expenditures in its Statements of Cash Flows since December 31, 2012. Management concluded the misstatement is immaterial to previously issued financial statements; however, the Company has corrected the cash flow presentation in the accompanying Condensed Consolidated Statement of Cash Flows for the six months ended June 30, 2014. There was no impact of the misstatement on the Condensed Consolidated Balance Sheet as of December 31, 2014, or on the Condensed Consolidated Statement of Operations for the three or six months ended June 30, 2014. The impact of the correction is shown in the following table (in thousands): For the Six Months Statement of Cash Flows As Previously As Restated Change in operating assets and liabilities: accounts receivable—JIB and other 1,929 (1,557 ) Net cash provided by operating activities 177,047 173,561 Investment in property and equipment (279,033 ) (275,547 ) Net cash used in investing activities (131,514 ) (128,028 ) |
Summary of Significant Accoun24
Summary of Significant Accounting Policies (Tables) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2015 | Dec. 31, 2014 | |
Summary of Significant Accounting Policies | ||
Schedule of the impact of correction | The impact of the correction is shown in the following table (in thousands): For the Six Months Statement of Cash Flows As Previously As Restated Change in operating assets and liabilities: accounts receivable—JIB and other 1,929 (1,557 ) Net cash provided by operating activities 177,047 173,561 Investment in property and equipment (279,033 ) (275,547 ) Net cash used in investing activities (131,514 ) (128,028 ) | For the Twelve Months Ended December 31, 2014 2013 2012 Statement of Cash Flows As As As As As As (in thousands) Change in operating assets and liabilities: accounts receivable—JIB and other (13,603 ) (18,897 ) (28,488 ) (18,002 ) (11,019 ) (3,249 ) Net cash provided by operating activities 356,838 351,544 227,102 237,588 137,249 145,019 Investment in property and equipment (561,691 ) (556,397 ) (573,734 ) (584,220 ) (422,332 ) (430,102 ) Net cash used in investing activities (409,558 ) (404,264 ) (1,193,846 ) (1,204,332 ) (773,608 ) (781,378 ) |
Fair Value Measurements of Fi25
Fair Value Measurements of Financial Instruments (Tables) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2015 | Dec. 31, 2014 | |
Fair Value Measurements of Financial Instruments | ||
Schedule of commodity derivative contracts in the condensed consolidated balance sheets are recorded at estimated fair value | Fair Value Measurements at June 30, 2015 Quoted Prices Significant Significant Total (in thousands) Assets: Commodity derivative oil swaps — 27,708 — 27,708 Commodity derivative gas swaps — 9,152 — 9,152 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total assets — 36,860 — 36,860 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Liabilities: Commodity derivative oil swaps — 2,869 — 2,869 Commodity derivative gas swaps — — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total liabilities — 2,869 — 2,869 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fair Value Measurements at December 31, 2014 Quoted Prices Significant Significant Total (in thousands) Assets: Commodity derivative oil swaps — 106,450 — 106,450 Commodity derivative gas swaps — 20,259 — 20,259 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total assets — 126,709 — 126,709 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Liabilities: Commodity derivative oil swaps — — — — Commodity derivative gas swaps — — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total liabilities — — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ | Fair Value Measurements at December 31, 2014 Quoted Prices Significant Significant Total (in thousands) Assets: Commodity derivative oil swaps — 106,450 — 106,450 Commodity derivative gas swaps — 20,259 — 20,259 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total assets — 126,709 — 126,709 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Liabilities: Commodity derivative oil swaps — — — — Commodity derivative NGL swaps — — — — Commodity derivative gas swaps — — — — Commodity derivative oil collars — — — — Commodity derivative gas collars — — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total liabilities — — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fair Value Measurements at December 31, 2013 Quoted Prices Significant Significant Total (in thousands) Assets: Commodity derivative NGL swaps — 469 — 469 Commodity derivative gas swaps — 488 — 488 Commodity derivative oil collars — 64 — 64 Commodity derivative gas collars — 751 — 751 Commodity derivative differential swaps — 806 — 806 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total assets — 2,578 — 2,578 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Liabilities: Commodity derivative oil swaps — 32,209 — 32,209 Commodity derivative NGL swaps — 74 — 74 Commodity derivative gas swaps — 809 — 809 Commodity derivative oil collars — 272 — 272 Commodity derivative gas collars — 26 — 26 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total liabilities — 33,390 — 33,390 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Risk Management and Derivativ26
Risk Management and Derivative Instruments (Tables) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2015 | Dec. 31, 2014 | |
Risk Management and Derivative Instruments | ||
Schedule of the entity's open commodity derivative contract positions | As of June 30, 2015, the Company had the following open commodity derivative contract positions: Hedged Weighted-Average Oil (Bbls): WTI Swaps—2015 2,208,000 71.56 Natural Gas (MMBtu): Swaps—2015(1) 9,200,000 4.13 (1) Includes 1,550,000 MMBtus in natural gas swaps that priced during the period, but had not cash settled as of June 30, 2015. | As of December 31, 2014, the Company had the following open commodity positions: Hedged Volume Weighted-Average Oil (Bbls): WTI Swaps—2015 3,276,000 88.72 Natural Gas (MMBtu): Swaps—2015(1) 20,050,000 4.15 (1) Includes 2,170,000 MMBtu in natural gas swaps that priced during the period, but had not cash settled as of December 31, 2014. |
Summary of location and fair values amounts of all derivative instruments as well as the gross recognized derivative assets, liabilities and amounts offset in the unaudited condensed consolidated balance sheets | The following table summarizes the gross fair values of derivative instruments by the appropriate balance sheet classification; however, the derivative instruments are subject to netting arrangements and qualify for net presentation in the Company's unaudited condensed consolidated balance sheets at June 30, 2015 and December 31, 2014, respectively (in thousands): Type Balance Sheet Location(1) June 30, December 31, Oil Swaps Derivative financial instruments—Current Assets 27,708 106,450 Oil Swaps Derivative financial instruments—Current Liabilities (2,869 ) — Gas Swaps Derivative financial instruments—Current Assets 9,152 20,259 ​ ​ ​ ​ ​ ​ ​ ​ ​ Total derivative fair value at period end 33,991 126,709 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (1) The fair values of commodity derivative instruments reported in the Company's condensed consolidated balance sheets are subject to netting arrangements and qualify for net presentation. The following table summarizes the location and fair value amounts of all derivative instruments in the unaudited condensed consolidated balance sheets, as well as the gross recognized derivative assets, liabilities and amounts offset in the unaudited condensed consolidated balance sheets at June 30, 2015 and December 31, 2014, respectively (in thousands): June 30, 2015 Not Designated as Balance Sheet Classification Gross Gross Net Derivative assets: Commodity contracts Derivative financial instruments—current 36,860 1,002 35,858 Commodity contracts Derivative financial instruments—noncurrent — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 36,860 1,002 35,858 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Derivative liabilities: Commodity contracts Derivative financial instruments—current 2,869 1,002 1,867 Commodity contracts Derivative financial instruments—noncurrent — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2,869 1,002 1,867 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2014 Not Designated as Balance Sheet Classification Gross Gross Net Derivative assets: Commodity contracts Derivative financial instruments—current 126,709 126,709 Commodity contracts Derivative financial instruments—noncurrent — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 126,709 — 126,709 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Derivative liabilities: Commodity contracts Derivative financial instruments—current — — — Commodity contracts Derivative financial instruments—noncurrent — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ | The following table summarizes the gross fair value of derivative instruments by the appropriate balance sheet classification, even when the derivative instruments are subject to netting arrangements and qualify for net presentation in the Company's consolidated balance sheets at December, 2014 and 2013, respectively (in thousands): Type Balance Sheet Location(1) December 31, December 31, Oil Swaps Derivative financial instruments—Current Assets 106,450 — Oil Swaps Derivative financial instruments—Current Liabilities — (28,871 ) Oil Swaps Derivative financial instruments—Non-Current Liabilities — (3,338 ) NGL Swaps Derivative financial instruments—Current Assets — 469 NGL Swaps Derivative financial instruments—Current Liabilities — (74 ) Gas Swaps Derivative financial instruments—Current Assets 20,259 469 Gas Swaps Derivative financial instruments—Non-Current Assets — 19 Gas Swaps Derivative financial instruments—Current Liabilities — (496 ) Gas Swaps Derivative financial instruments—Non-Current Liabilities — (313 ) Oil Collars Derivative financial instruments—Current Assets — 64 Oil Collars Derivative financial instruments—Current Liabilities — (272 ) Gas Collars Derivative financial instruments—Current Assets — 751 Gas Collars Derivative financial instruments—Current Liabilities — (26 ) Basis Differential Swaps Derivative financial instruments—Current Assets — 806 ​ ​ ​ ​ ​ ​ ​ ​ ​ Total derivative fair value at period end 126,709 (30,812 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (1) The fair values of commodity derivative instruments reported in the Company's consolidated balance sheets are subject to netting arrangements and qualify for net presentation. The following table summarizes the location and fair value amounts of all derivative instruments in the consolidated balance sheets, as well as the gross recognized derivative assets, liabilities and amounts offset in the consolidated balance sheets at December 31, 2014 and 2013, respectively (in thousands): December 31, 2014 Not Designated as ASC 815 Hedges: Balance Sheet Classification Gross Gross Net Recognized Derivative assets: Commodity contracts Derivative financial instruments—current 126,709 — 126,709 Commodity contracts Derivative financial instruments—noncurrent — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 126,709 — 126,709 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Derivative liabilities: Commodity contracts Derivative financial instruments—current — — — Commodity contracts Derivative financial instruments—noncurrent — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Not Designated as ASC 815 Hedges: Balance Sheet Classification Gross Gross Net Recognized Derivative assets: Commodity contracts Derivative financial instruments—current 2,559 1,859 700 Commodity contracts Derivative financial instruments—noncurrent 19 — 19 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2,578 1,859 719 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Derivative liabilities: Commodity contracts Derivative financial instruments—current 29,739 1,859 27,880 Commodity contracts Derivative financial instruments—noncurrent 3,651 — 3,651 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 33,390 1,859 31,531 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Schedule of "Gains (losses) on commodity derivative contracts - net" for the periods | For the Three Months For the Six Months 2015 2014 2015 2014 (in thousands) (in thousands) Net cash received (paid) for commodity derivative contracts 42,189 (17,138 ) 94,797 (31,948 ) Unrealized net gains (losses) (61,482 ) (14,329 ) (92,718 ) (22,192 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Gains (losses) on commodity derivative contracts—net (19,293 ) (31,467 ) 2,079 (54,140 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ | Years Ended December 31, 2014 2013 2012 (in thousands) Realized net losses (18,332 ) (17,585 ) (15,825 ) Unrealized net gains (losses) 157,521 (26,699 ) 4,667 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Gains (losses) on commodity derivative contracts—net 139,189 (44,284 ) (11,158 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Property and Equipment (Tables)
Property and Equipment (Tables) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2015 | Dec. 31, 2014 | |
Property and Equipment | ||
Schedule of property and equipment | June 30, December 31, (in thousands) Oil and gas properties, on the basis of full-cost accounting: Proved properties 3,527,182 3,398,146 Unevaluated properties 31,778 44,535 Other property and equipment 14,734 13,454 Less accumulated depreciation, depletion, amortization and impairment (2,119,458 ) (1,333,019 ) ​ ​ ​ ​ ​ ​ ​ Net property and equipment 1,454,236 2,123,116 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ | The Company's property and equipment as of December 31, 2014 and 2013 was as follows (in thousands): December 31, December 31, (in thousands) Oil and gas properties, on the basis of full-cost accounting: Proved properties 3,398,146 2,817,062 Unevaluated properties 44,535 243,599 Other property and equipment 13,454 11,113 Less accumulated depreciation, depletion, amortization and impairment (1,333,019 ) (976,880 ) ​ ​ ​ ​ ​ ​ ​ Net property and equipment 2,123,116 2,094,894 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Schedule of internal costs capitalized | During the three and six months ended June 30, 2015 and 2014, the Company capitalized the following (in thousands): Three Months Six Months Ended 2015 2014 2015 2014 Internal costs capitalized to oil and gas properties(1) 2,613 3,325 4,915 6,449 (1) Inclusive of $0.4 million and $0.6 million of qualifying share-based compensation expense for the three months ended June 30, 2015 and 2014, respectively. For the six months ended June 30, 2015 and 2014, inclusive of $0.9 million and $1.2 million, respectively. | |
Schedule of depletion expense related to oil and gas properties | Three Months Ended June 30, Six Months Ended June 30, 2015 2014 2015 2014 2015 2014 2015 2014 (in thousands) (per Boe) (in thousands) (per Boe) Depletion expense 54,359 70,323 17.63 24.22 111,964 136,527 18.18 24.76 Depreciation on other property 896 751 0.29 0.25 1,719 1,448 0.28 0.26 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Depreciation, depletion, and amortization 55,255 71,074 17.92 24.47 113,683 137,975 18.46 25.02 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Other Noncurrent Assets (Tables
Other Noncurrent Assets (Tables) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2015 | Dec. 31, 2014 | |
Other Noncurrent Assets | ||
Schedule of other noncurrent assets | June 30,2015 December 31,2014 (in thousands) Deferred financing costs 33,483 37,807 Field inventory 5,911 5,713 Other 166 211 ​ ​ ​ ​ ​ ​ ​ Other noncurrent assets 39,560 43,731 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ | At December 31, 2014 2013 (in thousands) Deferred financing costs 37,807 44,706 Field equipment inventory 5,713 9,682 Other 211 209 ​ ​ ​ ​ ​ ​ ​ Other noncurrent assets 43,731 54,597 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Accrued Liabilities (Tables)
Accrued Liabilities (Tables) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2015 | Dec. 31, 2014 | |
Accrued Liabilities. | ||
Schedule of accrued liabilities | June 30, 2015 December 31, 2014 (in thousands) Accrued oil and gas capital expenditures 54,674 76,398 Accrued revenue and royalty distributions 44,411 51,292 Accrued lease operating and workover expense 17,250 10,113 Accrued interest 23,567 21,521 Accrued taxes 4,427 4,226 Other 10,892 20,281 ​ ​ ​ ​ ​ ​ ​ Accrued liabilities 155,221 183,831 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ | At December 31 2014 2013 (in thousands) Accrued oil and gas capital expenditures 76,398 87,202 Accrued revenue and royalty distributions 51,292 64,370 Accrued lease operating and workover expense 10,113 8,279 Accrued interest 21,521 21,341 Accrued taxes 4,226 4,386 Other 20,281 18,803 ​ ​ ​ ​ ​ ​ ​ Accrued liabilities 183,831 204,381 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Asset Retirement Obligations (T
Asset Retirement Obligations (Tables) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2015 | Dec. 31, 2014 | |
Asset Retirement Obligations | ||
Schedule of changes in the Company's ARO's | Six Months Six Months (in thousands) Asset retirement obligations—beginning of period 21,599 26,308 Liabilities incurred 2 844 Revisions — — Liabilities settled — (47 ) Liabilities eliminated through asset sales (4,699 ) (7,652 ) Current period accretion expense 835 929 ​ ​ ​ ​ ​ ​ ​ Asset retirement obligations—end of period 17,737 20,382 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ | The following table details the change in the asset retirement obligations for the years ended December 31, 2014, 2013 and 2012, respectively (in thousands): Year ended December 31, 2014 2013 2012 Asset retirement obligations at beginning of year 26,308 15,245 7,627 Liabilities incurred 996 2,535 3,044 Liabilities assumed in Anadarko Basin Acquisition — 6,296 — Liabilities assumed in Eagle Property Acquisition — — 2,662 Revisions 288 858 1,189 Liabilities settled (47 ) (61 ) — Liabilities eliminated through asset sale(1) (7,652 ) — — Current period accretion expense 1,706 1,435 723 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Asset retirement obligations at end of year 21,599 26,308 15,245 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (1) As a result of the Pine Prairie Disposition, AROs were reduced by approximately $7.7 million during the year ended December 31, 2014. See discussion of the Pine Prairie Disposition in Note 7. |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2015 | Dec. 31, 2014 | |
Long-Term Debt | ||
Schedule of the company's long-term debt | The Company's long-term debt as of June 30, 2015 and December 31, 2014 is as follows (in thousands): December 31, Borrowings Repayments Exchanges Deferred Amortization PIK June 30, Credit Facility 435,150 33,000 (468,150 ) — — — — 2020 Senior Notes 600,000 — — (242,445 ) (63,930 ) — — 293,625 2021 Senior Notes 700,000 — — (281,676 ) (70,672 ) — — 347,652 Second Lien Notes — 625,000 — — 47,082 (896 ) — 671,186 Third Lien Notes — — — 524,121 87,520 (879 ) 1,187 611,949 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total debt 1,735,150 658,000 (468,150 ) — — (1,775 ) 1,187 1,924,412 Current maturities — — — — — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Long-term debt 1,735,150 658,000 (468,150 ) — — (1,775 ) 1,187 1,924,412 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ June 30, 2015 Unamortized June 30, 2015 Revolving Credit Facility — — 2020 Senior Notes 293,625 — 293,625 2021 Senior Notes 347,652 — 347,652 Second Lien Notes 671,186 (46,186 ) 625,000 Third Lien Notes 611,949 (86,641 ) 525,308 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total debt 1,924,412 (132,827 ) 1,791,585 Current maturities — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Long-term debt 1,924,412 (132,827 ) 1,791,585 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ | At December 31, 2014 2013 (in thousands) Revolving credit facility, due 2018 435,150 401,150 Senior notes, due 2020 600,000 600,000 Senior notes, due 2021 700,000 700,000 ​ ​ ​ ​ ​ ​ ​ Long-term debt 1,735,150 1,701,150 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Equity and Share-Based Compen32
Equity and Share-Based Compensation (Tables) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2015 | Dec. 31, 2014 | |
Equity and Share-Based Compensation | ||
Summary of changes in the number of outstanding shares | Number of Shares Common Stock Treasury Stock Share count as of December 31, 2014 7,049,173 (53,467 ) Grants of restricted stock 268,677 — Forfeitures of restricted stock (60,843 ) — Acquisition of treasury stock — (38,572 ) ​ ​ ​ ​ ​ ​ ​ Share count as of June 30, 2015 7,257,007 (92,039 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ | Common Treasury Share count as of January 1, 2012 — — Issuance of common stock in pre IPO reorganization 4,763,435 — Proceeds from the sale of common stock to public 1,800,000 — Issuance of preferred stock as consideration in Eagle Property Acquisition — — Share based compensation grants of restricted stock 102,951 — Forfeitures of restricted stock (4,415 ) — ​ ​ ​ ​ ​ ​ ​ Share count as of December 31, 2012 6,661,971 — Grants of restricted stock 284,024 — Forfeitures of restricted stock (53,421 ) — Acquisition of treasury stock — (11,870 ) ​ ​ ​ ​ ​ ​ ​ Share count as of December 31, 2013 6,892,574 (11,870 ) Grants of restricted stock 344,748 — Forfeitures of restricted stock (188,149 ) — Acquisition of treasury stock — (41,597 ) ​ ​ ​ ​ ​ ​ ​ Share count as of December 31, 2014 7,049,173 (53,467 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Summary of Company's non-vested share award activity | Shares Weighted Non-vested shares outstanding at December 31, 2014 306,201 52.76 Granted 268,677 12.29 Vested (136,479 ) 57.23 Forfeited (60,843 ) 47.06 ​ ​ ​ ​ ​ ​ ​ Non-vested shares outstanding at June 30, 2015 377,556 22.76 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ | Shares Weighted Non-vested shares outstanding at December 31, 2012 98,535 126.13 Granted 284,024 68.22 Vested (32,772 ) 126.18 Forfeited (53,420 ) 86.46 ​ ​ ​ ​ ​ ​ ​ Non-vested shares outstanding at December 31, 2013 296,367 77.81 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Granted 344,748 46.61 Vested (146,764 ) 72.08 Forfeited (188,150 ) 65.83 ​ ​ ​ ​ ​ ​ ​ Non-vested shares outstanding at December 31, 2014 306,201 52.76 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Net Loss Per Share (Tables)
Net Loss Per Share (Tables) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2015 | Dec. 31, 2014 | |
Net Loss Per Share | ||
Schedule of reconciliation of net income (losses) to preferred shareholders, common shareholders, and non-vested restricted shareholders for purposes of computing net income (loss) per share | The following table (in thousands, except per share amounts) provides a reconciliation of net loss to preferred shareholders, common shareholders, and non-vested restricted shareholders for purposes of computing net loss per share for the three and six months ended June 30, 2015 and 2014, respectively: Three Months Ended Six Months Ended 2015 2014 2015 2014 Net loss (598,437 ) (2,098 ) (791,989 ) (85,743 ) Preferred Dividend(1) (669 ) (4,806 ) (800 ) (7,426 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net loss attributable to shareholders (599,106 ) (6,904 ) (792,789 ) (93,169 ) Participating securities—Series A Preferred Stock(2) — — — — Participating securities—Non-vested Restricted Stock(2) — — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net loss attributable to common shareholders (599,106 ) (6,904 ) (792,789 ) (93,169 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted average shares outstanding 6,774 6,645 6,750 6,622 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net loss per share (88.44 ) (1.04 ) (117.45 ) (14.07 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (1) Calculation of the preferred stock dividend is discussed in "—Note 11. Preferred Stock" (2) As these shares are participating securities that participate in earnings, but are not required to participate in losses, this calculation demonstrates that there is not an allocation of the loss to the non-vested restricted stockholders. | The following table (in thousands, except per share amounts) provides a reconciliation of net income (loss) to preferred shareholders, common shareholders, and participating securities for purposes of computing net income (loss) per share: At December 31, 2014 2013 2012 (in thousands) Net income (loss) 116,929 (343,985 ) (150,097 ) Preferred Dividend(1) (10,378 ) (15,589 ) (6,500 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income (loss) attributable to shareholders 106,551 (359,574 ) (156,597 ) Participating securities—Series A Preferred Stock (35,696 ) — — Participating securities—Non-vested Restricted Stock (3,584 ) — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income (loss) attributable to common shareholders 67,271 (359,574 ) (156,597 ) Weighted average shares outstanding 6,644 6,576 5,997 Basic and diluted net income (loss) per share 10.13 (54.70 ) (26.11 ) (1) Calculation of the preferred stock dividend is discussed in Note 10. (2) As these shares are participating securities that participate in earnings, but are not required to participate in losses, this calculation demonstrates that there is not an allocation of the loss to the non-vested restricted stockholders. |
Organization and Business (Deta
Organization and Business (Details) - segment | Dec. 31, 2014 | Jun. 30, 2015 |
Segment information | ||
Number of reportable segments | 1 | 1 |
Liquidity and Capital Resourc35
Liquidity and Capital Resources (Details) $ in Thousands | Jun. 02, 2015USD ($) | Jun. 02, 2015USD ($) | May. 21, 2015USD ($) | Jun. 30, 2015USD ($) | Dec. 31, 2015item | Jun. 30, 2015USD ($) | Jun. 30, 2014USD ($) | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | Dec. 31, 2012USD ($) | Apr. 21, 2015USD ($) | May. 31, 2013USD ($) | Oct. 01, 2012USD ($) |
Cash payment on derivative contract settlement | $ 42,200 | $ 94,797 | $ (31,948) | ||||||||||
Principle Balance Outstanding | 1,791,585 | 1,791,585 | |||||||||||
Amount repaid | 468,150 | $ 131,000 | $ 131,000 | $ 34,300 | $ 285,467 | ||||||||
Dequincy assets | |||||||||||||
Purchase price of subject to standard post-closing adjustments received in cash | $ 44,000 | ||||||||||||
Senior Revolving Credit Facility, due 2018 | |||||||||||||
Amount repaid | $ 468,200 | 468,150 | |||||||||||
Borrowing base | $ 252,400 | $ 252,400 | |||||||||||
Second Lien Notes | |||||||||||||
Principle Balance Outstanding | $ 625,000 | $ 625,000 | $ 625,000 | ||||||||||
Interest rate (as a percent) | 10.00% | 10.00% | 10.00% | ||||||||||
Third Lien Notes | |||||||||||||
Principle Balance Outstanding | 20,000 | 20,000 | $ 504,100 | $ 525,308 | $ 525,308 | ||||||||
Interest rate (as a percent) | 12.00% | ||||||||||||
Par value of debt exchanged for | 524,121 | ||||||||||||
2020 Senior Notes | |||||||||||||
Principle Balance Outstanding | 293,625 | 293,625 | $ 600,000 | ||||||||||
Interest rate (as a percent) | 10.75% | 10.75% | |||||||||||
Par value of debt exchanged for | (306,400) | 26,600 | $ 279,800 | (242,445) | |||||||||
2021 Senior Notes | |||||||||||||
Principle Balance Outstanding | $ 347,652 | 347,652 | $ 700,000 | ||||||||||
Interest rate (as a percent) | 9.25% | 9.25% | |||||||||||
Par value of debt exchanged for | $ 352,300 | $ 2,000 | $ 350,300 | $ (281,676) | |||||||||
Unsecured Notes | |||||||||||||
Percentage of exchanged debt's par value | 70.00% | 80.00% | 80.00% | ||||||||||
Forecast | |||||||||||||
Percentage of notional volumes for second half of 2015, compared with first half of 2015 | 50.00% | ||||||||||||
Number of derivatives held | item | 0 |
Summary of Significant Accoun36
Summary of Significant Accounting Policies (Details) $ / shares in Units, $ in Thousands | Aug. 03, 2015$ / sharesshares | Jun. 30, 2015USD ($)$ / sharesshares | Jun. 30, 2014USD ($) | Dec. 31, 2014USD ($)$ / sharesshares | Dec. 31, 2013USD ($)$ / sharesshares | Dec. 31, 2012USD ($) |
Correction of Operating and Investing Cash Flows for the Three Months Ended March 31, 2014 | ||||||
Common stock, shares authorized | shares | 100,000,000 | 100,000,000 | 100,000,000 | |||
Common stock, par value (in dollars per share) | $ / shares | $ 0.01 | $ 0.01 | $ 0.01 | |||
Change in operating assets and liabilities: | ||||||
accounts receivable - JIB and other | $ 22,617 | $ (1,557) | $ (18,897) | $ (18,002) | $ (3,249) | |
Net cash provided by operating activities | 138,650 | 173,561 | 351,544 | 237,588 | 145,019 | |
Investment in property and equipment | (190,278) | (275,547) | (556,397) | (584,220) | (430,102) | |
Net cash used in investing activities | $ (149,994) | (128,028) | (404,264) | (1,204,332) | (781,378) | |
As Previously Reported | ||||||
Change in operating assets and liabilities: | ||||||
accounts receivable - JIB and other | 1,929 | (13,603) | (28,488) | (11,019) | ||
Net cash provided by operating activities | 177,047 | 356,838 | 227,102 | 137,249 | ||
Investment in property and equipment | (279,033) | (561,691) | (573,734) | (422,332) | ||
Net cash used in investing activities | $ (131,514) | $ (409,558) | $ (1,193,846) | $ (773,608) | ||
Subsequent event | ||||||
Correction of Operating and Investing Cash Flows for the Three Months Ended March 31, 2014 | ||||||
Stock split ratio | 0.10 | |||||
Common stock, shares authorized | shares | 100,000,000 | |||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.01 |
Fair Value Measurements of Fi37
Fair Value Measurements of Financial Instruments (Details) - Recurring - Commodity Derivatives $ in Thousands | Jun. 30, 2015USD ($)item | Dec. 31, 2014USD ($)item | Dec. 31, 2013item |
Significant Other Observable Inputs (Level 2) | |||
Fair Value Measurements of Financial Instruments | |||
Number of bank counterparties for company's commodity derivative contracts | item | 7 | 7 | 7 |
Assets: | |||
Total assets | $ 36,860 | $ 126,709 | |
Liabilities: | |||
Total liabilities | 2,869 | ||
Significant Other Observable Inputs (Level 2) | Swaps | Oil | |||
Liabilities: | |||
Total liabilities | 2,869 | ||
Significant Other Observable Inputs (Level 2) | Swaps | NGL | |||
Assets: | |||
Total assets | 27,708 | 106,450 | |
Significant Other Observable Inputs (Level 2) | Swaps | Gas | |||
Assets: | |||
Total assets | 9,152 | 20,259 | |
Total | |||
Assets: | |||
Total assets | 36,860 | 126,709 | |
Liabilities: | |||
Total liabilities | 2,869 | ||
Total | Swaps | Oil | |||
Liabilities: | |||
Total liabilities | 2,869 | ||
Total | Swaps | NGL | |||
Assets: | |||
Total assets | 27,708 | 106,450 | |
Total | Swaps | Gas | |||
Assets: | |||
Total assets | $ 9,152 | $ 20,259 |
Risk Management and Derivativ38
Risk Management and Derivative Instruments (Details) - Not designated as Hedging Instrument - Commodity Derivatives $ in Millions | 6 Months Ended | 12 Months Ended |
Jun. 30, 2015USD ($)MMBTU$ / bbl$ / Boebbl | Dec. 31, 2014$ / bbl$ / MMBTU | |
Risk Management and Derivative Instruments | ||
Maximum loss exposure under commodity derivative contracts on failure of the entity's counterparty's performance | $ | $ 35.9 | |
Oil | WTI | Swaps | 2015 | ||
Risk Management and Derivative Instruments | ||
Weighted-Average Fixed Price | $ / bbl | 71.56 | 88.72 |
Hedged Volume | bbl | 2,208,000 | |
Gas | Swaps | 2015 | ||
Risk Management and Derivative Instruments | ||
Weighted-Average Fixed Price | 4.13 | 4.15 |
Hedged Volume | 9,200,000 | |
Hedged Volume, not settled in cash | 1,550,000 |
Risk Management and Derivativ39
Risk Management and Derivative Instruments (Details 2) - Not designated as Hedging Instrument - Commodity Derivatives - USD ($) $ in Thousands | Jun. 30, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Risk Management and Derivative Instruments | |||
Derivative financial instruments - Current Liabilities | $ (2,869) | $ (33,390) | |
Total derivative fair value at period end | 33,991 | $ 126,709 | (30,812) |
Derivative assets: | |||
Gross Recognized Assets | 36,860 | 126,709 | 2,578 |
Gross Amounts Offset, Assets | 1,002 | 1,859 | |
Net Recognized Fair Value Assets | 35,858 | 126,709 | 719 |
Derivative liabilities: | |||
Gross Recognized Liabilities | 2,869 | 33,390 | |
Gross Amounts Offset, Liabilities | 1,002 | 1,859 | |
Net Recognized Fair Value Liabilities | 1,867 | 31,531 | |
Current Assets | |||
Derivative assets: | |||
Gross Recognized Assets | 36,860 | 126,709 | 2,559 |
Gross Amounts Offset, Assets | 1,002 | 1,859 | |
Net Recognized Fair Value Assets | 35,858 | 126,709 | 700 |
Current Liabilities | |||
Risk Management and Derivative Instruments | |||
Derivative financial instruments - Current Liabilities | (2,869) | (29,739) | |
Derivative liabilities: | |||
Gross Recognized Liabilities | 2,869 | 29,739 | |
Gross Amounts Offset, Liabilities | 1,002 | 1,859 | |
Net Recognized Fair Value Liabilities | 1,867 | 27,880 | |
Swaps | Current Assets | Oil | |||
Derivative assets: | |||
Gross Recognized Assets | 27,708 | 106,450 | |
Swaps | Current Assets | NGL | |||
Derivative assets: | |||
Gross Recognized Assets | 469 | ||
Swaps | Current Assets | Gas | |||
Derivative assets: | |||
Gross Recognized Assets | 9,152 | $ 20,259 | 469 |
Swaps | Current Liabilities | Oil | |||
Risk Management and Derivative Instruments | |||
Derivative financial instruments - Current Liabilities | (2,869) | 28,871 | |
Derivative liabilities: | |||
Gross Recognized Liabilities | $ 2,869 | (28,871) | |
Swaps | Current Liabilities | NGL | |||
Risk Management and Derivative Instruments | |||
Derivative financial instruments - Current Liabilities | 74 | ||
Derivative liabilities: | |||
Gross Recognized Liabilities | (74) | ||
Swaps | Current Liabilities | Gas | |||
Risk Management and Derivative Instruments | |||
Derivative financial instruments - Current Liabilities | 496 | ||
Derivative liabilities: | |||
Gross Recognized Liabilities | $ (496) |
Risk Management and Derivativ40
Risk Management and Derivative Instruments (Details 3) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Gains (losses) on Commodity Derivative Contracts | |||||||
Cash payment on derivative contract settlement | $ (42,200) | $ (94,797) | $ 31,948 | ||||
Unrealized net gains (losses) | $ 157,500 | ||||||
Gains (losses) on commodity derivative contracts - net | (19,293) | $ (31,467) | 2,079 | (54,140) | 139,189 | $ (44,284) | $ (11,158) |
Not designated as Hedging Instrument | |||||||
Gains (losses) on Commodity Derivative Contracts | |||||||
Cash payment on derivative contract settlement | 42,189 | (17,138) | 94,797 | (31,948) | |||
Unrealized net gains (losses) | $ (61,482) | $ (14,329) | $ (92,718) | $ (22,192) | 157,521 | (26,699) | 4,667 |
Gains (losses) on commodity derivative contracts - net | $ 139,189 | $ (44,284) | $ (11,158) |
Property and Equipment (Details
Property and Equipment (Details) | Apr. 21, 2015USD ($) | Jun. 30, 2015USD ($)$ / Boe | Jun. 30, 2014USD ($)$ / Boe | Jun. 30, 2015USD ($)$ / Boe | Jun. 30, 2014USD ($)$ / Boe | Dec. 31, 2014USD ($)$ / Boe | Dec. 31, 2013USD ($)$ / Boe | Dec. 31, 2012USD ($)$ / Boe |
Property and Equipment | ||||||||
Proved properties | $ 3,527,182,000 | $ 3,527,182,000 | $ 3,398,146,000 | $ 2,817,062,000 | ||||
Unevaluated properties | 31,778,000 | 31,778,000 | 44,535,000 | 243,599,000 | ||||
Other property and equipment | 14,734,000 | 14,734,000 | 13,454,000 | 11,113,000 | ||||
Less accumulated depreciation, depletion, amortization and impairment | (2,119,458,000) | (2,119,458,000) | (1,333,019,000) | (976,880,000) | ||||
Net property and equipment | 1,454,236,000 | 1,454,236,000 | 2,123,116,000 | 2,094,894,000 | ||||
Other information | ||||||||
Capitalized qualifying share-based compensation expense | 2,200,000 | 1,400,000 | ||||||
Impairment in carrying value of oil and gas properties | 498,389,000 | 673,056,000 | $ 86,471,000 | 86,471,000 | 453,310,000 | |||
Depreciation, depletion, and amortization | 55,255,000 | $ 71,074,000 | $ 113,683,000 | 137,975,000 | 269,935,000 | 250,396,000 | $ 125,561,000 | |
Dequincy assets | ||||||||
Other information | ||||||||
Purchase price of subject to standard post-closing adjustments received in cash | $ 44,000,000 | |||||||
Net proceeds | 42,400,000 | |||||||
Gain (Loss) on reduction of oil and natural gas properties | $ 0 | |||||||
Other Property and Equipment | ||||||||
Other information | ||||||||
Depreciation on other property | $ 3,100,000 | 2,200,000 | 500,000 | |||||
Other Property and Equipment | Minimum | ||||||||
Other information | ||||||||
Estimated useful lives | 5 years | 3 years | ||||||
Other Property and Equipment | Maximum | ||||||||
Other information | ||||||||
Estimated useful lives | 7 years | 7 years | ||||||
Oil and Gas Properties | ||||||||
Other information | ||||||||
Internal cost capitalized | 2,613,000 | 3,325,000 | $ 4,915,000 | 6,449,000 | $ 12,400,000 | 8,400,000 | 1,500,000 | |
Capitalized qualifying share-based compensation expense | 400,000 | 600,000 | 900,000 | 1,200,000 | $ 2,200,000 | $ 1,400,000 | $ 200,000 | |
Impairment | 498,400,000 | |||||||
Impairment in carrying value of oil and gas properties | 673,100,000 | 86,500,000 | ||||||
Depletion expense | 54,359,000 | 70,323,000 | 111,964,000 | 136,527,000 | ||||
Depreciation on other property | 896,000 | 751,000 | 1,719,000 | 1,448,000 | ||||
Depreciation, depletion, and amortization | $ 55,255,000 | $ 71,074,000 | $ 113,683,000 | $ 137,975,000 | ||||
Depletion expense (per Boe) | $ / Boe | 17.63 | 24.22 | 18.18 | 24.76 | 22.75 | 28.42 | 34.17 | |
Depreciation on other property (per BOE) | $ / Boe | 0.29 | 0.25 | 0.28 | 0.26 | ||||
Depreciation, depletion, and amortization (per BOE) | $ / Boe | 17.92 | 24.47 | 18.46 | 25.02 |
Other Noncurrent Assets (Detail
Other Noncurrent Assets (Details) - USD ($) $ in Thousands | Jun. 30, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Other Noncurrent Assets | |||
Deferred financing costs | $ 33,483 | $ 37,807 | $ 44,706 |
Field inventory | 5,911 | 5,713 | 9,682 |
Other | 166 | 211 | 209 |
Other noncurrent assets | 39,560 | $ 43,731 | $ 54,597 |
Impairment of deferred financing cost | $ 4,600 |
Accrued Liabilities (Details)
Accrued Liabilities (Details) - USD ($) $ in Thousands | Jun. 30, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Accrued Liabilities. | |||
Accrued oil and gas capital expenditures | $ 54,674 | $ 76,398 | $ 87,202 |
Accrued revenue and royalty distributions | 44,411 | 51,292 | 64,370 |
Accrued lease operating and workover expense | 17,250 | 10,113 | 8,279 |
Accrued interest | 23,567 | 21,521 | 21,341 |
Accrued taxes | 4,427 | 4,226 | 4,386 |
Other | 10,892 | 20,281 | 18,803 |
Accrued liabilities | $ 155,221 | $ 183,831 | $ 204,381 |
Asset Retirement Obligations (D
Asset Retirement Obligations (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Asset Retirement Obligations | |||||||
Asset retirement obligations | $ 17,737 | $ 20,382 | $ 21,599 | $ 26,308 | $ 26,308 | $ 15,245 | $ 7,627 |
Changes in Company's asset retirement obligations | |||||||
Asset retirement obligations - beginning of period | 21,599 | 26,308 | 26,308 | 15,245 | 7,627 | ||
Liabilities incurred | 2 | 844 | 996 | 2,535 | 3,044 | ||
Liabilities settled | (47) | (47) | (61) | ||||
Liabilities eliminated through asset sales | (4,699) | (7,652) | (7,652) | ||||
Current period accretion expense | 390 | 432 | 835 | 929 | 1,706 | 1,435 | 723 |
Asset retirement obligations - end of period | $ 17,737 | $ 20,382 | $ 17,737 | $ 20,382 | $ 21,599 | $ 26,308 | $ 15,245 |
Long-Term Debt (Details)
Long-Term Debt (Details) | Jun. 02, 2015USD ($) | Jun. 02, 2015USD ($) | May. 21, 2015USD ($) | Mar. 24, 2015 | Mar. 23, 2015 | May. 31, 2013USD ($) | Oct. 01, 2012USD ($) | Jun. 30, 2015USD ($)item | Jun. 30, 2014USD ($) | Dec. 31, 2014USD ($)item | Dec. 31, 2013USD ($) | Dec. 31, 2012USD ($) | Dec. 31, 2014USD ($) | Mar. 21, 2015USD ($) | Sep. 30, 2014USD ($) | Sep. 29, 2014USD ($) | Aug. 30, 2013 |
Long-Term Debt | |||||||||||||||||
Borrowings | $ 658,000,000 | $ 165,000,000 | $ 1,041,450,000 | $ 744,667,000 | |||||||||||||
Repayments | (468,150,000) | $ (131,000,000) | (131,000,000) | (34,300,000) | $ (285,467,000) | ||||||||||||
Amortization of Forgiven Debt | (1,775,000) | ||||||||||||||||
PIK interest | 1,187,000 | ||||||||||||||||
Total debt | 1,924,412,000 | 1,735,150,000 | $ 1,735,150,000 | ||||||||||||||
Long-term debt | 1,924,412,000 | $ 1,735,150,000 | 1,701,150,000 | $ 1,735,150,000 | |||||||||||||
Unamortized Deferred Gain on Debt Forgiven | (132,827,000) | ||||||||||||||||
Principle Balance Outstanding | 1,791,585,000 | ||||||||||||||||
Drawdowns during the period | $ 33,000,000 | $ 84,000,000 | |||||||||||||||
Leverage ratio | 3.7 | 3.7 | |||||||||||||||
Midstates Sub | |||||||||||||||||
Long-Term Debt | |||||||||||||||||
Ownership interest (as a percent) | 100.00% | 100.00% | |||||||||||||||
Any time before October 1, 2016 | |||||||||||||||||
Long-Term Debt | |||||||||||||||||
Redemption price (as a percentage) | 100.00% | ||||||||||||||||
Sixth Amendment | Fiscal quarter ending December 31, 2015 | |||||||||||||||||
Long-Term Debt | |||||||||||||||||
Leverage ratio | 4.5 | ||||||||||||||||
Minimum | |||||||||||||||||
Long-Term Debt | |||||||||||||||||
Actual Debt to EBITDA | 1 | ||||||||||||||||
Maximum | |||||||||||||||||
Long-Term Debt | |||||||||||||||||
Leverage ratio | 1 | ||||||||||||||||
Senior Revolving Credit Facility, due 2018 | |||||||||||||||||
Long-Term Debt | |||||||||||||||||
Carrying Value, beginning balance | $ 435,150,000 | ||||||||||||||||
Borrowings | 33,000,000 | ||||||||||||||||
Repayments | $ (468,200,000) | (468,150,000) | |||||||||||||||
Carrying Value, ending balance | $ 435,150,000 | $ 435,150,000 | |||||||||||||||
Total debt | 435,150,000 | $ 401,150,000 | 435,150,000 | ||||||||||||||
Maximum borrowing capacity | 750,000,000 | 750,000,000 | 750,000,000 | ||||||||||||||
Borrowing base | 252,400,000 | $ 525,000,000 | $ 475,000,000 | ||||||||||||||
Drawdowns during the period | 0 | ||||||||||||||||
Outstanding letters of credit amount | $ 1,500,000 | $ 1,400,000 | $ 1,400,000 | ||||||||||||||
Weighted-average interest rate (as a percent) | 2.90% | 2.80% | 2.80% | 2.50% | 2.80% | ||||||||||||
Commitment fee, option one (as a percent) | 0.375% | 0.375% | |||||||||||||||
Commitment fee, option two (as a percent) | 0.50% | 0.50% | |||||||||||||||
Period during which Company may request additional redetermination of borrowing base | 6 months | 6 months | |||||||||||||||
Number of equal successive monthly payments to make repayment on reduction of borrowing base | item | 6 | 6 | |||||||||||||||
Period for commencement of repayment of equal successive monthly payments following the administrative agent's notice regarding borrowing base reduction | 30 days | 30 days | |||||||||||||||
Mortgage requirement- percentage of properties included in the borrowing base that are required to be subject to mortgages for the benefit of the lenders | 80.00% | ||||||||||||||||
Actual Debt to EBITDA | 3.7 | 3.7 | |||||||||||||||
Increase in borrowing capacity under the credit agreement | $ 252,400,000 | $ 252,400,000 | |||||||||||||||
Senior Revolving Credit Facility, due 2018 | Fiscal quarter ending December 31, 2015 | |||||||||||||||||
Long-Term Debt | |||||||||||||||||
Current ratio | 4 | ||||||||||||||||
Senior Revolving Credit Facility, due 2018 | Sixth Amendment | |||||||||||||||||
Long-Term Debt | |||||||||||||||||
Mortgage requirement- percentage of properties included in the borrowing base that are required to be subject to mortgages for the benefit of the lenders | 90.00% | ||||||||||||||||
Senior Revolving Credit Facility, due 2018 | Seventh Amendment | |||||||||||||||||
Long-Term Debt | |||||||||||||||||
Total Senior Indebtedness (as defined) to EBITDA | 1 | ||||||||||||||||
Senior Revolving Credit Facility, due 2018 | Seventh Amendment | Midstates Sub | |||||||||||||||||
Long-Term Debt | |||||||||||||||||
Increase in borrowing capacity under the credit agreement | $ 252,400,000 | ||||||||||||||||
Senior Revolving Credit Facility, due 2018 | Minimum | |||||||||||||||||
Long-Term Debt | |||||||||||||||||
Interest rate added to base rate (as a percent) | 2.00% | ||||||||||||||||
Percentage of outstanding loans and other obligations held by lenders, on whose behalf the administrative agent may request for redetermination of borrowing base | 67.00% | 67.00% | |||||||||||||||
Current ratio | 1 | 1 | |||||||||||||||
Minimum aggregate principal amount as a percentage of the then effective borrowing base as default provision | 5.00% | ||||||||||||||||
Senior Revolving Credit Facility, due 2018 | Minimum | LIBOR Loans | |||||||||||||||||
Long-Term Debt | |||||||||||||||||
Interest rate added to base rate (as a percent) | 2.00% | ||||||||||||||||
Senior Revolving Credit Facility, due 2018 | Maximum | |||||||||||||||||
Long-Term Debt | |||||||||||||||||
Interest rate added to base rate (as a percent) | 3.00% | ||||||||||||||||
Additional borrowing base redeterminations at company request per 6 month period following each scheduled borrowing base redetermination | item | 1 | 1 | |||||||||||||||
Senior Revolving Credit Facility, due 2018 | Maximum | LIBOR Loans | |||||||||||||||||
Long-Term Debt | |||||||||||||||||
Interest rate added to base rate (as a percent) | 3.00% | ||||||||||||||||
2020 Senior Notes, 2021 Senior Notes, Second Lien Notes and Third Lien Notes | Minimum | |||||||||||||||||
Long-Term Debt | |||||||||||||||||
Principal amount- debt default provision | $ 50,000,000 | ||||||||||||||||
Unsecured Notes | |||||||||||||||||
Long-Term Debt | |||||||||||||||||
Percentage of exchanged debt's par value | 70.00% | 80.00% | 80.00% | ||||||||||||||
2020 Senior Notes | |||||||||||||||||
Long-Term Debt | |||||||||||||||||
Carrying Value, beginning balance | $ 600,000,000 | ||||||||||||||||
Exchanges | (306,400,000) | $ 26,600,000 | $ 279,800,000 | (242,445,000) | |||||||||||||
Deferred Gain on Forgiven Debt | (63,930,000) | ||||||||||||||||
Carrying Value, ending balance | 293,625,000 | $ 600,000,000 | $ 600,000,000 | ||||||||||||||
Total debt | 600,000,000 | $ 600,000,000 | 600,000,000 | ||||||||||||||
Principle Balance Outstanding | $ 600,000,000 | 293,625,000 | |||||||||||||||
Stated Interest Rate (as a percent) | 10.75% | 10.75% | |||||||||||||||
Principal amount extinguished | 63,900,000 | ||||||||||||||||
Redemption price, upon the occurrence of certain change of control events (as a percentage) | 101 | ||||||||||||||||
Estimated fair value of the Notes | $ 121,100,000 | 327,000,000 | $ 327,000,000 | ||||||||||||||
Effective annual interest rate (as a percent) | 11.10% | ||||||||||||||||
2020 Senior Notes | Any time prior to October 1, 2015 | |||||||||||||||||
Long-Term Debt | |||||||||||||||||
Redemption period, start date | Oct. 1, 2012 | ||||||||||||||||
Redemption period, end date | Sep. 30, 2015 | Sep. 30, 2015 | |||||||||||||||
Redemption price, with net proceeds from equity offering (as a percentage) | 110.75% | ||||||||||||||||
2020 Senior Notes | Any time before October 1, 2016 | |||||||||||||||||
Long-Term Debt | |||||||||||||||||
Redemption period, start date | Oct. 1, 2012 | ||||||||||||||||
Redemption period, end date | Sep. 30, 2016 | Sep. 30, 2016 | |||||||||||||||
Redemption price (as a percentage) | 100.00% | ||||||||||||||||
2020 Senior Notes | Maximum | Any time prior to October 1, 2015 | |||||||||||||||||
Long-Term Debt | |||||||||||||||||
Percentage of aggregate principal amount can be redeemed with net proceeds of equity offering | 35.00% | ||||||||||||||||
2021 Senior Notes | |||||||||||||||||
Long-Term Debt | |||||||||||||||||
Carrying Value, beginning balance | $ 700,000,000 | ||||||||||||||||
Exchanges | 352,300,000 | 2,000,000 | $ 350,300,000 | (281,676,000) | |||||||||||||
Deferred Gain on Forgiven Debt | (70,672,000) | ||||||||||||||||
Carrying Value, ending balance | 347,652,000 | 700,000,000 | $ 700,000,000 | ||||||||||||||
Total debt | 700,000,000 | $ 700,000,000 | 700,000,000 | ||||||||||||||
Principle Balance Outstanding | $ 700,000,000 | 347,652,000 | |||||||||||||||
Stated Interest Rate (as a percent) | 9.25% | 9.25% | |||||||||||||||
Principal amount extinguished | 70,700,000 | ||||||||||||||||
Redemption price, upon the occurrence of certain change of control events (as a percentage) | 101 | ||||||||||||||||
Estimated fair value of the Notes | $ 137,800,000 | $ 357,000,000 | $ 357,000,000 | ||||||||||||||
Effective annual interest rate (as a percent) | 9.60% | 9.50% | |||||||||||||||
2021 Senior Notes | Midstates Sub | |||||||||||||||||
Long-Term Debt | |||||||||||||||||
Ownership interest (as a percent) | 100.00% | ||||||||||||||||
2021 Senior Notes | Any time prior to October 1, 2015 | |||||||||||||||||
Long-Term Debt | |||||||||||||||||
Redemption period, end date | May 31, 2016 | ||||||||||||||||
Redemption price (as a percentage) | 100.00% | ||||||||||||||||
2021 Senior Notes | Prior to June 1, 2016 | |||||||||||||||||
Long-Term Debt | |||||||||||||||||
Redemption period, start date | May 31, 2013 | ||||||||||||||||
Redemption period, end date | May 31, 2016 | ||||||||||||||||
Redemption price, with net proceeds from equity offering (as a percentage) | 109.25% | ||||||||||||||||
Redemption price (as a percentage) | 100.00% | ||||||||||||||||
2021 Senior Notes | Maximum | Prior to June 1, 2016 | |||||||||||||||||
Long-Term Debt | |||||||||||||||||
Percentage of aggregate principal amount can be redeemed with net proceeds of equity offering | 35.00% | ||||||||||||||||
Second Lien Notes | |||||||||||||||||
Long-Term Debt | |||||||||||||||||
Borrowings | $ 625,000,000 | ||||||||||||||||
Deferred Gain on Forgiven Debt | 47,082,000 | ||||||||||||||||
Amortization of Forgiven Debt | (896,000) | ||||||||||||||||
Carrying Value, ending balance | 671,186,000 | ||||||||||||||||
Unamortized Deferred Gain on Debt Forgiven | (46,186,000) | ||||||||||||||||
Principle Balance Outstanding | $ 625,000,000 | $ 625,000,000 | |||||||||||||||
Stated Interest Rate (as a percent) | 10.00% | 10.00% | |||||||||||||||
Estimated fair value of the Notes | $ 601,600,000 | ||||||||||||||||
Debt Instrument, Number of Days To File Registration Statement | 270 days | ||||||||||||||||
Third Lien Notes | |||||||||||||||||
Long-Term Debt | |||||||||||||||||
Exchanges | 524,121,000 | ||||||||||||||||
Deferred Gain on Forgiven Debt | 87,520,000 | ||||||||||||||||
Amortization of Forgiven Debt | (879,000) | ||||||||||||||||
PIK interest | 1,187,000 | ||||||||||||||||
Carrying Value, ending balance | 611,949,000 | ||||||||||||||||
Unamortized Deferred Gain on Debt Forgiven | (86,641,000) | ||||||||||||||||
Principle Balance Outstanding | $ 20,000,000 | $ 20,000,000 | $ 504,100,000 | $ 525,308,000 | |||||||||||||
Stated Interest Rate (as a percent) | 12.00% | ||||||||||||||||
PIK Interest | 2.00% | ||||||||||||||||
Estimated fair value of the Notes | $ 420,300,000 | ||||||||||||||||
Effective annual interest rate (as a percent) | 12.00% | ||||||||||||||||
Debt Instrument, Number of Days To File Registration Statement | 270 days | ||||||||||||||||
Cash interest rate | 10.00% |
Preferred Stock (Details)
Preferred Stock (Details) - USD ($) $ / shares in Units, $ in Millions | Sep. 30, 2015 | Mar. 30, 2015 | Sep. 28, 2012 | Jun. 30, 2015 | Jun. 30, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Series A Preferred Stock | |||||||
Series A Preferred Stock | |||||||
Rate of interest for preferred stock (as a percent) | 8.00% | 8.00% | 8.00% | ||||
Number of shares issued of convertible preferred stock to common stock | 3,738,442 | ||||||
Preferred stock, shares outstanding | 325,000 | 325,000 | 325,000 | 325,000 | |||
Mandatorily redeemable convertible preferred units | |||||||
Series A Preferred Stock | |||||||
Dividends payable | $ 13 | ||||||
Liquidation value (in dollars per share) | $ 1,241 | ||||||
Conversion rate for preferred stock (in dollars per share) | $ 110 | $ 11 | $ 11 | ||||
Number of Common Shares Issuable Upon Conversion | 71,893 | 2,659,792 | 2,459,127 | ||||
Notional dividend amount of convertible preferred stock | $ 7.9 | $ 29.3 | $ 27.1 | ||||
Minimum | Mandatorily redeemable convertible preferred units | Common Stock | |||||||
Series A Preferred Stock | |||||||
Additional shares of common stock to be issued upon conversion | 580,151 | ||||||
Maximum | Mandatorily redeemable convertible preferred units | Common Stock | |||||||
Series A Preferred Stock | |||||||
Additional shares of common stock to be issued upon conversion | 712,004 | ||||||
Eagle Property Acquisition | Mandatorily redeemable convertible preferred units | |||||||
Series A Preferred Stock | |||||||
Preferred stock, shares designated | 325,000 | ||||||
Liquidation value (in dollars per share) | $ 1,000 | ||||||
Rate of interest for preferred stock (as a percent) | 8.00% | 8.00% | |||||
Conversion rate for preferred stock (in dollars per share) | $ 135 | $ 13.50 | |||||
Period required to convert preferred stock into common stock | 15 days | 15 days | |||||
Eagle Property Acquisition | Minimum | Mandatorily redeemable convertible preferred units | |||||||
Series A Preferred Stock | |||||||
Conversion rate for preferred stock (in dollars per share) | $ 110 | $ 11 | |||||
Eagle Property Acquisition | Maximum | Mandatorily redeemable convertible preferred units | |||||||
Series A Preferred Stock | |||||||
Conversion rate for preferred stock (in dollars per share) | $ 135 | $ 13.50 | |||||
$110.00 | Series A Preferred Stock | |||||||
Series A Preferred Stock | |||||||
Conversion rate for preferred stock (in dollars per share) | $ 110 |
Equity and Share-Based Compen47
Equity and Share-Based Compensation (Details) - shares | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Common Stock | ||||
Changes in number of outstanding shares | ||||
Share count at the beginning of the period (in shares) | 7,049,173 | 6,892,574 | 6,661,971 | |
Grants of restricted stock (in shares) | 268,677 | 344,748 | 284,024 | 102,951 |
Forfeitures of restricted stock (in shares) | (60,843) | (188,149) | (53,421) | (4,415) |
Share count at the end of the period (in shares) | 7,257,007 | 7,049,173 | 6,892,574 | 6,661,971 |
Treasury Stock | ||||
Changes in number of outstanding shares | ||||
Share count at the beginning of the period (in shares) | (53,467) | (11,870) | ||
Acquisition of treasury stock (in shares) | (38,572) | (41,597) | (11,870) | |
Share count at the end of the period (in shares) | (92,039) | (53,467) | (11,870) |
Equity and Share-Based Compen48
Equity and Share-Based Compensation (Details 2) - Incentive units - USD ($) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2015 | Dec. 31, 2014 | |
Restricted Stock Awards | ||
Incentive units issued | 1,099 | 1,099 |
Stock-based compensation expense (in dollars) | $ 0 | $ 0 |
Equity and Share-Based Compen49
Equity and Share-Based Compensation (Details 3) - USD ($) $ / shares in Units, $ in Millions | 6 Months Ended | 12 Months Ended | |||
Jun. 30, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | May. 27, 2014 | Apr. 20, 2012 | |
Restricted stock awards | |||||
Shares | |||||
Non-vested shares outstanding at the beginning of the period | 306,201 | 296,367 | 98,535 | ||
Granted (in shares) | 268,677 | 344,748 | 284,024 | ||
Vested (in shares) | (136,479) | (146,764) | (32,772) | ||
Forfeited (in shares) | (60,843) | (188,150) | (53,420) | ||
Non-vested shares outstanding at the end of the period | 377,556 | 306,201 | 296,367 | ||
Weighted Average Grant Date Fair Value | |||||
Non-vested shares outstanding at the beginning of the period (in dollars per share) | $ 52.76 | $ 77.81 | $ 126.13 | ||
Granted (in dollars per share) | 12.29 | 46.61 | 68.22 | ||
Vested (in dollars per share) | 57.23 | 72.08 | 126.18 | ||
Forfeited (in dollars per share) | 47.06 | 65.83 | 86.46 | ||
Non-vested shares outstanding at the end of the period (in dollars per share) | $ 22.76 | $ 52.76 | $ 77.81 | ||
Additional information | |||||
Unrecognized expense, adjusted for estimated forfeitures (in dollars) | $ 6.4 | $ 10.9 | |||
Weighted-average period for over which unrecognized expense will be recognized | 1 year 9 months 18 days | 1 year 11 months 19 days | |||
2012 LTIP | |||||
Restricted Stock Awards | |||||
Number of shares available for future issuance | 863,843 | 656,343 | |||
Number of shares authorized | 863,843 | 863,843 | 863,843 | 656,343 | |
Additional information | |||||
Shares available for issuance | 170,271 | 378,105 | |||
2012 LTIP | Restricted stock awards | |||||
Restricted Stock Awards | |||||
Number of restricted common stock issued to directors, management and employees under the long term incentive plan (in shares) | 377,556 | 306,201 | |||
Vesting period | 3 years | 3 years | |||
Percentage of awards vesting on each anniversary of the grant | 33.33% | 33.00% | |||
2012 LTIP | Restricted stock awards | Directors | |||||
Restricted Stock Awards | |||||
Vesting period | 1 year | 1 year |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Income Taxes | ||||
Effective annual tax rate (as a percent) | 1.10% | |||
Federal statutory rate | 35.00% | 35.00% | 35.00% | 35.00% |
Valuation allowance in light of the impairment of oil and gas properties | $ 305,900 | $ (42,134) | $ 45,688 | |
Valuation allowance | 309,700 | |||
Current income taxes | $ 0 | $ 809 |
Net Loss Per Share (Details)
Net Loss Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Net Loss Per Share | |||||||
Net loss | $ (598,437) | $ (2,098) | $ (791,989) | $ (85,743) | $ 116,929 | $ (343,985) | $ (150,097) |
Preferred Dividend | (669) | (4,806) | (800) | (7,426) | (10,378) | (15,589) | (6,500) |
Net loss attributable to shareholders | (599,106) | (6,904) | (792,789) | (93,169) | 106,551 | (359,574) | (156,597) |
NET LOSS ATTRIBUTABLE TO COMMON SHAREHOLDERS | $ (599,106) | $ (6,904) | $ (792,789) | $ (93,169) | $ 67,271 | $ (359,574) | $ (156,597) |
Weighted average shares outstanding | 6,774,000 | 6,645,000 | 6,750,000 | 6,622,000 | 6,644,000 | 6,576,000 | 5,997,000 |
Net loss per common share - basic and diluted | $ (88.44) | $ (1.04) | $ (117.45) | $ (14.07) | $ 10.13 | $ (54.70) | $ (26.11) |
Aggregate number of common shares outstanding | 7,164,968 | 7,164,968 | 6,995,705 | 6,880,704 | |||
Restricted stock awards | |||||||
Net Loss Per Share | |||||||
Aggregate number of common shares outstanding | 377,556 | 377,556 | |||||
Series A Preferred Stock | |||||||
Net Loss Per Share | |||||||
Preferred Stock, Shares Outstanding | 325,000 | 325,000 | 325,000 | 325,000 | |||
Preferred Stock, Liquidation Preference Per Share | $ 1,241 | $ 1,241 | $ 387,808 | $ 358,550 | |||
Equivalent number of common shares after conversion of Series A preferred stock | 3,666,549 | ||||||
Conversion price (in dollars per share) | $ 110 | $ 110 |
CONDENSED CONSOLIDATED BALANC52
CONDENSED CONSOLIDATED BALANCE SHEETS $ in Thousands | Dec. 31, 2013USD ($) |
CURRENT ASSETS: | |
Cash and cash equivalents | $ 33,163 |
Accounts receivable: | |
Oil and gas sales | 102,483 |
Joint interest billing | 42,631 |
Other | 1,090 |
Commodity derivative contracts | 700 |
Deferred income taxes | 11,837 |
Other current assets | 693 |
Total current assets | 192,597 |
PROPERTY AND EQUIPMENT: | |
Oil and gas properties, on the basis of full cost accounting | 3,060,661 |
Other property and equipment | 11,113 |
Less accumulated depreciation, depletion, amortization and impairment | (976,880) |
Net property and equipment | 2,094,894 |
OTHER ASSETS: | |
Commodity derivative contracts | 19 |
Other noncurrent assets | 54,597 |
Total other assets | 54,616 |
TOTAL | 2,342,107 |
CURRENT LIABILITIES: | |
Accounts payable | 21,493 |
Accrued liabilities | 204,381 |
Commodity derivative contracts | 27,880 |
Total current liabilities | 253,754 |
LONG-TERM LIABILITIES: | |
Asset retirement obligations | 26,308 |
Commodity derivative contracts | 3,651 |
Long-term debt | 1,701,150 |
Deferred income taxes | 15,291 |
Other long-term liabilities | 1,954 |
Total long-term liabilities | $ 1,748,354 |
COMMITMENTS AND CONTINGENCIES (Note 15) | |
STOCKHOLDERS' EQUITY | |
Preferred stock | |
Common stock, $0.01 par value, 100,000,000 shares authorized; 7,049,173 shares issued and 6,995,705 shares outstanding at December 31, 2014 and 6,892,574 shares issued and 6,880,704 shares outstanding at December 31, 2013 | $ 69 |
Treasury stock | (664) |
Additional paid-in-capital | 871,667 |
Retained deficit | (531,076) |
Total stockholders' (deficit) equity | 339,999 |
TOTAL | 2,342,107 |
Series A Preferred Stock | |
STOCKHOLDERS' EQUITY | |
Preferred stock | 3 |
Total stockholders' (deficit) equity | $ 3 |
CONDENSED CONSOLIDATED BALANC53
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 100,000,000 | 100,000,000 | 100,000,000 |
Common stock, shares issued | 7,257,007 | 7,049,173 | 6,892,574 |
Common stock, shares outstanding | 7,164,968 | 6,995,705 | 6,880,704 |
Preferred Stock | |||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 49,675,000 | 49,675,000 | 49,675,000 |
Preferred stock, shares issued | 0 | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 | 0 |
Series A Preferred Stock | |||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | $ 0.01 |
Preferred stock, shares issued | 325,000 | 325,000 | 325,000 |
Preferred stock, shares outstanding | 325,000 | 325,000 | 325,000 |
Preferred stock, liquidation value (in dollars per share) | $ 1,241 | $ 387,808 | $ 358,550 |
Preferred stock, cumulative dividends (as a percent) | 8.00% | 8.00% | 8.00% |
CONDENSED CONSOLIDATED STATEM54
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
REVENUES : | |||||||
Oil sales | $ 67,498 | $ 131,273 | $ 126,755 | $ 247,495 | $ 466,655 | $ 387,226 | $ 218,430 |
Natural gas liquid sales | 10,239 | 23,020 | 21,249 | 48,539 | 87,771 | 62,340 | 23,617 |
Natural gas sales | 15,995 | 24,994 | 35,167 | 50,379 | 99,204 | 63,187 | 16,030 |
Gains (losses) on commodity derivative contracts - net | (19,293) | (31,467) | 2,079 | (54,140) | 139,189 | (44,284) | (11,158) |
Other | 315 | 170 | 678 | 379 | 1,364 | 1,037 | 754 |
Total revenues | 74,754 | 147,990 | 185,928 | 292,652 | 794,183 | 469,506 | 247,673 |
EXPENSES : | |||||||
Lease operating and workover | 21,758 | 19,721 | 45,020 | 39,848 | 79,598 | 73,414 | 30,500 |
Gathering and transportation | 3,931 | 2,940 | 7,369 | 5,795 | 13,404 | 5,455 | |
Severance and other taxes | 2,505 | 5,632 | 6,069 | 13,279 | 24,266 | 27,237 | 24,921 |
Asset retirement accretion | 390 | 432 | 835 | 929 | 1,706 | 1,435 | 723 |
Depreciation, depletion, and amortization | 55,255 | 71,074 | 113,683 | 137,975 | 269,935 | 250,396 | 125,561 |
Impairment in carrying value of oil and gas properties | 498,389 | 673,056 | 86,471 | 86,471 | 453,310 | ||
General and administrative | 11,461 | 13,434 | 23,115 | 25,118 | 48,733 | 53,250 | 30,541 |
Acquisition and transaction costs | 251 | 2,483 | 251 | 2,611 | 4,129 | 11,803 | 14,884 |
Other | 609 | 73 | 939 | 5,108 | 615 | ||
Total expenses | 628,338 | 116,325 | 905,612 | 312,965 | 533,350 | 876,915 | 227,130 |
OPERATING INCOME (LOSS) | (553,584) | 31,665 | (719,684) | (20,313) | 260,833 | (407,409) | 20,543 |
OTHER INCOME (EXPENSE) | |||||||
Interest income | 27 | 9 | 36 | 19 | 39 | 33 | 245 |
Interest expense - net of amounts capitalized | (44,880) | (33,813) | (81,382) | (67,760) | (137,548) | (83,138) | (12,999) |
Total other expense | (44,853) | (33,804) | (81,346) | (67,741) | (137,509) | (83,105) | (12,754) |
INCOME (LOSS) BEFORE TAXES | (598,437) | (2,139) | (801,030) | (88,054) | 123,324 | (490,514) | 7,789 |
Income tax benefit (expense) | 41 | 9,041 | 2,311 | (6,395) | 146,529 | (157,886) | |
NET LOSS | (598,437) | (2,098) | (791,989) | (85,743) | 116,929 | (343,985) | (150,097) |
Preferred stock dividend | (669) | (4,806) | (800) | (7,426) | (10,378) | (15,589) | (6,500) |
Participating securities - Series A Preferred Stock | 35,696 | ||||||
Participating securities - Non-vested Restricted Stock | 3,584 | ||||||
NET LOSS ATTRIBUTABLE TO COMMON SHAREHOLDERS | $ (599,106) | $ (6,904) | $ (792,789) | $ (93,169) | $ 67,271 | $ (359,574) | $ (156,597) |
Basic and diluted net loss per share attributable to common shareholders | $ (88.44) | $ (1.04) | $ (117.45) | $ (14.07) | $ 10.13 | $ (54.70) | $ (26.11) |
Basic and diluted weighted average number of common shares outstanding | 6,774 | 6,645 | 6,750 | 6,622 | 6,644 | 6,576 | 5,997 |
CONDENSED CONSOLIDATED STATEM55
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | |||
Net loss | $ 116,929 | $ (343,985) | $ (150,097) |
Adjustments to reconcile net loss to net cash provided by operating activities: | |||
(Gains) losses on commodity derivative contracts-net | (139,189) | 44,284 | 11,158 |
Net cash paid for commodity derivative contracts not designated as hedging instruments | (18,332) | (17,585) | (15,825) |
Asset retirement accretion | 1,706 | 1,435 | 723 |
Depreciation, depletion, and amortization | 269,935 | 250,396 | 125,561 |
Impairment in carrying value of oil and gas properties | 86,471 | 453,310 | |
Share-based compensation, net of amounts capitalized to oil and gas properties | 8,618 | 5,713 | 2,459 |
Deferred income taxes | 5,586 | (146,529) | 157,886 |
Amortization of deferred financing costs | 7,857 | 5,955 | 1,530 |
Change in operating assets and liabilities: | |||
Accounts receivable - oil and gas sales | 33,322 | (66,865) | (11,826) |
Accounts receivable - JIB and other | (18,897) | (18,002) | (3,249) |
Other current and noncurrent assets | 3,191 | (1,802) | (218) |
Accounts payable | 2,327 | (4,350) | (646) |
Accrued liabilities | (7,733) | 75,903 | 27,931 |
Other | (247) | (290) | (368) |
Net cash provided by operating activities | 351,544 | 237,588 | 145,019 |
CASH FLOWS FROM INVESTING ACTIVITIES: | |||
Investment in property and equipment | (556,397) | (584,220) | (430,102) |
Investment in acquired property | (620,112) | (351,276) | |
Proceeds from the sale of oil and gas properties | 152,133 | ||
Net cash used in investing activities | (404,264) | (1,204,332) | (781,378) |
CASH FLOWS FROM FINANCING ACTIVITIES: | |||
Proceeds from long-term borrowings | 165,000 | 1,041,450 | 744,667 |
Repayment of revolving credit facility | (131,000) | (34,300) | (285,467) |
Proceeds from issuance of mandatorily redeemable convertible preferred units | 65,000 | ||
Repayment of mandatorily redeemable convertible preferred units | (65,000) | ||
Proceeds from sale of common stock, net of initial public offering expenses of $6.4 million | 213,569 | ||
Deferred financing costs | (958) | (25,457) | (24,876) |
Acquisition of treasury stock | (1,928) | (664) | |
Net cash provided by (used in) financing activities | 31,114 | 981,029 | 647,893 |
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS | (21,606) | 14,285 | 11,534 |
Cash and cash equivalents, beginning of period | 33,163 | 18,878 | 7,344 |
Cash and cash equivalents, end of period | 11,557 | 33,163 | 18,878 |
SUPPLEMENTAL INFORMATION: | |||
Non-cash transactions - investments in property and equipment accrued - not paid | 95,000 | 106,500 | 87,812 |
Non-cash components of Business Acquisition Purchase Price: | |||
Preferred stock issued for property | 291,956 | ||
Non- cash components of Pine Prairie Disposition: | |||
Cash paid for interest, net of capitalized interest of $12.4 million, $32.2 million and $11.2 million, respectively | 129,511 | 72,085 | |
Cash paid for taxes | 209 | ||
Tax attributes contributed at IPO reorganization date by shareholding entities | 33,888 | ||
Eagle Property Acquisition | |||
Non-cash components of Business Acquisition Purchase Price: | |||
Preferred stock issued for property | 291,956 | ||
Deferred tax liability assumed | (727) | 26,712 | |
Asset retirement obligation assumed | 2,662 | ||
Accrual for additional consideration | (941) | $ 1,500 | |
Anadarko Basin Acquisition | |||
Non-cash components of Business Acquisition Purchase Price: | |||
Asset retirement obligation assumed | 6,296 | ||
Accrual for miscellaneous liabilities assumed | (344) | $ 3,030 | |
Pine Prairie Disposition | |||
Non- cash components of Pine Prairie Disposition: | |||
Asset retirement obligation disposed | (7,652) | ||
Accrual for miscellaneous liabilities released | (2,185) | ||
Other non currents sold | $ 371 |
CONDENSED CONSOLIDATED STATEM56
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) - USD ($) $ in Millions | 6 Months Ended | 12 Months Ended | |||
Jun. 30, 2015 | Jun. 30, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||
Initial public offering expenses | $ 6.4 | ||||
Capitalized interest | $ 2.1 | $ 8 | $ 12.4 | $ 32.2 | $ 11.2 |
Organization and Business57
Organization and Business | 6 Months Ended | 12 Months Ended |
Jun. 30, 2015 | Dec. 31, 2014 | |
Organization and Business | ||
Organization and Business | 1. Organization and Business Midstates Petroleum Company, Inc., through its wholly owned subsidiary Midstates Petroleum Company LLC, engages in the business of drilling for, and production of, oil, natural gas liquids ("NGLs") and natural gas. Midstates Petroleum Company, Inc. was incorporated pursuant to the laws of the State of Delaware on October 25, 2011 to become a holding company for Midstates Petroleum Company LLC ("Midstates Sub"), which was previously a wholly owned subsidiary of Midstates Petroleum Holdings LLC ("Holdings LLC"). The terms "Company," "we," "us," "our," and similar terms refer to Midstates Petroleum Company, Inc. and its subsidiary, unless the context indicates otherwise. The Company has oil and gas operations and properties in Oklahoma, Texas and Louisiana. The Company operated oil and natural gas properties as one reportable segment engaged in the exploration, development and production of oil, natural gas liquids and natural gas. The Company's management evaluates performance based on one reportable segment as all our operations are located in the United States and therefore we maintain one cost center. | 1. Organization and Business Midstates Petroleum Company, Inc., through its wholly-owned subsidiary Midstates Petroleum Company LLC, engages in the business of drilling for, and production of, oil, natural gas liquids ("NGL") and natural gas. Midstates Petroleum Company, Inc. was incorporated pursuant to the laws of the State of Delaware on October 25, 2011 to become a holding company for Midstates Petroleum Company LLC ("Midstates Sub"), which was previously a wholly-owned subsidiary of Midstates Petroleum Holdings LLC ("Holdings LLC"). Pursuant to the terms of a corporate reorganization that was completed in connection with the closing of Midstates Petroleum Company, Inc.'s initial public offering, all of the interests in Midstates Petroleum Holdings LLC were exchanged for newly issued common shares of Midstates Petroleum Company, Inc., and as a result, Midstates Petroleum Company LLC became a wholly-owned subsidiary of Midstates Petroleum Company, Inc. and Midstates Petroleum Holdings LLC ceased to exist as a separate entity. The terms "Company," "we," "us," "our," and similar terms when used in the present tense, prospectively or for historical periods since April 25, 2012, refer to Midstates Petroleum Company, Inc. and its subsidiary, and for historical periods prior to April 25, 2012, refer to Midstates Petroleum Holdings LLC and its subsidiary, unless the context indicates otherwise. The term "Holdings LLC" refers solely to Midstates Petroleum Holdings LLC prior to the corporate reorganization. On April 25, 2012, the Company completed its initial public offering of common stock pursuant to a registration statement on Form S-1 (File 333-177966), as amended and declared effective by the SEC on April 19, 2012. Pursuant to the registration statement, the Company registered the offer and sale of 2,760,000 shares of $0.01 par value common stock, which included 600,000 shares of stock sold by the selling shareholders and 360,000 shares of common stock sold by the selling shareholders pursuant to an option granted to the underwriters to cover over-allotments. The Company's sale of the shares in its initial public offering closed on April 25, 2012 and its initial public offering terminated upon completion of the closing. The proceeds of the Company's initial public offering, based on the public offering price of $130.00 per share, were approximately $358.8 million. After subtracting underwriting discounts and commissions of $21.5 million and the net proceeds to the selling stockholders of $117.3 million, the Company received net proceeds of approximately $220.0 million from the registration and sale of 1,800,000 common shares (or $213.6 million net of offering expenses paid directly by the Company). The Company used $67.1 million of the net proceeds to redeem convertible preferred units in Holdings LLC, including interest and other charges, and $99.0 million to pay down a portion of the borrowings under its revolving credit facility. The Company used the remaining $47.5 million to fund the execution of its growth strategy through its drilling program. The Company did not receive any of the proceeds from the sale of the 960,000 shares by the selling stockholders. Immediately after the initial public offering and exercise of the over-allotment option granted to the underwriters, First Reserve Midstates Interholding LP and its affiliates owned approximately 41.4% of the Company's outstanding common stock. On October 1, 2012, the Company closed on the acquisition of all of Eagle Energy Production, LLC's producing properties as well as its developed and undeveloped acreage primarily in the Mississippian Lime liquids play in Oklahoma and Kansas for $325 million in cash and 325,000 shares of the Company's Series A Preferred Stock with an initial liquidation preference value of $1,000 per share (the "Eagle Property Acquisition"). The Company funded the cash portion of the Eagle Property Acquisition purchase price with a portion of the net proceeds from the private placement of $600 million in aggregate principal amount of 10.75% senior unsecured notes due 2020, which also closed on October 1, 2012 ("2020 Senior Notes"). On May 31, 2013, the Company closed on the acquisition of producing properties and undeveloped acreage in the Anadarko Basin in Texas and Oklahoma from Panther Energy Company, LLC and its partners for approximately $618 million in cash (the "Anadarko Basin Acquisition"), before customary post-closing adjustments. The Company funded the purchase price with a portion of the net proceeds from the private placement of $700 million in aggregate principal amount of 9.25% senior unsecured notes due 2021, which also closed on May 31, 2013 ("2021 Senior Notes"). On March 5, 2014, the Company executed a Purchase and Sale Agreement ("PSA") to sell all of its ownership interest in developed and undeveloped acreage in the Pine Prairie field area of Evangeline Parish, Louisiana to a private buyer for net proceeds of $147.7 million in cash (the "Pine Prairie Disposition"). Acreage subject to the transaction did not include acreage and production in the western part of Louisiana in Beauregard or Calcasieu Parishes or other undeveloped acreage held outside the Pine Prairie field. The sale closed on May 1, 2014. At December 31, 2014, the Company has oil and gas operations and properties in Oklahoma, Texas and Louisiana and operated the oil and natural gas properties as one reportable segment engaged in the exploration, development and production of oil, natural gas liquids and natural gas. The Company's management evaluated performance based on one reportable segment as there were not significantly different economic or operational environments within its oil and natural gas properties. All pro forma and per share information presented in the accompanying consolidated financial statements have been adjusted to reflect the effects of the Company's initial public offering. |
Liquidity and Capital Resourc58
Liquidity and Capital Resources | 6 Months Ended | 12 Months Ended |
Jun. 30, 2015 | Dec. 31, 2014 | |
Liquidity and Capital Resources | ||
Liquidity and Capital Resources | 2. Liquidity and Capital Resources As a result of substantial declines in oil, natural gas liquids and natural gas prices during the latter half of 2014 and continuing into 2015, we expect lower operating cash flows than previously experienced and if commodity prices continue to remain low, our liquidity will be impacted as current hedging contracts expire. During the three and six months ended June 30, 2015, the Company received cash payments on settled derivative contracts of $42.2 million and $94.8 million, respectively. The weighted average fixed price of the Company's derivatives for the second half of 2015 are lower than the weighted average fixed price for the first half of 2015, and the Company currently has no derivatives for any period subsequent to 2015. As such, the cash payments received during the first half of 2015 could significantly decrease in the second half of 2015, and such cash payments will not be received in 2016 and future periods due to the expiration of our hedging contracts. The interest payment obligations of the Company are substantial and the uncertainty associated with the Company's ability to meet commitments as they come due or to repay outstanding debt raises substantial doubt about the Company's ability to continue as a going concern. The Company received a going concern qualification from its independent registered public accounting firm for the year ended December 31, 2014, but obtained a waiver to the reserve based revolving credit facility ("the Credit Facility") waiving any default as a result of receiving such qualification. The accompanying financial statements do not include any adjustments that might result from the uncertainty associated with the Company's ability to meet obligations as they come due. As a result of the commodity price decline and the Company's substantial debt burden, the Company took steps to increase its liquidity and amended certain debt covenants. On April 21, 2015, the Company closed on the sale of certain of its oil and gas properties in Beauregard and Calcasieu Parishes, Louisiana (the "Dequincy Divestiture"), for approximately $44.0 million, before customary post-closing adjustments. The net proceeds from the Dequincy Divestiture were retained for general corporate purposes. On May 21, 2015, the Company sold $625.0 million of 10.0% Second Lien Senior Secured Notes due 2020 (the "Second Lien Notes") and utilized the proceeds to repay the outstanding balance of the Credit Facility of approximately $468.2 million, with the remainder to be utilized for general corporate purposes. Further, the Company exchanged approximately $504.121 million of 12.0% Third Lien Senior Secured Notes due 2020 (the "Third Lien Notes") for approximately $279.8 million of 10.75% Senior Unsecured Notes due 2020 (the "2020 Senior Notes") and $350.3 million of 9.25% Senior Unsecured Notes due 2021 (the "2021 Senior Notes" together with the 2020 Senior Notes, the "Unsecured Notes"), representing an exchange at 80.0% of the exchanged Unsecured Notes' par value. Additionally, on June 2, 2015, the Company exchanged approximately $20.0 million of Third Lien Notes for approximately $26.6 million of 2020 Senior Notes and $2.0 million of 2021 Senior Notes, representing an exchange at 70.0% of the exchanged Unsecured Notes' par value. The Company also entered into a Seventh Amendment to the Credit Facility ("Seventh Amendment") which provided that upon completion of the Second Lien Notes and Third Lien Notes exchange, the borrowing base of the Credit Facility would be reduced to $252.4 million. The Seventh Amendment also provided additional covenant flexibility. For further information regarding the Second Lien Notes, Third Lien Notes and updates to the Company's debt covenants, see "—Note 10. Long-Term Debt." The Dequincy Divestiture, the issuance of the Second Lien Notes and the exchange of the Third Lien Notes increased the Company's cash balance, increased the amount of borrowings available under the Credit Facility and as a result, increased the liquidity of the Company. | 2. Liquidity and Capital Resources As of December 31, 2014, the Company had available cash of approximately $11 million and availability under the reserve based revolving credit facility (the "Credit Facility") of approximately $90 million. If there is a downward revision in estimates of proved reserves, the borrowing base for the revolving credit facility may be reduced, and as a result, available liquidity will be reduced. As of December 31, 2014, payments due on contractual obligations during the next twelve months are approximately $150 million. This includes approximately $130 million of interest payments on the senior notes and other operating expenses such as fixed drilling commitments and operating leases. The Company expects it will need to complete certain transactions, including management of debt capital structure and potential asset sales, to have sufficient liquidity to satisfy these obligations in the long-term. The liquidity outlook has changed since December 31, 2014 primarily as a result of the substantial decrease in oil and gas prices. This has resulted in lower operating cash flows than expected and if commodity prices remain low compared to recent historical prices, will result in future significantly lower levels of operating cash flows as current hedging contracts expire. As a result of the commodity price decline and the Company's substantial debt burden, the Company believes that forecasted cash and available credit capacity are not expected to be sufficient to meet commitments as they come due over the next twelve months and that the Company will not be able to remain in compliance with current debt covenants unless able to successfully increase liquidity. Additionally, the terms of the Credit Facility and the indentures governing the senior notes require that some or all of the proceeds from certain asset sales be used to permanently reduce outstanding debt which could substantially reduce the amount of proceeds retained, and the covenants in these debt instruments impose limitations on the amount and type of additional indebtedness the Company can incur, which may significantly reduce the ability to obtain liquidity through the incurrence of additional indebtedness. Furthermore, the ability to refinance any of the existing indebtedness on commercially reasonably terms may be materially and adversely impacted by the current conditions in the energy industry and the Company's financial condition. The Company is currently pursuing a number of actions including (i) actively managing the debt capital structure, (ii) selling additional assets, (iii) minimizing capital expenditures, (iv) obtaining waivers or amendments from lenders, (v) effectively managing working capital and (vi) improving cash flows from operations. There can be no assurance that sufficient liquidity can be raised from one or more of these actions or that these actions can be consummated within the period needed to meet certain obligations. The interest payment obligations are substantial, and the Company will be required to pay approximately $32 million in interest on the 2020 Senior Notes on each of April 1 and October 1 and approximately $32 million in interest on the 2021 Senior Notes on each of June 1 and December 1. The Company has obtained a waiver to the Credit Facility waiving any default as a result of delivering an auditors' opinion in connection with the 2014 financial statements that includes a going concern qualification. As the Company pursues the actions mentioned above to increase liquidity, it may need to negotiate additional waivers or amendments to the Credit Facility or indentures to facilitate those actions. There can be no assurance that the lenders or the holders of the senior notes will agree to any amendment or waiver on acceptable terms and if a default occurs, a failure to do so may provide the lenders the opportunity to accelerate the outstanding debt under these facilities and it would be classified as a current liability on the balance sheet. The uncertainty associated with the ability to meet commitments as they come due or to repay outstanding debt raises substantial doubt about the ability to continue as a going concern. The accompanying financial statements do not include any adjustments related to the recoverability and classification of recorded assets or the amounts and classification of liabilities that might result from the uncertainty associated with the ability to meet obligations as they come due. As of December 31, 2014, the ratio of net consolidated indebtedness to EBITDA was 3.7:1.0 and the ratio of current assets to current liabilities was 1.1:1.0. If liquidity concerns are not addressed in the near-term, the Company may breach the leverage covenant of our Credit Facility, in the third quarter of 2015 which currently requires a maximum ratio of net consolidated indebtedness to EBITDA of 4.0:1.0 beginning with the quarter ended March 31, 2015. As of December 31, 2014, the Company was in compliance with the financial ratio covenants included in the Credit Facility. If oil, NGL, natural gas prices remain weak or deteriorate, the borrowing base under the Credit Facility may be reduced. Any reduction in the borrowing base will reduce our available liquidity, and, if the reduction results in the outstanding amount under the facility exceeding the borrowing base, the Company will be required to repay the deficiency within 30 days or in six monthly installments thereafter, at the Company's election. The Company may not have the financial resources to make any mandatory deficiency principal repayments, which could result in an event of default under the Credit Facility. The debt facilities contain significant cross default and/or cross acceleration provisions where a default under the Credit Facility or one of the indentures could enable the lenders of the other debt to also declare events of default and accelerate repayment of the obligations under those debt instruments. In general, these cross default/cross acceleration provisions are as follows: • The Credit Facility allows the lenders to declare an event of default if there is an event of default on other indebtedness and that default: (i) is the result of the failure to make any payment when due in respect of other indebtedness having an aggregate principal amount of at least 5% of the then effective borrowing base and such failure continues after the applicable grace or notice period; or (ii) is the result of a failure to perform any condition, covenant or other event and such failure permits the holders of such other indebtedness to cause the acceleration of such other indebtedness. • The indentures governing the senior notes allow the lenders to declare an event of default if there is an event of default on other indebtedness and that default: (i) is caused by a failure to make any payment of principal prior to the expiration of the grace period following the final maturity date of such indebtedness; or (ii) results in the acceleration of such indebtedness prior to its stated maturity, and, in each case, the principal amount of any such indebtedness, together with the principal amount of any other indebtedness with respect to which an event described herein has occurred, aggregates $50.0 million or more. In March 2015, the Company received a waiver related to the requirement that an unqualified auditors' opinion without an explanatory paragraph in relation to going concern accompany the 2014 financial statements. |
Summary of Significant Accoun59
Summary of Significant Accounting Policies | 6 Months Ended | 12 Months Ended |
Jun. 30, 2015 | Dec. 31, 2014 | |
Summary of Significant Accounting Policies | ||
Summary of Significant Accounting Policies | 3. Summary of Significant Accounting Policies These interim financial statements are unaudited and have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC") regarding interim financial reporting. Certain disclosures have been condensed or omitted from these financial statements. Accordingly, they do not include all of the information and notes required by accounting principles generally accepted in the United States of America ("GAAP") for complete consolidated financial statements, and should be read in conjunction with the audited consolidated financial statements and notes thereto for the year ended December 31, 2014 included herein. All intercompany transactions have been eliminated in consolidation. In the opinion of the Company's management, the accompanying unaudited condensed consolidated financial statements include all adjustments, consisting of normal recurring adjustments, necessary to fairly present the financial position as of, and the results of operations for, all periods presented. In preparing the accompanying condensed consolidated financial statements, management has made certain estimates and assumptions that affect reported amounts in the condensed consolidated financial statements and disclosures of contingencies. Actual results may differ from those estimates. The results for interim periods are not necessarily indicative of annual results. On August 3, 2015, the Company completed a 1-for-10 reverse stock split of its outstanding common stock. To effect the reverse stock split, the Company filed a Certificate of Amendment to the Company's Restated Certificate of Incorporation, which provides for the reverse stock split and for the corresponding reduction in the Company's authorized capital stock to 100 million shares of common stock, $0.01 par value per share, following the reverse stock split. The condensed consolidated financial statements and notes to the condensed consolidated financial statements included in this document give retrospective effect to the reverse stock split for all periods presented. In May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update 2014-09, "Revenue from Contracts with Customers (Topic 606)" ("ASU 2014-09"). ASU 2014-09 provides guidance concerning the recognition and measurement of revenue from contracts with customers. The objective of ASU 2014-09 is to increase the usefulness of information in the financial statements regarding the nature, timing and uncertainty of revenues. ASU 2014-09 requires an entity to (i) identify the contract(s) with a customer, (ii) identify the performance obligations in the contract(s), (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations in the contract(s), and (v) recognize revenue when, or as, the entity satisfies a performance obligation. ASU 2014-09 will be effective for the Company beginning on January 1, 2018, including interim periods within that reporting period, considering the one year deferral approved by the FASB on July 9, 2015. The standard permits the use of either the retrospective or cumulative effect transition method. Early adoption is permitted. The Company has not selected a transition method and is evaluating the impact this standard will have on its consolidated financial statements and related disclosures. In April 2015, the FASB issued Accounting Standards Update 2015-03, "Interest—Imputation of Interest: Simplifying the Presentation of Debt Issuance Costs (Topic 835)". The update requires debt issuance costs related to a recognized debt liability be presented on the balance sheet as a direct deduction from the carrying amount of that debt liability. The standard should be applied retrospectively and is effective for the Company beginning on January 1, 2016. The Company does not believe the adoption of this guidance will have a material impact on its financial position, results of operations or cash flows. In the first quarter of 2015, the Company determined that it had incorrectly presented non-cash accrued capital expenditures in its Statements of Cash Flows since December 31, 2012. Management concluded the misstatement is immaterial to previously issued financial statements; however, the Company has corrected the cash flow presentation in the accompanying Condensed Consolidated Statement of Cash Flows for the six months ended June 30, 2014. There was no impact of the misstatement on the Condensed Consolidated Balance Sheet as of December 31, 2014, or on the Condensed Consolidated Statement of Operations for the three or six months ended June 30, 2014. The impact of the correction is shown in the following table (in thousands): For the Six Months Statement of Cash Flows As Previously As Restated Change in operating assets and liabilities: accounts receivable—JIB and other 1,929 (1,557 ) Net cash provided by operating activities 177,047 173,561 Investment in property and equipment (279,033 ) (275,547 ) Net cash used in investing activities (131,514 ) (128,028 ) | 3. Summary of Significant Accounting Policies The accompanying consolidated financial statements of the Company have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC") and have been prepared in accordance with generally accepted accounting principles in the United States of America ("GAAP"). All intercompany transactions have been eliminated in consolidation. The consolidated financial statements as of and for the year ended December 31, 2014 include the results of the Pine Prairie field from January 1, 2014 through May 1, 2014, the date of disposition. The consolidated financial statements as of and for the year ended December 31, 2013 include the results from the Anadarko Basin Acquisition beginning May 31, 2013. The consolidated financial statements as of and for the year ended December 31, 2012 include the results from the Eagle Property Acquisition beginning October 1, 2012. On August 3, 2015, the Company completed a 1-for-10 reverse stock split of its outstanding common stock. To effect the reverse stock split, the Company filed a Certificate of Amendment to the Company's Restated Certificate of Incorporation, which provides for the reverse stock split and for the corresponding reduction in the Company's authorized capital stock to 100 million shares of common stock, $0.01 par value per share, following the reverse stock split. The conversion prices for the Series A Preferred Stock were automatically adjusted to reflect the reverse stock split. The consolidated financial statements and notes to the consolidated financial statements included in this document give retrospective effect to the reverse stock split for all periods presented. In the first quarter of 2015, the Company determined that it had incorrectly presented non-cash accrued capital expenditures in its Statements of Cash Flows since December 31, 2012. Management concluded the misstatement was immaterial to previously issued financial statements; however, the Company has elected to correct the cash flow presentation in the accompanying Consolidated Statement of Cash Flows for the years ended December 31, 2014, 2013 and 2012, as shown in the table below. There is no impact to the Consolidated Balance Sheets as of December 31, 2014 and 2013, or the Consolidated Statements of Operations for the years ended December 31, 2014, 2013 and 2012. For the Twelve Months Ended December 31, 2014 2013 2012 Statement of Cash Flows As As As As As As (in thousands) Change in operating assets and liabilities: accounts receivable—JIB and other (13,603 ) (18,897 ) (28,488 ) (18,002 ) (11,019 ) (3,249 ) Net cash provided by operating activities 356,838 351,544 227,102 237,588 137,249 145,019 Investment in property and equipment (561,691 ) (556,397 ) (573,734 ) (584,220 ) (422,332 ) (430,102 ) Net cash used in investing activities (409,558 ) (404,264 ) (1,193,846 ) (1,204,332 ) (773,608 ) (781,378 ) The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates include, but are not limited to, the amount of recoverable oil and natural gas reserves; future cash flows from oil and natural gas properties; the fair value of commodity derivative contracts; the fair value of share-based compensation; and the valuation of future asset retirement obligations. The Company considers all short-term investments with an original maturity of three months or less to be cash equivalents. Accounts receivable are stated at the historical carrying amount net of allowance for uncollectible accounts. The carrying amount of the Company's accounts receivable approximate fair value because of the short-term nature of the instruments. The Company accrues a reserve on a receivable when, based on the judgment of management, it is probable that a receivable will not be collected and the amount of any reserve may be reasonably estimated. As of December 31, 2014 and 2013, the Company had no allowance for doubtful accounts. The Company's financial instruments consist of cash and cash equivalents, receivables, payables, debt, and commodity derivative contracts. Commodity derivative contracts are recorded at fair value (see Note 4). Based upon recent amendments to the Company's Credit Facility, the Company believes the carrying amount of the related floating-rate debt approximates fair value due to the variable nature of the interest rate and the current secured financing terms available to the Company. See fair value discussion of Senior Notes and Series A Preferred Shares issued in October 2012 in Notes 9 and 10, respectively. The carrying amount of the Company's other financial instruments approximate fair value because of the short term nature of the items or variable pricing. Derivative financial instruments are recorded in the consolidated balance sheets as either an asset or liability measured at estimated fair value. Changes in the derivative's fair value are recognized currently in earnings as gains and losses in the period of change. The gains or losses are recorded in "Gains (losses) on commodity derivative contracts—net." The related cash flow impact is reflected within cash flows from operating activities. At December 31, 2014 and 2013, other noncurrent assets consisted of the following: At December 31, 2014 2013 (in thousands) Deferred financing costs 37,807 44,706 Field equipment inventory 5,713 9,682 Other 211 209 ​ ​ ​ ​ ​ ​ ​ Other noncurrent assets 43,731 54,597 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ During the year ended December 31, 2014, the Company has recorded approximately $5.9 million in adjustments to field equipment inventory, either as a result of physical inventory counts, disposals or market adjustments; this is offset by additional inventory added during the period of approximately $1.8 million. For the years ended December 31, 2014 and 2013, the Company recorded $4.1 million and $0.6 million, respectively, of losses on sale of, or market value adjustments to, field equipment inventory. The Company uses the full-cost method of accounting for its exploration and development activities. Under this method of accounting, the cost of both successful and unsuccessful exploration and development activities are capitalized as property and equipment. This includes any internal costs that are directly related to exploration and development activities, but does not include any costs related to production, general corporate overhead or similar activities. Proceeds from the sale or disposition of oil and gas properties are accounted for as a reduction to capitalized costs unless a significant portion of the Company's reserve quantities are sold that results in a significant alteration of the relationship between capitalized costs and remaining proved reserves, in which case a gain or loss is generally recognized in income. Oil and gas unevaluated properties and properties under development include costs that are not being depleted or amortized. These costs represent investments in unproved properties. The Company excludes these costs until proved reserves are found, until it is determined that the costs are impaired or until major development projects are placed in service, at which time the costs are moved into oil and natural gas properties subject to amortization. All unproved property costs are reviewed at least annually to determine if impairment has occurred. Based on current pricing and current drilling plans, we impaired the remaining Anadarko Basin unevaluated property to the full cost pool during the fourth quarter of 2014. Proved oil, NGLs and natural gas reserves utilized in the preparation of the consolidated financial statements are estimated in accordance with the rules established by the SEC and the Financial Accounting Standards Board (FASB), which require that reserve estimates be prepared under existing economic and operating conditions using a 12-month average price with no provision for price and cost escalations in future years except by contractual arrangements. Reserve estimates are inherently imprecise. Accordingly, the estimates are expected to change as more current information becomes available. The Company depletes its oil and gas properties using the units-of-production method. Capitalized costs of oil and natural gas properties subject to amortization are depleted over proved reserves. It is possible that, because of changes in market conditions or the inherent imprecision of reserve estimates, the estimates of future cash inflows, future gross revenues, the amount of oil and natural gas reserves, the remaining estimated lives of oil and natural gas properties, or any combination of the above may be increased or reduced. Increases in recoverable economic volumes generally reduce per unit depletion rates while decreases in recoverable economic volumes generally increase per unit depletion rates. The Company performs a full-cost ceiling test on a quarterly basis. The test establishes a limit (ceiling) on the book value of oil and gas properties. The capitalized costs of proved oil and gas properties, net of accumulated depreciation, depletion and amortization (DD&A) and the related deferred income taxes, may not exceed this "ceiling." The ceiling limitation is equal to the sum of: (i) the present value of estimated future net revenues from the projected production of proved oil and gas reserves, excluding future cash outflows associated with settling asset retirement obligations accrued on the balance sheet, calculated using the average oil and natural gas sales price received by the Company as of the first trading day of each month over the preceding twelve months (such prices are held constant throughout the life of the properties) and a discount factor of 10%; (ii) the cost of unproved and unevaluated properties excluded from the costs being amortized; (iii) the lower of cost or estimated fair value of unproved properties included in the costs being amortized; and (iv) related income tax effects. If capitalized costs exceed this ceiling, the excess is charged to expense in the accompanying consolidated statements of operations. For the year ended December 31, 2014, an impairment of oil and gas properties of $83.5 million, after tax, was recorded. For the year ended December 31, 2013, capitalized costs exceeded the ceiling and an impairment of oil and gas properties of $319.6 million, after tax, was recorded. The most significant factors affecting the impairment related to the transfer of unevaluated property costs to the full cost pool and negative reserve revisions in certain areas. During 2014, the Company transferred $59.2 million of Mississippian unevaluated property costs to the full cost pool. These costs were attributable to leases that either expired during 2014, were determined to not be prospective, or that were assigned proved reserves to previously unproved acreage as a result of the Company's development drilling activities. The Company also transferred $128.2 million of Anadarko Basin and $16.5 million of Gulf Coast unevaluated property costs based up on our lack of plans for further evaluation or development of those leases in the current commodity price environment. During 2013, the Company transferred $61.2 million of Gulf Coast unevaluated property costs to the full cost pool based upon our lack of future plans for further evaluation or development of those leases and $168.4 million of Mississippian unevaluated property costs attributable to leases that expired during 2013 or that were assigned to proved reserves as a result of the Company's drilling activities. The Company also transferred $89.6 million of Anadarko Basin unevaluated costs due primarily to lease expirations and development drilling. The negative reserve revisions in our Gulf Coast area were mainly attributable to variability in well performance, our decision during the second quarter of 2013 to halt further development in our West Gordon field and unfavorable cost revisions. See Note 6. DD&A of oil and gas properties is calculated using the Units of Production Method (UOP). The UOP calculation, in its simplest terms, multiplies the percentage of estimated proved reserves produced by the cost of those reserves. The result is to recognize expense at the same pace that the reserves are estimated to be depleting. The amortization base in the UOP calculation includes the sum of proved property costs net of accumulated DD&A, estimated future development costs (future costs to access and develop proved reserves) and asset retirement costs that are not already included in oil and gas property, less related salvage value. Interest from external borrowings is capitalized on unevaluated properties using the weighted-average cost of outstanding borrowings until the project is substantially complete and ready for its intended use, which for oil and gas assets is at the first production from the field. Capitalized interest is depleted over the useful lives of the assets in the same manner as the depletion of the underlying assets. The Company paid cash interest of $141.9 million, $104.3 million, and $7.2 million for the years ended December 31, 2014, 2013 and 2012, respectively. Other property and equipment consists of vehicles, furniture and fixtures, and computer hardware and software and are carried at cost. Depreciation is provided principally using the straight-line method over the estimated useful lives of the assets, which primarily range from three to seven years. Maintenance and repairs are charged to expense as incurred, while renewals and betterments are capitalized. At December 31, 2014 and 2013, accrued liabilities consisted of the following: At December 31 2014 2013 (in thousands) Accrued oil and gas capital expenditures 76,398 87,202 Accrued revenue and royalty distributions 51,292 64,370 Accrued lease operating and workover expense 10,113 8,279 Accrued interest 21,521 21,341 Accrued taxes 4,226 4,386 Other 20,281 18,803 ​ ​ ​ ​ ​ ​ ​ Accrued liabilities 183,831 204,381 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ The legal obligations associated with the retirement of long-lived assets are recognized at estimated fair value at the time that the obligation is incurred. Oil and gas producing companies incur such a liability upon acquiring or drilling a well. The Company estimates the fair value of an asset retirement obligation in the period in which the obligation is incurred and can be reliably measured. The corresponding asset retirement cost is capitalized by increasing the carrying amount of the related long-lived asset. The liability is accreted to its then present value each period, and the capitalized cost is depreciated over the useful life of the related asset. If the liability is settled for an amount other than the recorded amount, any adjustment is recorded in the full cost pool. See Note 8. We measure share-based compensation cost at fair value and generally recognize the corresponding compensation expense on a straight-line basis over the service period during which awards are expected to vest. We include share-based compensation expense, net of amounts capitalized to oil and gas properties, in "General and administrative expense" in our consolidated statements of operations. See Note 11. Oil, NGLs and natural gas revenues are recognized when production is sold to a purchaser at a fixed or determinable price, when delivery has occurred and title has transferred and collection of the revenues is reasonably assured. Cash received relating to future revenues is deferred and recognized when all revenue recognition criteria are met. The Company follows the sales method of accounting for oil and gas revenues, whereby revenue is recognized for all oil and gas sold to purchasers regardless of whether the sales are proportionate to the Company's ownership interest in the property. Production imbalances are recognized as a liability to the extent an imbalance on a specific property exceeds the Company's share of remaining proved oil and gas reserves. The Company had no significant imbalances at December 31, 2014 or 2013. Acquisition and transaction related costs are expensed as incurred and as services are received. Such costs include finders' fees; advisory, legal, accounting, valuation and other professional and consulting fees; and acquisition related general and administrative costs. Costs incurred in 2014 relate to the Pine Prairie Disposition, costs incurred in 2013 relate to the Anadarko Basis Acquisition, and costs incurred in 2012 relate to the Eagle Property Acquisition. See Note 7. Income taxes are provided for the tax effects of transactions reported in the financial statements and consist of taxes currently payable plus deferred income taxes related to certain income and expenses recognized in different periods for financial and income tax reporting purposes. Deferred income tax assets and liabilities represent the future tax return consequences of those differences, which will either be taxable or deductible when assets are recovered or liabilities are settled. Deferred income taxes also include tax credits and net operating losses that are available to offset future income taxes. Deferred income taxes are measured by applying currently enacted tax rates. The Company accounts for uncertainty in income taxes for tax positions taken or expected to be taken in a tax return. Only tax positions that meet the more-than-likely-than-not recognition threshold are recognized. Prior to its corporate reorganization (See Note 1), the Company was a limited liability company and not subject to federal income tax or state income tax (in most states). Accordingly, no provision for federal or state income taxes was recorded prior to the corporate reorganization as the Company's equity holders were responsible for income tax on the Company's profits. In connection with the closing of the Company's initial public offering, the Company merged into a corporation and became subject to federal and state income taxes. The Company's book and tax basis in assets and liabilities differed at the time of the corporate reorganization due primarily to different cost recovery periods utilized for book and tax purposes for the Company's oil and natural gas properties. See Note 12. Basic earnings (loss) per common share is calculated by dividing net income available to common shareholders by the weighted average number of common shares outstanding during each period. Diluted earnings (loss) per common share is calculated by dividing net income available to common shareholders by the weighted average number of diluted common shares outstanding, which includes the effect of potentially dilutive securities. Potentially dilutive securities for the diluted earnings per share calculations consist of unvested restricted stock awards and outstanding stock options (if any) using the treasury method, as well as the Company's Series A Preferred Stock using the if-converted method. In the computation of diluted earnings per share, excess tax benefits that would be created upon the assumed vesting of unvested restricted shares or the assumed exercise of stock options (i.e. hypothetical excess tax benefits) are included in the assumed proceeds component of the treasury share method to the extent that such excess tax benefits are more likely than not to be realized. When a loss from continuing operations exists, all potentially dilutive securities are anti-dilutive and are therefore excluded from the computation of diluted earnings per share. See Note 13. The Company reviewed recently issued accounting pronouncements that became effective during the twelve months ended December 31, 2014, and determined that none would have a material impact on the Company's consolidated financial statements with the exception of ASU 2014-09, "Revenue from Contracts with Customers "and ASU 2014-15, "Presentation of Financial Statements—Going Concern," (both effective for annual reporting periods beginning after December 15, 2016), which the Company is still evaluating. |
Fair Value Measurements of Fi60
Fair Value Measurements of Financial Instruments | 6 Months Ended | 12 Months Ended |
Jun. 30, 2015 | Dec. 31, 2014 | |
Fair Value Measurements of Financial Instruments | ||
Fair Value Measurements of Financial Instruments | 4. Fair Value Measurements of Financial Instruments Commodity derivative contracts reflected in the condensed consolidated balance sheets are recorded at estimated fair value. At June 30, 2015 and December 31, 2014, all of the Company's commodity derivative contracts were with seven bank counterparties, and were classified as Level 2 in the fair value input hierarchy. Derivative instruments listed below are presented gross and consist of swaps that are carried at fair value. The Company records the net change in the fair value of these positions in "Gains (losses) on commodity derivative contracts—net" in the Company's unaudited condensed consolidated statements of operations. See "—Note 5. Risk Management and Derivative Instruments" for additional information on the Company's derivative instruments and balance sheet presentation. Fair Value Measurements at June 30, 2015 Quoted Prices Significant Significant Total (in thousands) Assets: Commodity derivative oil swaps — 27,708 — 27,708 Commodity derivative gas swaps — 9,152 — 9,152 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total assets — 36,860 — 36,860 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Liabilities: Commodity derivative oil swaps — 2,869 — 2,869 Commodity derivative gas swaps — — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total liabilities — 2,869 — 2,869 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fair Value Measurements at December 31, 2014 Quoted Prices Significant Significant Total (in thousands) Assets: Commodity derivative oil swaps — 106,450 — 106,450 Commodity derivative gas swaps — 20,259 — 20,259 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total assets — 126,709 — 126,709 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Liabilities: Commodity derivative oil swaps — — — — Commodity derivative gas swaps — — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total liabilities — — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ | 4. Fair Value Measurements of Financial Instruments The Company uses a valuation framework based upon inputs that market participants use in pricing an asset or liability, which are classified into two categories: observable inputs and unobservable inputs. Observable inputs represent market data obtained from independent sources; whereas, unobservable inputs reflect a company's own market assumptions, which are used if observable inputs are not reasonably available without undue cost and effort. These two types of inputs are further divided into the following fair value input hierarchy: Level 1—Inputs are unadjusted quoted prices in active markets for identical assets or liabilities at the measurement date. Level 2—Inputs, other than quoted prices included in Level 1, are observable for the asset or liability, either directly or indirectly. Level 2 inputs include quoted prices for similar instruments in active markets, and inputs other than quoted prices that are observable for the asset or liability. Fair value assets and liabilities that are generally included in this category are commodity derivative contracts with fair values based on inputs from actively quoted markets. The Company uses a discounted cash flow approach to estimate the fair values of its commodity derivative contracts, utilizing commodity futures price strips for the underlying commodities provided by a reputable third-party. Level 3—Inputs are unobservable for the asset or liability, and include situations where there is little, if any, market activity for the asset or liability. Assets and liabilities are classified based on the lowest level of input that is significant to the fair value measurement. The Company's assessment of the significance of a particular input to the fair value measurement requires judgment, and may affect the valuation of the fair value of assets and liabilities and their placement within the fair value hierarchy levels. Derivative Instruments—Commodity derivative contracts reflected in the consolidated balance sheets are recorded at estimated fair value. At December 31, 2014 and 2013, all of the Company's commodity derivative contracts were with seven counterparties, respectively, and are classified as Level 2. Fair Value Measurements at December 31, 2014 Quoted Prices Significant Significant Total (in thousands) Assets: Commodity derivative oil swaps — 106,450 — 106,450 Commodity derivative gas swaps — 20,259 — 20,259 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total assets — 126,709 — 126,709 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Liabilities: Commodity derivative oil swaps — — — — Commodity derivative NGL swaps — — — — Commodity derivative gas swaps — — — — Commodity derivative oil collars — — — — Commodity derivative gas collars — — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total liabilities — — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fair Value Measurements at December 31, 2013 Quoted Prices Significant Significant Total (in thousands) Assets: Commodity derivative NGL swaps — 469 — 469 Commodity derivative gas swaps — 488 — 488 Commodity derivative oil collars — 64 — 64 Commodity derivative gas collars — 751 — 751 Commodity derivative differential swaps — 806 — 806 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total assets — 2,578 — 2,578 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Liabilities: Commodity derivative oil swaps — 32,209 — 32,209 Commodity derivative NGL swaps — 74 — 74 Commodity derivative gas swaps — 809 — 809 Commodity derivative oil collars — 272 — 272 Commodity derivative gas collars — 26 — 26 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total liabilities — 33,390 — 33,390 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Derivative instruments listed above are presented gross and include collars and swaps that are carried at fair value. The Company records the net change in the fair value of these positions in "Gains (losses) on commodity derivative contracts—net" in the Company's consolidated statements of operations. See Note 5 for additional information on the Company's derivative instruments and balance sheet presentation. |
Risk Management and Derivativ61
Risk Management and Derivative Instruments | 6 Months Ended | 12 Months Ended |
Jun. 30, 2015 | Dec. 31, 2014 | |
Risk Management and Derivative Instruments | ||
Risk Management and Derivative Instruments | 5. Risk Management and Derivative Instruments The Company's production is exposed to fluctuations in crude oil, NGL and natural gas prices. The Company believes it is prudent to manage the variability in cash flows by entering into derivative financial instruments to economically hedge a portion of its crude oil, NGL and natural gas production. The Company utilizes various types of derivative financial instruments, including swaps and collars, to reduce fluctuations in cash flows resulting from changes in commodity prices. These derivative contracts are placed with major financial institutions that the Company believes are minimal credit risks. The oil, NGL and natural gas reference prices, upon which the commodity derivative contracts are based, reflect various market indices that management believes have a high degree of historical correlation with actual prices received by the Company for its crude oil, NGL and natural gas production. Inherent in the Company's portfolio of commodity derivative contracts are certain business risks, including market risk and credit risk. Market risk is the risk that the price of the commodity will change, either favorably or unfavorably, in response to changing market conditions. Credit risk is the risk of loss from nonperformance by the Company's counterparty to a contract. The Company does not require collateral from its counterparties but does attempt to minimize its credit risk associated with derivative instruments by entering into derivative instruments only with counterparties that are large financial institutions, which management believes present minimal credit risk. In addition, to mitigate its risk of loss due to default, the Company has entered into agreements with its counterparties on its derivative instruments that allow the Company to offset its asset position with its liability position in the event of default by the counterparty. Due to the netting arrangements, had the Company's counterparties failed to perform under existing commodity derivative contracts, the maximum loss at June 30, 2015 would have been approximately $35.9 million. As of June 30, 2015, the Company had the following open commodity derivative contract positions: Hedged Weighted-Average Oil (Bbls): WTI Swaps—2015 2,208,000 71.56 Natural Gas (MMBtu): Swaps—2015(1) 9,200,000 4.13 (1) Includes 1,550,000 MMBtus in natural gas swaps that priced during the period, but had not cash settled as of June 30, 2015. The following table summarizes the gross fair values of derivative instruments by the appropriate balance sheet classification; however, the derivative instruments are subject to netting arrangements and qualify for net presentation in the Company's unaudited condensed consolidated balance sheets at June 30, 2015 and December 31, 2014, respectively (in thousands): Type Balance Sheet Location(1) June 30, December 31, Oil Swaps Derivative financial instruments—Current Assets 27,708 106,450 Oil Swaps Derivative financial instruments—Current Liabilities (2,869 ) — Gas Swaps Derivative financial instruments—Current Assets 9,152 20,259 ​ ​ ​ ​ ​ ​ ​ ​ ​ Total derivative fair value at period end 33,991 126,709 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (1) The fair values of commodity derivative instruments reported in the Company's condensed consolidated balance sheets are subject to netting arrangements and qualify for net presentation. The following table summarizes the location and fair value amounts of all derivative instruments in the unaudited condensed consolidated balance sheets, as well as the gross recognized derivative assets, liabilities and amounts offset in the unaudited condensed consolidated balance sheets at June 30, 2015 and December 31, 2014, respectively (in thousands): June 30, 2015 Not Designated as Balance Sheet Classification Gross Gross Net Derivative assets: Commodity contracts Derivative financial instruments—current 36,860 1,002 35,858 Commodity contracts Derivative financial instruments—noncurrent — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 36,860 1,002 35,858 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Derivative liabilities: Commodity contracts Derivative financial instruments—current 2,869 1,002 1,867 Commodity contracts Derivative financial instruments—noncurrent — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2,869 1,002 1,867 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2014 Not Designated as Balance Sheet Classification Gross Gross Net Derivative assets: Commodity contracts Derivative financial instruments—current 126,709 126,709 Commodity contracts Derivative financial instruments—noncurrent — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 126,709 — 126,709 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Derivative liabilities: Commodity contracts Derivative financial instruments—current — — — Commodity contracts Derivative financial instruments—noncurrent — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ The Company does not designate its commodity derivative contracts as hedging instruments for financial reporting purposes. Accordingly, commodity derivative contracts are marked-to-market each quarter with the change in fair value during the periodic reporting period recognized currently as a gain or loss in "Gains (losses) on commodity derivative contracts—net" within revenues in the unaudited condensed consolidated statements of operations. The following table presents net cash received (paid) for commodity derivative contracts and unrealized net gains (losses) recorded by the Company related to the change in fair value of the derivative instruments in "Gains (losses) on commodity derivative contracts—net" for the periods presented: For the Three Months For the Six Months 2015 2014 2015 2014 (in thousands) (in thousands) Net cash received (paid) for commodity derivative contracts 42,189 (17,138 ) 94,797 (31,948 ) Unrealized net gains (losses) (61,482 ) (14,329 ) (92,718 ) (22,192 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Gains (losses) on commodity derivative contracts—net (19,293 ) (31,467 ) 2,079 (54,140 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ | 5. Risk Management and Derivative Instruments The Company's production is exposed to fluctuations in crude oil, NGLs and natural gas prices. The Company believes it is prudent to manage the variability in cash flows by entering into derivative financial instruments to economically hedge a portion of its crude oil, NGLs and natural gas production. The Company utilizes various types of derivative financial instruments, including swaps and collars, to manage fluctuations in cash flows resulting from changes in commodity prices. These derivative contracts are placed with major financial institutions that the Company believes are minimal credit risks. The oil, NGLs and gas reference prices, upon which the commodity derivative contracts are based, reflect various market indices that management believes have a high degree of historical correlation with actual prices received by the Company for its oil, NGLs and natural gas production. Inherent in the Company's portfolio of commodity derivative contracts are certain business risks, including market risk and credit risk. Market risk is the risk that the price of the commodity will change, either favorably or unfavorably, in response to changing market conditions. Credit risk is the risk of loss from nonperformance by the Company's counterparty to a contract. The Company does not require collateral from its counterparties but does attempt to minimize its credit risk associated with derivative instruments by entering into derivative instruments only with counterparties that are large financial institutions, which management believes present minimal credit risk. In addition, to mitigate its risk of loss due to default, the Company has entered into agreements with its counterparties on its derivative instruments that allow the Company to offset its asset position with its liability position in the event of default by the counterparty. Due to the netting arrangements, had the Company's counterparties failed to perform under existing commodity derivative contracts, the maximum loss at December 31, 2014 would have been approximately $126.7 million. As of December 31, 2014, the Company had the following open commodity positions: Hedged Volume Weighted-Average Oil (Bbls): WTI Swaps—2015 3,276,000 88.72 Natural Gas (MMBtu): Swaps—2015(1) 20,050,000 4.15 (1) Includes 2,170,000 MMBtu in natural gas swaps that priced during the period, but had not cash settled as of December 31, 2014. The following table summarizes the gross fair value of derivative instruments by the appropriate balance sheet classification, even when the derivative instruments are subject to netting arrangements and qualify for net presentation in the Company's consolidated balance sheets at December, 2014 and 2013, respectively (in thousands): Type Balance Sheet Location(1) December 31, December 31, Oil Swaps Derivative financial instruments—Current Assets 106,450 — Oil Swaps Derivative financial instruments—Current Liabilities — (28,871 ) Oil Swaps Derivative financial instruments—Non-Current Liabilities — (3,338 ) NGL Swaps Derivative financial instruments—Current Assets — 469 NGL Swaps Derivative financial instruments—Current Liabilities — (74 ) Gas Swaps Derivative financial instruments—Current Assets 20,259 469 Gas Swaps Derivative financial instruments—Non-Current Assets — 19 Gas Swaps Derivative financial instruments—Current Liabilities — (496 ) Gas Swaps Derivative financial instruments—Non-Current Liabilities — (313 ) Oil Collars Derivative financial instruments—Current Assets — 64 Oil Collars Derivative financial instruments—Current Liabilities — (272 ) Gas Collars Derivative financial instruments—Current Assets — 751 Gas Collars Derivative financial instruments—Current Liabilities — (26 ) Basis Differential Swaps Derivative financial instruments—Current Assets — 806 ​ ​ ​ ​ ​ ​ ​ ​ ​ Total derivative fair value at period end 126,709 (30,812 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (1) The fair values of commodity derivative instruments reported in the Company's consolidated balance sheets are subject to netting arrangements and qualify for net presentation. The following table summarizes the location and fair value amounts of all derivative instruments in the consolidated balance sheets, as well as the gross recognized derivative assets, liabilities and amounts offset in the consolidated balance sheets at December 31, 2014 and 2013, respectively (in thousands): December 31, 2014 Not Designated as ASC 815 Hedges: Balance Sheet Classification Gross Gross Net Recognized Derivative assets: Commodity contracts Derivative financial instruments—current 126,709 — 126,709 Commodity contracts Derivative financial instruments—noncurrent — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 126,709 — 126,709 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Derivative liabilities: Commodity contracts Derivative financial instruments—current — — — Commodity contracts Derivative financial instruments—noncurrent — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Not Designated as ASC 815 Hedges: Balance Sheet Classification Gross Gross Net Recognized Derivative assets: Commodity contracts Derivative financial instruments—current 2,559 1,859 700 Commodity contracts Derivative financial instruments—noncurrent 19 — 19 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2,578 1,859 719 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Derivative liabilities: Commodity contracts Derivative financial instruments—current 29,739 1,859 27,880 Commodity contracts Derivative financial instruments—noncurrent 3,651 — 3,651 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 33,390 1,859 31,531 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ The Company does not designate its commodity derivative contracts as hedging instruments for financial reporting purposes. Accordingly, commodity derivative contracts are marked-to-market each quarter with the change in fair value during the periodic reporting period recognized currently as a gain or loss in "Gains (losses) on commodity derivative contracts—net" within revenues in the consolidated statements of operations. Realized gains and losses represent the actual settlements under commodity derivative contracts that require making a payment to or receiving a payment from the counterparty, as well as any deferred premiums payable to the counterparty upon contract settlement. During the year ended December 31, 2012, the Company paid deferred premiums of $3.3 million related to put options covering a total of 549,000 barrels of crude oil, respectively. No such payments for deferred premiums were made during 2014 or 2013. The following table presents realized net losses and unrealized net gains (losses) recorded by the Company in "Gains (losses) on commodity derivative contracts—net" related to the change in fair value of the commodity derivative instruments for the periods presented: Years Ended December 31, 2014 2013 2012 (in thousands) Realized net losses (18,332 ) (17,585 ) (15,825 ) Unrealized net gains (losses) 157,521 (26,699 ) 4,667 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Gains (losses) on commodity derivative contracts—net 139,189 (44,284 ) (11,158 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Property and Equipment62
Property and Equipment | 6 Months Ended | 12 Months Ended |
Jun. 30, 2015 | Dec. 31, 2014 | |
Property and Equipment | ||
Property and Equipment | 6. Property and Equipment June 30, December 31, (in thousands) Oil and gas properties, on the basis of full-cost accounting: Proved properties 3,527,182 3,398,146 Unevaluated properties 31,778 44,535 Other property and equipment 14,734 13,454 Less accumulated depreciation, depletion, amortization and impairment (2,119,458 ) (1,333,019 ) ​ ​ ​ ​ ​ ​ ​ Net property and equipment 1,454,236 2,123,116 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ The Company capitalizes internal costs directly related to exploration and development activities to oil and gas properties. During the three and six months ended June 30, 2015 and 2014, the Company capitalized the following (in thousands): Three Months Six Months Ended 2015 2014 2015 2014 Internal costs capitalized to oil and gas properties(1) 2,613 3,325 4,915 6,449 (1) Inclusive of $0.4 million and $0.6 million of qualifying share-based compensation expense for the three months ended June 30, 2015 and 2014, respectively. For the six months ended June 30, 2015 and 2014, inclusive of $0.9 million and $1.2 million, respectively. The Company accounts for its oil and gas properties under the full cost method. Under the full cost method, proceeds from the sale or disposition of oil and gas properties are accounted for as a reduction to capitalized costs unless a significant portion of the Company's reserve quantities are sold such that it results in a significant alteration of the relationship between capitalized costs and remaining proved reserves, in which case a gain or loss is generally recognized in income. The Company performs a ceiling test on a quarterly basis. The test establishes a limit (ceiling) on the book value of oil and gas properties. The capitalized costs of oil and gas properties, net of accumulated DD&A and the related deferred income taxes, may not exceed this "ceiling." The ceiling limitation is equal to the sum of: (i) the present value of estimated future net revenues from the projected production of proved oil and gas reserves, excluding future cash outflows associated with settling asset retirement obligations ("ARO") accrued on the balance sheet, calculated using the average oil and natural gas sales price received by the Company as of the first trading day of each month over the preceding twelve months (such prices are held constant throughout the life of the properties) and a discount factor of 10%; (ii) the cost of unevaluated properties excluded from the costs being amortized; (iii) the lower of cost or estimated fair value of unproved properties included in the costs being amortized; and (iv) related income tax effects. If capitalized costs exceed this ceiling, the excess is charged to expense in the accompanying condensed consolidated statements of operations. At June 30, 2015, capitalized costs exceeded the ceiling and the Company recorded an impairment of oil and gas properties of $498.4 million. During the six months ended June 30, 2015 and 2014, the Company recorded impairments of oil and gas properties of $673.1 million and $86.5 million, respectively. Impairments at June 30, 2015 and March 31, 2015 were primarily due to continued low commodity prices, which resulted in a reduction of the discounted present value of the Company's proved oil and natural gas reserves. Depreciation, depletion and amortization is calculated using the Units of Production Method ("UOP"). The UOP calculation multiplies the percentage of estimated proved reserves produced by the cost of those reserves. The result is to recognize expense at the same pace that the reservoirs are estimated to be depleting. The amortization base in the UOP calculation includes the sum of proved property costs net of accumulated depreciation, depletion, amortization and impairment, estimated future development costs (future costs to access and develop proved reserves) and asset retirement costs that are not already included in oil and gas property, less related salvage value. The following table presents depletion expense related to oil and gas properties for the three and six months ended June 30, 2015 and 2014, respectively: Three Months Ended June 30, Six Months Ended June 30, 2015 2014 2015 2014 2015 2014 2015 2014 (in thousands) (per Boe) (in thousands) (per Boe) Depletion expense 54,359 70,323 17.63 24.22 111,964 136,527 18.18 24.76 Depreciation on other property 896 751 0.29 0.25 1,719 1,448 0.28 0.26 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Depreciation, depletion, and amortization 55,255 71,074 17.92 24.47 113,683 137,975 18.46 25.02 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Oil and gas unevaluated properties and properties under development include costs that are not being depleted or amortized. These costs represent investments in unproved properties. The Company excludes these costs until proved reserves are found, until it is determined that the costs are impaired or until major development projects are placed in service, at which time the costs are moved into oil and natural gas properties subject to amortization. All unproved property costs are reviewed at least quarterly to determine if impairment has occurred. Unevaluated property was $31.8 million and $44.5 million at June 30, 2015 and December 31, 2014, respectively. Other property and equipment consists of vehicles, furniture and fixtures, and computer hardware and software and are carried at cost. Depreciation is calculated principally using the straight-line method over the estimated useful lives of the assets, which range from five to seven years. Maintenance and repairs are charged to expense as incurred, while renewals and betterments are capitalized. On April 21, 2015, the Company closed on the sale of its ownership interest in developed and undeveloped acreage in the Dequincy area located in Beauregard and Calcasieu Parishes, Louisiana for $44.0 million to Pintail Oil and Gas LLC. The net proceeds of approximately $42.4 million, which was net of customary closing adjustments, was reflected as a reduction of oil and natural gas properties, with no gain or loss recognized. The proceeds from the sale have been and will continue to be used for general corporate purposes. | 6. Property and Equipment The Company's property and equipment as of December 31, 2014 and 2013 was as follows (in thousands): December 31, December 31, (in thousands) Oil and gas properties, on the basis of full-cost accounting: Proved properties 3,398,146 2,817,062 Unevaluated properties 44,535 243,599 Other property and equipment 13,454 11,113 Less accumulated depreciation, depletion, amortization and impairment (1,333,019 ) (976,880 ) ​ ​ ​ ​ ​ ​ ​ Net property and equipment 2,123,116 2,094,894 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the years ended December 31, 2014, 2013 and 2012, depletion expense related to oil and gas properties was $266.8 million, $248.2 million and $125.1 million, respectively and $22.75, $28.42 and $34.17 per barrel of oil equivalent ("Boe"), respectively. For the years ended December 31, 2014, 2013 and 2012, depreciation expense related to other property and equipment was $3.1 million, $2.2 million and $0.5 million, respectively. For the years ended December 31, 2014, 2013 and 2012, interest capitalized to unevaluated properties was $12.4 million, $32.2 million and $11.2 million, respectively. For the years ended December 31, 2014, 2013 and 2012, the Company capitalized $12.4 million, $8.4 million and $1.5 million, respectively, of internal costs to oil and gas properties, including $2.2 million, $1.4 million and $0.2 million, respectively, of qualifying share based compensation expense (see Note 11). |
Acquisition and Divestitures of
Acquisition and Divestitures of Oil and Gas Properties | 12 Months Ended |
Dec. 31, 2014 | |
Acquisition of Oil and Gas Properties | |
Acquisition of Oil and Gas Properties | 7. Acquisition and Divestitures of Oil and Gas Properties On March 5, 2014, the Company executed a PSA to sell all of its ownership interest in developed and undeveloped acreage in the Pine Prairie field area of Evangeline Parish, Louisiana to a private buyer for a purchase price of $170 million in cash, subject to standard post-closing adjustments. Acreage subject to the transaction did not include acreage and production in the western part of Louisiana in Beauregard and Calcasieu Parishes or other undeveloped acreage held outside the Pine Prairie field. On May 1, 2014, the Company closed on the sale for net proceeds of $147.7 million, of which $131.0 million was used to reduce amounts outstanding under its revolving credit facility, with the remainder retained for transaction expenses and working capital purposes. The Company reduced the full cost pool subject to amortization by the amount of the net proceeds received and other standard post-closing adjustments. Accordingly, no gain or loss was recognized. On June 25, 2014, the Company entered into an exploration agreement with PetroQuest Energy LLC ("PetroQuest") with an effective date of May 1, 2014, in which the Company conveyed to PetroQuest an undivided 50% of its right, title and interest in and to the acreage and other interests in the Fleetwood prospect area in Louisiana. With the execution of the agreement, PetroQuest paid $3.0 million in cash consideration and in January 2015, PetroQuest paid additional cash of $7.0 million. As further consideration, PetroQuest granted a credit to the Company of an additional non-interest bearing total sum of $14.0 million, to be credited or paid against the Company's share of costs or expenses incurred to develop the prospect area, including but not limited to, all mineral lease acquisition or maintenance costs and all drilling, completion, equipping and facility costs. For any amounts not fully paid on or before December 31, 2015, the Company can elect to take the remaining portion in cash. At December 31, 2014, the Company had a receivable of $7.0 million included in "Other accounts receivable," which represented the additional cash the Company subsequently received in January 2015 under the exploration agreement with PetroQuest. During the twelve months ended December 31, 2014, the Company received $1.4 million in cash for the sale of other properties. On May 31, 2013, the Company closed on the acquisition of producing properties and undeveloped acreage in the Anadarko Basin in Texas and Oklahoma from Panther Energy Company, LLC and its partners for approximately $618 million in cash (before customary post-closing adjustments). The Company funded the purchase price of the Anadarko Basin Acquisition with a portion of the net proceeds from the private placement of $700 million in aggregate principal amount of 9.25% senior unsecured notes due 2021, which also closed on May 31, 2013. The transaction was accounted for using the acquisition method of accounting which requires, among other things, that assets acquired and liabilities assumed be recognized at their fair values as of the acquisition date. The fair value of, and the allocation to, the assets acquired and liabilities assumed in the Anadarko Basin Acquisition has been finalized and is shown in the following table (in thousands): Anadarko Basin Oil and gas properties Proved 417,750 Unevaluated 207,606 ​ ​ ​ ​ Total assets acquired 625,356 Asset retirement obligations 6,296 ​ ​ ​ ​ Total liabilities assumed 6,296 ​ ​ ​ ​ Net assets acquired 619,060 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ The finalized balances in the table above include immaterial changes to the amounts originally allocated to oil and gas properties. These changes were required to reflect the final consideration paid after adjustment for certain post-closing purchase price amounts. On October 1, 2012, the Company closed on the Eagle Property Acquisition. The assets acquired include certain interests in producing oil and natural gas assets and unevaluated leasehold acreage in Oklahoma and Kansas and related hedging instruments. The aggregate purchase price, before adjustments for expenses incurred and revenue received by Eagle from June 1, 2012 through the closing date and other customary post-closing purchase price adjustments, consisted of (a) $325 million in cash and (b) 325,000 shares of Series A Preferred Stock with an initial liquidation preference of $1,000/share. The Company funded the cash portion of the Eagle Property Acquisition purchase price with a portion of the net proceeds from the private placement (which also closed on October 1, 2012) of $600 million in aggregate principal amount of 10.75% senior unsecured notes due October 1, 2020. The transaction was accounted for using the acquisition method of accounting. The fair value of, and the allocation to, the assets acquired and liabilities assumed in the Eagle Property Acquisition has been finalized and is shown in the following table (in thousands): Eagle Property Oil and gas properties Proved 419,549 Unevaluated 244,236 Commodity derivative contracts 8,453 ​ ​ ​ ​ Total assets acquired 672,238 Asset retirement obligations 2,662 Deferred income tax liabilities 25,985 Commodity derivative contracts — ​ ​ ​ ​ Total liabilities assumed 28,647 ​ ​ ​ ​ Net assets acquired 643,591 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ On April 1, 2013, the Company exercised preference rights and acquired additional acreage and producing wells in its Gulf Coast region for $3.4 million. Revenues attributable to the Anadarko Basin Acquisition included in the Company's consolidated statements of operations for the year ended December 31, 2014 and 2013 were $178.9 million and $104.7 million, respectively. Revenues attributable to the Eagle Property Acquisition, included in the Company's consolidated statements of operations for the year ended December 31, 2012 were $28.4 million. The following table presents unaudited pro forma information for the Company as if the Eagle Property Acquisition occurred on January 1, 2011 and the Anadarko Basin Acquisition had been completed on January 1, 2012 (in thousands, other than per share amounts): For the Year Ended 2013(1) 2012(2) Revenues and other 539,562 490,241 ​ ​ ​ ​ ​ ​ ​ Net income (loss) (340,400 ) (129,885 ) Preferred stock dividends (15,589 ) (26,000 ) ​ ​ ​ ​ ​ ​ ​ Loss attributable to common shareholders (355,989 ) (155,885 ) Net loss per common share—basic and diluted (54.13 ) (25.99 ) (1) Includes the effect of the Anadarko Basin Acquisition, as the Eagle Property Acquisition was included in the historical results for this period. (2) Includes the effect of the Eagle Property Acquisition and the Anadarko Basin Acquisition. The historical financial information was adjusted to give effect to the pro forma events that were directly attributable to the Eagle Property Acquisition and the Anadarko Basin Acquisition and are factually supportable. The unaudited pro forma consolidated results are not necessarily indicative of what the Company's consolidated results of operations actually would have been had the Eagle Property Acquisition been completed on January 1, 2011 and if the Anadarko Basin Acquisition had been completed on January 1, 2012. In addition, the unaudited pro forma consolidated results do not purport to project the future results of operations for the combined Company. For the year ended December 31, 2014, acquisition and transaction costs are costs the Company has incurred primarily as a result of the Pine Prairie Disposition and include advisory, legal, accounting, valuation and other professional and consulting fees; and other general and administrative costs. For the year ended December 31, 2014, the Company recorded $4.1 million of such expenses. For the year ended December 31, 2013, acquisition and transaction costs are costs the Company has incurred as a result of the Anadarko Basin Acquisition and include advisory, legal, accounting, valuation and other professional and consulting fees; and general and administrative costs. For the year ended December 31, 2013, the Company recorded $11.8 million of such expenses. For the year ended December 31, 2012, acquisition and transaction costs are costs the Company has incurred as a result of the Eagle Property Acquisition and include finders' fees; advisory, legal, accounting, valuation and other professional and consulting fees; and acquisition related general and administrative costs. For the year ended December 31, 2012, the Company recorded $14.9 million of such expenses. |
Asset Retirement Obligations64
Asset Retirement Obligations | 6 Months Ended | 12 Months Ended |
Jun. 30, 2015 | Dec. 31, 2014 | |
Asset Retirement Obligations | ||
Asset Retirement Obligations | 9. Asset Retirement Obligations Asset Retirement Obligations ("AROs") represent the future abandonment costs of tangible assets, such as wells, service assets and other facilities. The fair value of the ARO at inception is capitalized as part of the carrying amount of the related long-lived assets. The following table reflects the changes in the Company's AROs for the periods indicated: Six Months Six Months (in thousands) Asset retirement obligations—beginning of period 21,599 26,308 Liabilities incurred 2 844 Revisions — — Liabilities settled — (47 ) Liabilities eliminated through asset sales (4,699 ) (7,652 ) Current period accretion expense 835 929 ​ ​ ​ ​ ​ ​ ​ Asset retirement obligations—end of period 17,737 20,382 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ | 8. Asset Retirement Obligations For the Company, asset retirement obligations represent the future abandonment costs of tangible assets, such as wells, service assets and other facilities. The fair value of the asset retirement obligation at inception is capitalized as part of the carrying amount of the related long-lived assets. Asset retirement obligations approximated $21.6 million and $26.3 million as of December 31, 2014 and 2013, respectively. The liability has been accreted to its present value as of December 31, 2014 and 2013. The Company evaluated its wells and determined a range of abandonment dates through 2079. At December 31, 2014, all asset retirement obligations represent long-term liabilities and are classified as such. The following table details the change in the asset retirement obligations for the years ended December 31, 2014, 2013 and 2012, respectively (in thousands): Year ended December 31, 2014 2013 2012 Asset retirement obligations at beginning of year 26,308 15,245 7,627 Liabilities incurred 996 2,535 3,044 Liabilities assumed in Anadarko Basin Acquisition — 6,296 — Liabilities assumed in Eagle Property Acquisition — — 2,662 Revisions 288 858 1,189 Liabilities settled (47 ) (61 ) — Liabilities eliminated through asset sale(1) (7,652 ) — — Current period accretion expense 1,706 1,435 723 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Asset retirement obligations at end of year 21,599 26,308 15,245 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (1) As a result of the Pine Prairie Disposition, AROs were reduced by approximately $7.7 million during the year ended December 31, 2014. See discussion of the Pine Prairie Disposition in Note 7. Revisions during the year ended December 31, 2014 were due primarily to an increase in estimated future abandonment costs based upon higher costs for oilfield services and materials in the Mississippian Lime and Anadarko areas. Revisions during the year ended December 31, 2013 were due to an increase in estimated future abandonment costs based upon higher oilfield service pricing. Revisions during the year ended December 31, 2012 were due to an increase in estimated future abandonment costs for our Gulf Coast wells based upon higher oilfield service pricing and a change in the Company's approach to site remediation based upon expected environmental and regulatory requirements. |
Long-Term Debt65
Long-Term Debt | 6 Months Ended | 12 Months Ended |
Jun. 30, 2015 | Dec. 31, 2014 | |
Long-Term Debt | ||
Long-Term Debt | 10. Long-Term Debt The Company's long-term debt as of June 30, 2015 and December 31, 2014 is as follows (in thousands): December 31, Borrowings Repayments Exchanges Deferred Amortization PIK June 30, Credit Facility 435,150 33,000 (468,150 ) — — — — 2020 Senior Notes 600,000 — — (242,445 ) (63,930 ) — — 293,625 2021 Senior Notes 700,000 — — (281,676 ) (70,672 ) — — 347,652 Second Lien Notes — 625,000 — — 47,082 (896 ) — 671,186 Third Lien Notes — — — 524,121 87,520 (879 ) 1,187 611,949 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total debt 1,735,150 658,000 (468,150 ) — — (1,775 ) 1,187 1,924,412 Current maturities — — — — — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Long-term debt 1,735,150 658,000 (468,150 ) — — (1,775 ) 1,187 1,924,412 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ June 30, 2015 Unamortized June 30, 2015 Revolving Credit Facility — — 2020 Senior Notes 293,625 — 293,625 2021 Senior Notes 347,652 — 347,652 Second Lien Notes 671,186 (46,186 ) 625,000 Third Lien Notes 611,949 (86,641 ) 525,308 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total debt 1,924,412 (132,827 ) 1,791,585 Current maturities — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Long-term debt 1,924,412 (132,827 ) 1,791,585 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ On May 21, 2015, the Company issued $625.0 million of Second Lien Notes and utilized the proceeds to repay the outstanding balance of the Credit Facility in an amount of approximately $468.2 million, with the remainder to be utilized for general corporate purposes. Further, the Company exchanged approximately $504.121 million of Third Lien Notes for approximately $279.8 million of 2020 Senior Notes and $350.3 million of 2021 Senior Notes, representing an exchange at 80.0% of the exchanged Unsecured Notes' par value. Additionally, on June 2, 2015, the Company exchanged approximately $20.0 million of Third Lien Notes for approximately $26.6 million of 2020 Senior Notes and $2.0 million of 2021 Senior Notes, representing an exchange at 70.0% of the exchanged Unsecured Notes' par value. Approximately $63.9 million of the principal amount of 2020 Senior Notes and $70.7 million of the principal amount of 2021 Senior Notes were extinguished. Additionally, the Company and Midstates Sub entered into the Seventh Amendment to the Credit Facility which provided that upon completion of the offering of the Second Lien Notes and exchange of Third Lien Notes, the borrowing base of the Credit Facility would be reduced to $252.4 million. The Seventh Amendment also provided additional covenant flexibility. Further discussion regarding the Second Lien Notes, Third Lien Notes and Seventh Amendment can be found below. The exchanges of Third Lien Notes for the Unsecured Notes as well as the issuance of the Second Lien Notes were accounted for as a troubled debt restructuring. As the future cash flows of the modified debt instruments are greater than the carrying amount of the previous debt instruments, no gain was recognized. The amount of extinguished debt will be amortized and recognized as a reduction of interest expense over the remaining life of the Second Lien Notes and Third Lien Notes using the effective interest method. As a result, the Company's reported interest expense will be significantly less than the contractual interest payments throughout the term of Second Lien Notes and Third Lien Notes. All costs incurred, including restructuring costs as well as the direct issuance costs of the Second Lien Notes and Third Lien Notes, were expensed and are included within debt restructuring costs in our condensed consolidated statements of operations. The Company maintains a $750.0 million Credit Facility with a borrowing base of $252.4 million supported by the Company's Mississippian Lime and Anadarko Basin oil and gas assets. At June 30, 2015, the Company had no amounts drawn on the Credit Facility and had outstanding letters of credit obligations totaling $1.5 million. The Credit Facility matures on May 31, 2018 and borrowings thereunder are secured by substantially all of the Company's oil and natural gas properties and bear interest at LIBOR plus an applicable margin, depending upon the Company's borrowing base utilization, between 2.00% and 3.00% per annum. At June 30, 2015 and 2014, the weighted average interest rate was 2.9% and 2.8%, respectively. In addition to interest expense, the Credit Facility requires the payment of a commitment fee each quarter. The commitment fee is computed at the rate of either 0.375% or 0.500% per annum based on the average daily amount by which the borrowing base exceeds the outstanding borrowings during each quarter. The borrowing base under the Credit Facility is subject to semiannual redeterminations in April and October and up to one additional time per six month period following each scheduled borrowing base redetermination, as may be requested by the Company or the administrative agent, acting on behalf of lenders holding at least two-thirds of the outstanding loans and other obligations. Under the terms of the Credit Facility, the Company is required to repay any amount by which the principal balance of its outstanding loans and its letter of credit obligations exceed its redetermined borrowing base or grant liens on additional property having sufficient value to eliminate such excess. The Company is permitted to make such repayment in six equal successive monthly payments commencing 30 days following the administrative agent's notice regarding such borrowing base reduction. On March 24, 2015, the Company and Midstates Sub entered into a Sixth Amendment (the "Sixth Amendment") to the Credit Facility. The Sixth Amendment amended the required ratio of net consolidated indebtedness to EBITDA under the Credit Agreement for each of the fiscal quarters in 2015 from 4.0:1.0 to 4.5:1.0. Additionally, the Sixth Amendment amended the mortgage requirements under the Credit Facility to provide for an increase from 80% to 90% for the percentage of properties included in the borrowing base that are required to be subject to mortgages for the benefit of the lenders. On May 21, 2015, the Company and Midstates Sub entered into a Seventh Amendment (the "Seventh Amendment") to the Credit Facility. The Seventh Amendment provided that, with the completion of the offering of the Second Lien Notes and Third Lien Notes (both discussed below), the Company's borrowing base would be reduced to approximately $252.4 million. The Seventh Amendment also eliminated the required ratio of net consolidated indebtedness to EBITDA covenant and added a ratio of Total Senior Indebtedness (as defined therein) to EBITDA of not more than 1.0:1.0, which is further discussed below under "—Debt Covenants." The next scheduled redetermination of the borrowing base is October 2015. On October 1, 2012, the Company issued $600 million in aggregate principal amount of 2020 Senior Notes conducted pursuant to Rule 144A and Regulation S under the Securities Act of 1933, as amended (the "Securities Act"). In October 2013, these notes were exchanged for an equal principal amount of identical registered notes. The 2020 Senior Notes rank pari passu in right of payment with the 2021 Senior Notes, the Second Lien Notes and Third Lien Notes. The 2020 Senior Notes were co-issued on a joint and several basis by the Company and its wholly owned subsidiary, Midstates Sub. The Company does not have any operations or independent assets other than its 100% ownership interest in Midstates Sub and there are no other subsidiaries of the Company. The indenture governing the 2020 Senior Notes (the "2020 Senior Notes Indenture") does not create any restricted assets within Midstates Sub, nor does it impose any significant restrictions on the ability of Midstates Sub to pay dividends or make loans to the Company or limit the ability of the Company to advance loans to Midstates Sub. At any time prior to October 1, 2015, the Company may, under certain circumstances, redeem up to 35% of the aggregate principal amount of the 2020 Senior Notes with the net proceeds of a public or private equity offering at a redemption price of 110.75% of the principal amount of the 2020 Senior Notes, plus any accrued and unpaid interest up to the redemption date. In addition, at any time before October 1, 2016, the Company may redeem all or a part of the 2020 Senior Notes at a redemption price equal to 100% of the principal amount of 2020 Senior Notes redeemed plus the Applicable Premium (as defined in the 2020 Senior Notes Indenture) at the redemption date, plus any accrued and unpaid interest, if any, up to the redemption date. On or after October 1, 2016, the Company may redeem all or a part of the 2020 Senior Notes at varying redemption prices (expressed as percentages of principal amount) set forth in the 2020 Senior Notes Indenture plus accrued and unpaid interest, if any, on the 2020 Senior Notes redeemed, up to the redemption date. Upon the occurrence of certain change of control events, as defined in the 2020 Senior Notes Indenture, each holder of the 2020 Senior Notes will have the right to require that the Company repurchase all or a portion of such holder's 2020 Senior Notes in cash at a purchase price equal to 101% of the aggregate principal amount thereof plus any accrued and unpaid interest to the date of repurchase. On May 21, 2015 and June 2, 2015, a total of approximately $306.4 million of 2020 Senior Notes were exchanged for Third Lien Notes, as discussed above. The estimated fair value of the 2020 Senior Notes as of June 30, 2015 was $121.1 million (Level 2 in the fair value measurement hierarchy), based on quoted market prices for these same debt securities. On May 31, 2013, the Company issued $700 million in aggregate principal amount of 2021 Senior Notes. In October 2013, these notes were exchanged for an equal principal amount of identical registered notes. The 2021 Senior Notes rank pari passu in right of payment with the 2020 Senior Notes, Second Lien Notes and Third Lien Notes. The 2021 Senior Notes were co-issued on a joint and several basis by the Company and its wholly owned subsidiary, Midstates Sub. The indenture governing the 2021 Senior Notes (the "2021 Senior Notes Indenture") does not create any restricted assets within Midstates Sub, nor does it impose any significant restrictions on the ability of Midstates Sub to pay dividends or make loans to the Company or limit the ability of the Company to advance loans to Midstates Sub. Prior to June 1, 2016, the Company may, under certain circumstances, redeem up to 35% of the aggregate principal amount of the 2021 Senior Notes with the net proceeds of any equity offerings at a redemption price of 109.25% of the principal amount of the 2021 Senior Notes redeemed, plus any accrued and unpaid interest, if any, up to the redemption date. In addition, at any time before June 1, 2016, the Company may redeem all or a part of the 2021 Senior Notes at a redemption price equal to 100% of the principal amount of the 2021 Senior Notes redeemed plus the Applicable Premium (as defined in the 2021 Senior Notes Indenture) at the redemption date, plus any accrued and unpaid interest, if any, up to, the redemption date. On or after June 1, 2016, the Company may redeem all or a part of the 2021 Senior Notes at varying redemption prices (expressed as percentages of principal amount) set forth in the 2021 Senior Notes Indenture plus accrued and unpaid interest, if any, on the 2021 Senior Notes redeemed, up to, the redemption date. Upon the occurrence of certain change of control events, as defined in the 2021 Senior Notes Indenture, each holder of the 2021 Senior Notes will have the right to require that the Company repurchase all or a portion of such holder's 2021 Senior Notes in cash at a purchase price equal to 101% of the aggregate principal amount thereof plus any accrued and unpaid interest to the date of repurchase. On May 21, 2015 and June 2, 2015, a total of approximately $352.3 million of 2021 Senior Notes were exchanged for Third Lien Notes, as discussed above. The estimated fair value as of June 30, 2015 of the 2021 Senior Notes was $137.8 million (Level 2 in the fair value measurement hierarchy), based on quoted market prices for these same debt securities. On May 21, 2015, the Company and Midstates Sub issued and sold $625.0 million aggregate principal amount of Second Lien Notes in a private placement conducted pursuant to Rule 144A under the Securities Act. The Second Lien Notes mature on the earlier of June 1, 2020 or 12 months after the maturity date of the Company's Credit Facility (including any extension or refinancing of such facility). The Second Lien Notes have an interest rate of 10.0% and interest is payable semi-annually on June 1 and December 1 of each fiscal year. The Second Lien Notes are unconditionally guaranteed, jointly and severally, on a senior secured basis by each of the Company's future restricted subsidiaries (the "Guarantors") and will be initially secured by second-priority liens on substantially all of the Company's and Guarantors' assets that secure the Company's Credit Facility. On May 21, 2015, in connection with the offering of Second Lien Notes, the Company and Midstates Sub entered into a registration rights agreement with the initial purchasers of the Second Lien Notes pursuant to which the Company and Midstates Sub are obligated, within 270 days after the issuance of the Second Lien Notes, to file with the Securities and Exchange Commission under the Securities Act a registration statement with respect to an offer to exchange the Second Lien Notes for substantially identical registered new notes. The Company will be obligated to pay liquidated damages consisting of additional interest on the Second Lien Notes if, within the periods specified in the agreement, it does not file the exchange offer registration statement or if certain other events occur. The Second Lien Notes are senior secured obligations of the Company and rank effectively junior to its obligations under the Credit Facility, effectively senior to its existing and future unsecured indebtedness, effectively senior to the Company's Third Lien Notes and all future junior lien obligations, effectively junior to all existing and future secured indebtedness secured by assets not constituting collateral under the Second Lien Notes, pari passu with all of the Company's existing and future senior debt, structurally subordinated to all existing and future indebtedness of any non-Guarantor subsidiaries and senior to any existing or future subordinated debt. Upon the occurrence of certain change of control events, as defined in the indenture governing the Second Lien Notes, each holder of the Second Lien Notes will have the right to require that the Company repurchase all or a portion of such holder's 2020 Second Lien Notes in cash at a purchase price equal to 101% of the aggregate principal amount thereof plus any accrued and unpaid interest to the date of repurchase. The estimated fair value of the Second Lien Notes was $601.6 million as of June 30, 2015 (Level 2 in the fair value measurement hierarchy), based on quoted market prices for these same debt securities. On May 21, 2015 and June 2, 2015, the Company issued approximately $504.121 million and $20.0 million, respectively, in aggregate principal amount of Third Lien Notes in a private placement and in exchange for an aggregate $306.4 million of the 2020 Senior Notes and $352.3 million of the 2021 Senior Notes. The Third Lien Notes are unconditionally guaranteed, jointly and severally, on a senior secured basis by each of the Guarantors. The Third Lien Notes are secured by third-priority liens on substantially all of the Company's assets that secure the Credit Facility. The Third Lien Notes have an interest rate of 12.0%, consisting of cash interest of 10.0% and paid-in-kind interest of 2.0%, per annum and mature on the earlier of June 1, 2020 or 12 months after the maturity date of the Company's Credit Facility (including any extension or refinancing of such facility). Interest is payable semi-annually on June 1 and December 1 of each fiscal year. On May 21, 2015, in connection with the issuance of the Third Lien Notes, the Company entered into a registration rights agreement with the initial purchasers of the Third Lien Notes pursuant to which the Company is obligated, within 270 days after the issuance of the Third Lien Notes, to file with the Securities and Exchange Commission under the Securities Act a registration statement with respect to an offer to exchange the Third Lien Notes for substantially identical registered new notes. The Company will be obligated to pay liquidated damages consisting of additional interest on the Third Lien Notes if, within the periods specified in the agreement, it does not file the exchange offer registration statement or if certain other events occur. The Third Lien Notes are senior secured obligations of the Company and rank effectively junior to its obligations under the Credit Facility and Second Lien Notes to the extent of the value of the collateral securing such indebtedness, effectively senior to its existing and future unsecured indebtedness to the extent of the value of the collateral securing the Third Lien Notes, effectively senior to all future junior lien obligations that rank below a third-priority basis to the extent of the value of the collateral securing the Third Lien Notes, effectively junior to all existing and future secured indebtedness secured by assets not constituting collateral under the Third Lien Notes, pari passu to all of the Company's existing and future senior debt, structurally subordinated to all existing and future indebtedness of any non-Guarantor subsidiaries and senior in right of payment to any existing or future subordinated debt. Upon the occurrence of certain change of control events, as defined in the indenture governing the Third Lien Notes, each holder of the Third Lien Notes will have the right to require that the Company repurchase all or a portion of such holder's Third Lien Notes in cash at a purchase price equal to 101% of the aggregate principal amount thereof plus any accrued and unpaid interest to the date of repurchase. The estimated fair value of the Third Lien Notes was $420.3 million as of June 30, 2015 (Level 2 in the fair value measurement hierarchy), based on quoted market prices for these same debt securities. The indentures governing the 2020 Senior Notes, 2021 Senior Notes, Second Lien Notes and Third Lien Notes contain covenants that, among other things, restrict the Company's ability to: (i) incur additional indebtedness, guarantee indebtedness or issue certain preferred shares; (ii) make loans, investments and other restricted payments; (iii) pay dividends on or make other distributions in respect of, or repurchase or redeem, capital stock; (iv) create or incur certain liens; (v) sell, transfer or otherwise dispose of certain assets; (vi) enter into certain types of transactions with the Company's affiliates; (vii) consolidate, merge or sell substantially all of the Company's assets; (viii) prepay, redeem or repurchase certain debt; (ix) alter the business the Company conducts and (x) enter into agreements restricting the ability of the Company's current and any future subsidiaries to pay dividends. Additionally, the Credit Facility, as amended, contains, among other standard affirmative and negative covenants, financial covenants including a maximum ratio of Total Senior Indebtedness to EBITDA (as defined therein) of not more than 1.0:1.0 and a minimum current ratio (as defined therein) of not less than 1.0 to 1.0. The Credit Facility also limits the Company's ability to make any dividends, distributions or redemptions. The Company was in compliance with all debt covenants at June 30, 2015. The Company's debt facilities contain significant cross default and/or cross acceleration provisions where a default under the Credit Facility or one of the indentures could enable the lenders of the other debt to also declare events of default and accelerate repayment of the obligations under those debt instruments. In general, these cross default/cross acceleration provisions are as follows: • The Credit Facility allows the lenders to declare an event of default if there is an event of default on other indebtedness and that default: (i) is the result of the failure to make any payment when due in respect of other indebtedness having an aggregate principal amount of at least 5% of the then effective borrowing base and such failure continues after the applicable grace or notice period; or (ii) is the result of a failure to perform any condition, covenant or other event and such failure permits the holders of such other indebtedness to cause the acceleration of such other indebtedness. • The indentures governing the 2020 Senior Notes, 2021 Senior Notes, Second Lien Notes and Third Lien Notes allow the lenders to declare an event of default if there is an event of default on other indebtedness and that default: (i) is caused by a failure to make any payment of principal prior to the expiration of the grace period following the final maturity date of such indebtedness; or (ii) results in the acceleration of such indebtedness prior to its stated maturity, and, in each case, the principal amount of any such indebtedness, together with the principal amount of any other indebtedness with respect to which an event described herein has occurred, aggregates $50.0 million or more. | 9. Long-Term Debt The Company's long-term debt as of December 31, 2014 and 2013 is as follows: At December 31, 2014 2013 (in thousands) Revolving credit facility, due 2018 435,150 401,150 Senior notes, due 2020 600,000 600,000 Senior notes, due 2021 700,000 700,000 ​ ​ ​ ​ ​ ​ ​ Long-term debt 1,735,150 1,701,150 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of December 31, 2014, the Company's credit facility consisted of a $750 million Credit Facility with a borrowing base supported by the Company's Mississippian Lime and Anadarko Basin oil and gas assets. On September 30, 2014, the Company entered into an Assignment and Borrowing Base Increase Agreement that increased the borrowing base from $475 million to $525 million. At December 31, 2014, the Company had drawn $435.2 million on the Credit Facility and had outstanding letters of credit obligations totaling $1.4 million. The Credit Facility matures on May 31, 2018 and borrowings thereunder are secured by substantially all of the Company's oil and natural gas properties and bear interest at LIBOR plus an applicable margin, depending upon the Company's borrowing base utilization, between 2.00% and 3.00% per annum. At December 31, 2014 and December 31, 2013, the weighted average interest rate was 2.8% and 2.5%, respectively. In addition to interest expense, the Credit Facility requires the payment of a commitment fee each quarter. The commitment fee is computed at the rate of either 0.375% or 0.50% per annum based on the average daily amount by which the borrowing base exceeds the outstanding borrowings during each quarter. The borrowing base under the Credit Facility is subject to semiannual redeterminations in April and October and up to one additional time per six month period following each scheduled borrowing base redetermination, as may be requested by the Company or the administrative agent, acting on behalf of lenders holding at least two-thirds of the outstanding loans and other obligations. Under the terms of the Credit Facility, the Company is required to repay the amount by which the principal balance of its outstanding loans and its letter of credit obligations exceed its redetermined borrowing base. The Company is permitted to make such repayment in six equal successive monthly payments commencing 30 days following the administrative agent's notice regarding such borrowing base reduction. The Credit Facility, as amended, contains, among other standard affirmative and negative covenants, financial covenants including a maximum ratio of net debt to EBITDA (i.e. leverage ratio) and a minimum current ratio (as defined therein) of not less than 1.0 to 1.0. The Company is required to maintain a leverage ratio of not more than 4.75 to 1.00 for the quarter ended December 31, 2014, and currently 4.00 to 1.00 for each quarter thereafter. The Credit Facility also limits the Company's ability to make any dividends, distributions or redemptions. As of December 31, 2014, the Company was in compliance with the current ratio and the ratio of debt to EBITDA covenants as set forth in the Credit Facility. The Company's current ratio at December 31, 2014 was 1.1 to 1.0. At December 31, 2014, the Company's leverage ratio was 3.7 to 1.0. In March 2015, the Company received a waiver related to the requirement that an unqualified auditors' opinion without an explanatory paragraph in relation to going concern accompany the 2014 financial statements. Based upon the recent amendments to the Credit Facility, the Company believes its carrying amount at December 31, 2014 approximates its fair value (Level 2) due to the variable nature of the applicable interest rate and current financing terms available to the Company. On October 1, 2012, the Company issued $600 million in aggregate principal amount of 10.75% senior notes due 2020 (the "2020 Outstanding Notes") in a private placement conducted pursuant to Rule 144A and Regulation S under the Securities Act of 1933, as amended (the "Securities Act"). On October 29, 2013, substantially all of the 2020 Outstanding Notes were exchanged for an equal principal amount of registered 10.75% senior subordinated notes due 2020 pursuant to an effective registration statement on Form S-4 filed on August 30, 2013 under the Securities Act (the "2020 Exchange Notes"). The 2020 Exchange Notes are identical to the 2020 Outstanding Notes except that the 2020 Exchange Notes are registered under the Securities Act and do not have restrictions on transfer, registration rights or provisions for additional interest. As used herein, the term "2020 Senior Notes" refers to both the 2020 Outstanding Notes and the 2020 Exchange Notes. The 2020 Senior Notes were co-issued on a joint and several basis by the Company and its wholly owned subsidiary, Midstates Sub. The Company does not have any operations or independent assets other than its 100% ownership interest in Midstates Sub and there are no other subsidiaries of the Company. The 2020 Senior Notes Indenture does not create any restricted assets within Midstates Sub, nor does it impose any significant restrictions on the ability of Midstates Sub to pay dividends or make loans to the Company or limit the ability of the Company to advance loans to Midstates Sub. At any time prior to October 1, 2015, the Company may, under certain circumstances, redeem up to 35% of the aggregate principal amount of the 2020 Senior Notes with the net proceeds of a public or private equity offering at a redemption price of 110.75% of the principal amount of the 2020 Senior Notes, plus any accrued and unpaid interest up to the redemption date. In addition, at any time before October 1, 2016, the Company may redeem all or a part of the 2020 Senior Notes at a redemption price equal to 100% of the principal amount of 2020 Senior Notes redeemed plus the Applicable Premium (as defined in the Indenture) at the redemption date, plus any accrued and unpaid interest and Additional Interest (as defined in the Indenture), if any, up to, the redemption date. On or after October 1, 2016, the Company may redeem all or a part of the 2020 Senior Notes at varying redemption prices (expressed as percentages of principal amount) set forth in the Indenture plus accrued and unpaid interest and Additional Interest (as defined in the Indenture), if any, on the 2020 Senior Notes redeemed, up to, the redemption date. The Indenture contains covenants that, among other things, restrict the Company's ability to: (i) incur additional indebtedness, guarantee indebtedness or issue certain preferred shares; (ii) make loans, investments and other restricted payments; (iii) pay dividends on or make other distributions in respect of, or repurchase or redeem, capital stock; (iv) create or incur certain liens; (v) sell, transfer or otherwise dispose of certain assets; (vi) enter into certain types of transactions with the Company's affiliates; (vii) consolidate, merge or sell substantially all of the Company's assets; (viii) prepay, redeem or repurchase certain debt; (ix) alter the business the Company conducts and (x) enter into agreements restricting the ability of the Company's current and any future subsidiaries to pay dividends. Upon the occurrence of certain change of control events, as defined in the Indenture, each holder of the 2020 Senior Notes will have the right to require that the Company repurchase all or a portion of such holder's 2020 Senior Notes in cash at a purchase price equal to 101% of the aggregate principal amount thereof plus any accrued and unpaid interest to the date of repurchase. The estimated fair value of the 2020 Senior Notes was $327.0 million as of December 31, 2014 (Level 2 in the fair value measurement hierarchy due to the limited trading volume on the secondary market), based on quoted market prices for these same debt securities. The effective annual interest rate for the 2020 Senior Notes was approximately 11.1% for the years ended December 31, 2014 and 2013. On May 31, 2013, the Company issued $700 million in aggregate principal amount of 9.25% senior notes due 2021 (the "2021 Outstanding Notes") in a private placement conducted pursuant to Rule 144A and Regulation S under the Securities Act. On October 29, 2013, all of the 2021 Outstanding Notes were exchanged for an equal principal amount of registered 9.25% senior subordinated notes due 2021 pursuant to an effective registration statement on Form S-4 filed on August 30, 2013 under the Securities Act (the "2021 Exchange Notes"). The 2021 Exchange Notes are identical to the 2021 Outstanding Notes except that the 2021 Exchange Notes are registered under the Securities Act and do not have restrictions on transfer, registration rights or provisions for additional interest. As used herein, the term "2021 Senior Notes" refers to both the 2021 Outstanding Notes and the 2021 Exchange Notes. The proceeds from the offering of $700 million (net of the initial purchasers' discount and related offering expenses) were used to fund the Anadarko Basin Acquisition and the related expenses, to pay the expenses related to an amendment to the Company's revolving credit facility, to repay $34.3 million in outstanding borrowings under the Company's Credit Facility, and for general corporate purposes. The 2021 Senior Notes rank pari passu in right of payment with the 2020 Senior Notes. The 2021 Senior Notes were co-issued on a joint and several basis by the Company and its wholly owned subsidiary, Midstates Sub. The Company does not have any operations or independent assets other than its 100% ownership interest in Midstates Sub and there are no other subsidiaries of the Company. The 2021 Senior Notes indenture does not create any restricted assets within Midstates Sub, nor does it impose any significant restrictions on the ability of Midstates Sub to pay dividends or make loans to the Company or limit the ability of the Company to advance loans to Midstates Sub. Prior to June 1, 2016, the Company may, under certain circumstances, redeem up to 35% of the aggregate principal amount of the 2021 Senior Notes (less the amount of 2021 Senior Notes redeemed pursuant to the preceding paragraph) with the net proceeds of any Equity Offerings at a redemption price of 109.25% of the principal amount of the 2021 Senior Notes redeemed, plus any accrued and unpaid interest, if any, up to the redemption date. In addition, at any time before June 1, 2016, the Company may redeem all or a part of the 2021 Senior Notes at a redemption price equal to 100% of the principal amount of the 2021 Senior Notes redeemed plus the Applicable Premium (as defined in the Indenture) at the redemption date, plus any accrued and unpaid interest and Additional Interest (as defined in the 2021 Senior Notes Indenture), if any, up to, the redemption date. On or after October 1, 2016, the Company may redeem all or a part of the 2021 Senior Notes at varying redemption prices (expressed as percentages of principal amount) set forth in the 2021 Senior Notes Indenture plus accrued and unpaid interest and Additional Interest (as defined in the 2021 Senior Notes Indenture), if any, on the 2021 Senior Notes redeemed, up to, the redemption date. The terms of the covenants and change in control provisions in the 2021 Senior Notes Indenture are substantially identical to those of the 2020 Senior Notes discussed above. The estimated fair value of the 2021 Senior Notes was $357.0 million as of December 31, 2014 (Level 2 in the fair value measurement hierarchy due to the limited trading volume on the secondary market), based on quoted market prices for these same debt securities. The effective annual interest rate for the 2021 Senior Notes was approximately 9.6% and 9.5% for the years ended December 31, 2014 and 2013, respectively. |
Preferred Stock_Units
Preferred Stock/Units | 6 Months Ended | 12 Months Ended |
Jun. 30, 2015 | Dec. 31, 2014 | |
Preferred Stock. | ||
Preferred Stock/Units | 11. Preferred Stock In connection with the Company's acquisition of its Mississippian Lime properties, on September 28, 2012, the Company designated 325,000 shares of Series A Mandatorily Convertible Preferred Stock (the "Series A Preferred Stock") with an initial liquidation preference of $1,000 per share and an 8% per annum dividend, payable semiannually at the Company's option in cash or through an increase in the liquidation preference. On March 30, 2015, the Company elected to pay the $13.0 million semi-annual dividend due on that date through an increase in the Series A Preferred Stock liquidation preference to $1,241 per share. Therefore, for the three months ended June 30, 2015, the $7.9 million Series A Preferred Stock dividend, which the Company paid through the adjustment to the liquidation preference, is based upon the estimated fair value of 71,893 common shares that would have been issued had the Series A Preferred Stock dividend for the three months been converted into common shares at a conversion price of $110.00 per share. On September 30, 2015, the Series A Preferred Stock converted into 3,738,424 shares of the Company's common stock at a conversion price of $110.00 per share. | 10. Preferred Stock/Units At December 31, 2014, the Company had 325,000 shares of Series A Mandatorily Convertible Preferred Stock (the "Series A Preferred Stock") issued and outstanding. In connection with the Eagle Property Acquisition, on September 28, 2012, the Company designated 325,000 shares of Series A Preferred Stock with an initial liquidation preference of $1,000 per share and an 8% per annum dividend, payable semiannually at the Company's option in cash or through an increase in the liquidation preference. The Series A Preferred Shares are convertible after October 1, 2013, in whole but not in part and at the option of the holders of a majority of the outstanding shares of Series A Preferred Stock, into a number shares of the Company's common stock calculated by dividing the then-current liquidation preference by the conversion price of $135.00 per share and, if not previously converted, are mandatorily convertible at September 30, 2015 into shares of the Company's common stock at a conversion price no greater than $135.00 per share and no less than $110.00 per share, with the ultimate conversion price dependent upon the volume weighted average price of the Company's common stock during the 15 trading days immediately prior to September 30, 2015. The Series A Preferred Stock was issued on October 1, 2012. On September 30, 2015, the Series A Preferred Stock converted into 3,738,424 shares of the Company's common stock at a conversion price of $110.00 per share. For the twelve months ended December 31, 2014, the $10.4 million Series A Preferred Stock dividend was based upon the estimated fair value of 265,979 common shares that would have been issued had the notional dividend amounts for the year of $29.3 million been converted into common shares at a conversion price of $110.00 per share. For the twelve months ended December 31, 2013, the $15.6 million Series A Preferred Stock dividend was based upon the estimated fair value of 245,912 common shares that would have been issued had the notional dividend amounts for the year of $27.1 million been converted into common shares at a conversion price of $110.00 per share. The following table summarizes changes in the number of Series A Preferred Stock shares since January 1, 2012: Series A Share count as of January 1, 2012 — Issuance of preferred stock as consideration in Eagle Property Acquisition 325,000 ​ ​ ​ ​ Share count as of December 31, 2012 325,000 ​ ​ ​ ​ Share count as of December 31, 2013 325,000 ​ ​ ​ ​ Share count as of December 31, 2014 325,000 In December 2011, Holdings LLC, FR Midstates Holdings LLC ("FR Midstates") and Midstates Petroleum Holdings, Inc. ("Petroleum Inc.") entered into an amended and restated limited liability company agreement, which was later amended in March 2012, to provide for the issuance of up to 65,000, or $65 million in aggregate value, of certain mandatorily redeemable convertible preferred units (the "Preferred Units") between December 15, 2011 and June 10, 2015. During the year ended December 31, 2012, Holdings LLC issued 65,000 Preferred Units to FR Midstates for aggregate cash proceeds of $65.0 million. On April 26, 2012, the Company used $67.1 million of the proceeds from its initial public offering to redeem the Preferred Units in full, including interest and other charges. As such, at December 31, 2012, the Preferred Units are no longer outstanding. The Company recorded $2.1 million related to interest expense associated with these Preferred Units for the year ended December 31, 2012. There was no related interest expense for the years ended December 31, 2014 or 2013. |
Equity and Share-Based Compen67
Equity and Share-Based Compensation | 6 Months Ended | 12 Months Ended |
Jun. 30, 2015 | Dec. 31, 2014 | |
Equity and Share-Based Compensation | ||
Equity and Share-Based Compensation | 12. Equity and Share-Based Compensation The following table summarizes changes in the number of outstanding shares since December 31, 2014: Number of Shares Common Stock Treasury Stock Share count as of December 31, 2014 7,049,173 (53,467 ) Grants of restricted stock 268,677 — Forfeitures of restricted stock (60,843 ) — Acquisition of treasury stock — (38,572 ) ​ ​ ​ ​ ​ ​ ​ Share count as of June 30, 2015 7,257,007 (92,039 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ The Company's 2012 LTIP (discussed below) allows for the recipients of restricted stock to surrender a portion of their shares upon vesting to satisfy Federal Income Tax ("FIT") withholding requirements. The Company then remits to the IRS the cash equivalent of the FIT withholding liability. Shares surrendered to the Company in this fashion have been treated as treasury shares acquired at a cost equivalent to the related tax liability. These shares are available for future issuance by the Company. At June 30, 2015, 1,099 incentive units were issued and outstanding. These incentive units were issued prior to the Company's initial public offering. In connection with the corporate reorganization that occurred immediately prior to the Company's initial public offering, these incentive units held in the Company were contributed to FR Midstates Interholding, LP ("FRMI") in exchange for incentive units in FRMI. Holders of FRMI incentive units will receive, out of proceeds otherwise distributable to FRMI, a percentage interest in the amounts distributed to FRMI in excess of certain multiples of FRMI's aggregate capital contributions and investment expenses ("FRMI Profits"). Although any future payments to the incentive unit holders will be made out of the proceeds otherwise distributable to FRMI and not by the Company, the Company will be required to record a non-cash compensation charge in the period any payment is made related to the FRMI incentive units. To date, no compensation expense related to the incentive units has been recognized by the Company, as any payout under the incentive units is not considered probable, and thus, the amount of FRMI Profits, if any, cannot be determined. On April 20, 2012, the Company established the 2012 Long Term Incentive Plan (the "2012 LTIP") and filed a Form S-8 with the SEC, registering 656,343 shares of common stock for future issuance under the terms of the 2012 LTIP. On May 27, 2014, the Company filed a Form S-8 with the SEC, increasing the number of shares available for future issuance under the terms of the 2012 LTIP to 863,843 shares of common stock. The 2012 LTIP provides a means for the Company to attract and retain employees, directors and consultants, and a method whereby employees, directors and consultants of the Company who contribute to its success can acquire and maintain stock ownership or awards, the value of which is tied to the performance of the Company, thereby strengthening their concern for the welfare of the Company and their desire to remain employed. The 2012 LTIP provides for the granting of Options (incentive and other), Restricted Stock Awards, Restricted Stock Units, Stock Appreciation Rights, Dividend Equivalents, Bonus Stock, Other Stock-Based Awards, Annual Incentive Awards, Performance Awards, or any combination of the foregoing (the "Awards"). Subject to certain limitations as defined in the 2012 LTIP, the terms of each Award are as determined by the Compensation Committee of the Board of Directors. As of June 30, 2015 a total of 863,843 common share Awards are authorized for issuance and shares of stock subject to an Award that expire, or are canceled, forfeited, exchanged, settled in cash or otherwise terminated, will again be available for future Awards under the 2012 LTIP. At June 30, 2015, the Company had 377,556 non-vested shares of restricted common stock to directors, management and employees outstanding pursuant to the 2012 LTIP. Shares granted under the LTIP generally vest ratably over a period of three years (one-third on each anniversary of the grant); however, beginning in 2013, shares granted under the 2012 LTIP to directors are subject to one-year cliff vesting. The fair value of restricted stock grants is based on the value of the Company's common stock on the date of grant. Compensation expense is recognized ratably over the requisite service period. The following table summarizes the Company's non-vested share award activity for the six months ended June 30, 2015: Shares Weighted Non-vested shares outstanding at December 31, 2014 306,201 52.76 Granted 268,677 12.29 Vested (136,479 ) 57.23 Forfeited (60,843 ) 47.06 ​ ​ ​ ​ ​ ​ ​ Non-vested shares outstanding at June 30, 2015 377,556 22.76 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Unrecognized expense, adjusted for estimated forfeitures, as of June 30, 2015 for all outstanding restricted stock awards was $6.4 million and will be recognized over a weighted average period of 1.8 years. At June 30, 2015, 170,271 shares remain available for issuance under the terms of the 2012 LTIP. | 11. Equity and Share-Based Compensation At December 31, 2014, the Company had 7,049,173 and 6,995,705 shares of its common stock issued and outstanding, respectively. On April 25, 2012, the Company completed its initial public offering of common stock pursuant to a registration statement on Form S-1 (File 333-177966), as amended and declared effective by the SEC on April 19, 2012. Pursuant to the registration statement, the Company registered the offer and sale of 2,760,000 shares of $0.01 par value common stock, which included 600,000 shares of stock sold by the selling shareholders and 360,000 shares of common stock sold by the selling stockholders pursuant to an option granted to the underwriters to cover over-allotments. After the corporate reorganization and the completion of its initial public offering discussed above, the Company is authorized to issue up to a total of 100,000,000 shares of its common stock with a par value of $0.01 per share, and 50,000,000 shares of its preferred stock with a par value of $0.01 per share. Holders of the Company's common shares are entitled to one vote for each share held of record on all matters submitted to a vote of stockholders and to receive ratably in proportion to the shares of common stock held by them any dividends declared from time to time by the board of directors. The common shares have no preferences or rights of conversion, exchange, pre-exemption or other subscription rights. With respect to preferred shares, the Company is authorized, without further stockholder approval, to establish and issue from time to time one or more classes or series of preferred stock with such powers, preferences, rights, qualifications, limitations and restrictions as determined by its board of directors. See discussion of Series A Preferred Shares in Note 10. The following table summarizes changes in the number of shares of common stock and treasury stock outstanding shares since January 1, 2012: Common Treasury Share count as of January 1, 2012 — — Issuance of common stock in pre IPO reorganization 4,763,435 — Proceeds from the sale of common stock to public 1,800,000 — Issuance of preferred stock as consideration in Eagle Property Acquisition — — Share based compensation grants of restricted stock 102,951 — Forfeitures of restricted stock (4,415 ) — ​ ​ ​ ​ ​ ​ ​ Share count as of December 31, 2012 6,661,971 — Grants of restricted stock 284,024 — Forfeitures of restricted stock (53,421 ) — Acquisition of treasury stock — (11,870 ) ​ ​ ​ ​ ​ ​ ​ Share count as of December 31, 2013 6,892,574 (11,870 ) Grants of restricted stock 344,748 — Forfeitures of restricted stock (188,149 ) — Acquisition of treasury stock — (41,597 ) ​ ​ ​ ​ ​ ​ ​ Share count as of December 31, 2014 7,049,173 (53,467 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ At December 31, 2014, 1,099 incentive units were issued and outstanding. In connection with the corporate reorganization that occurred immediately prior to our initial public offering, these incentive units held in the Company were contributed to FR Midstates Interholding, LP ("FRMI") in exchange for incentive units in FRMI. Holders of FRMI incentive units will receive, out of proceeds otherwise distributable to FRMI, a percentage interest in the amounts distributed to FRMI in excess of certain multiples of FRMI's aggregate capital contributions and investment expenses ("FRMI Profits"). Although any future payments to the incentive unit holders will be made out of the proceeds otherwise distributable to FRMI and not by the Company, the Company will be required to record a non-cash compensation charge in the period any payment is made related to the FRMI incentive units. To date, no compensation expense related to the incentive units has been recognized by the Company, as any payout under the incentive units is not considered probable, and thus, the amount of FRMI Profits, if any, cannot be determined. On April 20, 2012, the Company established the 2012 Long Term Incentive Plan (the "2012 LTIP") and filed a Form S-8 with the SEC, registering 656,343 shares of common stock for future issuance under the terms of the 2012 LTIP. On May 27, 2014, the Company filed a Form S-8 with the SEC, increasing the number of shares available for future issuance under the terms of the 2012 LTIP to 863,843 shares of common stock. The 2012 LTIP provides a means for the Company to attract and retain employees, directors and consultants, and a method whereby employees, directors and consultants of the Company who contribute to its success can acquire and maintain stock ownership or awards, the value of which is tied to the performance of the Company, thereby strengthening their concern for the welfare of the Company and their desire to remain employed. The 2012 LTIP provides for the granting of Options (Incentive and other), Restricted Stock Awards, Restricted Stock Units, Stock Appreciation Rights, Dividend Equivalents, Bonus Stock, Other Stock-Based Awards, Annual Incentive Awards, Performance Awards, or any combination of the foregoing (the "Awards"). Subject to certain limitations as defined in the 2012 LTIP, the terms of each Award are as determined by the Compensation Committee of the Board of Directors. As of December 31, 2014, a total of 863,843 common share Awards are authorized for issuance under the 2012 LTIP and shares of stock subject to an Award that expire, or are canceled, forfeited, exchanged, settled in cash or otherwise terminated, will again be available for future Awards under the 2012 LTIP. At December 31, 2014 the Company had 306,201 shares of restricted common stock outstanding pursuant to the 2012 LTIP. Shares granted under the LTIP generally vest ratably over a period of three years (one-third on each anniversary of the grant), however, beginning in 2013, shares granted under the 2012 LTIP to directors are subject to one-year cliff vesting. The fair value of restricted stock grants is based on the value of the Company's common stock on the date of grant. Compensation expense is recognized ratably over the requisite three year service period. The following table summarizes the Company's non-vested share award activity for the years ended December 31, 2014 and 2013: Shares Weighted Non-vested shares outstanding at December 31, 2012 98,535 126.13 Granted 284,024 68.22 Vested (32,772 ) 126.18 Forfeited (53,420 ) 86.46 ​ ​ ​ ​ ​ ​ ​ Non-vested shares outstanding at December 31, 2013 296,367 77.81 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Granted 344,748 46.61 Vested (146,764 ) 72.08 Forfeited (188,150 ) 65.83 ​ ​ ​ ​ ​ ​ ​ Non-vested shares outstanding at December 31, 2014 306,201 52.76 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Unrecognized expense as of December 31, 2014 for all outstanding restricted stock awards, adjusted for estimated forfeitures, was $10.9 million and will be recognized over a weighted average period of 1.97 years. At December 31, 2014, 378,105 shares remain available for issuance under the terms of the 2012 LTIP. The share-based compensation costs (net of amounts capitalized to oil and gas properties) recognized as general and administrative expense by the Company for the years ended December 31, 2014, 2013 and 2012 of $8.6 million, $5.7 million and $2.5 million, respectively, all relate to the 2012 LTIP. During the quarter ended December 31, 2014, the Company announced that its Houston office would be closing, resulting in accelerated vesting of restricted stock awards in the period for those employees subject to a severance agreement. Of the $8.6 million in share-based compensation for the twelve months ended December 31, 2014, approximately $2.9 million was related to the accelerated vesting for employees impacted by the office closure. For the years ended December 31, 2014 and 2013, the Company capitalized $2.2 million and $1.4 million, respectively, of qualifying share-based compensation costs to oil and gas properties. |
Income Taxes68
Income Taxes | 6 Months Ended | 12 Months Ended |
Jun. 30, 2015 | Dec. 31, 2014 | |
Income Taxes | ||
Income Taxes | 13. Income Taxes The Company has recorded a tax benefit on its year-to-date pre-tax loss. The Company believes this methodology to be more appropriate at this time due to uncertainty in forecasting the annual effective tax rate (or benefit) on 2015 income (or loss) due to previously recorded property impairments and the effects of federal and state valuation allowance adjustments. For the six months ended June 30, 2015, the Company's effective tax rate was a benefit of approximately 1.1%. The Company's effective tax rate differs from the federal statutory rate of 35% due to the effect of state income taxes and changes in the valuation allowance. This year, the Company recorded $305.9 million in additional valuation allowance in light of the impairment of oil and gas properties bringing the total valuation allowance to $309.7 million at June 30, 2015. A valuation allowance has been recorded as management does not believe that it is more-likely-than-not that the NOLs are realizable except to the extent of future taxable income primarily related to the excess of book carrying value of properties over their respective tax bases. No other sources of future taxable income are considered in this judgment. The Company expects to incur a tax loss in the current year due to the flexibility in deducting or capitalizing current year intangible drilling costs; thus no current income taxes are anticipated to be paid. | 12. Income Taxes Prior to its corporate reorganization (See Note 1), the Company was a limited liability company and not subject to federal income tax or state income tax (in most states). Accordingly, no provision for federal or state income taxes was recorded prior to the corporate reorganization as the Company's equity holders were responsible for income tax on the Company's profits. In connection with the closing of the Company's initial public offering, the Company merged into a corporation and became subject to federal and state income taxes. The Company's book and tax basis in assets and liabilities differed at the time of the corporate reorganization due primarily to different cost recovery methodology utilized for book and tax purposes for the Company's oil and natural gas properties. In the quarter ended June 30, 2012, the Company recorded a one-time charge to income tax expense of $149.5 million to recognize this deferred tax liability related to the Company's change in tax status caused by the initial public offering. The Company incurred a tax net operating loss ("NOL") in the current year due principally to the ability to expense certain intangible drilling and development costs under current law. There is no tax refund available to the Company, nor is there any current federal income tax payable. In light of the impairment of oil and gas properties recorded in the year ended December 31, 2013, Management recorded a $45.7 million valuation allowance against the Company's federal and State of Louisiana NOLs for 2013. Management believed that the balance of the Company's NOLs were realizable only to the extent of future taxable income primarily related to the excess of book carrying value of properties over their respective tax bases. No other sources of future taxable income are considered in this judgment. During the year ended December 31, 2014, the Company recorded unrealized gains on commodity derivative contracts in the amount of $157.5 million, which resulted in pre-tax book income $123.3 million. This activity resulted in the full release of the federal valuation allowance of $39.9 million. The Company continues to report a net valuation allowance of $3.8 million for Louisiana state losses. The Company's NOLs were incurred in the tax years 2012 through 2014. U.S. federal and State of Oklahoma NOLs will generally be available for use through the tax years 2033 and 2034, respectively, and its State of Louisiana NOLs are generally available through 2023 and 2029, respectively. The State of Texas currently has no NOL carryover provision. The Company believes that Section 382 of the Internal Revenue Code of 1986, as amended, which relates to tax attribute limitations upon the 50% or greater change of ownership of an entity during any three-year look back period, will not have an adverse effect on future NOL usage. On September 13, 2013, the US Treasury and IRS issued final Tangible Property Regulations ("TPR") under IRC Section 162 and IRC Section 263(a). The regulations are effective for tax years beginning on or after January 1, 2014. Due to these changes, certain portions may require an accounting method change on a retroactive basis, thus requiring a IRC Section 481(a) adjustment related to fixed and real asset deferred taxes. The accounting rules under ASC 740 treat the release of the regulations as a change in tax law as of the date of issuance and require the Company to determine whether there will be an impact on its financial statements for the period ended December 31, 2014. Any such impact of the final tangible property regulations would affect temporary deferred taxes only and result in a balance sheet reclassification within non-current deferred taxes. The Company has analyzed the expected impact of the TPR on the Company and concluded that the expected impact is minimal. The Company will continue to monitor the impact of any future changes to the TPR on the Company prospectively. As of December 31, 2014, the Company has not recorded a reserve for any uncertain tax positions. No federal income tax payments are expected in the upcoming four quarterly reporting periods. The Company expects $0.6 million in Texas Margins Tax payments in 2015. Years Ended December 31, 2014 2013 2012 (in thousands) Current United States — — — State 809 — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total current 809 — — Deferred United States 3,863 (130,906 ) 137,496 State 1,723 (15,623 ) 20,390 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total deferred 5,586 (146,529 ) 157,886 Total income tax provision (benefit) 6,395 (146,529 ) 157,886 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ The Company's estimated income tax expense differs from the amount derived by applying the statutory federal rate to pretax income principally due the effect of the following items (in thousands): Years Ended December 31, 2014 2013 2012 (in thousands) Income before taxes 123,324 (490,514 ) 7,789 Statutory rate 35 % 35 % 35 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Income tax expense computed at statutory rate 43,164 (171,680 ) 2,726 Reconciling items: Non-deductible pre-IPO loss — — 4,561 State income taxes, net of federal benefit 4,398 (10,886 ) 1,053 Change in valuation allowance (42,134 ) 45,688 — Change in state rate (414 ) (10,500 ) — Other, net 1,381 849 57 Change in tax status(1) — — 149,489 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total income tax provision (benefit) 6,395 (146,529 ) 157,886 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (1) The change in tax status for the year ended December 31, 2012 is split between federal of $130.2 million and state of $19.3 million. Deferred income taxes primarily represent the net tax effect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The components of our deferred taxes are detailed in the table below (in thousands): Years Ended December, 31 2014 2013 Deferred tax assets—current Derivative instruments and other — 15,581 Less valuation allowance — (3,744 ) ​ ​ ​ ​ ​ ​ ​ Total deferred tax assets, current — 11,837 Deferred tax assets—noncurrent US tax loss carryforwards 75,604 151,872 State tax loss carryforwards 7,122 14,154 Employee benefit plans 2,193 1,539 Less valuation allowance (3,826 ) (41,944 ) ​ ​ ​ ​ ​ ​ ​ Total deferred tax assets, noncurrent 81,093 125,621 Deferred tax liabilities—current Derivative instruments and other 44,862 — ​ ​ ​ ​ ​ ​ ​ Total deferred tax liabilities—current 44,862 — Deferred tax liabilities—noncurrent Oil and gas properties and equipment 45,272 140,912 ​ ​ ​ ​ ​ ​ ​ Total deferred tax liabilities, noncurrent 45,272 140,912 Reflected in the accompanying balance sheet as: Net deferred tax asset, current — 11,837 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net deferred tax liability, current 44,862 — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net deferred tax asset, noncurrent 35,821 — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net deferred tax liability, noncurrent — 15,291 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Earnings (Loss) Per Share
Earnings (Loss) Per Share | 6 Months Ended | 12 Months Ended |
Jun. 30, 2015 | Dec. 31, 2014 | |
Net Loss Per Share | ||
Earnings (Loss) Per Share | 14. Net Loss Per Share The Company's Series A Preferred Stock has the nonforfeitable right to participate on an as converted basis at the conversion rate then in effect in any common stock dividends declared and as such, is considered a participating security. The Company's nonvested stock awards, which are granted as part of the 2012 LTIP, contain nonforfeitable rights to dividends and as such, are considered to be participating securities and, together with the Series A Preferred Stock, are included in the computation of basic and diluted loss per share, pursuant to the two-class method. In the calculation of basic loss per share attributable to common shareholders, participating securities are allocated earnings based on actual dividend distributions received plus a proportionate share of undistributed net income attributable to common shareholders, if any, after recognizing distributed earnings. The Company's participating securities do not participate in undistributed net losses because they are not contractually obligated to do so. The computation of diluted earnings per share attributable to common shareholders reflects the potential dilution that could occur if securities or other contracts to issue common shares that are dilutive were exercised or converted into common shares (or resulted in the issuance of common shares) and would then share in the earnings of the Company. During the periods in which the Company records a loss from continuing operations attributable to common shareholders, securities would not be dilutive to net loss per share and conversion into common shares is assumed to not occur. Diluted net income per share attributable to common shareholders is calculated under both the two-class method and the treasury stock method; the more dilutive of the two calculations is presented below. The following table (in thousands, except per share amounts) provides a reconciliation of net loss to preferred shareholders, common shareholders, and non-vested restricted shareholders for purposes of computing net loss per share for the three and six months ended June 30, 2015 and 2014, respectively: Three Months Ended Six Months Ended 2015 2014 2015 2014 Net loss (598,437 ) (2,098 ) (791,989 ) (85,743 ) Preferred Dividend(1) (669 ) (4,806 ) (800 ) (7,426 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net loss attributable to shareholders (599,106 ) (6,904 ) (792,789 ) (93,169 ) Participating securities—Series A Preferred Stock(2) — — — — Participating securities—Non-vested Restricted Stock(2) — — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net loss attributable to common shareholders (599,106 ) (6,904 ) (792,789 ) (93,169 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted average shares outstanding 6,774 6,645 6,750 6,622 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net loss per share (88.44 ) (1.04 ) (117.45 ) (14.07 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (1) Calculation of the preferred stock dividend is discussed in "—Note 11. Preferred Stock" (2) As these shares are participating securities that participate in earnings, but are not required to participate in losses, this calculation demonstrates that there is not an allocation of the loss to the non-vested restricted stockholders. The aggregate number of common shares outstanding at June 30, 2015 was 7,257,007 of which 377,556 were non-vested restricted shares. The aggregate number of shares of Series A Preferred Stock outstanding at June 30, 2015 was 325,000, each with a liquidation preference of $1,241 representing on an as-converted basis approximately 3,666,549 common shares based upon a conversion price of $110.00 per share, which have been excluded from the weighted average shares outstanding for EPS purposes for the three and six months ended June 30, 2015 due to their anti-dilutive effect. | 13. Earnings (Loss) Per Share The Company's Series A Preferred Stock issued in connection with the Eagle Property Acquisition has the nonforfeitable right to participate on an as converted basis at the conversion rate then in effect in any common stock dividends declared and as such, is considered a participating security. The Company's nonvested stock awards, which are granted as part of the 2012 LTIP, contain nonforfeitable rights to dividends and as such, are considered to be participating securities and, together with the Series A Preferred Stock, are included in the computation of basic and diluted earnings (loss) per share, pursuant to the two-class method. In the calculation of basic earnings (loss) per share attributable to common shareholders, participating securities are allocated earnings based on actual dividend distributions received plus a proportionate share of undistributed net income attributable to common shareholders, if any, after recognizing distributed earnings. The Company's participating securities do not participate in undistributed net losses because they are not contractually obligated to do so. The computation of diluted earnings per share attributable to common shareholders reflects the potential dilution that could occur if securities or other contracts to issue common shares that are dilutive were exercised or converted into common shares (or resulted in the issuance of common shares) and would then share in the earnings of the Company. During the periods in which the Company records a loss from continuing operations attributable to common shareholders, securities would not be dilutive to net loss per share and conversion into common shares is assumed to not occur. Diluted net income per share attributable to common shareholders is calculated under both the two-class method and the treasury stock method; the more dilutive of the two calculations is presented below. The following table (in thousands, except per share amounts) provides a reconciliation of net income (loss) to preferred shareholders, common shareholders, and participating securities for purposes of computing net income (loss) per share: At December 31, 2014 2013 2012 (in thousands) Net income (loss) 116,929 (343,985 ) (150,097 ) Preferred Dividend(1) (10,378 ) (15,589 ) (6,500 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income (loss) attributable to shareholders 106,551 (359,574 ) (156,597 ) Participating securities—Series A Preferred Stock (35,696 ) — — Participating securities—Non-vested Restricted Stock (3,584 ) — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income (loss) attributable to common shareholders 67,271 (359,574 ) (156,597 ) Weighted average shares outstanding 6,644 6,576 5,997 Basic and diluted net income (loss) per share 10.13 (54.70 ) (26.11 ) (1) Calculation of the preferred stock dividend is discussed in Note 10. (2) As these shares are participating securities that participate in earnings, but are not required to participate in losses, this calculation demonstrates that there is not an allocation of the loss to the non-vested restricted stockholders. |
Concentrations of Credit Risk
Concentrations of Credit Risk | 12 Months Ended |
Dec. 31, 2014 | |
Concentrations of Credit Risk | |
Concentrations of Credit Risk | 14. Concentrations of Credit Risk Financial instruments which potentially subject the Company to credit risk consist primarily of cash balances, accounts receivable and derivative financial instruments. The Company maintains cash and cash equivalents in bank deposit accounts which, at times, may exceed the federally insured limits. The Company has not experienced any significant losses from such investments. The Company attempts to limit the amount of credit exposure to any one financial institution or company. The Company normally sells production to a relatively small number of purchasers, as is customary in the exploration, development and production business. The Company typically sells a substantial portion of production under short-term (usually one month) contracts tied to a local index. The Company does not have any long-term, fixed-price sales contracts. For the year ended December 31, 2014, four purchasers accounted for 28%, 18%, 15% and 12% respectively, of the Company's revenue. For the year ended December 31, 2013, five purchasers accounted for 28%, 16%, 13%, 12% and 11% respectively, of the Company's revenue. For the year ended December 31, 2012, three purchasers accounted for 41%, 32% and 10%, respectively, of the Company's revenue. Substantially all of the Company's accounts receivable result from the sale of oil, natural gas and natural gas liquids. At December 31, 2014, four purchasers accounted for approximately 25%, 23%, 15% and 13% respectively, of the accounts receivable balance. At December 31, 2013, three purchasers accounted for approximately 31%, 16%, and 13%, respectively, of the accounts receivable balance. Derivative financial instruments are generally executed with major financial institutions that expose the Company to market and credit risks and which may, at times, be concentrated with certain counterparties. The credit worthiness of the counterparties is subject to continual review. The Company also has netting arrangements in place with counterparties to reduce credit exposure. The Company has not experienced any losses from such instruments. |
Commitments and Contingencies71
Commitments and Contingencies | 6 Months Ended | 12 Months Ended |
Jun. 30, 2015 | Dec. 31, 2014 | |
Commitments and Contingencies | ||
Commitments and Contingencies | 15. Commitments and Contingencies The Company is involved in various matters incidental to its operations and business that might give rise to a loss contingency. These matters may include legal and regulatory proceedings, commercial disputes, claims from royalty, working interest and surface owners, property damage and personal injury claims and environmental authorities or other matters. In addition, the Company may be subject to customary audits by governmental authorities regarding the payment and reporting of various taxes, governmental royalties and fees as well as compliance with unclaimed property (escheatment) requirements and other laws. Further, other parties with an interest in wells operated by the Company have the ability under various contractual agreements to perform audits of its joint interest billing practices. The Company vigorously defends itself in these matters. If the Company determines that an unfavorable outcome or loss of a particular matter is probable and the amount of the loss can be reasonably estimated, it accrues a liability for the contingent obligation. As new information becomes available or as a result of legal or administrative rulings in similar matters or a change in applicable law, the Company's conclusions regarding the probability of outcomes and the amount of estimated loss, if any, may change. The impact of subsequent changes to the Company's accruals could have a material effect on its results of operations. | 15. Commitments and Contingencies At December 31, 2014, contractual obligations for drilling contracts, long-term operating leases, seismic contracts and other contracts are as follows (in thousands): Total 2015(1) 2016 2017 2018 2019 and Drilling contracts 16,698 15,819 879 — — — Non-cancellable office lease commitments(2) 9,320 1,857 1,877 1,941 1,471 2,174 Seismic contracts 3,192 3,192 — — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net minimum commitments 29,210 20,868 2,756 1,941 1,471 2,174 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (1) In addition to the $20.9 million of minimum commitments noted above, the Company also has approximately $130 million of interest payments due on the senior notes during the year ended December 31, 2015, for estimated total obligations of approximately $150 million. (2) During the quarter ended December 31, 2014, the Company announced plans to relocate the headquarters from Houston, Texas to Tulsa, Oklahoma. At December 31, 2014, the Company still leased space in Houston (contractually through 2018) and of the $9.3 million total in office lease commitments, approximately $3.4 million related to the Houston leases. For the years ended December 31, 2014, 2013 and 2012, the Company expensed $2.3 million, $1.7 million and $1.1 million, respectively, for office rent. In addition to the commitments noted in the above table, the Company is party to a gas transportation, gathering and processing contract (as amended and effective June 1, 2013) in the Mississippian Lime region which includes certain minimum natural gas and NGL volume commitments. To the extent the Company does not deliver natural gas volumes in sufficient quantities to generate, when processed, the minimum levels of recovered NGLs, the Company would be required to reimburse the counterparty an amount equal to the sum of the monthly shortfall, if any, multiplied by a fee of roughly $0.08 to $0.125 per gallon (subject to annual escalation). The NGL volume commitments range from 2,800 Bbls to 5,780 Bbls per day for each monthly accounting period over the remaining term of the contract. Additionally, the Company is obligated to deliver a total of 38,100,000 MMBtu and 76,200,000 MMBtu during the first 30 months and 60 months of the contract, respectively. During the first 30 months, any shortfall in delivered volumes would result in a payment to the counterparty equal to the shortfall amount multiplied by a fee of approximately $0.36 per MMBtu. During the first 60 months, any shortfall in delivered volumes would result in a payment to the counterparty equal to the shortfall amount multiplied by a fee of approximately $0.36 per MMBtu, provided that the Company would receive volumetric credit for any deficiency payment made after the initial 30 months. The Company is currently delivering at least the minimum volumes required under these contractual provisions and does not expect to incur any future volumetric shortfall payments during the term of this contract. Commitments related to ARO's are not included in the table above; see Note 8 for discussion of those commitments. The Company is involved in disputes or legal actions arising in the ordinary course of its business. The Company may not be able to predict the timing or outcome of these or future claims and proceedings with certainty, and an unfavorable resolution of one or more of such matters could have a material adverse effect on our financial condition, results of operations or cash flows. Currently, it is not party to any legal proceedings that the Company believes, individually or in the aggregate, are reasonably expected to have a material adverse effect on its financial position, results of operations, or cash flows. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2014 | |
Subsequent Events | |
Subsequent Events | 16. Subsequent Events The Company executed a PSA in March 2015 for the sale of its Dequincy assets, its only remaining producing properties in Louisiana, for total consideration of $44 million (subject to customary purchase price adjustments). The PSA includes the ownership interests in developed and undeveloped acreage in the Dequincy area.; the transaction does not include our acreage and interests in the Fleetwood area of Louisiana. The net proceeds from the sale will be used to pay down a portion of the outstanding borrowings under the Company revolving credit facility and for general corporate purposes. The transaction has an effective date of March 1, 2015 and closed on April 21, 2015. |
Summary of Significant Accoun73
Summary of Significant Accounting Policies (Policies) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2015 | Dec. 31, 2014 | |
Summary of Significant Accounting Policies | ||
Basis of Presentation | Basis of Presentation These interim financial statements are unaudited and have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC") regarding interim financial reporting. Certain disclosures have been condensed or omitted from these financial statements. Accordingly, they do not include all of the information and notes required by accounting principles generally accepted in the United States of America ("GAAP") for complete consolidated financial statements, and should be read in conjunction with the audited consolidated financial statements and notes thereto for the year ended December 31, 2014 included herein. All intercompany transactions have been eliminated in consolidation. In the opinion of the Company's management, the accompanying unaudited condensed consolidated financial statements include all adjustments, consisting of normal recurring adjustments, necessary to fairly present the financial position as of, and the results of operations for, all periods presented. In preparing the accompanying condensed consolidated financial statements, management has made certain estimates and assumptions that affect reported amounts in the condensed consolidated financial statements and disclosures of contingencies. Actual results may differ from those estimates. The results for interim periods are not necessarily indicative of annual results. | Basis of Presentation The accompanying consolidated financial statements of the Company have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC") and have been prepared in accordance with generally accepted accounting principles in the United States of America ("GAAP"). All intercompany transactions have been eliminated in consolidation. The consolidated financial statements as of and for the year ended December 31, 2014 include the results of the Pine Prairie field from January 1, 2014 through May 1, 2014, the date of disposition. The consolidated financial statements as of and for the year ended December 31, 2013 include the results from the Anadarko Basin Acquisition beginning May 31, 2013. The consolidated financial statements as of and for the year ended December 31, 2012 include the results from the Eagle Property Acquisition beginning October 1, 2012. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates include, but are not limited to, the amount of recoverable oil and natural gas reserves; future cash flows from oil and natural gas properties; the fair value of commodity derivative contracts; the fair value of share-based compensation; and the valuation of future asset retirement obligations. | |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all short-term investments with an original maturity of three months or less to be cash equivalents. | |
Accounts Receivable and Allowance for Doubtful Accounts | Accounts Receivable and Allowance for Doubtful Accounts Accounts receivable are stated at the historical carrying amount net of allowance for uncollectible accounts. The carrying amount of the Company's accounts receivable approximate fair value because of the short-term nature of the instruments. The Company accrues a reserve on a receivable when, based on the judgment of management, it is probable that a receivable will not be collected and the amount of any reserve may be reasonably estimated. As of December 31, 2014 and 2013, the Company had no allowance for doubtful accounts. | |
Financial Instruments | Financial Instruments The Company's financial instruments consist of cash and cash equivalents, receivables, payables, debt, and commodity derivative contracts. Commodity derivative contracts are recorded at fair value (see Note 4). Based upon recent amendments to the Company's Credit Facility, the Company believes the carrying amount of the related floating-rate debt approximates fair value due to the variable nature of the interest rate and the current secured financing terms available to the Company. See fair value discussion of Senior Notes and Series A Preferred Shares issued in October 2012 in Notes 9 and 10, respectively. The carrying amount of the Company's other financial instruments approximate fair value because of the short term nature of the items or variable pricing. Derivative financial instruments are recorded in the consolidated balance sheets as either an asset or liability measured at estimated fair value. Changes in the derivative's fair value are recognized currently in earnings as gains and losses in the period of change. The gains or losses are recorded in "Gains (losses) on commodity derivative contracts—net." The related cash flow impact is reflected within cash flows from operating activities. | |
Other Noncurrent Assets | Other Noncurrent Assets At December 31, 2014 and 2013, other noncurrent assets consisted of the following: At December 31, 2014 2013 (in thousands) Deferred financing costs 37,807 44,706 Field equipment inventory 5,713 9,682 Other 211 209 ​ ​ ​ ​ ​ ​ ​ Other noncurrent assets 43,731 54,597 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ During the year ended December 31, 2014, the Company has recorded approximately $5.9 million in adjustments to field equipment inventory, either as a result of physical inventory counts, disposals or market adjustments; this is offset by additional inventory added during the period of approximately $1.8 million. For the years ended December 31, 2014 and 2013, the Company recorded $4.1 million and $0.6 million, respectively, of losses on sale of, or market value adjustments to, field equipment inventory. | |
Property and Equipment | Property and Equipment The Company uses the full-cost method of accounting for its exploration and development activities. Under this method of accounting, the cost of both successful and unsuccessful exploration and development activities are capitalized as property and equipment. This includes any internal costs that are directly related to exploration and development activities, but does not include any costs related to production, general corporate overhead or similar activities. Proceeds from the sale or disposition of oil and gas properties are accounted for as a reduction to capitalized costs unless a significant portion of the Company's reserve quantities are sold that results in a significant alteration of the relationship between capitalized costs and remaining proved reserves, in which case a gain or loss is generally recognized in income. Oil and gas unevaluated properties and properties under development include costs that are not being depleted or amortized. These costs represent investments in unproved properties. The Company excludes these costs until proved reserves are found, until it is determined that the costs are impaired or until major development projects are placed in service, at which time the costs are moved into oil and natural gas properties subject to amortization. All unproved property costs are reviewed at least annually to determine if impairment has occurred. Based on current pricing and current drilling plans, we impaired the remaining Anadarko Basin unevaluated property to the full cost pool during the fourth quarter of 2014. Proved oil, NGLs and natural gas reserves utilized in the preparation of the consolidated financial statements are estimated in accordance with the rules established by the SEC and the Financial Accounting Standards Board (FASB), which require that reserve estimates be prepared under existing economic and operating conditions using a 12-month average price with no provision for price and cost escalations in future years except by contractual arrangements. Reserve estimates are inherently imprecise. Accordingly, the estimates are expected to change as more current information becomes available. The Company depletes its oil and gas properties using the units-of-production method. Capitalized costs of oil and natural gas properties subject to amortization are depleted over proved reserves. It is possible that, because of changes in market conditions or the inherent imprecision of reserve estimates, the estimates of future cash inflows, future gross revenues, the amount of oil and natural gas reserves, the remaining estimated lives of oil and natural gas properties, or any combination of the above may be increased or reduced. Increases in recoverable economic volumes generally reduce per unit depletion rates while decreases in recoverable economic volumes generally increase per unit depletion rates. The Company performs a full-cost ceiling test on a quarterly basis. The test establishes a limit (ceiling) on the book value of oil and gas properties. The capitalized costs of proved oil and gas properties, net of accumulated depreciation, depletion and amortization (DD&A) and the related deferred income taxes, may not exceed this "ceiling." The ceiling limitation is equal to the sum of: (i) the present value of estimated future net revenues from the projected production of proved oil and gas reserves, excluding future cash outflows associated with settling asset retirement obligations accrued on the balance sheet, calculated using the average oil and natural gas sales price received by the Company as of the first trading day of each month over the preceding twelve months (such prices are held constant throughout the life of the properties) and a discount factor of 10%; (ii) the cost of unproved and unevaluated properties excluded from the costs being amortized; (iii) the lower of cost or estimated fair value of unproved properties included in the costs being amortized; and (iv) related income tax effects. If capitalized costs exceed this ceiling, the excess is charged to expense in the accompanying consolidated statements of operations. For the year ended December 31, 2014, an impairment of oil and gas properties of $83.5 million, after tax, was recorded. For the year ended December 31, 2013, capitalized costs exceeded the ceiling and an impairment of oil and gas properties of $319.6 million, after tax, was recorded. The most significant factors affecting the impairment related to the transfer of unevaluated property costs to the full cost pool and negative reserve revisions in certain areas. During 2014, the Company transferred $59.2 million of Mississippian unevaluated property costs to the full cost pool. These costs were attributable to leases that either expired during 2014, were determined to not be prospective, or that were assigned proved reserves to previously unproved acreage as a result of the Company's development drilling activities. The Company also transferred $128.2 million of Anadarko Basin and $16.5 million of Gulf Coast unevaluated property costs based up on our lack of plans for further evaluation or development of those leases in the current commodity price environment. During 2013, the Company transferred $61.2 million of Gulf Coast unevaluated property costs to the full cost pool based upon our lack of future plans for further evaluation or development of those leases and $168.4 million of Mississippian unevaluated property costs attributable to leases that expired during 2013 or that were assigned to proved reserves as a result of the Company's drilling activities. The Company also transferred $89.6 million of Anadarko Basin unevaluated costs due primarily to lease expirations and development drilling. The negative reserve revisions in our Gulf Coast area were mainly attributable to variability in well performance, our decision during the second quarter of 2013 to halt further development in our West Gordon field and unfavorable cost revisions. See Note 6. DD&A of oil and gas properties is calculated using the Units of Production Method (UOP). The UOP calculation, in its simplest terms, multiplies the percentage of estimated proved reserves produced by the cost of those reserves. The result is to recognize expense at the same pace that the reserves are estimated to be depleting. The amortization base in the UOP calculation includes the sum of proved property costs net of accumulated DD&A, estimated future development costs (future costs to access and develop proved reserves) and asset retirement costs that are not already included in oil and gas property, less related salvage value. Interest from external borrowings is capitalized on unevaluated properties using the weighted-average cost of outstanding borrowings until the project is substantially complete and ready for its intended use, which for oil and gas assets is at the first production from the field. Capitalized interest is depleted over the useful lives of the assets in the same manner as the depletion of the underlying assets. The Company paid cash interest of $141.9 million, $104.3 million, and $7.2 million for the years ended December 31, 2014, 2013 and 2012, respectively. Other property and equipment consists of vehicles, furniture and fixtures, and computer hardware and software and are carried at cost. Depreciation is provided principally using the straight-line method over the estimated useful lives of the assets, which primarily range from three to seven years. Maintenance and repairs are charged to expense as incurred, while renewals and betterments are capitalized. | |
Accrued Liabilities | Accrued Liabilities At December 31, 2014 and 2013, accrued liabilities consisted of the following: At December 31 2014 2013 (in thousands) Accrued oil and gas capital expenditures 76,398 87,202 Accrued revenue and royalty distributions 51,292 64,370 Accrued lease operating and workover expense 10,113 8,279 Accrued interest 21,521 21,341 Accrued taxes 4,226 4,386 Other 20,281 18,803 ​ ​ ​ ​ ​ ​ ​ Accrued liabilities 183,831 204,381 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ | |
Asset Retirement Obligations | Asset Retirement Obligations The legal obligations associated with the retirement of long-lived assets are recognized at estimated fair value at the time that the obligation is incurred. Oil and gas producing companies incur such a liability upon acquiring or drilling a well. The Company estimates the fair value of an asset retirement obligation in the period in which the obligation is incurred and can be reliably measured. The corresponding asset retirement cost is capitalized by increasing the carrying amount of the related long-lived asset. The liability is accreted to its then present value each period, and the capitalized cost is depreciated over the useful life of the related asset. If the liability is settled for an amount other than the recorded amount, any adjustment is recorded in the full cost pool. See Note 8. | |
Share-Based Compensation | Share-Based Compensation We measure share-based compensation cost at fair value and generally recognize the corresponding compensation expense on a straight-line basis over the service period during which awards are expected to vest. We include share-based compensation expense, net of amounts capitalized to oil and gas properties, in "General and administrative expense" in our consolidated statements of operations. See Note 11. | |
Revenue Recognition | Revenue Recognition Oil, NGLs and natural gas revenues are recognized when production is sold to a purchaser at a fixed or determinable price, when delivery has occurred and title has transferred and collection of the revenues is reasonably assured. Cash received relating to future revenues is deferred and recognized when all revenue recognition criteria are met. The Company follows the sales method of accounting for oil and gas revenues, whereby revenue is recognized for all oil and gas sold to purchasers regardless of whether the sales are proportionate to the Company's ownership interest in the property. Production imbalances are recognized as a liability to the extent an imbalance on a specific property exceeds the Company's share of remaining proved oil and gas reserves. The Company had no significant imbalances at December 31, 2014 or 2013. | |
Acquisition and Transaction Costs | Acquisition and Transaction Costs Acquisition and transaction related costs are expensed as incurred and as services are received. Such costs include finders' fees; advisory, legal, accounting, valuation and other professional and consulting fees; and acquisition related general and administrative costs. Costs incurred in 2014 relate to the Pine Prairie Disposition, costs incurred in 2013 relate to the Anadarko Basis Acquisition, and costs incurred in 2012 relate to the Eagle Property Acquisition. See Note 7. | |
Income Taxes | Income Taxes Income taxes are provided for the tax effects of transactions reported in the financial statements and consist of taxes currently payable plus deferred income taxes related to certain income and expenses recognized in different periods for financial and income tax reporting purposes. Deferred income tax assets and liabilities represent the future tax return consequences of those differences, which will either be taxable or deductible when assets are recovered or liabilities are settled. Deferred income taxes also include tax credits and net operating losses that are available to offset future income taxes. Deferred income taxes are measured by applying currently enacted tax rates. The Company accounts for uncertainty in income taxes for tax positions taken or expected to be taken in a tax return. Only tax positions that meet the more-than-likely-than-not recognition threshold are recognized. Prior to its corporate reorganization (See Note 1), the Company was a limited liability company and not subject to federal income tax or state income tax (in most states). Accordingly, no provision for federal or state income taxes was recorded prior to the corporate reorganization as the Company's equity holders were responsible for income tax on the Company's profits. In connection with the closing of the Company's initial public offering, the Company merged into a corporation and became subject to federal and state income taxes. The Company's book and tax basis in assets and liabilities differed at the time of the corporate reorganization due primarily to different cost recovery periods utilized for book and tax purposes for the Company's oil and natural gas properties. See Note 12. | |
Earnings (Loss) Per Share | Earnings (Loss) Per Share Basic earnings (loss) per common share is calculated by dividing net income available to common shareholders by the weighted average number of common shares outstanding during each period. Diluted earnings (loss) per common share is calculated by dividing net income available to common shareholders by the weighted average number of diluted common shares outstanding, which includes the effect of potentially dilutive securities. Potentially dilutive securities for the diluted earnings per share calculations consist of unvested restricted stock awards and outstanding stock options (if any) using the treasury method, as well as the Company's Series A Preferred Stock using the if-converted method. In the computation of diluted earnings per share, excess tax benefits that would be created upon the assumed vesting of unvested restricted shares or the assumed exercise of stock options (i.e. hypothetical excess tax benefits) are included in the assumed proceeds component of the treasury share method to the extent that such excess tax benefits are more likely than not to be realized. When a loss from continuing operations exists, all potentially dilutive securities are anti-dilutive and are therefore excluded from the computation of diluted earnings per share. See Note 13. | |
Recent Accounting Pronouncements | Recently Issued Standards Not Yet Adopted In May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update 2014-09, "Revenue from Contracts with Customers (Topic 606)" ("ASU 2014-09"). ASU 2014-09 provides guidance concerning the recognition and measurement of revenue from contracts with customers. The objective of ASU 2014-09 is to increase the usefulness of information in the financial statements regarding the nature, timing and uncertainty of revenues. ASU 2014-09 requires an entity to (i) identify the contract(s) with a customer, (ii) identify the performance obligations in the contract(s), (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations in the contract(s), and (v) recognize revenue when, or as, the entity satisfies a performance obligation. ASU 2014-09 will be effective for the Company beginning on January 1, 2018, including interim periods within that reporting period, considering the one year deferral approved by the FASB on July 9, 2015. The standard permits the use of either the retrospective or cumulative effect transition method. Early adoption is permitted. The Company has not selected a transition method and is evaluating the impact this standard will have on its consolidated financial statements and related disclosures. In April 2015, the FASB issued Accounting Standards Update 2015-03, "Interest—Imputation of Interest: Simplifying the Presentation of Debt Issuance Costs (Topic 835)". The update requires debt issuance costs related to a recognized debt liability be presented on the balance sheet as a direct deduction from the carrying amount of that debt liability. The standard should be applied retrospectively and is effective for the Company beginning on January 1, 2016. The Company does not believe the adoption of this guidance will have a material impact on its financial position, results of operations or cash flows. | Recent Accounting Pronouncements The Company reviewed recently issued accounting pronouncements that became effective during the twelve months ended December 31, 2014, and determined that none would have a material impact on the Company's consolidated financial statements with the exception of ASU 2014-09, "Revenue from Contracts with Customers "and ASU 2014-15, "Presentation of Financial Statements—Going Concern," (both effective for annual reporting periods beginning after December 15, 2016), which the Company is still evaluating. |
Summary of Significant Accoun74
Summary of Significant Accounting Policies (Tables) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2015 | Dec. 31, 2014 | |
Summary of Significant Accounting Policies | ||
Schedule of the impact of correction | The impact of the correction is shown in the following table (in thousands): For the Six Months Statement of Cash Flows As Previously As Restated Change in operating assets and liabilities: accounts receivable—JIB and other 1,929 (1,557 ) Net cash provided by operating activities 177,047 173,561 Investment in property and equipment (279,033 ) (275,547 ) Net cash used in investing activities (131,514 ) (128,028 ) | For the Twelve Months Ended December 31, 2014 2013 2012 Statement of Cash Flows As As As As As As (in thousands) Change in operating assets and liabilities: accounts receivable—JIB and other (13,603 ) (18,897 ) (28,488 ) (18,002 ) (11,019 ) (3,249 ) Net cash provided by operating activities 356,838 351,544 227,102 237,588 137,249 145,019 Investment in property and equipment (561,691 ) (556,397 ) (573,734 ) (584,220 ) (422,332 ) (430,102 ) Net cash used in investing activities (409,558 ) (404,264 ) (1,193,846 ) (1,204,332 ) (773,608 ) (781,378 ) |
Schedule of other noncurrent assets | June 30,2015 December 31,2014 (in thousands) Deferred financing costs 33,483 37,807 Field inventory 5,911 5,713 Other 166 211 ​ ​ ​ ​ ​ ​ ​ Other noncurrent assets 39,560 43,731 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ | At December 31, 2014 2013 (in thousands) Deferred financing costs 37,807 44,706 Field equipment inventory 5,713 9,682 Other 211 209 ​ ​ ​ ​ ​ ​ ​ Other noncurrent assets 43,731 54,597 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Schedule of accrued liabilities | June 30, 2015 December 31, 2014 (in thousands) Accrued oil and gas capital expenditures 54,674 76,398 Accrued revenue and royalty distributions 44,411 51,292 Accrued lease operating and workover expense 17,250 10,113 Accrued interest 23,567 21,521 Accrued taxes 4,427 4,226 Other 10,892 20,281 ​ ​ ​ ​ ​ ​ ​ Accrued liabilities 155,221 183,831 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ | At December 31 2014 2013 (in thousands) Accrued oil and gas capital expenditures 76,398 87,202 Accrued revenue and royalty distributions 51,292 64,370 Accrued lease operating and workover expense 10,113 8,279 Accrued interest 21,521 21,341 Accrued taxes 4,226 4,386 Other 20,281 18,803 ​ ​ ​ ​ ​ ​ ​ Accrued liabilities 183,831 204,381 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Fair Value Measurements of Fi75
Fair Value Measurements of Financial Instruments (Tables) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2015 | Dec. 31, 2014 | |
Fair Value Measurements of Financial Instruments | ||
Schedule of commodity derivative contracts in the condensed consolidated balance sheets are recorded at estimated fair value | Fair Value Measurements at June 30, 2015 Quoted Prices Significant Significant Total (in thousands) Assets: Commodity derivative oil swaps — 27,708 — 27,708 Commodity derivative gas swaps — 9,152 — 9,152 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total assets — 36,860 — 36,860 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Liabilities: Commodity derivative oil swaps — 2,869 — 2,869 Commodity derivative gas swaps — — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total liabilities — 2,869 — 2,869 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fair Value Measurements at December 31, 2014 Quoted Prices Significant Significant Total (in thousands) Assets: Commodity derivative oil swaps — 106,450 — 106,450 Commodity derivative gas swaps — 20,259 — 20,259 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total assets — 126,709 — 126,709 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Liabilities: Commodity derivative oil swaps — — — — Commodity derivative gas swaps — — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total liabilities — — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ | Fair Value Measurements at December 31, 2014 Quoted Prices Significant Significant Total (in thousands) Assets: Commodity derivative oil swaps — 106,450 — 106,450 Commodity derivative gas swaps — 20,259 — 20,259 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total assets — 126,709 — 126,709 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Liabilities: Commodity derivative oil swaps — — — — Commodity derivative NGL swaps — — — — Commodity derivative gas swaps — — — — Commodity derivative oil collars — — — — Commodity derivative gas collars — — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total liabilities — — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fair Value Measurements at December 31, 2013 Quoted Prices Significant Significant Total (in thousands) Assets: Commodity derivative NGL swaps — 469 — 469 Commodity derivative gas swaps — 488 — 488 Commodity derivative oil collars — 64 — 64 Commodity derivative gas collars — 751 — 751 Commodity derivative differential swaps — 806 — 806 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total assets — 2,578 — 2,578 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Liabilities: Commodity derivative oil swaps — 32,209 — 32,209 Commodity derivative NGL swaps — 74 — 74 Commodity derivative gas swaps — 809 — 809 Commodity derivative oil collars — 272 — 272 Commodity derivative gas collars — 26 — 26 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total liabilities — 33,390 — 33,390 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Risk Management and Derivativ76
Risk Management and Derivative Instruments (Tables) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2015 | Dec. 31, 2014 | |
Risk Management and Derivative Instruments | ||
Schedule of the entity's open commodity positions | As of June 30, 2015, the Company had the following open commodity derivative contract positions: Hedged Weighted-Average Oil (Bbls): WTI Swaps—2015 2,208,000 71.56 Natural Gas (MMBtu): Swaps—2015(1) 9,200,000 4.13 (1) Includes 1,550,000 MMBtus in natural gas swaps that priced during the period, but had not cash settled as of June 30, 2015. | As of December 31, 2014, the Company had the following open commodity positions: Hedged Volume Weighted-Average Oil (Bbls): WTI Swaps—2015 3,276,000 88.72 Natural Gas (MMBtu): Swaps—2015(1) 20,050,000 4.15 (1) Includes 2,170,000 MMBtu in natural gas swaps that priced during the period, but had not cash settled as of December 31, 2014. |
Summary of location and fair values amounts of all derivative instruments as well as the gross recognized derivative assets, liabilities and amounts offset in the unaudited condensed consolidated balance sheets | The following table summarizes the gross fair values of derivative instruments by the appropriate balance sheet classification; however, the derivative instruments are subject to netting arrangements and qualify for net presentation in the Company's unaudited condensed consolidated balance sheets at June 30, 2015 and December 31, 2014, respectively (in thousands): Type Balance Sheet Location(1) June 30, December 31, Oil Swaps Derivative financial instruments—Current Assets 27,708 106,450 Oil Swaps Derivative financial instruments—Current Liabilities (2,869 ) — Gas Swaps Derivative financial instruments—Current Assets 9,152 20,259 ​ ​ ​ ​ ​ ​ ​ ​ ​ Total derivative fair value at period end 33,991 126,709 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (1) The fair values of commodity derivative instruments reported in the Company's condensed consolidated balance sheets are subject to netting arrangements and qualify for net presentation. The following table summarizes the location and fair value amounts of all derivative instruments in the unaudited condensed consolidated balance sheets, as well as the gross recognized derivative assets, liabilities and amounts offset in the unaudited condensed consolidated balance sheets at June 30, 2015 and December 31, 2014, respectively (in thousands): June 30, 2015 Not Designated as Balance Sheet Classification Gross Gross Net Derivative assets: Commodity contracts Derivative financial instruments—current 36,860 1,002 35,858 Commodity contracts Derivative financial instruments—noncurrent — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 36,860 1,002 35,858 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Derivative liabilities: Commodity contracts Derivative financial instruments—current 2,869 1,002 1,867 Commodity contracts Derivative financial instruments—noncurrent — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2,869 1,002 1,867 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2014 Not Designated as Balance Sheet Classification Gross Gross Net Derivative assets: Commodity contracts Derivative financial instruments—current 126,709 126,709 Commodity contracts Derivative financial instruments—noncurrent — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 126,709 — 126,709 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Derivative liabilities: Commodity contracts Derivative financial instruments—current — — — Commodity contracts Derivative financial instruments—noncurrent — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ | The following table summarizes the gross fair value of derivative instruments by the appropriate balance sheet classification, even when the derivative instruments are subject to netting arrangements and qualify for net presentation in the Company's consolidated balance sheets at December, 2014 and 2013, respectively (in thousands): Type Balance Sheet Location(1) December 31, December 31, Oil Swaps Derivative financial instruments—Current Assets 106,450 — Oil Swaps Derivative financial instruments—Current Liabilities — (28,871 ) Oil Swaps Derivative financial instruments—Non-Current Liabilities — (3,338 ) NGL Swaps Derivative financial instruments—Current Assets — 469 NGL Swaps Derivative financial instruments—Current Liabilities — (74 ) Gas Swaps Derivative financial instruments—Current Assets 20,259 469 Gas Swaps Derivative financial instruments—Non-Current Assets — 19 Gas Swaps Derivative financial instruments—Current Liabilities — (496 ) Gas Swaps Derivative financial instruments—Non-Current Liabilities — (313 ) Oil Collars Derivative financial instruments—Current Assets — 64 Oil Collars Derivative financial instruments—Current Liabilities — (272 ) Gas Collars Derivative financial instruments—Current Assets — 751 Gas Collars Derivative financial instruments—Current Liabilities — (26 ) Basis Differential Swaps Derivative financial instruments—Current Assets — 806 ​ ​ ​ ​ ​ ​ ​ ​ ​ Total derivative fair value at period end 126,709 (30,812 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (1) The fair values of commodity derivative instruments reported in the Company's consolidated balance sheets are subject to netting arrangements and qualify for net presentation. The following table summarizes the location and fair value amounts of all derivative instruments in the consolidated balance sheets, as well as the gross recognized derivative assets, liabilities and amounts offset in the consolidated balance sheets at December 31, 2014 and 2013, respectively (in thousands): December 31, 2014 Not Designated as ASC 815 Hedges: Balance Sheet Classification Gross Gross Net Recognized Derivative assets: Commodity contracts Derivative financial instruments—current 126,709 — 126,709 Commodity contracts Derivative financial instruments—noncurrent — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 126,709 — 126,709 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Derivative liabilities: Commodity contracts Derivative financial instruments—current — — — Commodity contracts Derivative financial instruments—noncurrent — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Not Designated as ASC 815 Hedges: Balance Sheet Classification Gross Gross Net Recognized Derivative assets: Commodity contracts Derivative financial instruments—current 2,559 1,859 700 Commodity contracts Derivative financial instruments—noncurrent 19 — 19 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2,578 1,859 719 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Derivative liabilities: Commodity contracts Derivative financial instruments—current 29,739 1,859 27,880 Commodity contracts Derivative financial instruments—noncurrent 3,651 — 3,651 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 33,390 1,859 31,531 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Schedule of net losses and unrealized net (losses) gains recorded by the Company related to the change in fair value of the derivative instruments in losses on commodity derivative contracts - net for the periods | For the Three Months For the Six Months 2015 2014 2015 2014 (in thousands) (in thousands) Net cash received (paid) for commodity derivative contracts 42,189 (17,138 ) 94,797 (31,948 ) Unrealized net gains (losses) (61,482 ) (14,329 ) (92,718 ) (22,192 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Gains (losses) on commodity derivative contracts—net (19,293 ) (31,467 ) 2,079 (54,140 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ | Years Ended December 31, 2014 2013 2012 (in thousands) Realized net losses (18,332 ) (17,585 ) (15,825 ) Unrealized net gains (losses) 157,521 (26,699 ) 4,667 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Gains (losses) on commodity derivative contracts—net 139,189 (44,284 ) (11,158 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Property and Equipment (Table77
Property and Equipment (Tables) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2015 | Dec. 31, 2014 | |
Property and Equipment | ||
Schedule of property and equipment | June 30, December 31, (in thousands) Oil and gas properties, on the basis of full-cost accounting: Proved properties 3,527,182 3,398,146 Unevaluated properties 31,778 44,535 Other property and equipment 14,734 13,454 Less accumulated depreciation, depletion, amortization and impairment (2,119,458 ) (1,333,019 ) ​ ​ ​ ​ ​ ​ ​ Net property and equipment 1,454,236 2,123,116 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ | The Company's property and equipment as of December 31, 2014 and 2013 was as follows (in thousands): December 31, December 31, (in thousands) Oil and gas properties, on the basis of full-cost accounting: Proved properties 3,398,146 2,817,062 Unevaluated properties 44,535 243,599 Other property and equipment 13,454 11,113 Less accumulated depreciation, depletion, amortization and impairment (1,333,019 ) (976,880 ) ​ ​ ​ ​ ​ ​ ​ Net property and equipment 2,123,116 2,094,894 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Acquisition and Divestitures 78
Acquisition and Divestitures of Oil and Gas Properties (Tables) | 12 Months Ended |
Dec. 31, 2014 | |
Acquisition of Oil and Gas Properties | |
Schedule of unaudited pro forma information as of the acquisition | The following table presents unaudited pro forma information for the Company as if the Eagle Property Acquisition occurred on January 1, 2011 and the Anadarko Basin Acquisition had been completed on January 1, 2012 (in thousands, other than per share amounts): For the Year Ended 2013(1) 2012(2) Revenues and other 539,562 490,241 ​ ​ ​ ​ ​ ​ ​ Net income (loss) (340,400 ) (129,885 ) Preferred stock dividends (15,589 ) (26,000 ) ​ ​ ​ ​ ​ ​ ​ Loss attributable to common shareholders (355,989 ) (155,885 ) Net loss per common share—basic and diluted (54.13 ) (25.99 ) (1) Includes the effect of the Anadarko Basin Acquisition, as the Eagle Property Acquisition was included in the historical results for this period. (2) Includes the effect of the Eagle Property Acquisition and the Anadarko Basin Acquisition. |
Anadarko Basin Acquisition | |
Acquisition of Oil and Gas Properties | |
Schedule of fair value of the assets acquired and liabilities assumed in acquisition | The fair value of, and the allocation to, the assets acquired and liabilities assumed in the Anadarko Basin Acquisition has been finalized and is shown in the following table (in thousands): Anadarko Basin Oil and gas properties Proved 417,750 Unevaluated 207,606 ​ ​ ​ ​ Total assets acquired 625,356 Asset retirement obligations 6,296 ​ ​ ​ ​ Total liabilities assumed 6,296 ​ ​ ​ ​ Net assets acquired 619,060 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Eagle Property Acquisition | |
Acquisition of Oil and Gas Properties | |
Schedule of fair value of the assets acquired and liabilities assumed in acquisition | The transaction was accounted for using the acquisition method of accounting. The fair value of, and the allocation to, the assets acquired and liabilities assumed in the Eagle Property Acquisition has been finalized and is shown in the following table (in thousands): Eagle Property Oil and gas properties Proved 419,549 Unevaluated 244,236 Commodity derivative contracts 8,453 ​ ​ ​ ​ Total assets acquired 672,238 Asset retirement obligations 2,662 Deferred income tax liabilities 25,985 Commodity derivative contracts — ​ ​ ​ ​ Total liabilities assumed 28,647 ​ ​ ​ ​ Net assets acquired 643,591 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Asset Retirement Obligations 79
Asset Retirement Obligations (Tables) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2015 | Dec. 31, 2014 | |
Asset Retirement Obligations | ||
Schedule of changes in the Company's ARO's | Six Months Six Months (in thousands) Asset retirement obligations—beginning of period 21,599 26,308 Liabilities incurred 2 844 Revisions — — Liabilities settled — (47 ) Liabilities eliminated through asset sales (4,699 ) (7,652 ) Current period accretion expense 835 929 ​ ​ ​ ​ ​ ​ ​ Asset retirement obligations—end of period 17,737 20,382 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ | The following table details the change in the asset retirement obligations for the years ended December 31, 2014, 2013 and 2012, respectively (in thousands): Year ended December 31, 2014 2013 2012 Asset retirement obligations at beginning of year 26,308 15,245 7,627 Liabilities incurred 996 2,535 3,044 Liabilities assumed in Anadarko Basin Acquisition — 6,296 — Liabilities assumed in Eagle Property Acquisition — — 2,662 Revisions 288 858 1,189 Liabilities settled (47 ) (61 ) — Liabilities eliminated through asset sale(1) (7,652 ) — — Current period accretion expense 1,706 1,435 723 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Asset retirement obligations at end of year 21,599 26,308 15,245 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (1) As a result of the Pine Prairie Disposition, AROs were reduced by approximately $7.7 million during the year ended December 31, 2014. See discussion of the Pine Prairie Disposition in Note 7. |
Long-Term Debt (Tables)80
Long-Term Debt (Tables) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2015 | Dec. 31, 2014 | |
Long-Term Debt | ||
Schedule of the company's long term debt | The Company's long-term debt as of June 30, 2015 and December 31, 2014 is as follows (in thousands): December 31, Borrowings Repayments Exchanges Deferred Amortization PIK June 30, Credit Facility 435,150 33,000 (468,150 ) — — — — 2020 Senior Notes 600,000 — — (242,445 ) (63,930 ) — — 293,625 2021 Senior Notes 700,000 — — (281,676 ) (70,672 ) — — 347,652 Second Lien Notes — 625,000 — — 47,082 (896 ) — 671,186 Third Lien Notes — — — 524,121 87,520 (879 ) 1,187 611,949 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total debt 1,735,150 658,000 (468,150 ) — — (1,775 ) 1,187 1,924,412 Current maturities — — — — — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Long-term debt 1,735,150 658,000 (468,150 ) — — (1,775 ) 1,187 1,924,412 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ June 30, 2015 Unamortized June 30, 2015 Revolving Credit Facility — — 2020 Senior Notes 293,625 — 293,625 2021 Senior Notes 347,652 — 347,652 Second Lien Notes 671,186 (46,186 ) 625,000 Third Lien Notes 611,949 (86,641 ) 525,308 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total debt 1,924,412 (132,827 ) 1,791,585 Current maturities — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Long-term debt 1,924,412 (132,827 ) 1,791,585 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ | At December 31, 2014 2013 (in thousands) Revolving credit facility, due 2018 435,150 401,150 Senior notes, due 2020 600,000 600,000 Senior notes, due 2021 700,000 700,000 ​ ​ ​ ​ ​ ​ ​ Long-term debt 1,735,150 1,701,150 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Preferred Stock_Units (Tables)
Preferred Stock/Units (Tables) | 12 Months Ended |
Dec. 31, 2014 | |
Preferred Stock. | |
Summary of changes in the number of outstanding shares | Series A Share count as of January 1, 2012 — Issuance of preferred stock as consideration in Eagle Property Acquisition 325,000 ​ ​ ​ ​ Share count as of December 31, 2012 325,000 ​ ​ ​ ​ Share count as of December 31, 2013 325,000 ​ ​ ​ ​ Share count as of December 31, 2014 325,000 |
Equity and Share-Based Compen82
Equity and Share-Based Compensation (Tables) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2015 | Dec. 31, 2014 | |
Equity and Share-Based Compensation | ||
Summary of changes in the number of outstanding shares | Number of Shares Common Stock Treasury Stock Share count as of December 31, 2014 7,049,173 (53,467 ) Grants of restricted stock 268,677 — Forfeitures of restricted stock (60,843 ) — Acquisition of treasury stock — (38,572 ) ​ ​ ​ ​ ​ ​ ​ Share count as of June 30, 2015 7,257,007 (92,039 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ | Common Treasury Share count as of January 1, 2012 — — Issuance of common stock in pre IPO reorganization 4,763,435 — Proceeds from the sale of common stock to public 1,800,000 — Issuance of preferred stock as consideration in Eagle Property Acquisition — — Share based compensation grants of restricted stock 102,951 — Forfeitures of restricted stock (4,415 ) — ​ ​ ​ ​ ​ ​ ​ Share count as of December 31, 2012 6,661,971 — Grants of restricted stock 284,024 — Forfeitures of restricted stock (53,421 ) — Acquisition of treasury stock — (11,870 ) ​ ​ ​ ​ ​ ​ ​ Share count as of December 31, 2013 6,892,574 (11,870 ) Grants of restricted stock 344,748 — Forfeitures of restricted stock (188,149 ) — Acquisition of treasury stock — (41,597 ) ​ ​ ​ ​ ​ ​ ​ Share count as of December 31, 2014 7,049,173 (53,467 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Summary of Company's non-vested share award activity | Shares Weighted Non-vested shares outstanding at December 31, 2014 306,201 52.76 Granted 268,677 12.29 Vested (136,479 ) 57.23 Forfeited (60,843 ) 47.06 ​ ​ ​ ​ ​ ​ ​ Non-vested shares outstanding at June 30, 2015 377,556 22.76 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ | Shares Weighted Non-vested shares outstanding at December 31, 2012 98,535 126.13 Granted 284,024 68.22 Vested (32,772 ) 126.18 Forfeited (53,420 ) 86.46 ​ ​ ​ ​ ​ ​ ​ Non-vested shares outstanding at December 31, 2013 296,367 77.81 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Granted 344,748 46.61 Vested (146,764 ) 72.08 Forfeited (188,150 ) 65.83 ​ ​ ​ ​ ​ ​ ​ Non-vested shares outstanding at December 31, 2014 306,201 52.76 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2014 | |
Income Taxes | |
Schedule of income tax provision | Years Ended December 31, 2014 2013 2012 (in thousands) Current United States — — — State 809 — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total current 809 — — Deferred United States 3,863 (130,906 ) 137,496 State 1,723 (15,623 ) 20,390 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total deferred 5,586 (146,529 ) 157,886 Total income tax provision (benefit) 6,395 (146,529 ) 157,886 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Schedule of difference between the Company's estimated income tax from amount derived by applying statutory federal rate to pretax income | The Company's estimated income tax expense differs from the amount derived by applying the statutory federal rate to pretax income principally due the effect of the following items (in thousands): Years Ended December 31, 2014 2013 2012 (in thousands) Income before taxes 123,324 (490,514 ) 7,789 Statutory rate 35 % 35 % 35 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Income tax expense computed at statutory rate 43,164 (171,680 ) 2,726 Reconciling items: Non-deductible pre-IPO loss — — 4,561 State income taxes, net of federal benefit 4,398 (10,886 ) 1,053 Change in valuation allowance (42,134 ) 45,688 — Change in state rate (414 ) (10,500 ) — Other, net 1,381 849 57 Change in tax status(1) — — 149,489 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total income tax provision (benefit) 6,395 (146,529 ) 157,886 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (1) The change in tax status for the year ended December 31, 2012 is split between federal of $130.2 million and state of $19.3 million. |
Schedule of components of the entity's deferred taxes | The components of our deferred taxes are detailed in the table below (in thousands): Years Ended December, 31 2014 2013 Deferred tax assets—current Derivative instruments and other — 15,581 Less valuation allowance — (3,744 ) ​ ​ ​ ​ ​ ​ ​ Total deferred tax assets, current — 11,837 Deferred tax assets—noncurrent US tax loss carryforwards 75,604 151,872 State tax loss carryforwards 7,122 14,154 Employee benefit plans 2,193 1,539 Less valuation allowance (3,826 ) (41,944 ) ​ ​ ​ ​ ​ ​ ​ Total deferred tax assets, noncurrent 81,093 125,621 Deferred tax liabilities—current Derivative instruments and other 44,862 — ​ ​ ​ ​ ​ ​ ​ Total deferred tax liabilities—current 44,862 — Deferred tax liabilities—noncurrent Oil and gas properties and equipment 45,272 140,912 ​ ​ ​ ​ ​ ​ ​ Total deferred tax liabilities, noncurrent 45,272 140,912 Reflected in the accompanying balance sheet as: Net deferred tax asset, current — 11,837 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net deferred tax liability, current 44,862 — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net deferred tax asset, noncurrent 35,821 — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net deferred tax liability, noncurrent — 15,291 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Earnings (Loss) Per Share (Tabl
Earnings (Loss) Per Share (Tables) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2015 | Dec. 31, 2014 | |
Net Loss Per Share | ||
Schedule of reconciliation of net income (loss) to preferred shareholders, common shareholders, and non-vested restricted shareholders for purposes of computing net income (loss) per share | The following table (in thousands, except per share amounts) provides a reconciliation of net loss to preferred shareholders, common shareholders, and non-vested restricted shareholders for purposes of computing net loss per share for the three and six months ended June 30, 2015 and 2014, respectively: Three Months Ended Six Months Ended 2015 2014 2015 2014 Net loss (598,437 ) (2,098 ) (791,989 ) (85,743 ) Preferred Dividend(1) (669 ) (4,806 ) (800 ) (7,426 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net loss attributable to shareholders (599,106 ) (6,904 ) (792,789 ) (93,169 ) Participating securities—Series A Preferred Stock(2) — — — — Participating securities—Non-vested Restricted Stock(2) — — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net loss attributable to common shareholders (599,106 ) (6,904 ) (792,789 ) (93,169 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted average shares outstanding 6,774 6,645 6,750 6,622 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net loss per share (88.44 ) (1.04 ) (117.45 ) (14.07 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (1) Calculation of the preferred stock dividend is discussed in "—Note 11. Preferred Stock" (2) As these shares are participating securities that participate in earnings, but are not required to participate in losses, this calculation demonstrates that there is not an allocation of the loss to the non-vested restricted stockholders. | The following table (in thousands, except per share amounts) provides a reconciliation of net income (loss) to preferred shareholders, common shareholders, and participating securities for purposes of computing net income (loss) per share: At December 31, 2014 2013 2012 (in thousands) Net income (loss) 116,929 (343,985 ) (150,097 ) Preferred Dividend(1) (10,378 ) (15,589 ) (6,500 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income (loss) attributable to shareholders 106,551 (359,574 ) (156,597 ) Participating securities—Series A Preferred Stock (35,696 ) — — Participating securities—Non-vested Restricted Stock (3,584 ) — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income (loss) attributable to common shareholders 67,271 (359,574 ) (156,597 ) Weighted average shares outstanding 6,644 6,576 5,997 Basic and diluted net income (loss) per share 10.13 (54.70 ) (26.11 ) (1) Calculation of the preferred stock dividend is discussed in Note 10. (2) As these shares are participating securities that participate in earnings, but are not required to participate in losses, this calculation demonstrates that there is not an allocation of the loss to the non-vested restricted stockholders. |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2014 | |
Commitments and Contingencies | |
Schedule of contractual obligations for drilling contracts, long-term operating leases and seismic contracts | At December 31, 2014, contractual obligations for drilling contracts, long-term operating leases, seismic contracts and other contracts are as follows (in thousands): Total 2015(1) 2016 2017 2018 2019 and Drilling contracts 16,698 15,819 879 — — — Non-cancellable office lease commitments(2) 9,320 1,857 1,877 1,941 1,471 2,174 Seismic contracts 3,192 3,192 — — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net minimum commitments 29,210 20,868 2,756 1,941 1,471 2,174 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (1) In addition to the $20.9 million of minimum commitments noted above, the Company also has approximately $130 million of interest payments due on the senior notes during the year ended December 31, 2015, for estimated total obligations of approximately $150 million. (2) During the quarter ended December 31, 2014, the Company announced plans to relocate the headquarters from Houston, Texas to Tulsa, Oklahoma. At December 31, 2014, the Company still leased space in Houston (contractually through 2018) and of the $9.3 million total in office lease commitments, approximately $3.4 million related to the Houston leases. |
Organization and Business (De86
Organization and Business (Details) - USD ($) $ / shares in Units, $ in Thousands | Apr. 25, 2012 | Dec. 31, 2012 | Jun. 30, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Stock issuances and other information | |||||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | $ 0.01 | ||
Underwriting discounts and commissions | $ 6,400 | ||||
Proceeds from sale of common stock, net of initial public offering expenses of $6.4 million | $ 213,569 | ||||
Initial public offering | |||||
Stock issuances and other information | |||||
Initial public offering, aggregate number of shares of common stock sold | 2,760,000 | ||||
Common stock, par value (in dollars per share) | $ 0.01 | ||||
Number of shares of stock sold by the selling shareholders | 600,000 | ||||
Number of shares of sold by the selling shareholders pursuant to an option granted to the underwriters to cover over-allotments | 360,000 | ||||
Public offering price (in dollars per share) | $ 13 | ||||
Proceeds from initial public offering | $ 358,800 | ||||
Underwriting discounts and commissions | 21,500 | ||||
Net proceeds to selling stockholders | 117,300 | ||||
Net proceeds from registration and sale | $ 220,000 | ||||
Number of shares of common stock sold | 18,000,000 | ||||
Proceeds from sale of common stock, net of initial public offering expenses of $6.4 million | $ 213,600 | ||||
Amount of net proceeds from initial public offering used to redeem convertible preferred units, including interest and other charges | 67,100 | ||||
Amount of borrowings repaid under the facility | 99,000 | ||||
Amount of net proceeds from common stock offering used to fund the execution of company's growth strategy through its drilling program | $ 47,500 | ||||
Number of shares sold by the selling stockholders | 9,600,000 |
Organization and Business (De87
Organization and Business (Details 2) | Apr. 25, 2012 |
First Reserve or its affiliates | |
Minority ownership interest | |
Ownership interest percentage | 41.40% |
Organization and Business (De88
Organization and Business (Details 3) $ / shares in Units, $ in Thousands | Dec. 31, 2014segment | May. 31, 2013USD ($) | Oct. 01, 2012USD ($)$ / sharesshares | Jun. 30, 2015USD ($)segment | May. 21, 2015 | May. 01, 2014USD ($) | Mar. 05, 2014USD ($) |
Acquisition information | |||||||
Aggregate principal amount borrowed | $ 1,791,585 | ||||||
Segment information | |||||||
Number of reportable segments | segment | 1 | 1 | |||||
Pine Prairie Disposition | |||||||
Acquisition information | |||||||
Purchase price of subject to standard post-closing adjustments received in cash | $ 147,700 | $ 170,000 | |||||
2020 Senior Notes | |||||||
Acquisition information | |||||||
Aggregate principal amount borrowed | $ 600,000 | $ 293,625 | |||||
Interest rate (as a percent) | 10.75% | 10.75% | |||||
2021 Senior Notes | |||||||
Acquisition information | |||||||
Aggregate principal amount borrowed | $ 700,000 | $ 347,652 | |||||
Interest rate (as a percent) | 9.25% | 9.25% | |||||
Eagle Property Acquisition | |||||||
Acquisition information | |||||||
Purchase price, cash | $ 325,000 | ||||||
Eagle Property Acquisition | 2020 Senior Notes | |||||||
Acquisition information | |||||||
Aggregate principal amount borrowed | $ 600,000 | ||||||
Interest rate (as a percent) | 10.75% | ||||||
Eagle Property Acquisition | Mandatorily redeemable convertible preferred units | |||||||
Acquisition information | |||||||
Purchase price, preferred shares | shares | 325,000 | ||||||
Preferred stock, liquidation value (in dollars per share) | $ / shares | $ 1,000 | ||||||
Anadarko Basin Acquisition | 2021 Senior Notes | Panther Energy LLC | |||||||
Acquisition information | |||||||
Purchase price, cash | $ 618,000 | ||||||
Aggregate principal amount borrowed | $ 700,000 | ||||||
Interest rate (as a percent) | 9.25% |
Liquidity and Capital Resourc89
Liquidity and Capital Resources (Details) $ in Thousands | 12 Months Ended | |||||
Dec. 31, 2014USD ($) | Jun. 30, 2015USD ($) | Jun. 30, 2014USD ($) | Dec. 31, 2013USD ($) | Dec. 31, 2012USD ($) | Dec. 31, 2011USD ($) | |
Available cash | $ 11,557 | $ 151,037 | $ 29,660 | $ 33,163 | $ 18,878 | $ 7,344 |
Contractual obligations during the next twelve months | 150,000 | |||||
Interest payments on the senior notes and other operating expenses | $ 130,000 | |||||
Financial Ratio Covenants | ||||||
Net consolidated indebtedness to EBITDA ratio | 3.7 | |||||
Current Ratio | 1.1 | |||||
Cross Default Provisions | ||||||
Minimum effective borrowing base under credit facility | 5.00% | |||||
Minimum indebtedness of senior notes including principal amount | $ 50,000 | |||||
Maximum | ||||||
Financial Ratio Covenants | ||||||
Net consolidated indebtedness to EBITDA ratio | 1 | |||||
Credit Facility | ||||||
Availability under the facility | $ 90,000 | |||||
Borrowing Base Redetermination | ||||||
Period for commencement of repayment of equal successive monthly payments following the administrative agent's notice regarding borrowing base reduction | 30 days | |||||
Period during which Company may request additional redetermination of borrowing base | 6 months | |||||
Credit Facility | Maximum | ||||||
Financial Ratio Covenants | ||||||
Net consolidated indebtedness to EBITDA ratio | 4 | |||||
2020 Senior Notes | ||||||
Liquidity Sufficiency | ||||||
Periodic interest payment amount on due dates | $ 32,000 | |||||
2021 Senior Notes | ||||||
Liquidity Sufficiency | ||||||
Periodic interest payment amount on due dates | $ 32,000 |
Summary of Significant Accoun90
Summary of Significant Accounting Policies (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Accounts Receivable and Allowance for Doubtful Accounts | ||||
Allowance for doubtful accounts | $ 0 | $ 0 | ||
Other Noncurrent Assets | ||||
Deferred financing costs | $ 33,483 | 37,807 | 44,706 | |
Field equipment inventory | 5,911 | 5,713 | 9,682 | |
Other | 166 | 211 | 209 | |
Other noncurrent assets | 39,560 | 43,731 | 54,597 | |
Adjustments amount of field inventory | 5,900 | |||
Additional field inventory purchased | 1,800 | |||
Gain (loss) on sale of or market value adjustments to inventory | (4,100) | (600) | ||
Oil and Gas Reserves | ||||
Provision for price and cost escalations | 0 | |||
Cash interest paid | 141,900 | 104,300 | $ 7,200 | |
Accrued Liabilities | ||||
Accrued oil and gas capital expenditures | 54,674 | 76,398 | 87,202 | |
Accrued revenue and royalty distributions | 44,411 | 51,292 | 64,370 | |
Accrued lease operating and workover expense | 17,250 | 10,113 | 8,279 | |
Accrued interest | 23,567 | 21,521 | 21,341 | |
Accrued taxes | 4,427 | 4,226 | 4,386 | |
Other | $ 10,892 | 20,281 | 18,803 | |
Accrued Liabilities | 183,831 | 204,381 | ||
Income Taxes | ||||
Provision for Federal or State Income Tax Prior to Company Reorganization | 0 | |||
Oil and Gas Properties | ||||
Property and equipment | ||||
Ceiling limit of capitalized cost for determining impairment to oil and gas properties, after tax | 83,500 | 319,600 | ||
Mississippian unevaluated property costs attributable to leases | 59,200 | 168,400 | ||
Anadarko Basin unevaluated property costs transferred | 128,200 | 89,600 | ||
Gulf Coast unevaluated property costs transferred to the full cost pool | $ 16,500 | $ 61,200 | ||
Other Property and Equipment | Minimum | ||||
Property and equipment | ||||
Estimated useful lives | 5 years | 3 years | ||
Other Property and Equipment | Maximum | ||||
Property and equipment | ||||
Estimated useful lives | 7 years | 7 years |
Summary of Significant Accoun91
Summary of Significant Accounting Policies (Details 2) $ / shares in Units, $ in Thousands | Aug. 03, 2015$ / sharesshares | Jun. 30, 2015USD ($)$ / sharesshares | Jun. 30, 2014USD ($) | Dec. 31, 2014USD ($)$ / sharesshares | Dec. 31, 2013USD ($)$ / sharesshares | Dec. 31, 2012USD ($) |
Correction of Operating and Investing Cash Flows for the Three Months Ended March 31, 2014 | ||||||
Common stock, shares authorized | shares | 100,000,000 | 100,000,000 | 100,000,000 | |||
Common stock, par value (in dollars per share) | $ / shares | $ 0.01 | $ 0.01 | $ 0.01 | |||
Change in operating assets and liabilities: | ||||||
accounts receivable - JIB and other | $ 22,617 | $ (1,557) | $ (18,897) | $ (18,002) | $ (3,249) | |
Net cash provided by operating activities | 138,650 | 173,561 | 351,544 | 237,588 | 145,019 | |
Investment in property and equipment | (190,278) | (275,547) | (556,397) | (584,220) | (430,102) | |
Net cash used in investing activities | $ (149,994) | (128,028) | (404,264) | (1,204,332) | (781,378) | |
As Previously Reported | ||||||
Change in operating assets and liabilities: | ||||||
accounts receivable - JIB and other | 1,929 | (13,603) | (28,488) | (11,019) | ||
Net cash provided by operating activities | 177,047 | 356,838 | 227,102 | 137,249 | ||
Investment in property and equipment | (279,033) | (561,691) | (573,734) | (422,332) | ||
Net cash used in investing activities | $ (131,514) | (409,558) | (1,193,846) | (773,608) | ||
As Restated | ||||||
Change in operating assets and liabilities: | ||||||
accounts receivable - JIB and other | (18,897) | (18,002) | (3,249) | |||
Net cash provided by operating activities | 351,544 | 237,588 | 145,019 | |||
Investment in property and equipment | (556,397) | (584,220) | (430,102) | |||
Net cash used in investing activities | $ (404,264) | $ (1,204,332) | $ (781,378) | |||
Subsequent event | ||||||
Correction of Operating and Investing Cash Flows for the Three Months Ended March 31, 2014 | ||||||
Stock split ratio | 0.10 | |||||
Common stock, shares authorized | shares | 100,000,000 | |||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.01 |
Fair Value Measurements of Fi92
Fair Value Measurements of Financial Instruments (Details) - Recurring - Commodity Derivatives $ in Thousands | Jun. 30, 2015item | Dec. 31, 2014USD ($)item | Dec. 31, 2013USD ($)item |
Significant Other Observable Inputs (Level 2) | |||
Fair Value Measurements of Financial Instruments | |||
Number of bank counterparties for company's commodity derivative contracts | item | 7 | 7 | 7 |
Assets: | |||
Total assets | $ 126,709 | $ 2,578 | |
Liabilities: | |||
Total liabilities | 33,390 | ||
Significant Other Observable Inputs (Level 2) | Swaps | Oil | |||
Assets: | |||
Total assets | 469 | ||
Liabilities: | |||
Total liabilities | 32,209 | ||
Significant Other Observable Inputs (Level 2) | Swaps | NGL | |||
Assets: | |||
Total assets | 488 | ||
Liabilities: | |||
Total liabilities | 74 | ||
Significant Other Observable Inputs (Level 2) | Collars | Oil | |||
Assets: | |||
Total assets | 106,450 | 64 | |
Liabilities: | |||
Total liabilities | 809 | ||
Significant Other Observable Inputs (Level 2) | Collars | Natural Gas | |||
Assets: | |||
Total assets | 20,259 | 751 | |
Liabilities: | |||
Total liabilities | 272 | ||
Significant Other Observable Inputs (Level 2) | Basis Differential Swaps | |||
Assets: | |||
Total assets | 806 | ||
Liabilities: | |||
Total liabilities | 26 | ||
Total | |||
Assets: | |||
Total assets | 126,709 | 2,578 | |
Liabilities: | |||
Total liabilities | 33,390 | ||
Total | Swaps | Oil | |||
Assets: | |||
Total assets | 469 | ||
Liabilities: | |||
Total liabilities | 32,209 | ||
Total | Swaps | NGL | |||
Assets: | |||
Total assets | 488 | ||
Liabilities: | |||
Total liabilities | 74 | ||
Total | Collars | Oil | |||
Assets: | |||
Total assets | 106,450 | 64 | |
Liabilities: | |||
Total liabilities | 809 | ||
Total | Collars | Natural Gas | |||
Assets: | |||
Total assets | $ 20,259 | 751 | |
Liabilities: | |||
Total liabilities | 272 | ||
Total | Basis Differential Swaps | |||
Assets: | |||
Total assets | 806 | ||
Liabilities: | |||
Total liabilities | $ 26 |
Risk Management and Derivativ93
Risk Management and Derivative Instruments (Details) - Not designated as Hedging Instrument - Commodity Derivatives $ in Millions | 6 Months Ended | 12 Months Ended |
Jun. 30, 2015MMBTU$ / bbl$ / Boe | Dec. 31, 2014USD ($)itemMMBTU$ / bbl$ / MMBTU | |
Risk Management and Derivative Instruments | ||
Maximum loss exposure under commodity derivative contracts on failure of the entity's counterparty's performance | $ | $ 126.7 | |
Oil | WTI | Swaps | 2015 | ||
Risk Management and Derivative Instruments | ||
Hedged Volume | 3,276,000 | |
Weighted-Average Fixed Price | $ / bbl | 71.56 | 88.72 |
Natural Gas | Swaps | 2014 | ||
Risk Management and Derivative Instruments | ||
Hedged Volume, not settled in cash | MMBTU | 2,170,000 | |
Natural Gas | Swaps | 2015 | ||
Risk Management and Derivative Instruments | ||
Hedged Volume | 20,050,000 | |
Weighted-Average Fixed Price | 4.13 | 4.15 |
Hedged Volume, not settled in cash | MMBTU | 1,550,000 |
Risk Management and Derivativ94
Risk Management and Derivative Instruments (Details 2) - Commodity Derivatives $ in Thousands | 12 Months Ended | |||
Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | Dec. 31, 2012USD ($)bbl | Jun. 30, 2015USD ($) | |
Option | Oil | Put | ||||
Derivative liabilities: | ||||
Payment of deferred premium | $ 0 | $ 0 | $ 3,300 | |
Number of barrels covered under the commodity contract | bbl | 549,000 | |||
Not designated as Hedging Instrument | ||||
Risk Management and Derivative Instruments | ||||
Total derivative fair value at period end | 126,709 | (30,812) | $ 33,991 | |
Derivative assets: | ||||
Gross Recognized Assets | 126,709 | 2,578 | 36,860 | |
Gross Amounts Offset, Assets | 1,859 | 1,002 | ||
Net Recognized Fair Value Assets | 126,709 | 719 | 35,858 | |
Derivative liabilities: | ||||
Gross Recognized Liabilities | 33,390 | 2,869 | ||
Gross Amounts Offset, Liabilities | 1,859 | 1,002 | ||
Net Recognized Fair Value Liabilities | 31,531 | 1,867 | ||
Not designated as Hedging Instrument | Current Assets | ||||
Derivative assets: | ||||
Gross Recognized Assets | 126,709 | 2,559 | 36,860 | |
Gross Amounts Offset, Assets | 1,859 | 1,002 | ||
Net Recognized Fair Value Assets | 126,709 | 700 | 35,858 | |
Not designated as Hedging Instrument | Non-Current Assets | ||||
Derivative assets: | ||||
Gross Recognized Assets | 19 | |||
Net Recognized Fair Value Assets | 19 | |||
Not designated as Hedging Instrument | Current Liabilities | ||||
Derivative liabilities: | ||||
Gross Recognized Liabilities | 29,739 | 2,869 | ||
Gross Amounts Offset, Liabilities | 1,859 | 1,002 | ||
Net Recognized Fair Value Liabilities | 27,880 | 1,867 | ||
Not designated as Hedging Instrument | Non-Current Liabilities | ||||
Derivative liabilities: | ||||
Gross Recognized Liabilities | 3,651 | |||
Net Recognized Fair Value Liabilities | 3,651 | |||
Not designated as Hedging Instrument | Swaps | Current Assets | Oil | ||||
Derivative assets: | ||||
Gross Recognized Assets | 106,450 | 27,708 | ||
Not designated as Hedging Instrument | Swaps | Current Assets | NGL | ||||
Derivative assets: | ||||
Gross Recognized Assets | 469 | |||
Not designated as Hedging Instrument | Swaps | Current Assets | Natural Gas | ||||
Derivative assets: | ||||
Gross Recognized Assets | $ 20,259 | 469 | 9,152 | |
Not designated as Hedging Instrument | Swaps | Non-Current Assets | Natural Gas | ||||
Derivative assets: | ||||
Gross Recognized Assets | 19 | |||
Not designated as Hedging Instrument | Swaps | Current Liabilities | Oil | ||||
Derivative liabilities: | ||||
Gross Recognized Liabilities | (28,871) | $ 2,869 | ||
Not designated as Hedging Instrument | Swaps | Current Liabilities | NGL | ||||
Derivative liabilities: | ||||
Gross Recognized Liabilities | (74) | |||
Not designated as Hedging Instrument | Swaps | Current Liabilities | Natural Gas | ||||
Derivative liabilities: | ||||
Gross Recognized Liabilities | (496) | |||
Not designated as Hedging Instrument | Swaps | Non-Current Liabilities | Oil | ||||
Derivative liabilities: | ||||
Gross Recognized Liabilities | (3,338) | |||
Not designated as Hedging Instrument | Swaps | Non-Current Liabilities | Natural Gas | ||||
Derivative liabilities: | ||||
Gross Recognized Liabilities | (313) | |||
Not designated as Hedging Instrument | Collars | Current Assets | Oil | ||||
Derivative assets: | ||||
Gross Recognized Assets | 64 | |||
Not designated as Hedging Instrument | Collars | Current Assets | Natural Gas | ||||
Derivative assets: | ||||
Gross Recognized Assets | 751 | |||
Not designated as Hedging Instrument | Collars | Current Liabilities | Oil | ||||
Derivative liabilities: | ||||
Gross Recognized Liabilities | (272) | |||
Not designated as Hedging Instrument | Collars | Current Liabilities | Natural Gas | ||||
Derivative liabilities: | ||||
Gross Recognized Liabilities | (26) | |||
Not designated as Hedging Instrument | Basis Differential Swaps | Current Assets | ||||
Derivative assets: | ||||
Gross Recognized Assets | $ 806 |
Risk Management and Derivativ95
Risk Management and Derivative Instruments (Details 3) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Gains (losses) on Commodity Derivative Contracts | |||||||
Realized net losses | $ 18,332 | $ 17,585 | $ 15,825 | ||||
Unrealized net gains (losses) | 157,500 | ||||||
Gains (losses) on commodity derivative contracts - net | $ (19,293) | $ (31,467) | $ 2,079 | $ (54,140) | 139,189 | (44,284) | (11,158) |
Not designated as Hedging Instrument | |||||||
Gains (losses) on Commodity Derivative Contracts | |||||||
Realized net losses | (18,332) | (17,585) | (15,825) | ||||
Unrealized net gains (losses) | $ (61,482) | $ (14,329) | $ (92,718) | $ (22,192) | 157,521 | (26,699) | 4,667 |
Gains (losses) on commodity derivative contracts - net | $ 139,189 | $ (44,284) | $ (11,158) |
Property and Equipment (Detai96
Property and Equipment (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||
Jun. 30, 2015USD ($)$ / Boe | Jun. 30, 2014USD ($)$ / Boe | Jun. 30, 2015USD ($)$ / Boe | Jun. 30, 2014USD ($)$ / Boe | Dec. 31, 2014USD ($)$ / Boe | Dec. 31, 2013USD ($)$ / Boe | Dec. 31, 2012USD ($)$ / Boe | |
Property and Equipment | |||||||
Proved properties | $ 3,527,182 | $ 3,527,182 | $ 3,398,146 | $ 2,817,062 | |||
Unevaluated properties | 31,778 | 31,778 | 44,535 | 243,599 | |||
Other property and equipment | 14,734 | 14,734 | 13,454 | 11,113 | |||
Less accumulated depreciation, depletion, amortization and impairment | (2,119,458) | (2,119,458) | (1,333,019) | (976,880) | |||
Net property and equipment | $ 1,454,236 | $ 1,454,236 | 2,123,116 | 2,094,894 | |||
Other information | |||||||
Capitalized qualifying share-based compensation expense | 2,200 | 1,400 | |||||
Other Property and Equipment | |||||||
Other information | |||||||
Depreciation expense | 3,100 | 2,200 | $ 500 | ||||
Oil and Gas Properties | |||||||
Other information | |||||||
Depletion expense related to oil and gas properties | $ 266,800 | $ 248,200 | $ 125,100 | ||||
Depletion expense (per Boe) | $ / Boe | 17.63 | 24.22 | 18.18 | 24.76 | 22.75 | 28.42 | 34.17 |
Depreciation expense | $ 896 | $ 751 | $ 1,719 | $ 1,448 | |||
Costs capitalized to unevaluated properties | $ 12,400 | $ 32,200 | $ 11,200 | ||||
Internal cost capitalized | 2,613 | 3,325 | 4,915 | 6,449 | 12,400 | 8,400 | 1,500 |
Capitalized qualifying share-based compensation expense | $ 400 | $ 600 | $ 900 | $ 1,200 | $ 2,200 | $ 1,400 | $ 200 |
Acquisition and Divestitures 97
Acquisition and Divestitures of Oil and Gas Properties (Details) - USD ($) | Jun. 25, 2014 | May. 01, 2014 | May. 31, 2013 | Apr. 01, 2013 | Oct. 01, 2012 | Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | May. 21, 2015 | Mar. 05, 2014 |
Oil and gas properties | ||||||||||||||
Proved | $ 3,527,182,000 | $ 3,527,182,000 | $ 3,398,146,000 | $ 2,817,062,000 | ||||||||||
Additional disclosures | ||||||||||||||
Cost of acquiring additional acreage and producing wells | 620,112,000 | $ 351,276,000 | ||||||||||||
Proceeds from sale of other properties | 1,400,000 | |||||||||||||
Unaudited Pro forma information | ||||||||||||||
NET LOSS ATTRIBUTABLE TO COMMON SHAREHOLDERS | (599,106,000) | $ (6,904,000) | (792,789,000) | $ (93,169,000) | 67,271,000 | (359,574,000) | (156,597,000) | |||||||
Other accounts receivable | 16,758,000 | 16,758,000 | 22,193,000 | 1,090,000 | ||||||||||
Acquisition and transaction costs | $ 251,000 | $ 2,483,000 | $ 251,000 | $ 2,611,000 | 4,129,000 | 11,803,000 | 14,884,000 | |||||||
PetroQuest | Exploration agreement | ||||||||||||||
Unaudited Pro forma information | ||||||||||||||
Undivided right, title and interest (as a percent) | 50.00% | |||||||||||||
Cash consideration | 3,000,000 | |||||||||||||
Additional cash consideration | 7,000,000 | |||||||||||||
Additional non-interest consideration | 14,000,000 | |||||||||||||
Other accounts receivable | 7,000,000 | |||||||||||||
Pro Forma | ||||||||||||||
Unaudited Pro forma information | ||||||||||||||
Revenues and other | 539,562,000 | 490,241,000 | ||||||||||||
Net income (loss) | (340,400,000) | (129,885,000) | ||||||||||||
Preferred stock dividends | (15,589,000) | (26,000,000) | ||||||||||||
NET LOSS ATTRIBUTABLE TO COMMON SHAREHOLDERS | $ (355,989,000) | $ (155,885,000) | ||||||||||||
Net loss per common share - basic and diluted | $ 5.41 | $ 2.60 | ||||||||||||
Pine Prairie Disposition | ||||||||||||||
Unaudited Pro forma information | ||||||||||||||
Purchase price of subject to standard post-closing adjustments received in cash | $ (147,700,000) | $ (170,000,000) | ||||||||||||
Acquisition and transaction costs | 4,100,000 | |||||||||||||
2020 Senior Notes | ||||||||||||||
Additional disclosures | ||||||||||||||
Interest rate (as a percent) | 10.75% | 10.75% | ||||||||||||
2021 Senior Notes | ||||||||||||||
Additional disclosures | ||||||||||||||
Interest rate (as a percent) | 9.25% | 9.25% | ||||||||||||
Credit Facility | Pine Prairie Disposition | ||||||||||||||
Unaudited Pro forma information | ||||||||||||||
Repayment of debt | $ 131,000,000 | |||||||||||||
Mandatorily redeemable convertible preferred units | ||||||||||||||
Unaudited Pro forma information | ||||||||||||||
Preferred stock dividends | (10,400,000) | $ (15,600,000) | ||||||||||||
Anadarko Basin Acquisition | ||||||||||||||
Oil and gas properties | ||||||||||||||
Proved | $ 417,750,000 | |||||||||||||
Unevaluated | 207,606,000 | |||||||||||||
Total assets acquired | 625,356,000 | |||||||||||||
Asset retirement obligations | 6,296,000 | 6,296,000 | ||||||||||||
Total liabilities assumed | 6,296,000 | |||||||||||||
Net assets acquired | 619,060,000 | |||||||||||||
Additional disclosures | ||||||||||||||
Revenue included in the statement of consolidated operations | $ 178,900,000 | 104,700,000 | ||||||||||||
Unaudited Pro forma information | ||||||||||||||
Acquisition and transaction costs | 11,800,000 | |||||||||||||
Anadarko Basin Acquisition | 2021 Senior Notes | Panther Energy LLC | ||||||||||||||
Acquisition of Oil and Gas Properties | ||||||||||||||
Purchase price, cash | 618,000,000 | |||||||||||||
Additional disclosures | ||||||||||||||
Aggregate principal amount borrowed | $ 700,000,000 | |||||||||||||
Interest rate (as a percent) | 9.25% | |||||||||||||
Eagle Property Acquisition | ||||||||||||||
Acquisition of Oil and Gas Properties | ||||||||||||||
Purchase price, cash | $ 325,000,000 | |||||||||||||
Oil and gas properties | ||||||||||||||
Proved | 419,549,000 | |||||||||||||
Unevaluated | 244,236,000 | |||||||||||||
Commodity derivative contracts | 8,453,000 | |||||||||||||
Total assets acquired | 672,238,000 | |||||||||||||
Asset retirement obligations | 2,662,000 | $ 2,662,000 | ||||||||||||
Deferred income tax liabilities | 25,985,000 | $ (727,000) | 26,712,000 | |||||||||||
Total liabilities assumed | 28,647,000 | |||||||||||||
Net assets acquired | 643,591,000 | |||||||||||||
Additional disclosures | ||||||||||||||
Revenue included in the statement of consolidated operations | 28,400,000 | |||||||||||||
Unaudited Pro forma information | ||||||||||||||
Acquisition and transaction costs | $ 14,900,000 | |||||||||||||
Eagle Property Acquisition | 2020 Senior Notes | ||||||||||||||
Additional disclosures | ||||||||||||||
Aggregate principal amount borrowed | $ 600,000,000 | |||||||||||||
Interest rate (as a percent) | 10.75% | |||||||||||||
Eagle Property Acquisition | Mandatorily redeemable convertible preferred units | ||||||||||||||
Acquisition of Oil and Gas Properties | ||||||||||||||
Purchase price, preferred shares | 325,000 | |||||||||||||
Liquidation value (in dollars per share) | $ 1,000 | |||||||||||||
Other Property Acquisitions | Gulf Coast | ||||||||||||||
Additional disclosures | ||||||||||||||
Cost of acquiring additional acreage and producing wells | $ 3,400,000 |
Asset Retirement Obligations 98
Asset Retirement Obligations (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Asset Retirement Obligations | |||||||
Asset retirement obligations | $ 17,737 | $ 20,382 | $ 21,599 | $ 26,308 | $ 26,308 | $ 15,245 | $ 7,627 |
Changes in Company's asset retirement obligations | |||||||
Asset retirement obligations - beginning of period | 21,599 | 26,308 | 26,308 | 15,245 | 7,627 | ||
Liabilities incurred | 2 | 844 | 996 | 2,535 | 3,044 | ||
Liabilities assumed in Anadarko Basin and Eagle Property Acquisition for year ended 2013 and 2012 respectively | 6,296 | 2,662 | |||||
Revisions | 288 | 858 | 1,189 | ||||
Liabilities settled | (47) | (47) | (61) | ||||
Liabilities eliminated through asset sale | (4,699) | (7,652) | (7,652) | ||||
Current period accretion expense | 390 | 432 | 835 | 929 | 1,706 | 1,435 | 723 |
Asset retirement obligations - end of period | $ 17,737 | $ 20,382 | $ 17,737 | $ 20,382 | 21,599 | $ 26,308 | $ 15,245 |
Liabilities reduced in Prairie Disposition | $ 7,700 |
Long-Term Debt (Details)99
Long-Term Debt (Details) $ in Thousands | May. 31, 2013USD ($) | Oct. 01, 2012USD ($) | Jun. 30, 2015USD ($)item | Dec. 31, 2014USD ($)item | Dec. 31, 2013USD ($) | Dec. 31, 2014USD ($) | May. 21, 2015 | Mar. 31, 2015 | Sep. 30, 2014USD ($) | Sep. 29, 2014USD ($) | Jun. 30, 2014 | Aug. 30, 2013 |
Long-Term Debt | ||||||||||||
Long-term debt | $ 1,924,412 | $ 1,735,150 | $ 1,735,150 | |||||||||
Long-term debt | 1,924,412 | $ 1,735,150 | $ 1,701,150 | $ 1,735,150 | ||||||||
Leverage ratio | 3.7 | 3.7 | ||||||||||
Actual current ratio | 1.1 | |||||||||||
Aggregate principal amount borrowed | $ 1,791,585 | |||||||||||
Midstates Sub | ||||||||||||
Long-Term Debt | ||||||||||||
Ownership interest (as a percent) | 100.00% | 100.00% | ||||||||||
Period Two | ||||||||||||
Long-Term Debt | ||||||||||||
Redemption price, percentage | 100.00% | |||||||||||
Credit Facility Amendment - September 26, 2013 | Fiscal quarter ending March 31, 2015 and each fiscal quarter thereafter | ||||||||||||
Long-Term Debt | ||||||||||||
Leverage ratio | 4 | |||||||||||
Minimum | ||||||||||||
Long-Term Debt | ||||||||||||
Actual Debt to EBITDA | 1 | |||||||||||
Maximum | ||||||||||||
Long-Term Debt | ||||||||||||
Leverage ratio | 1 | |||||||||||
Maximum | Credit Facility Amendment - September 26, 2013 | Fiscal quarter ending December 31, 2014 | ||||||||||||
Long-Term Debt | ||||||||||||
Leverage ratio | 4.75 | 4.75 | ||||||||||
Senior Revolving Credit Facility, due 2018 | ||||||||||||
Long-Term Debt | ||||||||||||
Long-term debt | $ 435,150 | $ 401,150 | $ 435,150 | |||||||||
Maximum borrowing capacity | $ 750,000 | $ 750,000 | $ 750,000 | |||||||||
Borrowing base | $ 252,400 | $ 525,000 | $ 475,000 | |||||||||
Interest rate, description | LIBOR | |||||||||||
Weighted-average interest rate (as a percent) | 2.90% | 2.80% | 2.50% | 2.80% | 2.80% | |||||||
Commitment fee, option one (as a percent) | 0.375% | 0.375% | ||||||||||
Commitment fee, option two (as a percent) | 0.50% | 0.50% | ||||||||||
Period during which Company may request additional redetermination of borrowing base | 6 months | 6 months | ||||||||||
Outstanding letters of credit amount | $ 1,500 | $ 1,400 | $ 1,400 | |||||||||
Number of equal successive monthly payments to make repayment on reduction of borrowing base | item | 6 | 6 | ||||||||||
Period for commencement of repayment of equal successive monthly payments following the administrative agent's notice regarding borrowing base reduction | 30 days | 30 days | ||||||||||
Actual current ratio | 1.1 | |||||||||||
Actual Debt to EBITDA | 3.7 | 3.7 | ||||||||||
Senior Revolving Credit Facility, due 2018 | Minimum | ||||||||||||
Long-Term Debt | ||||||||||||
Interest rate added to base rate (as a percent) | 2.00% | |||||||||||
Percentage of outstanding loans and other obligations held by lenders, on whose behalf the administrative agent may request for redetermination of borrowing base | 67.00% | 67.00% | ||||||||||
Current ratio | 1 | 1 | ||||||||||
Senior Revolving Credit Facility, due 2018 | Maximum | ||||||||||||
Long-Term Debt | ||||||||||||
Interest rate added to base rate (as a percent) | 3.00% | |||||||||||
Additional borrowing base redeterminations at company request per 6 month period following each scheduled borrowing base redetermination | item | 1 | 1 | ||||||||||
2020 Senior Notes | ||||||||||||
Long-Term Debt | ||||||||||||
Long-term debt | $ 600,000 | $ 600,000 | $ 600,000 | |||||||||
Interest rate (as a percent) | 10.75% | 10.75% | ||||||||||
Estimated fair value of the Notes | $ 121,100 | $ 327,000 | $ 327,000 | |||||||||
Aggregate principal amount borrowed | $ 600,000 | $ 293,625 | ||||||||||
Redemption price, expressed as percentage of principal amount | 101.00% | |||||||||||
Effective annual interest rate (as a percent) | 11.10% | |||||||||||
2020 Senior Notes | Period One | ||||||||||||
Long-Term Debt | ||||||||||||
Debt instrument redemption period end date | Sep. 30, 2015 | Sep. 30, 2015 | ||||||||||
Redemption price, expressed as percentage of principal amount | 110.75% | |||||||||||
2020 Senior Notes | Period Two | ||||||||||||
Long-Term Debt | ||||||||||||
Debt instrument redemption period end date | Sep. 30, 2016 | Sep. 30, 2016 | ||||||||||
Redemption price, percentage | 100.00% | |||||||||||
2020 Senior Notes | Maximum | Period One | ||||||||||||
Long-Term Debt | ||||||||||||
Percentage of debt that can be redeemed | 35.00% | |||||||||||
2021 Senior Notes | ||||||||||||
Long-Term Debt | ||||||||||||
Long-term debt | $ 700,000 | $ 700,000 | $ 700,000 | |||||||||
Interest rate (as a percent) | 9.25% | 9.25% | ||||||||||
Proceeds from the offering (net of the initial purchasers' discount and related offering expenses) | $ 700,000 | |||||||||||
Repayment of outstanding facility balance | 34,300 | |||||||||||
Estimated fair value of the Notes | $ 137,800 | $ 357,000 | $ 357,000 | |||||||||
Aggregate principal amount borrowed | $ 700,000 | $ 347,652 | ||||||||||
Effective annual interest rate (as a percent) | 9.60% | 9.50% | ||||||||||
2021 Senior Notes | Midstates Sub | ||||||||||||
Long-Term Debt | ||||||||||||
Ownership interest (as a percent) | 100.00% | |||||||||||
2021 Senior Notes | Period One | ||||||||||||
Long-Term Debt | ||||||||||||
Debt instrument redemption period end date | May 31, 2016 | |||||||||||
Redemption price, percentage | 100.00% | |||||||||||
Redemption price, expressed as percentage of principal amount | 109.25% | |||||||||||
2021 Senior Notes | Maximum | Period Two | ||||||||||||
Long-Term Debt | ||||||||||||
Percentage of debt that can be redeemed | 35.00% | |||||||||||
Credit Facility | ||||||||||||
Long-Term Debt | ||||||||||||
Period during which Company may request additional redetermination of borrowing base | 6 months | |||||||||||
Period for commencement of repayment of equal successive monthly payments following the administrative agent's notice regarding borrowing base reduction | 30 days | |||||||||||
Credit Facility | Maximum | ||||||||||||
Long-Term Debt | ||||||||||||
Leverage ratio | 4 | 4 |
Preferred Stock_Units (Details)
Preferred Stock/Units (Details) - USD ($) $ / shares in Units, $ in Thousands | Sep. 30, 2015 | Mar. 30, 2015 | Sep. 28, 2012 | Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Apr. 26, 2012 | Dec. 31, 2011 |
Financial Instruments Subject to Mandatory Redemption, Settlement Terms, Share Value, Amount [Abstract] | ||||||||||||
Proceeds from issuance of preferred units | $ 65,000 | |||||||||||
Interest Expense | $ 44,880 | $ 33,813 | $ 81,382 | $ 67,760 | $ 137,548 | $ 83,138 | 12,999 | |||||
Mandatorily redeemable convertible preferred units | ||||||||||||
Financial Instruments Subject to Mandatory Redemption, Settlement Terms, Share Value, Amount [Abstract] | ||||||||||||
Number of shares authorized | 65,000 | |||||||||||
Value of shares authorized to be issued | $ 65,000 | |||||||||||
Redemption amount | $ 67,100 | |||||||||||
Interest Expense | $ 0 | $ 0 | $ 2,100 | |||||||||
Common Stock | ||||||||||||
Changes in number of outstanding shares | ||||||||||||
Share count at the beginning of the period (in shares) | 7,049,173 | 6,892,574 | 6,892,574 | 6,661,971 | ||||||||
Share count at the end of the period (in shares) | 7,257,007 | 7,257,007 | 7,049,173 | 6,892,574 | 6,661,971 | |||||||
Mandatorily redeemable convertible preferred units | ||||||||||||
Series A Preferred Stock | ||||||||||||
Liquidation value (in dollars per share) | $ 1,241 | |||||||||||
Conversion rate for preferred stock (in dollars per share) | $ 110 | $ 11 | $ 11 | |||||||||
Preferred stock dividends | $ 10,400 | $ 15,600 | ||||||||||
Number of Common Shares Issuable Upon Conversion | 71,893 | 2,659,792 | 2,459,127 | |||||||||
Notional dividend amount of convertible preferred stock | $ 7,900 | $ 29,300 | $ 27,100 | |||||||||
Eagle Property Acquisition | Mandatorily redeemable convertible preferred units | ||||||||||||
Series A Preferred Stock | ||||||||||||
Preferred stock, shares designated | 325,000 | |||||||||||
Liquidation value (in dollars per share) | $ 1,000 | |||||||||||
Rate of interest for preferred stock (as a percent) | 8.00% | 8.00% | ||||||||||
Conversion rate for preferred stock (in dollars per share) | $ 135 | $ 13.50 | ||||||||||
Period required to convert preferred stock into common stock | 15 days | 15 days | ||||||||||
Eagle Property Acquisition | Maximum | Mandatorily redeemable convertible preferred units | ||||||||||||
Series A Preferred Stock | ||||||||||||
Conversion rate for preferred stock (in dollars per share) | $ 135 | $ 13.50 | ||||||||||
Eagle Property Acquisition | Minimum | Mandatorily redeemable convertible preferred units | ||||||||||||
Series A Preferred Stock | ||||||||||||
Conversion rate for preferred stock (in dollars per share) | $ 110 | $ 11 | ||||||||||
Series A Preferred Stock | ||||||||||||
Series A Preferred Stock | ||||||||||||
Preferred stock, shares issued | 325,000 | 325,000 | 325,000 | 325,000 | ||||||||
Preferred stock, shares outstanding | 325,000 | 325,000 | 325,000 | 325,000 | ||||||||
Rate of interest for preferred stock (as a percent) | 8.00% | 8.00% | 8.00% | |||||||||
Number of shares issued of convertible preferred stock to common stock | 3,738,442 | |||||||||||
Changes in number of outstanding shares | ||||||||||||
Share count at the beginning of the period (in shares) | 325,000 | 325,000 | 325,000 | 325,000 | ||||||||
Issuance of preferred stock as consideration in Eagle Property Acquisition (in shares) | 325,000 | |||||||||||
Share count at the end of the period (in shares) | 325,000 | 325,000 | 325,000 | |||||||||
Holdings LLC | Mandatorily redeemable convertible preferred units | ||||||||||||
Series A Preferred Stock | ||||||||||||
Preferred stock, shares issued | 65,000 | |||||||||||
Financial Instruments Subject to Mandatory Redemption, Settlement Terms, Share Value, Amount [Abstract] | ||||||||||||
Proceeds from issuance of preferred units | $ 65,000 | |||||||||||
$110.00 | Series A Preferred Stock | ||||||||||||
Series A Preferred Stock | ||||||||||||
Conversion rate for preferred stock (in dollars per share) | $ 110 |
Equity and Share-Based Compe101
Equity and Share-Based Compensation (Details) $ / shares in Units, $ in Millions | Sep. 28, 2012 | Apr. 25, 2012$ / sharesshares | Jun. 30, 2015$ / sharesshares | Dec. 31, 2014item$ / sharesshares | Dec. 31, 2013$ / sharesshares | Dec. 31, 2012shares | Jun. 30, 2015USD ($)$ / sharesshares | Dec. 31, 2014USD ($)$ / sharesshares | Dec. 31, 2013$ / sharesshares |
Transactions with Chief Executive Officer of Petroleum Inc. | |||||||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.01 | $ 0.01 | $ 0.01 | ||||||
Common stock, shares authorized | 100,000,000 | 100,000,000 | 100,000,000 | ||||||
Changes in number of outstanding shares | |||||||||
Common stock, shares outstanding | 7,164,968 | 6,995,705 | 6,880,704 | ||||||
Restricted stock awards | |||||||||
Changes in number of outstanding shares | |||||||||
Common stock, shares outstanding | 377,556 | ||||||||
Granted (in dollars per share) | $ / shares | $ 12.29 | $ 46.61 | $ 68.22 | ||||||
Unrecognized expense, adjusted for estimated forfeitures (in dollars) | $ | $ 6.4 | $ 10.9 | |||||||
Eagle Property Acquisition | Mandatorily redeemable convertible preferred units | |||||||||
Changes in number of outstanding shares | |||||||||
Rate of interest for preferred stock (as a percent) | 8.00% | 8.00% | |||||||
Common Stock | |||||||||
Transactions with Chief Executive Officer of Petroleum Inc. | |||||||||
Shares issued upon conversion | 4,763,435 | ||||||||
Numbers of shares sold | 2,760,000 | ||||||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.01 | ||||||||
Number of shares of stock sold by the selling shareholders | 600,000 | ||||||||
Number of shares of sold by the selling shareholders pursuant to an option granted to the underwriters to cover over-allotments | 360,000 | ||||||||
Common stock, shares authorized | 100,000,000 | ||||||||
Number of votes per share entitled to holders | item | 1 | ||||||||
Number of preferences or rights of conversion or rights of conversion, exchange, pre-exemption or other subscription rights for common stock | item | 0 | ||||||||
Changes in number of outstanding shares | |||||||||
Share count at the beginning of the period (in shares) | 7,049,173 | 6,892,574 | 6,661,971 | ||||||
Issuance of common stock in pre IPO reorganization (in shares) | 4,763,435 | ||||||||
Proceeds from the sale of common stock to public (in shares) | 1,800,000 | ||||||||
Grants of restricted stock (in shares) | 268,677 | 344,748 | 284,024 | 102,951 | |||||
Forfeitures of restricted stock (in shares) | (60,843) | (188,149) | (53,421) | (4,415) | |||||
Share count at the end of the period (in shares) | 7,257,007 | 7,049,173 | 6,892,574 | 6,661,971 | |||||
Common stock, shares outstanding | 6,995,705 | ||||||||
Other shares or units were issued | 7,049,173 | 6,892,574 | 6,661,971 | 6,661,971 | 7,257,007 | 7,049,173 | 6,892,574 | ||
Treasury Stock | |||||||||
Changes in number of outstanding shares | |||||||||
Share count at the beginning of the period (in shares) | (53,467) | (11,870) | |||||||
Acquisition of treasury stock (in shares) | (38,572) | (41,597) | (11,870) | ||||||
Share count at the end of the period (in shares) | (92,039) | (53,467) | (11,870) | ||||||
Other shares or units were issued | (53,467) | (11,870) | (11,870) | (92,039) | (53,467) | (11,870) | |||
Preferred Stock | |||||||||
Transactions with Chief Executive Officer of Petroleum Inc. | |||||||||
Preferred stock, shares authorized | 50,000,000 | ||||||||
Preferred stock, par value (in dollars per share) | $ / shares | $ 0.01 |
Equity and Share-Based Compe102
Equity and Share-Based Compensation (Details 2) - Incentive units - USD ($) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2015 | Dec. 31, 2014 | |
Restricted Stock Awards | ||
Incentive units issued | 1,099 | 1,099 |
Stock-based compensation expense (in dollars) | $ 0 | $ 0 |
Equity and Share-Based Compe103
Equity and Share-Based Compensation (Details 3) - USD ($) $ / shares in Units, $ in Millions | 6 Months Ended | 12 Months Ended | |||
Jun. 30, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | May. 27, 2014 | Apr. 20, 2012 | |
Restricted stock awards | |||||
Restricted Stock Awards | |||||
Requisite service period for recognition of compensation expense | 3 years | ||||
Shares | |||||
Non-vested shares outstanding at the beginning of the period | 306,201 | 296,367 | 98,535 | ||
Granted (in shares) | 268,677 | 344,748 | 284,024 | ||
Vested (in shares) | (136,479) | (146,764) | (32,772) | ||
Forfeited (in shares) | (60,843) | (188,150) | (53,420) | ||
Non-vested shares outstanding at the end of the period | 377,556 | 306,201 | 296,367 | ||
Weighted Average Grant Date Fair Value | |||||
Non-vested shares outstanding at the beginning of the period (in dollars per share) | $ 52.76 | $ 77.81 | $ 126.13 | ||
Granted (in dollars per share) | 12.29 | 46.61 | 68.22 | ||
Vested (in dollars per share) | 57.23 | 72.08 | 126.18 | ||
Forfeited (in dollars per share) | 47.06 | 65.83 | 86.46 | ||
Non-vested shares outstanding at the end of the period (in dollars per share) | $ 22.76 | $ 52.76 | $ 77.81 | ||
Additional information | |||||
Unrecognized expense, adjusted for estimated forfeitures (in dollars) | $ 6.4 | $ 10.9 | |||
Weighted-average period for over which unrecognized expense will be recognized | 1 year 9 months 18 days | 1 year 11 months 19 days | |||
LTIP | |||||
Restricted Stock Awards | |||||
Number of shares registered for future issuance | 863,843 | 863,843 | 863,843 | 656,343 | |
Additional information | |||||
Shares available for issuance | 170,271 | 378,105 | |||
LTIP | Restricted stock awards | |||||
Restricted Stock Awards | |||||
Number of restricted common stock issued to directors, management and employees under the long term incentive plan (in shares) | 377,556 | 306,201 | |||
Vesting period | 3 years | 3 years | |||
Percentage of awards vesting on each anniversary of the grant | 33.33% | 33.00% | |||
LTIP | Restricted stock awards | Directors | |||||
Restricted Stock Awards | |||||
Vesting period | 1 year | 1 year |
Equity and Share-Based Compe104
Equity and Share-Based Compensation (Details 4) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended | |||
Jun. 30, 2015 | Jun. 30, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Share-based Compensation, Post-Initial Public Offering | |||||
Total share-based compensation expense | $ 2,897 | $ 3,668 | $ 8,618 | $ 5,713 | $ 2,459 |
Capitalized qualifying share-based compensation costs to oil and gas properties | 2,200 | 1,400 | |||
Severance | |||||
Share-based Compensation, Post-Initial Public Offering | |||||
Total share-based compensation expense | 2,900 | ||||
LTIP | General and administrative expense Member | |||||
Share-based Compensation, Post-Initial Public Offering | |||||
Share-based compensation costs recognized | $ 8,600 | $ 5,700 | $ 2,500 |
Income Taxes (Details)105
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2012 | Jun. 30, 2015 | Jun. 30, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Income Taxes | ||||||||
Provision for federal or state income tax prior to company reorganization | $ 0 | |||||||
Net deferred income tax expense | $ 149,500 | $ (9,041) | $ (2,311) | 5,586 | $ (146,529) | $ 157,886 | ||
Unrealized net gains (losses) | 157,500 | |||||||
Income before taxes | $ (598,437) | $ (2,139) | (801,030) | (88,054) | 123,324 | (490,514) | 7,789 | |
Income tax payments expected in the upcoming four quarterly reporting periods | 0 | |||||||
Income tax expense benefit expected in Texas margin tax payment in 2015 | 600 | |||||||
Income Taxes | ||||||||
Valuation allowance | 309,700 | 309,700 | ||||||
Tax refund | 0 | |||||||
Current income taxes | 0 | 809 | ||||||
Current | ||||||||
State | 809 | |||||||
Total current | 0 | 809 | ||||||
Deferred | ||||||||
United States | 3,863 | (130,906) | 137,496 | |||||
State | 1,723 | (15,623) | 20,390 | |||||
Total deferred | $ 149,500 | (9,041) | (2,311) | 5,586 | (146,529) | 157,886 | ||
Income tax benefit (expense) | 41 | 9,041 | 2,311 | (6,395) | 146,529 | (157,886) | ||
Reconciliation of income tax expense | ||||||||
Income before taxes | (598,437) | (2,139) | $ (801,030) | (88,054) | $ 123,324 | $ (490,514) | $ 7,789 | |
Statutory rate | 35.00% | 35.00% | 35.00% | 35.00% | ||||
Income tax expense computed at statutory rate | $ 43,164 | $ (171,680) | $ 2,726 | |||||
Reconciling items: | ||||||||
Non-deductible pre-IPO loss | 4,561 | |||||||
State income taxes, net of federal benefit | 4,398 | (10,886) | 1,053 | |||||
Change in valuation allowance | $ 305,900 | (42,134) | 45,688 | |||||
Change in state rate | (414) | (10,500) | ||||||
Other, net | 1,381 | 849 | 57 | |||||
Change in tax status (1) | 149,489 | |||||||
Tax income tax provision (benefit) | $ (41) | (9,041) | $ (2,311) | 6,395 | (146,529) | 157,886 | ||
Federal change in tax status | 130,200 | |||||||
State change in tax status | $ 19,300 | |||||||
Deferred tax assets - current | ||||||||
Derivative instruments and other | 15,581 | |||||||
Less valuation allowance | (3,744) | |||||||
Total deferred tax assets, current | 11,837 | |||||||
Deferred tax assets - noncurrent | ||||||||
US tax loss carryforwards | 75,604 | 151,872 | ||||||
State tax loss carryforwards | 7,122 | 14,154 | ||||||
Employee benefit plans | 2,193 | 1,539 | ||||||
Less valuation allowance | (3,826) | (41,944) | ||||||
Total deferred tax assets, noncurrent | 81,093 | 125,621 | ||||||
Deferred tax liabilities | ||||||||
Derivative instruments and other | 44,862 | |||||||
Total deferred tax liabilities - current | 44,862 | |||||||
Oil and gas properties and equipment | 45,272 | 140,912 | ||||||
Total deferred tax liabilities, noncurrent | 45,272 | 140,912 | ||||||
Reflected in the accompanying balance sheet as: | ||||||||
Net deferred tax assets, current | 11,837 | |||||||
Net deferred tax liability, current | 9,579 | 9,579 | 44,862 | |||||
Net deferred tax asset, noncurrent | $ 9,579 | $ 9,579 | 35,821 | |||||
Net deferred tax liability noncurrent | $ 15,291 | |||||||
Louisiana | ||||||||
Income Taxes | ||||||||
Valuation allowance against net operating loss carryforwards | 45,700 | |||||||
Federal | ||||||||
Income Taxes | ||||||||
Valuation allowance | 39,900 | |||||||
State | Louisiana | ||||||||
Income Taxes | ||||||||
Valuation allowance | $ 3,800 |
Earnings (Loss) Per Share (Deta
Earnings (Loss) Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Earnings (Loss) Per Share | |||||||
Net loss | $ (598,437) | $ (2,098) | $ (791,989) | $ (85,743) | $ 116,929 | $ (343,985) | $ (150,097) |
Preferred Dividend | (669) | (4,806) | (800) | (7,426) | (10,378) | (15,589) | (6,500) |
Net loss attributable to shareholders | (599,106) | (6,904) | (792,789) | (93,169) | 106,551 | (359,574) | (156,597) |
Participating securities - Series A Preferred Stock | (35,696) | ||||||
Participating securities - Non-vested Restricted Stock | (3,584) | ||||||
NET LOSS ATTRIBUTABLE TO COMMON SHAREHOLDERS | $ (599,106) | $ (6,904) | $ (792,789) | $ (93,169) | $ 67,271 | $ (359,574) | $ (156,597) |
Weighted average shares outstanding | 6,774,000 | 6,645,000 | 6,750,000 | 6,622,000 | 6,644,000 | 6,576,000 | 5,997,000 |
Basic and diluted income (loss) per share | $ (88.44) | $ (1.04) | $ (117.45) | $ (14.07) | $ 10.13 | $ (54.70) | $ (26.11) |
Series A Preferred Stock | |||||||
Earnings (Loss) Per Share | |||||||
Participating securities - Series A Preferred Stock | $ (35,696) | ||||||
Preferred stock, shares outstanding | 325,000 | 325,000 | 325,000 | 325,000 |
Concentrations of Credit Risk (
Concentrations of Credit Risk (Details) - item | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Concentrations of Credit Risk | |||
Short-term contracts usual term | 1 month | ||
Revenue | Customer concentration | |||
Concentrations of Credit Risk | |||
Number of purchasers | 4 | 5 | 3 |
Revenue | Customer concentration | Purchaser one | |||
Concentrations of Credit Risk | |||
Concentration risk (as a percent) | 28.00% | 28.00% | 41.00% |
Revenue | Customer concentration | Purchaser two | |||
Concentrations of Credit Risk | |||
Concentration risk (as a percent) | 18.00% | 16.00% | 32.00% |
Revenue | Customer concentration | Purchaser three | |||
Concentrations of Credit Risk | |||
Concentration risk (as a percent) | 15.00% | 13.00% | 10.00% |
Revenue | Customer concentration | Purchaser four | |||
Concentrations of Credit Risk | |||
Concentration risk (as a percent) | 12.00% | 12.00% | |
Revenue | Customer concentration | Purchaser five | |||
Concentrations of Credit Risk | |||
Concentration risk (as a percent) | 11.00% | ||
Accounts receivable | Customer concentration | |||
Concentrations of Credit Risk | |||
Number of purchasers | 4 | 3 | |
Accounts receivable | Customer concentration | Purchaser one | |||
Concentrations of Credit Risk | |||
Concentration risk (as a percent) | 25.00% | 31.00% | |
Accounts receivable | Customer concentration | Purchaser two | |||
Concentrations of Credit Risk | |||
Concentration risk (as a percent) | 23.00% | 16.00% | |
Accounts receivable | Customer concentration | Purchaser three | |||
Concentrations of Credit Risk | |||
Concentration risk (as a percent) | 15.00% | 13.00% | |
Accounts receivable | Customer concentration | Purchaser four | |||
Concentrations of Credit Risk | |||
Concentration risk (as a percent) | 13.00% |
Commitments and Contingencie108
Commitments and Contingencies (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2014USD ($)bbl / dMMBTU$ / MMBTU$ / gal | Dec. 31, 2013USD ($) | Dec. 31, 2012USD ($) | |
Net minimum commitments | |||
Total | $ 29,210 | ||
2,015 | 20,868 | ||
2,016 | 2,756 | ||
2,017 | 1,941 | ||
2,018 | 1,471 | ||
2019 and beyond | 2,174 | ||
Interest payments due on the senior notes during the year ended December 31, 2015 | 130,000 | ||
Total obligations due in December 31, 2015 | 150,000 | ||
Office rent | $ 2,300 | $ 1,700 | $ 1,100 |
Natural Gas | Delivery during first 60 months of the contract | |||
Net minimum commitments | |||
Period after which company would receive volumetric credit for any deficiency payment under contract | 60 months | ||
Drilling contracts | |||
Net minimum commitments | |||
Total | $ 16,698 | ||
2,015 | 15,819 | ||
2,016 | 879 | ||
Non-cancellable office lease commitments | |||
Net minimum commitments | |||
Total | 9,320 | ||
2,015 | 1,857 | ||
2,016 | 1,877 | ||
2,017 | 1,941 | ||
2,018 | 1,471 | ||
2019 and beyond | 2,174 | ||
Non-cancellable office lease commitments | Houston | |||
Net minimum commitments | |||
Total | 3,400 | ||
Seismic contracts | |||
Net minimum commitments | |||
Total | 3,192 | ||
2,015 | $ 3,192 | ||
Gas transportation gathering and processing contract | Minimum | |||
Net minimum commitments | |||
Fee used as multiple for payment to the counterparty equal to the shortfall amount (in dollars per gallon/MMBTU) | $ / gal | 0.08 | ||
Gas transportation gathering and processing contract | Maximum | |||
Net minimum commitments | |||
Fee used as multiple for payment to the counterparty equal to the shortfall amount (in dollars per gallon/MMBTU) | $ / gal | 0.125 | ||
Gas transportation gathering and processing contract | Natural Gas | |||
Net minimum commitments | |||
Period after which company would receive volumetric credit for any deficiency payment under contract | 30 months | ||
Gas transportation gathering and processing contract | Natural Gas | Delivery during first 30 months of the contract | |||
Net minimum commitments | |||
Fee used as multiple for payment to the counterparty equal to the shortfall amount (in dollars per gallon/MMBTU) | $ / MMBTU | 0.36 | ||
Contractual obligation | MMBTU | 38,100,000 | ||
Gas transportation gathering and processing contract | Natural Gas | Delivery during first 60 months of the contract | |||
Net minimum commitments | |||
Fee used as multiple for payment to the counterparty equal to the shortfall amount (in dollars per gallon/MMBTU) | $ / MMBTU | 0.36 | ||
Contractual obligation | MMBTU | 76,200,000 | ||
Gas transportation gathering and processing contract | NGL | Minimum | |||
Net minimum commitments | |||
Volume commitments per day over the remaining term of the contract | bbl / d | 2,800 | ||
Gas transportation gathering and processing contract | NGL | Maximum | |||
Net minimum commitments | |||
Volume commitments per day over the remaining term of the contract | bbl / d | 5,780 |
Subsequent Evenets (Details)
Subsequent Evenets (Details) - Dequincy assets - USD ($) $ in Millions | Apr. 21, 2015 | Mar. 01, 2015 |
Significant Acquisitions and Disposals, Acquisition Costs or Sale Proceeds | $ 44 | |
Subsequent event | ||
Significant Acquisitions and Disposals, Acquisition Costs or Sale Proceeds | $ 44 |
Uncategorized Items - mpo-20151
Label | Element | Value |
Treasury Stock, Value, Acquired, Cost Method | us-gaap_TreasuryStockValueAcquiredCostMethod | $ 664 |
Treasury Stock, Value, Acquired, Cost Method | us-gaap_TreasuryStockValueAcquiredCostMethod | 1,928 |
Treasury Stock, Value, Acquired, Cost Method | us-gaap_TreasuryStockValueAcquiredCostMethod | 1,491 |
Treasury Stock, Value, Acquired, Cost Method | us-gaap_TreasuryStockValueAcquiredCostMethod | 429 |
Stock Issued During Period, Value, New Issues Net of Estimated Offering Expense | mpo_StockIssuedDuringPeriodValueNewIssuesNetOfEstimatedOfferingExpense | 213,569 |
Stock Issued During Period, Value, Share-based Compensation, Gross | us-gaap_StockIssuedDuringPeriodValueShareBasedCompensationGross | 2,651 |
Stock Issued During Period, Value, Share-based Compensation, Gross | us-gaap_StockIssuedDuringPeriodValueShareBasedCompensationGross | 7,179 |
Stock Issued During Period, Value, Share-based Compensation, Gross | us-gaap_StockIssuedDuringPeriodValueShareBasedCompensationGross | 10,862 |
Stock Issued During Period, Value, Share-based Compensation, Gross | us-gaap_StockIssuedDuringPeriodValueShareBasedCompensationGross | 4,818 |
Stock Issued During Period, Value, Share-based Compensation, Gross | us-gaap_StockIssuedDuringPeriodValueShareBasedCompensationGross | 3,759 |
Adjustments to Additional Paid in Capital Tax Attributes Contributed at IPO Reorganization Date by Shareholding Entities | mpo_AdjustmentsToAdditionalPaidInCapitalTaxAttributesContributedAtIPOReorganizationDateByShareholdingEntities | 33,888 |
Additional Paid In Capital [Member] | ||
Adjustments to Additional Paid in Capital Reclassification of Members Contributions | mpo_AdjustmentsToAdditionalPaidInCapitalReclassificationOfMembersContributions | 322,448 |
Stock Issued During Period, Value, New Issues Net of Estimated Offering Expense | mpo_StockIssuedDuringPeriodValueNewIssuesNetOfEstimatedOfferingExpense | 213,551 |
Adjustments to Additional Paid in Capital Tax Attributes Contributed at IPO Reorganization Date by Shareholding Entities | mpo_AdjustmentsToAdditionalPaidInCapitalTaxAttributesContributedAtIPOReorganizationDateByShareholdingEntities | 33,888 |
Stock Issued During Period, Value, Acquisitions | us-gaap_StockIssuedDuringPeriodValueAcquisitions | 291,953 |
Common Stock [Member] | ||
Stock Issued During Period, Value, New Issues Net of Estimated Offering Expense | mpo_StockIssuedDuringPeriodValueNewIssuesNetOfEstimatedOfferingExpense | 18 |
Stock Issued During Period, Value, New Issues | us-gaap_StockIssuedDuringPeriodValueNewIssues | 48 |
Members Equity [Member] | ||
Adjustments to Additional Paid in Capital Reclassification of Members Contributions | mpo_AdjustmentsToAdditionalPaidInCapitalReclassificationOfMembersContributions | (322,448) |
Stockholders' Equity Attributable to Parent | us-gaap_StockholdersEquity | 322,496 |
Stock Issued During Period, Value, New Issues | us-gaap_StockIssuedDuringPeriodValueNewIssues | (48) |
Mandatory Convertible Preferred Stock [Member] | ||
Stock Issued During Period, Value, Acquisitions | us-gaap_StockIssuedDuringPeriodValueAcquisitions | $ 3 |