Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Feb. 20, 2018 | Jun. 30, 2017 | |
Document And Entity Information [Line Items] | |||
Entity Registrant Name | Centennial Resource Development, Inc. | ||
Entity Central Index Key | 1,658,566 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Filer Category | Large Accelerated Filer | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2017 | ||
Document Fiscal Year Focus | 2,017 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Public Float | $ 2,479,264,380 | ||
Common Class A | |||
Document And Entity Information [Line Items] | |||
Entity Common Stock, Shares Outstanding | 260,368,235 | ||
Common Class C | |||
Document And Entity Information [Line Items] | |||
Entity Common Stock, Shares Outstanding | 15,661,338 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Current assets | ||
Cash and cash equivalents | $ 117,315 | $ 134,083 |
Accounts receivable, net | 78,786 | 14,734 |
Derivative instruments, net | 433 | 431 |
Prepaid and other current assets | 6,051 | 2,078 |
Total current assets | 202,585 | 151,326 |
Oil and natural gas properties, successful efforts method | ||
Unproved properties | 1,952,680 | 1,905,661 |
Proved properties | 1,602,002 | 604,022 |
Accumulated depreciation, depletion and amortization | (173,906) | (14,436) |
Total oil and natural gas properties, net | 3,380,776 | 2,495,247 |
Other property and equipment, net | 5,465 | 2,193 |
Total property and equipment, net | 3,386,241 | 2,497,440 |
Noncurrent assets | ||
Derivative instruments, net | 662 | 0 |
Other noncurrent assets | 27,081 | 2,876 |
Total assets | 3,616,569 | 2,651,642 |
Current liabilities | ||
Accounts payable and accrued expenses | 199,533 | 86,100 |
Derivative instruments, net | 240 | 5,361 |
Total current liabilities | 199,773 | 91,461 |
Noncurrent liabilities | ||
Long-term debt, net | 390,764 | 0 |
Asset retirement obligations | 12,161 | 7,226 |
Deferred tax liability, net | 9,899 | 0 |
Derivative instruments, net | 0 | 20 |
Total liabilities | 612,597 | 98,707 |
Commitments and contingencies (Note 13) | ||
Shareholders’ Equity | ||
Additional paid-in capital | 2,767,558 | 2,364,049 |
Retained earnings (accumulated deficit) | 66,639 | (8,929) |
Total shareholders’ equity | 2,834,225 | 2,355,142 |
Noncontrolling interest | 169,747 | 197,793 |
Total equity | 3,003,972 | 2,552,935 |
Total liabilities and shareholders’ equity | 3,616,569 | 2,651,642 |
Series A Preferred Stock | ||
Shareholders’ Equity | ||
Preferred stock, $.0001 par value, 1,000,000 shares authorized: | 0 | 0 |
Series B Preferred Stock | ||
Shareholders’ Equity | ||
Preferred stock, $.0001 par value, 1,000,000 shares authorized: | 0 | 0 |
Common Class A | ||
Shareholders’ Equity | ||
Common stock | 26 | 20 |
Common Class C | ||
Shareholders’ Equity | ||
Common stock | $ 2 | $ 2 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Dec. 31, 2017 | Dec. 31, 2016 |
Preferred stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized (in shares) | 1,000,000 | 1,000,000 |
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized (in shares) | 620,000,000 | 620,000,000 |
Series A Preferred Stock | ||
Preferred stock, shares issued (in shares) | 1 | 1 |
Preferred stock, shares outstanding (in shares) | 1 | 1 |
Series B Preferred Stock | ||
Preferred stock, shares issued (in shares) | 0 | 104,400 |
Preferred stock, shares outstanding (in shares) | 0 | 104,400 |
Common Class A | ||
Common stock, shares issued (in shares) | 261,337,636 | 201,091,646 |
Common stock, shares outstanding (in shares) | 260,327,920 | 200,835,049 |
Common Class C | ||
Common stock, shares issued (in shares) | 15,661,338 | 19,155,921 |
Common stock, shares outstanding (in shares) | 15,661,338 | 19,155,921 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |
Dec. 31, 2016 | Oct. 10, 2016 | Dec. 31, 2017 | Dec. 31, 2015 | |
Net revenues | ||||
Oil sales | $ 24,313,000 | $ 336,931,000 | ||
Natural gas sales | 3,449,000 | 48,868,000 | ||
NGL sales | 1,955,000 | 44,103,000 | ||
Total net revenues | 29,717,000 | 429,902,000 | ||
Operating expenses | ||||
Lease operating expenses | 3,541,000 | 41,336,000 | ||
Severance and ad valorem taxes | 1,636,000 | 23,173,000 | ||
Gathering, processing and transportation expenses | 2,187,000 | 34,259,000 | ||
Depreciation, depletion and amortization | 14,877,000 | 161,628,000 | ||
Impairment and abandonment expenses | 0 | (29,000) | ||
Exploration expense | 1,468,000 | 14,373,000 | ||
Contract termination and rig stacking | 0 | 0 | ||
General and administrative expenses | 13,091,000 | 49,882,000 | ||
Incentive unit compensation | 0 | 0 | ||
Total operating expenses | 36,800,000 | 324,622,000 | ||
Total operating income (loss) | (7,083,000) | 105,280,000 | ||
Other income (expense) | ||||
Gain (loss) on sale of oil and natural gas properties | 24,000 | 8,796,000 | ||
Interest expense | (378,000) | (5,729,000) | ||
Net gain (loss) on derivative instruments | (1,548,000) | 5,138,000 | ||
Other income | 0 | 0 | ||
Other income (expense) | (1,902,000) | 8,205,000 | ||
Income (loss) before income taxes | (8,985,000) | 113,485,000 | ||
Income tax (expense) benefit | 0 | (29,930,000) | ||
Net income (loss) | (8,985,000) | 83,555,000 | ||
Less: Net income (loss) attributable to noncontrolling interest | (904,000) | 7,987,000 | ||
Net income (loss) attributable to common shareholders | $ (8,081,000) | $ 75,568,000 | ||
Income (loss) per share: | ||||
Income (loss) per share, basic (in dollars per share) | $ (0.05) | $ 0.32 | ||
Income (loss) per share, diluted (in dollars per share) | $ (0.05) | $ 0.32 | ||
Predecessor | ||||
Net revenues | ||||
Oil sales | $ 59,787,000 | $ 77,643,000 | ||
Natural gas sales | 6,045,000 | 7,965,000 | ||
NGL sales | 3,284,000 | 4,852,000 | ||
Total net revenues | 69,116,000 | 90,460,000 | ||
Operating expenses | ||||
Lease operating expenses | 11,036,000 | 21,173,000 | ||
Severance and ad valorem taxes | 3,696,000 | 5,021,000 | ||
Gathering, processing and transportation expenses | 4,583,000 | 5,732,000 | ||
Depreciation, depletion and amortization | 62,964,000 | 90,084,000 | ||
Impairment and abandonment expenses | 2,545,000 | 7,619,000 | ||
Exploration expense | 920,000 | 84,000 | ||
Contract termination and rig stacking | 0 | 2,387,000 | ||
General and administrative expenses | 24,661,000 | 14,206,000 | ||
Incentive unit compensation | 165,394,000 | 0 | ||
Total operating expenses | 275,799,000 | 146,306,000 | ||
Total operating income (loss) | (206,683,000) | (55,846,000) | ||
Other income (expense) | ||||
Gain (loss) on sale of oil and natural gas properties | 11,000 | 2,439,000 | ||
Interest expense | (5,626,000) | (6,266,000) | ||
Net gain (loss) on derivative instruments | (6,838,000) | 20,756,000 | ||
Other income | 6,000 | 20,000 | ||
Other income (expense) | (12,447,000) | 16,949,000 | ||
Income (loss) before income taxes | (219,130,000) | (38,897,000) | ||
Income tax (expense) benefit | 406,000 | 572,000 | ||
Net income (loss) | (218,724,000) | (38,325,000) | ||
Less: Net income (loss) attributable to noncontrolling interest | 0 | 0 | ||
Net income (loss) attributable to common shareholders | $ (218,724,000) | $ (38,325,000) |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |
Dec. 31, 2016 | Oct. 10, 2016 | Dec. 31, 2017 | Dec. 31, 2015 | |
Cash flows from operating activities: | ||||
Net income (loss) | $ (8,985,000) | $ 83,555,000 | ||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||||
Depreciation, depletion and amortization | 14,877,000 | 161,628,000 | ||
Incentive unit compensation | 0 | 0 | ||
Stock-based compensation expense | 1,333,000 | 13,759,000 | ||
Noncash transaction cost | 0 | 0 | ||
Impairment and abandonment expenses | 0 | (29,000) | ||
Exploratory dry hole costs | 0 | 5,658,000 | ||
Write-off of deferred S-1 related expense | 0 | 0 | ||
Deferred tax expense (benefit) | 0 | 29,930,000 | ||
(Gain) loss on sale of oil and natural gas properties | (24,000) | (8,796,000) | ||
Non-cash portion of derivative (gain) loss | 2,602,000 | (5,805,000) | ||
Amortization of debt issuance costs | 70,000 | 887,000 | ||
Changes in operating assets and liabilities: | ||||
(Increase) decrease in accounts receivable | (983,000) | (43,553,000) | ||
Increase in prepaid and other assets | (1,092,000) | (4,088,000) | ||
Increase (decrease) in accounts payable and other liabilities | 1,612,000 | 26,772,000 | ||
Net cash provided by operating activities | 9,410,000 | 259,918,000 | ||
Cash flows from investing activities | ||||
Proceeds withdrawn from trust account | 500,561,000 | 0 | ||
Acquisition of Centennial Resource Production, LLC | (1,375,744,000) | 0 | ||
Acquisition of oil and natural gas properties | (849,642,000) | (435,547,000) | ||
Drilling and development capital expenditures | (24,107,000) | (566,427,000) | ||
Purchases of other property and equipment | (801,000) | (4,921,000) | ||
Other assets | 0 | 7,907,000 | ||
Proceeds from sales of oil and natural gas properties | 0 | 22,496,000 | ||
Net cash used by investing activities | (1,749,733,000) | (992,306,000) | ||
Cash flows from financing activities | ||||
Issuance of Class A common shares | 1,540,556,000 | 340,750,000 | ||
Issuance of Preferred Series B Shares | 379,494,000 | 0 | ||
Underwriting discount and offering costs | (27,104,000) | (7,291,000) | ||
Payment of deferred underwriting compensation | (17,500,000) | 0 | ||
Proceeds from revolving credit facility | 0 | 275,000,000 | ||
Repayment of revolving credit facility | 0 | (275,000,000) | ||
Proceeds from senior notes | 0 | 400,000,000 | ||
Proceeds from stock options exercised | 0 | 877,000 | ||
Restricted stock used for tax withholdings | 0 | (644,000) | ||
Capital contributions | 0 | 0 | ||
Debt issuance costs | (1,115,000) | (9,472,000) | ||
Financing obligation | (63,000) | 0 | ||
Net cash provided by financing activities | 1,874,268,000 | 724,220,000 | ||
Net increase (decrease) in cash, cash equivalents and restricted cash | 133,945,000 | (8,168,000) | ||
Cash, cash equivalents and restricted cash, beginning of period | 138,000 | 134,083,000 | ||
Cash, cash equivalents and restricted cash, end of period | 134,083,000 | $ 138,000 | 125,915,000 | |
Supplemental cash flow information | ||||
Cash paid for interest | 234,000 | 4,280,000 | ||
Supplemental noncash activity | ||||
Accrued capital expenditures included in accounts payable and accrued expenses | 65,217,000 | 126,480,000 | ||
Asset retirement obligations incurred, including changes in estimate | 186,000 | 4,044,000 | ||
Financing obligation | 0 | 0 | ||
Restricted Cash and Cash Equivalents [Abstract] | ||||
Total cash, cash and cash equivalents and restricted cash | 134,083,000 | 138,000 | $ 134,083,000 | |
Predecessor | ||||
Cash flows from operating activities: | ||||
Net income (loss) | (218,724,000) | $ (38,325,000) | ||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||||
Depreciation, depletion and amortization | 62,964,000 | 90,084,000 | ||
Incentive unit compensation | 165,394,000 | 0 | ||
Stock-based compensation expense | 0 | 0 | ||
Noncash transaction cost | 14,049,000 | 0 | ||
Impairment and abandonment expenses | 2,545,000 | 7,619,000 | ||
Exploratory dry hole costs | 0 | 0 | ||
Write-off of deferred S-1 related expense | 0 | 1,585,000 | ||
Deferred tax expense (benefit) | (406,000) | (572,000) | ||
(Gain) loss on sale of oil and natural gas properties | (11,000) | (2,439,000) | ||
Non-cash portion of derivative (gain) loss | 23,461,000 | 14,737,000 | ||
Amortization of debt issuance costs | 376,000 | 482,000 | ||
Changes in operating assets and liabilities: | ||||
(Increase) decrease in accounts receivable | 969,000 | 5,244,000 | ||
Increase in prepaid and other assets | (170,000) | (864,000) | ||
Increase (decrease) in accounts payable and other liabilities | 1,293,000 | (8,669,000) | ||
Net cash provided by operating activities | 51,740,000 | 68,882,000 | ||
Cash flows from investing activities | ||||
Proceeds withdrawn from trust account | 0 | 0 | ||
Acquisition of Centennial Resource Production, LLC | 0 | 0 | ||
Acquisition of oil and natural gas properties | (55,564,000) | (43,223,000) | ||
Drilling and development capital expenditures | (45,605,000) | (156,006,000) | ||
Purchases of other property and equipment | (265,000) | (2,097,000) | ||
Other assets | 0 | 0 | ||
Proceeds from sales of oil and natural gas properties | 0 | 2,691,000 | ||
Net cash used by investing activities | (101,434,000) | (198,635,000) | ||
Cash flows from financing activities | ||||
Issuance of Class A common shares | 0 | 0 | ||
Issuance of Preferred Series B Shares | 0 | 0 | ||
Underwriting discount and offering costs | 0 | 0 | ||
Payment of deferred underwriting compensation | 0 | 0 | ||
Proceeds from revolving credit facility | 55,000,000 | 92,000,000 | ||
Repayment of revolving credit facility | (5,000,000) | (83,000,000) | ||
Proceeds from senior notes | 0 | 0 | ||
Proceeds from stock options exercised | 0 | 0 | ||
Restricted stock used for tax withholdings | 0 | 0 | ||
Capital contributions | 0 | 111,396,000 | ||
Debt issuance costs | 0 | (259,000) | ||
Financing obligation | (2,074,000) | (1,633,000) | ||
Net cash provided by financing activities | 47,926,000 | 118,504,000 | ||
Net increase (decrease) in cash, cash equivalents and restricted cash | (1,768,000) | (11,249,000) | ||
Cash, cash equivalents and restricted cash, beginning of period | 0 | 1,768,000 | 13,017,000 | |
Cash, cash equivalents and restricted cash, end of period | 0 | 1,768,000 | ||
Supplemental cash flow information | ||||
Cash paid for interest | 5,092,000 | 5,782,000 | ||
Supplemental noncash activity | ||||
Accrued capital expenditures included in accounts payable and accrued expenses | 21,025,000 | 13,124,000 | ||
Asset retirement obligations incurred, including changes in estimate | 206,000 | 146,000 | ||
Financing obligation | 0 | 3,770,000 | ||
Restricted Cash and Cash Equivalents [Abstract] | ||||
Total cash, cash and cash equivalents and restricted cash | $ 0 | $ 1,768,000 | $ 13,017,000 |
CONSOLIDATED STATEMENTS OF SHAR
CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY (Successor) - USD ($) $ in Thousands | Total | Additional Paid-In Capital | Retained Earnings (Accumulated Deficit) | Total Shareholder's Equity | Non-controlling Interest | Class A | Class ACommon Stock | Class AAdditional Paid-In Capital | Class ATotal Shareholder's Equity | Class BCommon Stock | Class C | Class CCommon Stock | Series A | Series APreferred Stock | Series B | Series BPreferred Stock | Series BAdditional Paid-In Capital | Series BTotal Shareholder's Equity | Conversion of common shares from Class B to Class A at transaction | Conversion of common shares from Class B to Class A at transactionClass ACommon Stock | Conversion of common shares from Class B to Class A at transactionClass AAdditional Paid-In Capital | Conversion of common shares from Class B to Class A at transactionClass BCommon Stock | Conversion of common shares from Class B to Class A at transactionSeries BPreferred Stock | Class A common shares released from possible redemption | Class A common shares released from possible redemptionAdditional Paid-In Capital | Class A common shares released from possible redemptionTotal Shareholder's Equity | Class A common shares released from possible redemptionClass ACommon Stock | Conversion of common shares from Class C to Class A | Conversion of common shares from Class C to Class AAdditional Paid-In Capital | Conversion of common shares from Class C to Class ATotal Shareholder's Equity | Conversion of common shares from Class C to Class ANon-controlling Interest | Conversion of common shares from Class C to Class AClass ACommon Stock | Conversion of common shares from Class C to Class AClass CCommon Stock |
Common shares outstanding at beginning of period (in shares) at Oct. 10, 2016 | 2,175,000 | 12,500,000 | 0 | ||||||||||||||||||||||||||||||
Preferred stock, beginning balance, shares (in shares) at Oct. 10, 2016 | 0 | 0 | |||||||||||||||||||||||||||||||
Balance, beginning of period at Oct. 10, 2016 | $ 5,000 | $ 5,460 | $ (461) | $ 5,000 | $ 0 | $ 0 | $ 1 | $ 0 | $ 0 | $ 0 | |||||||||||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||||||||||||||||||||
Conversion of common shares (in shares) | 12,500,000 | (12,500,000) | 47,825,000 | 844,000 | (844,000) | ||||||||||||||||||||||||||||
Conversion of common shares | 0 | $ 1 | $ (1) | $ 7,798 | $ 7,798 | $ (7,798) | |||||||||||||||||||||||||||
Class A common shares released from possible redemption | $ 478,248 | $ 478,243 | $ 478,248 | $ 5 | |||||||||||||||||||||||||||||
Stock issued during period (in shares) | 101,005,000 | 20,000,000 | 0 | ||||||||||||||||||||||||||||||
Stock issued during period | 0 | (2) | $ 1,010,050 | $ 10 | $ 1,010,040 | $ 1,010,050 | $ 2 | ||||||||||||||||||||||||||
Underwriters’ discount and offering expense | (6,713) | (6,713) | (6,713) | ||||||||||||||||||||||||||||||
Net income (loss) | (387) | (387) | (387) | ||||||||||||||||||||||||||||||
Noncontrolling interest in Centennial Resource Production, LLC | 184,779 | 184,779 | |||||||||||||||||||||||||||||||
Common shares outstanding at end of period (in shares) at Oct. 11, 2016 | 164,349,000 | 0 | 19,156,000 | ||||||||||||||||||||||||||||||
Preferred stock, ending balance, shares (in shares) at Oct. 11, 2016 | 0 | 0 | |||||||||||||||||||||||||||||||
Balance, end of period at Oct. 11, 2016 | 1,670,977 | 1,494,826 | (848) | 1,493,996 | 176,981 | $ 16 | $ 0 | $ 2 | $ 0 | $ 0 | |||||||||||||||||||||||
Common shares outstanding at beginning of period (in shares) at Oct. 10, 2016 | 2,175,000 | 12,500,000 | 0 | ||||||||||||||||||||||||||||||
Preferred stock, beginning balance, shares (in shares) at Oct. 10, 2016 | 0 | 0 | |||||||||||||||||||||||||||||||
Balance, beginning of period at Oct. 10, 2016 | 5,000 | 5,460 | (461) | 5,000 | 0 | $ 0 | $ 1 | $ 0 | $ 0 | $ 0 | |||||||||||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||||||||||||||||||||
Stock issued during period (in shares) | 36,486,000 | 104,000 | |||||||||||||||||||||||||||||||
Stock issued during period | $ 530,507 | $ 4 | 530,503 | 530,507 | $ 379,494 | $ 379,494 | $ 379,494 | ||||||||||||||||||||||||||
Restricted stock issued (in shares) | 257,000 | ||||||||||||||||||||||||||||||||
Underwriters’ discount and offering expense | (20,391) | (20,391) | (20,391) | ||||||||||||||||||||||||||||||
Change in equity due to issuance of shares by Centennial Resource Production, LLC | 0 | (21,716) | (21,716) | 21,716 | |||||||||||||||||||||||||||||
Stock-based compensation | 1,333 | 1,333 | 1,333 | ||||||||||||||||||||||||||||||
Net income (loss) | (8,985) | (8,081) | (8,081) | (904) | |||||||||||||||||||||||||||||
Common shares outstanding at end of period (in shares) at Dec. 31, 2016 | 200,835,049 | 201,092,000 | 0 | 19,155,921 | 19,156,000 | ||||||||||||||||||||||||||||
Preferred stock, ending balance, shares (in shares) at Dec. 31, 2016 | 1 | 0 | 104,400 | 104,000 | |||||||||||||||||||||||||||||
Balance, end of period at Dec. 31, 2016 | 2,552,935 | 2,364,049 | (8,929) | 2,355,142 | 197,793 | $ 20 | $ 0 | $ 2 | $ 0 | $ 0 | |||||||||||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||||||||||||||||||||
Conversion of common shares (in shares) | 26,100,000 | (104,000) | 3,495,000 | (3,495,000) | |||||||||||||||||||||||||||||
Conversion of common shares | $ 0 | $ 3 | $ (3) | $ 20,031 | $ 58,746 | $ 58,746 | $ (38,715) | ||||||||||||||||||||||||||
Stock issued during period (in shares) | 23,500,000 | ||||||||||||||||||||||||||||||||
Stock issued during period | $ 340,750 | $ 2 | $ 340,748 | $ 340,750 | |||||||||||||||||||||||||||||
Warrants exercised (in shares) | 6,235,790 | ||||||||||||||||||||||||||||||||
Warrants exercised | (1) | $ 1 | |||||||||||||||||||||||||||||||
Restricted stock issued (in shares) | 902,000 | ||||||||||||||||||||||||||||||||
Restricted stock forfeited (in shares) | (12,000) | ||||||||||||||||||||||||||||||||
Restricted stock used for tax withholding (in shares) | (33,000) | ||||||||||||||||||||||||||||||||
Restricted stock used for tax withholding | (644) | (644) | (644) | ||||||||||||||||||||||||||||||
Option exercises (in shares) | 58,000 | ||||||||||||||||||||||||||||||||
Option Exercises | 877 | 877 | 877 | ||||||||||||||||||||||||||||||
Underwriters’ discount and offering expense | (7,291) | (7,291) | (7,291) | ||||||||||||||||||||||||||||||
Change in equity due to issuance of shares by Centennial Resource Production, LLC | 0 | (2,682) | (2,682) | 2,682 | |||||||||||||||||||||||||||||
Stock-based compensation | 13,759 | 13,759 | 13,759 | ||||||||||||||||||||||||||||||
Net income (loss) | 83,555 | 75,568 | 75,568 | 7,987 | |||||||||||||||||||||||||||||
Common shares outstanding at end of period (in shares) at Dec. 31, 2017 | 260,327,920 | 261,338,000 | 0 | 15,661,338 | 15,661,000 | ||||||||||||||||||||||||||||
Preferred stock, ending balance, shares (in shares) at Dec. 31, 2017 | 1 | 0 | 0 | 0 | |||||||||||||||||||||||||||||
Balance, end of period at Dec. 31, 2017 | $ 3,003,972 | $ 2,767,558 | $ 66,639 | $ 2,834,225 | $ 169,747 | $ 26 | $ 0 | $ 2 | $ 0 | $ 0 |
CONSOLIDATED STATEMENTS OF OWNE
CONSOLIDATED STATEMENTS OF OWNERS' EQUITY (Predecessor) CONSOLIDATED STATEMENTS OF OWNERS' EQUITY (Predecessor) - Predecessor $ in Thousands | USD ($) |
Balance, beginning of period at Dec. 31, 2014 | $ 377,932 |
Increase (Decrease) in Partners' Capital [Roll Forward] | |
Deemed contributions | 111,396 |
Deemed distribution from sale of assets | (139) |
Net loss | (38,325) |
Balance, end of period at Dec. 31, 2015 | 450,864 |
Increase (Decrease) in Partners' Capital [Roll Forward] | |
Deemed contributions | 179,442 |
Net loss | (218,724) |
Balance, end of period at Oct. 10, 2016 | $ 411,582 |
Basis of Presentation and Summa
Basis of Presentation and Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation and Summary of Significant Accounting Policies | Note 1—Basis of Presentation and Summary of Significant Accounting Policies Description of Business Centennial Resource Development, Inc. (the “Company” or “Centennial”) is an independent oil and natural gas company focused on the development of unconventional oil and associated liquids-rich natural gas reserves in the Permian Basin. The Company’s assets are concentrated in the Delaware Basin, a sub-basin of the Permian Basin, and its properties consist of large, contiguous acreage blocks primarily in Reeves County in West Texas and Lea County in New Mexico. Centennial was originally incorporated in Delaware on November 4, 2015 as a special purpose acquisition company under the name Silver Run Acquisition Corporation (“Silver Run”) for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination involving the Company and one or more businesses. On February 29, 2016, the Company consummated its initial public offering of Units each consisting of one share of Class A Common Stock and one-third of one Public Warrant. On October 11, 2016, the Company consummated the acquisition of approximately 89% of the outstanding membership interests in Centennial Resource Production, LLC, a Delaware limited liability company (“CRP” and such acquisition, the “Business Combination”). In connection with the closing of the Business Combination, the Company changed its name from “Silver Run Acquisition Corporation” to “Centennial Resource Development, Inc.” Refer to Note 2—Business Combination for further information related to the Business Combination. CRP was formed in August 2012 by an affiliate of NGP Energy Capital Management, a family of energy-focused private equity investment funds, in connection with the acquisition of all of the oil and natural gas properties and certain other assets of Celero, which was formed in 2006 to focus on the development and acquisition of oil and natural gas properties located primarily in the Permian Basin of West Texas. Until the closing of the Business Combination, CRP operated as a privately-held independent oil and natural gas company. Principles of Consolidation and Basis of Presentation The consolidated financial statements include the accounts of the Company and its majority owned subsidiary CRP, and CRP’s wholly-owned subsidiaries and have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and the rules and regulations of the Securities and Exchange Commission (“SEC”). All intercompany balances and transactions have been eliminated in consolidation. Noncontrolling interests represent third-party ownership in the Company’s consolidated subsidiary and is presented as a component of equity. See Note 7—Shareholders' Equity and Noncontrolling Interest for further discussion of noncontrolling interest. Certain prior period amounts have been reclassified to conform to the current presentation on the accompanying consolidated financial statements. Such reclassifications had no impact on net income, cash flows or shareholders’ equity previously reported. As a result of the Business Combination, the Company is the acquirer for accounting purposes, and CRP is the acquiree and accounting Predecessor. The Company’s financial statement presentation distinguishes CRP as an accounting “Predecessor” for periods prior to the Business Combination. The Company is the “Successor” for periods after the Business Combination, which includes consolidation of CRP subsequent to the Business Combination on October 11, 2016. The Business Combination was accounted for as a business combination using the acquisition method of accounting, and the Successor financial statements reflect a new basis of accounting that is based on the fair value of CRP’s net assets acquired. Refer to Note 2—Business Combination for further information related to the Business Combination. As a result of the application of the acquisition method of accounting as of the Business Combination, the financial statements for the Predecessor periods and for the Successor periods are presented on a different basis of accounting. Use of Estimates The preparation of the Company’s consolidated financial statements requires the Company’s management to make various assumptions, judgments and estimates to determine the reported amounts of assets, liabilities, revenues and expenses, and in the disclosures of commitments and contingencies. Changes in these assumptions, judgments, and estimates will occur as a result of the passage of time and the occurrence of future events and, accordingly, actual results could differ from amounts previously established. The more significant areas requiring the use of assumptions, judgments and estimates include: (i) oil and natural gas reserves; (ii) cash flow estimates used in impairment tests of long-lived assets; (iii) depreciation, depletion and amortization; (iv) asset retirement obligations; (v) determining fair value and allocating purchase price in connection with business combinations and asset acquisitions; (vi) accrued revenue and related receivables; and (vii) accrued liabilities. Risks and Uncertainties The prices received for oil, natural gas and NGLs production heavily influences the Company’s revenue, profitability, access to capital, future rate of growth and carrying value of our properties. Oil, natural gas and NGLs are commodities, and their prices can be volatile in response to changes in global and domestic supply and demand and market uncertainty. The Company generally funds its operations and capital expenditures with cash flow from its operations, borrowings under CRP’s revolving credit facility and offerings of debt and equity securities. The Company expects to be able to fund its operations, planned capital expenditures and working capital requirements during the next 12 months and the foreseeable future. However, continued volatility of oil and gas prices could have an adverse effect on the Company’s future business, financial condition, results of operations, operating cash flows, liquidity and quantities of oil and gas reserves that may be economically produced, which could impact the Company’s ability to comply with the financial covenants under CRP’s credit facility and limit further borrowings to fund capital expenditures and potential acquisitions. Additionally, if forward prices decline, the Company could incur additional impairment of its oil and gas assets. Cash and Cash Equivalents and Restricted Cash The Company considers all highly liquid instruments with an original maturity of three months or less at the time of issuance to be cash equivalents. The carrying value of cash and cash equivalents approximates fair value because of the short-term maturity of these investments. From time to time, the Company is required to maintain cash in separate accounts, the use of which, is restricted by the terms of contracted arrangements. Such amounts are included in Other Noncurrent Assets on the Consolidated Balance Sheets. Accounts Receivable Accounts receivable consists mainly of receivables from oil and natural gas purchasers and from joint interest owners on properties the Company operates. For receivables from joint interest owners, the Company typically has the ability to withhold future revenue disbursements to recover non-payment of joint interest billings. Accordingly, oil and natural gas receivables are collected, and the Company has minimal bad debts. Although diversified among many companies, collectability is dependent upon the financial wherewithal of each individual company and is influenced by the general economic conditions of the industry. Receivables are not collateralized. The Company establishes an allowance for doubtful accounts equal to the estimable portions of accounts receivable for which failure to collect is probable. The Company had no allowance for doubtful accounts as of December 31, 2017 and December 31, 2016 . Credit Risk and Other Concentrations The Company normally sells production to a relatively small number of customers, as is customary in its business. The table below presents percentages by purchaser that accounted for 10% or more of our total oil, natural gas and NGL sales for each year as presented: Year Ended December 31, 2017 Shell Trading (US) Company 33 % BP America 16 % Eagleclaw Midstream Ventures, LLC 14 % Year Ended December 31, 2016 Plains Marketing, LP 48 % Shell Trading (US) Company 22 % Permian Transport and Trading 11 % Year Ended December 31, 2015 Plains Marketing, LP 64 % During these periods, no other purchaser accounted for 10% or more of our revenue. The loss of any of the Company’s major purchasers could materially and adversely affect its revenues in the short-term. However, based on the current demand for oil and natural gas and the availability of other purchasers, the Company believes that the loss of any major purchaser would not have a material adverse effect on its financial condition and results of operations because crude oil and natural gas are fungible products with well-established markets and numerous purchasers. By using derivative instruments to economically hedge exposures to changes in commodity prices, the Company exposes itself to credit risk and market risk. Credit risk is the failure of the counterparty to perform under the terms of the derivative contract. When the fair value of a derivative contract is positive, the counterparty owes the Company, which creates credit risk. The Company minimizes the credit risk in derivative instruments by: (i) limiting its exposure to any single counterparty; and (ii) monitoring the creditworthiness of the Company’s counterparties on an ongoing basis. Oil and Natural Gas Properties The Company’s oil and natural gas producing activities are accounted for using the successful efforts method of accounting. Under the successful efforts method, the costs incurred to acquire, drill, and complete productive development wells are capitalized. Oil and gas lease acquisition costs are also capitalized. Exploration costs, including personnel and other internal costs, geological and geophysical expenses, delay rentals for gas and oil leases, and costs associated with unsuccessful lease acquisitions are charged to expense as incurred. Costs of drilling exploratory wells are initially capitalized but are charged to expense if the well is determined to be unsuccessful. Costs to operate and maintain wells and field equipment are expensed as incurred. The Company capitalizes interest on expenditures made in connection with exploration and development projects that are not subject to current amortization. Interest is capitalized only for the period that activities are in process to bring the projects to their intended use. Capitalized interest cannot exceed interest expense for the period capitalized. The Company capitalized interest of $1.2 million during the year ended December 31, 2017. The Company did not have any capitalized interest for the periods October 11, 2016 through December 31, 2016 (Successor) and January 1, 2016 through October 10, 2016 (Predecessor) and for the year ended December 31, 2015 (Predecessor) . Proved Oil and Natural Gas Properties. Costs incurred to obtain access to proved reserves and to provide facilities for extracting, treating, gathering and storing oil, natural gas and NGLs are capitalized. All costs incurred to drill and equip successful exploratory wells, development wells, development-type stratigraphic test wells and service wells, including unsuccessful development wells, are capitalized. Capitalized costs are depleted on a unit-of production method based on proved oil and gas reserves. Net carrying values of retired, sold or abandoned properties that constitute less than a complete unit of depreciable property are charged or credited, net of proceeds, to accumulated depreciation, depletion and amortization unless doing so significantly affects the unit-of-production amortization rate, in which case a gain or loss is recognized. Gains or losses from the disposal of complete units of depreciable property are recognized to income. The Company reviews it proved oil and natural gas properties for impairment when events and circumstances indicate a possible decline in the recoverability of the carrying amount of such property. The Company estimates the expected future cash flows of its oil and natural gas properties and compares these undiscounted cash flows to the carrying amount of the oil and natural gas properties to determine if the carrying amount is recoverable. If the carrying amount exceeds the estimated undiscounted future cash flows, the Company will write down the carrying amount of the oil and natural gas properties to fair value. The factors used to determine fair value include, but are not limited to, estimates of reserves, future commodity prices, future production estimates, estimated future capital expenditures and discount rates commensurate with the risk associated with realizing the projected cash flows. There were no impairments of proved oil and natural gas properties for the year ended December 31, 2017 (Successor) , for the periods October 11, 2016 through December 31, 2016 (Successor) and January 1, 2016 through October 10, 2016 (Predecessor) and for the year ended December 31, 2015 (Predecessor) . Unproved Properties. Unproved properties consist of costs to acquire undeveloped leases as well as costs to acquire unproved reserves. Acquisition costs associated with the acquisition of non-producing leaseholds are recorded as unproved leasehold costs and capitalized as incurred. These consist of costs incurred in obtaining a mineral interest or right in a property, such as a lease in addition to options to lease, broker fees, recording fees and other similar costs related to acquiring properties. Leasehold costs are classified as unproved until proved reserves are discovered, at which time related costs are transferred to proved oil and natural gas properties. Unproved properties and the related costs are transferred to proved properties when reserves are discovered on or otherwise attributed to the property. The Company evaluates significant unproved properties for impairment based on remaining lease term, drilling results, reservoir performance, seismic interpretation or future plans to develop acreage. There was no unproved property impairment expense for the year ended December 31, 2017 (Successor) or for the period from October 11, 2016 through December 31, 2016 (Successor) . For the period from January 1, 2016, through October 10, 2016 (Predecessor) , the Predecessor recorded unproved property impairment expense of $2.5 million for leases which have expired, or were expected to expire. For the year ended December 31, 2015 (Predecessor) , the Predecessor recorded unproved property impairment expense of $7.6 million for leases which have expired, or were expected to expire. Other Property and Equipment Other property and equipment such as office furniture and equipment, buildings, vehicles, and computer hardware and software is recorded at cost. Depreciation is calculated using the straight-line method over the estimated useful lives of the assets ranging from three to twenty years. Major renewals and improvements are capitalized while expenditures for maintenance and repairs are expensed as incurred. When other property and equipment is sold or retired, the capitalized costs and related accumulated depreciation are removed from the accounts. Deferred Loan Costs Deferred loan costs related to the Company’s revolving credit facility are included in the line item Other Noncurrent Assets on the Consolidated Balance Sheets and are stated at cost, net of amortization. These costs are amortized to interest expense on a straight-line basis over the borrowing term. Costs incurred in connection with the 5.375% Senior Notes Offering are also deferred and charged to interest expense over the term of the agreement; however, these amounts are reflected as a reduction of the related obligation in the line item Long-term Debt on the Consolidated Balance Sheets. Derivative Financial Instruments In order to manage its exposure to oil and natural gas price volatility, the Company opportunistically utilizes derivative transactions from time to time, including commodity swap, basis swap, collar, and other similar agreements. To the extent legal right of offset exists with a counterparty, the Company reports derivative assets and liabilities on a net basis. The Company has exposure to credit risk to the extent the counterparty is unable to satisfy its settlement obligation. The Company actively monitors the creditworthiness of counterparties and assesses the impact, if any, on its derivative position. The Company records derivative instruments on the Consolidated Balance Sheets as either an asset or liability measured at fair value and records changes in the fair value of derivatives in current earnings as they occur. The Company’s derivatives have not been designated as hedges for accounting purposes. For additional discussion on derivatives, please refer to Note 9—Derivative Instruments . Asset Retirement Obligations The Company recognizes an estimated liability for future costs associated with abandonment of its oil and natural gas properties. A liability for the fair value of an asset retirement obligation and corresponding increase to the carrying value of the related long-lived asset are recorded at the time a well is drilled or acquired. The fair value of the liability recognized is based on the present value of the estimated future cash outflows associated with its plug and abandonment obligations. The Company depletes the amount added to proved oil and natural gas property costs and recognizes expense in connection with the accretion of the discounted liability over the remaining estimated economic lives of the respective oil and natural gas properties. Revisions typically occur due to changes in estimated abandonment costs or well economic lives, or if federal or state regulators enact new requirements regarding the abandonment of wells. For additional discussion, please refer to Note 11—Asset Retirement Obligations . Revenue Recognition The Company derives revenue primarily from the sale of produced oil, natural gas, and NGLs. Revenue is recognized when the Company’s production is delivered to the purchaser, but payment is generally received between 30 and 90 days after the date of production. No revenue is recognized unless it is determined that title to the product has transferred to the purchaser. At the end of each month, the Company estimates the amount of production delivered to the purchaser and the price the Company will receive. The Company follows the sales method of accounting for its oil and natural gas revenue, whereby revenue is recorded based on the Company’s share of volume sold, regardless of whether the Company has taken its proportional share of volume produced. A receivable or liability is recognized only to the extent that the Company has an imbalance on a specific property greater than the expected remaining proved reserves. The Company had no significant imbalances as of December 31, 2017 or 2016 . Income Taxes Income taxes and uncertain tax positions are accounted for in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 740, Accounting for Income Taxes (“ASC 740”). Deferred income taxes are provided for the differences between the bases of assets and liabilities for financial reporting and income tax purposes. Tax positions meeting the more-likely-than-not recognition threshold are measured pursuant to the guidance set forth in ASC 740. We routinely assess the realizability of deferred income tax assets based on several factors and a valuation allowance is established if it’s more likely that not that some portion or all of deferred income tax assets will not be realized. Stock-Based Compensation (Successor) The Company grants various types of stock-based awards including stock options, restricted stock awards and performance stock units. The Company recognizes compensation related to all stock-based awards in the financial statements based on their estimated grant-date fair value and is recognized ratably over the applicable vesting period. The fair value of stock option awards is determined using the Black-Scholes option pricing model. Stock options typically expire ten years from the grant date and have service-based vesting schedules of three years. Service-based restricted stock awards are valued using the market price of the Company’s common stock on the grant date and generally vest ratably over a three -year service period. Performance stock units are subject to market-based vesting criteria as well as a three -year service period and the grant-date fair value is estimated using a Monte Carlo valuation model. See Note 8—Stock-Based Compensation for additional information regarding the Company’s stock-based compensation. Incentive Unit Compensation (Predecessor) Pursuant to the LLC Agreement of CRP (prior to the Business Combination), certain incentive units were available to be issued to the Company’s management and employees, consisting of Tier I, Tier I A, Tier II, Tier III and Tier IV units. The incentive units were intended to be compensation for services rendered to CRP. Tier Incentive units are accounted for as liability awards under FASB ASC Topic 718, Compensation: Stock Compensation (“ASC 718”) , with compensation expense based on period-end fair value. Refer to Note 8—Stock-Based Compensation for additional information regarding the CRP’s incentive unit compensation (Predecessor). Earnings (Loss) Per Share The two-class method of computing earnings per share is required for entities that have participating securities. The two-class method is an earnings allocation formula that determines earnings per share for participating securities according to dividends declared (or accumulated) and participation rights in undistributed earnings. Basic earnings per share (“EPS”) is calculated by dividing net income available to common shareholders by the weighted average shares outstanding during each period. Dilutive EPS is calculated by dividing adjusted 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 EPS calculation consists of (i) unvested restricted stock and performance stock units, outstanding stock options and warrants using the treasury stock method, and (ii) the Company’s Class C common stock using the “if-converted” method, which is net of tax. Shares of the Company’s unvested restricted stock and performance stock units are eligible to receive dividends; however, dividend rights will be forfeited if the award does not vest. Accordingly, these shares are not considered participating securities. Shares of the Company’s Class C Common Stock and warrants do not share in earnings or losses and are therefore not participating securities as well. In addition, the Company’s shares of Series B Preferred Stock were converted into shares of Class A Common Stock on May 25, 2017 as a result of shareholder vote. As such, the Company no longer has any participating securities as of December 31, 2017 . The following table reflects the allocation of net income to common stockholders and EPS computations for the periods indicated based on a weighted average number of common stock outstanding for the period: Successor Year Ended December 31, 2017 October 11, 2016 (in thousands, except per share data) Net income (loss) attributable to common shareholders $ 75,568 $ (8,081 ) Add: Income from conversion of Class C Common Stock — — Less: Loss allocable to participating securities — (46 ) Adjusted net income (loss) attributable to common shareholders $ 75,568 $ (8,035 ) Basic net earnings (loss) per share $ 0.32 $ (0.05 ) Diluted net earnings (loss) per share $ 0.32 $ (0.05 ) Basic weighted average share outstanding 235,447 165,684 Add: Dilutive effect of potential common shares 4,307 — Diluted weighted average shares outstanding 239,754 165,684 For the year ended December 31, 2017 , the diluted earnings per share calculation excludes 0.8 million stock options that were out-of-the-money and 18.6 million weighted average Class C Common Stock as their effect was anti-dilutive. For the period from October 11, 2016, through December 31, 2016 , the diluted earnings per share calculation excludes all outstanding restricted stock and options as the Company recognized a net loss and their effect would have been anti-dilutive. Segment Reporting The Company operates in only one industry segment which is the exploration and production of oil and natural gas. All of its operations are conducted in one geographic area of the United States. All revenues are derived from customers located in the United States. Recently Issued Accounting Standards In January 2017, the FASB issued Accounting Standards Update (“ASU”) 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business . This update affects all reporting entities and the objective of the guidance is to assist with evaluation of whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The mandatory effective date for this update is for financial statements issued for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. The amendments should be applied prospectively on or after the effective date and disclosures are not required at transition. Early adoption is permitted for transactions for which the acquisition date occurs before the issuance date or effective date of the amendments, only when the transaction has not been reported in financial statements that have been issued or made available for issuance. The Company early adopted ASU 2017-01 in the second quarter of 2017. Refer to Note 3—Property Acquisitions for details of the GMT Acquisition. In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows: Restricted Cash . This update applies to all entities that are required to present a statement of cash flows. This update expands the statement of cash flows to explain changes in restricted cash as well cash and cash equivalents. This update will be effective for financial statements issued for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years with early adoption permitted. This update should be applied using the retrospective transition method. The Company early adopted ASU 2016-18 in the fourth quarter of 2017 and the only impact was related to presentation. Refer to the Consolidated Statements of Cash Flows for presentation. In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows: Classification of Certain Cash Receipts and Cash Payments . This update applies to all entities that are required to present a statement of cash flows. This update provides guidance on eight specific cash flow issues: debt prepayment or debt extinguishment costs, settlement of zero-coupon debt instruments or other debt instruments with coupon interest rates that are insignificant in relation to the effective interest rate of the borrowing, contingent consideration payments made after a business combination, proceeds from the settlement of insurance claims, proceeds from the settlement of corporate-owned life insurance policies, including bank-owned life insurance policies, distributions received from equity method investees, beneficial interests in securitization transactions and separately identifiable cash flows and application of the predominance principle. This update will be effective for financial statements issued for fiscal years beginning after December 31, 2017, including interim periods within those fiscal years with early adoption permitted. This update should be applied using the retrospective transition method. Adoption of this standard will only affect the presentation of the Company’s statements of cash flows and will not have a material impact on its consolidated financial statements. In March 2016, the FASB issued ASU 2016-09, Compensation-Stock Compensation . This update applies to all entities that issue equity-based payment awards to their employees. Under this update, there were several areas that were simplified including the income tax consequences, classification of awards as either equity or liabilities and classification on the statement of cash flows. This update will be effective for financial statements issued for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years with early adoption permitted. The Company elected to early adopt this guidance in October 2016 in conjunction with the issuance of its equity awards. In February 2016, the FASB issued ASU 2016-02, Leases, which created Topic ASC 842, Leases (“Topic ASC 842”), superseding current lease requirements under Topic ASC 840. S ubsequently, in January 2018, the FASB issued ASU 2018-01, which provides a practical expedient to the evaluation of existing land easement agreements under ASU 2016-02. ASU 2016-02 and its amendments applies to any entity that enters into a lease, with some specified scope exemptions. Under Topic ASC 842, a lessee should recognize in the statement of financial position a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term. While there were no major changes to the lessor accounting, changes were made to align key aspects with the revenue recognition guidance. Topic ASC 842 will be effective for public entities for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years, with early adoption permitted. Entities will be required to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach. Although the Company is still in the process of evaluating the effect of adopting ASU 2016-02 and related amendments, the adoption is expected to result in the recognition of assets and liabilities on its Consolidated Balance Sheet for current operating leases. The Company is evaluating existing arrangements to determine if they qualify for lease accounting under Topic ASC 842. In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers , which supersedes the revenue recognition requirements in ASC Topic 605, Revenue Recognition , and most industry-specific guidance. The FASB subsequently issued various ASUs which deferred the effective date of ASU 2014-09 and provided additional implementation guidance. ASU 2014-09 and its amendments provides companies with a single model for use in accounting for revenue arising from contracts with customers and supersedes current revenue recognition guidance, including industry-specific revenue guidance. The core principle of the model is to recognize revenue when control of the goods or services transfers to the customer, as opposed to recognizing revenue when the risks and rewards transfer to the customer under the existing revenue guidance. In addition, new qualitative and quantitative disclosure requirements aim to enable financial statement users to understand the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. ASU 2014-09 and its amendments are effective for fiscal years, and interim periods within those years, beginning after December 15, 2017. The standards permit retrospective application using either of the following methodologies: (i) restatement of each prior reporting period presented or (ii) recognition of a cumulative-effect adjustment as of the date of initial application. The Company has selected the modified retrospective method and has adopted this guidance as of January 1, 2018, the effective date. The Company has substantially completed its review of the impact of the new standard on its significant contracts. However, the Company will finalize the adoption of ASU No. 2014-09 during the first quarter of 2018, but at this time, management does not believe there will be a material impact to net income or cash flows upon adoption of the new standard. Where the Company delivers raw gas to midstream process |
Business Combination
Business Combination | 12 Months Ended |
Dec. 31, 2017 | |
Business Combinations [Abstract] | |
Business Combination | Note 2—Business Combination On October 11, 2016 (the “Closing Date”), the Company consummated the acquisition of approximately 89% of the outstanding membership interests in Centennial Resource Production, LLC, a Delaware limited liability company (“CRP”), pursuant to (i) that certain Contribution Agreement, dated as of July 6, 2016 (as amended by Amendment No. 1 thereto, dated as of July 29, 2016, the “Contribution Agreement”), among Centennial Resource Development, LLC, a Delaware limited liability company (“CRP”), NGP Centennial Follow-On LLC, a Delaware limited liability company (“NGP Follow-On”), Celero Energy Company, LP, a Delaware limited partnership (together with CRD and NGP Follow-On, the “Centennial Contributors”), CRP and New Centennial, LLC, a Delaware limited liability company (“NewCo”), (ii) that certain Assignment Agreement, dated as of October 7, 2016, between NewCo and the Company and (iii) that certain Joinder Agreement, dated as of October 7, 2016, by the Company (such acquisition, together with the other transactions contemplated by the Contribution Agreement, the “Business Combination”). At the closing of the Business Combination (the “Closing”), Silver Run contributed approximately $1.49 billion in cash to CRP of which approximately $1.19 billion was then distributed to the Centennial Contributors for partial redemption of their membership interests in CRP. At the Closing, Silver Run and the Centennial Contributors effected a recapitalization of CRP pursuant to which (i) all of the remaining outstanding membership interests in CRP of the Centennial Contributors were converted into 20,000,000 units representing common membership interests in CRP (the “CRP Common Units”) and (ii) the Company was admitted as a member of CRP and issued 163,505,000 CRP Common Units, representing an approximate 89% interest in CRP. The Business Combination was recorded using the acquisition method of accounting for business combinations. The allocation of the purchase price has been finalized and was based upon management’s estimates and assumptions related to the fair value of assets acquired and liabilities assumed on the Closing Date using currently available information. The purchase price consideration for the Business Combination was as follows: (in thousands) October 11, 2016 Purchase price consideration: Cash $ 1,186,744 Repayment of CRP long-term debt (1) 189,000 Total purchase price consideration 1,375,744 Fair value of non-controlling interest (2) 184,779 Total purchase price consideration and fair value of non-controlling interest $ 1,560,523 (1) Represents the additional contribution made by Silver Run to CRP in exchange for CRP Common Units to repay CRP’s outstanding indebtedness at the Closing Date. (2) Represents the fair value of the non-controlling interest (“NCI”) attributable to the Centennial Contributors. NCI is the portion of equity (net assets) in a subsidiary not attributable, directly or indirectly, to Silver Run. In a business combination the NCI is recognized at its acquisition date fair value. The fair value of the NCI at the Closing represented an 11% membership interest in CRP. The following table summarizes the allocation of the purchase price to the assets acquired and liabilities assumed: (in thousands) October 11, 2016 Fair value of assets acquired: Other current assets $ 13,341 Derivative instruments 1,052 Oil and natural gas properties: Proved properties 444,551 Unproved properties 1,138,423 Other property and equipment 1,764 Goodwill — Total fair value of assets acquired 1,599,131 Fair value of liabilities assumed: Accounts payable and accrued expenses 30,156 Other current liabilities 63 Derivative instruments 3,400 Asset retirement obligation 4,989 Fair value of net assets acquired $ 1,560,523 Unaudited Pro Forma Operating Results The following unaudited pro forma combined financial information has been prepared as if the Business Combination and other related transactions had taken place on January 1, 2015. The unaudited pro forma consolidated financial information has been prepared using the acquisition method of accounting in accordance with GAAP. The information reflects pro forma adjustments based on available information and certain assumptions that the Company believes are reasonable, including depletion of CRP’s fair-valued proved oil and gas properties, and the estimated tax impacts of the pro forma adjustments. Additionally, pro forma earnings for the year ended December 31, 2016, were adjusted to exclude $18.7 million of transaction-related costs and $165.4 million of incentive unit compensation incurred by CRP. The pro forma condensed combined financial information has been included for comparative purposes and is not necessarily indicative of the results that might have actually occurred had the Business Combination taken place on January 1, 2015; furthermore, the financial information is not intended to be a projection of future results. (Unaudited Pro Forma) Year Ended December 31, (in thousands) 2016 2015 Total net revenues $ 98,833 $ 90,460 Total operating expenses 86,490 123,702 Net income (loss) attributable to common shareholders 1,666 (6,397 ) Basic and diluted net income (loss) per share $ 0.01 $ (0.04 ) |
Property Acquisitions
Property Acquisitions | 12 Months Ended |
Dec. 31, 2017 | |
Business Combinations [Abstract] | |
Property Acquisitions | Note 3—Property Acquisitions 2017 Acquisitions On June 8, 2017, the Company completed the GMT Acquisition and acquired interests in 36 gross producing horizontal wells plus undeveloped acreage on approximately 11,850 net acres ( 14,770 gross acres) in Lea County, New Mexico for an unadjusted purchase price of $350.0 million . The Company operates approximately 79% of, and has an approximate 85% average working interest in, this acreage. The acquired acres are located in the Northern Delaware Basin with drilling locations in the Avalon Shale, 2nd Bone Spring Sand, 3rd Bone Spring Sand and Wolfcamp A formations. The GMT Acquisition was recorded as an asset acquisition under ASU 2017-01. Accordingly, the GMT purchase consideration has been allocated to the GMT oil and natural gas properties based on their relative fair values measured as of the acquisition date. After settlement statement adjustments of $0.1 million , the Company paid a net purchase price of $350.1 million . On a relative fair value basis, $296.9 million was allocated to unproved properties and $53.2 million to proved properties with the remaining purchase price allocated amongst other assets and liabilities. Transaction costs as they relate to the GMT Acquisition mainly consist of advisory, legal and accounting fees and are capitalized as incurred, and the Company has incurred $0.5 million in transaction costs related to this acquisition as of December 31, 2017 . 2016 Acquisitions On December 28, 2016, the Company acquired interests in 31 producing horizontal wells plus undeveloped acreage on approximately 35,500 net acres ( 43,500 gross acres) located in Reeves County, Texas from Silverback Exploration, LLC, for an unadjusted purchase price of $855.0 million , which consisted of cash consideration paid by the Company and a $32.3 million payable at December 31, 2016 that was settled in 2017 when title issues relating to the purchased acreage were satisfied. The Company operates approximately 90% of, and has an approximate 90% working interest in, this acreage. The Wolfcamp A and Wolfcamp B are producing horizons on this acreage, and the Company believes that this acreage may be prospective for the Wolfcamp C, Avalon and Bone Spring shale formations. The Silverback Acquisition was recorded using the acquisition method of accounting for business combinations. The allocation of the purchase price has been finalized and is based upon management’s estimates and assumptions related to the fair value of assets acquired and liabilities assumed on the acquisition date using currently available information. Transaction costs relating to this purchase were expensed as incurred. Since the acquisition date, the Company has recorded adjustments to provisional amounts totaling $0.3 million . These adjustments did not have a material impact on the Company’s previously reported consolidated financial statements, and therefore the Company has not retrospectively adjusted those financial statements. The table below summarizes the allocation of the $867.8 million adjusted purchase price, based on the acquisition date fair value of the assets acquired and the liabilities assumed as of December 31, 2017 : (in thousands) Silverback Acquisition Purchase price $ 867,772 Allocation of purchase price: Unproved properties 753,763 Proved properties 116,700 Other property and equipment 56 Liabilities (2,747 ) Total $ 867,772 In June 2016, the Company acquired undeveloped acreage and oil and gas producing properties located in Reeves County, Texas. Total cash consideration paid by the Company was $33.0 million , including usual and customary post-closing adjustments. Approximately $15.4 million was recorded as proved oil and natural gas properties. The assets include four operated producing horizontal wells and approximately 1,580 net acres that directly offset the Company’s existing acreage in Reeves County, Texas. Predecessor (in thousands) June 3, 2016 Cash consideration $ 32,979 Fair value of assets and liabilities acquired: Proved oil and natural gas properties 15,374 Unproved oil and natural gas properties 18,071 Total fair value of oil and natural gas properties acquired 33,445 Revenue Suspense (400 ) Asset retirement obligation (66 ) Total fair value of net assets acquired $ 32,979 |
Accounts Receivable, Accounts P
Accounts Receivable, Accounts Payable and Accrued Expenses | 12 Months Ended |
Dec. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Accounts Receivable, Accounts Payable and Accrued Expenses | Note 4—Accounts Receivable, Accounts Payable and Accrued Expenses Accounts receivable are comprised of the following: (in thousands) December 31, 2017 December 31, 2016 Oil and natural gas $ 52,891 $ 11,596 Joint interest billings 25,256 2,942 Other 639 196 Accounts receivable, net $ 78,786 $ 14,734 Accounts payable and accrued expenses are comprised of the following: (in thousands) December 31, 2017 December 31, 2016 Accounts payable $ 64,004 $ 11,210 Accrued capital expenditures 90,511 24,038 Revenues payable 23,390 3,815 Accrued employee compensation and benefits 8,350 4,221 Accrued interest 1,936 230 Payable to Silverback — 32,293 Accrued underwriting fees — 7,719 Other 11,342 2,574 Accounts payable and accrued expenses $ 199,533 $ 86,100 |
Long-Term Debt
Long-Term Debt | 12 Months Ended |
Dec. 31, 2017 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | Note 5—Long-Term Debt Credit Agreement CRP, the Company’s consolidated subsidiary, has a credit agreement with a syndicate of banks that as of December 31, 2017 , had a borrowing base of $475.0 million , which has been committed by lenders and is available for borrowing. A portion of the revolving credit facility in an aggregate amount not to exceed $15.0 million may be used to issue letters of credit for the account of CRP or other designated subsidiaries of the Company. As of December 31, 2017 , the Company had no borrowings outstanding and $474.1 million in available borrowing capacity, which was net of $0.9 million in letters of credit outstanding. The amount available to be borrowed under CRP's revolving credit facility is subject to a borrowing base that is redetermined semi-annually each April 1 and October 1 by the lenders in their sole discretion. CRP's credit agreement also allows for two optional borrowing base redeterminations on January 1 and July 1. The borrowing base depends on, among other things, the volumes of CRP’s proved oil and natural gas reserves, estimated cash flows from these reserves and its commodity hedge positions. The borrowing base will automatically be decreased by an amount equal to 25% of the aggregate notional amount of permitted issued senior unsecured notes unless such decrease is waived by the lenders. Upon a redetermination of the borrowing base, if borrowings in excess of the revised borrowing capacity are outstanding, CRP could be required to immediately repay a portion of its debt outstanding under the credit agreement. Borrowings under CRP’s revolving credit facility are guaranteed by certain of its subsidiaries. In connection with the October 2017 semi-annual redetermination, on November 2, 2017, the credit agreement’s borrowing base was increased from $350.0 million to $575.0 million ; however, on December 1, 2017 simultaneous with the issuance of the Senior Notes, CRP entered into an amendment to the credit agreement to, among other things, reflect CRP’s election to voluntarily reduce the commitments and borrowing base under the credit agreement to $475.0 million . Interest and commitment fees are accrued based on a borrowing base utilization grid set forth in the credit agreement and are discussed in “ Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations - Liquidity and Capital Resources” in this report. Commitment fees are accrued on the unused portion of the aggregate lender commitment amount and are included in interest expense in the Consolidated Statements of Operations. The credit facility provides for interest only payments until October 15, 2019, when the credit agreement expires, and all outstanding borrowings are due. CRP’s credit agreement contains restrictive covenants that limit its ability to, among other things: incur additional indebtedness; make investments and loans; enter into mergers; make or declare dividends; enter into commodity hedges exceeding a specified percentage of its expected production; enter into interest rate hedges exceeding a specified percentage of its outstanding indebtedness; incur liens; sell assets; and engage in transactions with affiliates. CRP’s credit agreement also requires it to maintain compliance with the following financial ratios: (i) a current ratio, which is the ratio of CRP’s consolidated current assets (including unused commitments under its revolving credit facility and excluding non-cash assets under FASB’s ASC Topic 815, Derivatives and Hedging (“ASC 815”) , and certain restricted cash) to its consolidated current liabilities (excluding the current portion of long-term debt under the credit agreement and non-cash liabilities under ASC 815), of not less than 1.0 to 1.0 ; and (ii) a leverage ratio, which is the ratio of Total Funded Debt (as defined in CRP’s credit agreement) to consolidated EBITDAX (as defined in CRP’s credit agreement) for the rolling four fiscal quarter period ending on such day, of not greater than 4.0 to 1.0 . CRP was in compliance with the covenants and the financial ratios described above as of December 31, 2017 and through the filing of this report. 5.375% Senior Unsecured Notes due 2026 On November 30, 2017, CRP issued at par $400.0 million of 5.375% senior notes due 2026 (the “Senior Notes”) in an 144A private placement that resulted in net proceeds to CRP of $391 million , after deducting $9 million in debt issuance costs. Interest is payable on the Senior Notes semi-annually in arrears on each January 15 and July 15, commencing July 15, 2018. The Senior Notes are fully and unconditionally guaranteed on a senior unsecured basis by each of CRP’s current subsidiaries that guarantee CRP’s revolving credit facility. The Senior Notes are not guaranteed by the Company nor is the Company subject to the terms of the indenture governing the Senior Notes. At any time prior to January 15, 2021, CRP may, on any one or more occasions, redeem up to 35% of the aggregate principal amount of the Senior Notes with an amount of cash not greater than the net cash proceeds of certain equity offerings at a redemption price equal to 105.375% of the principal amount of the Senior Notes redeemed, plus accrued and unpaid interest, if any, to the date of redemption; provided that at least 65% of the aggregate principal amount issued under the indenture governing the Senior Notes remains outstanding immediately after such redemption and the redemption occurs within 180 days of the closing date of such equity offering. At any time prior to January 15, 2021, CRP may, on any one or more occasions, redeem all or a part of the Senior Notes at a redemption price equal to 100% of the principal amount of the Senior Notes redeemed, plus a “make-whole” premium as of, and accrued and unpaid interest, if any, to, the date of redemption. On and after January 15, 2021, CRP may redeem the Senior Notes, in whole or in part, at redemption prices (expressed as percentages of principal amount) equal to 102.688% for the 12-month period beginning on January 15, 2021, 101.344% for the 12-month period beginning January 15, 2022, and 100% beginning on January 15, 2023, plus accrued and unpaid interest to the redemption date. If CRP experiences certain defined changes of control, each holder of the Senior Notes may require CRP to repurchase all or a portion of its Senior Notes for cash at a price equal to 101% of the aggregate principal amount of such Senior Notes, plus any accrued but unpaid interest to the date of repurchase. The indenture governing the Senior Notes contains covenants that, among other things and subject to certain exceptions and qualifications, limit CRP’s ability and the ability of CRP’s restricted subsidiaries to: (i) incur or guarantee additional indebtedness or issue certain types of preferred stock; (ii) pay dividends on capital stock or redeem, repurchase or retire capital stock or subordinated indebtedness; (iii) transfer or sell assets; (iv) make investments; (v) create certain liens; (vi) enter into agreements that restrict dividends or other payments from their subsidiaries to them; (vii) consolidate, merge or transfer all or substantially all of their assets; (viii) engage in transactions with affiliates; and (ix) create unrestricted subsidiaries. CRP was in compliance with the covenants as of December 31, 2017 and through the filing of this report. Upon an Event of Default (as defined in the indenture governing the Senior Notes), the trustee or the holders of at least 25% of the aggregate principal amount of then outstanding Senior Notes may declare the Senior Notes immediately due and payable, except that a default resulting from certain events of bankruptcy or insolvency with respect to CRP, any restricted subsidiary of CRP that is a significant subsidiary or any group of restricted subsidiaries that, taken together, would constitute a significant subsidiary, will automatically cause all outstanding Senior Notes to become due and payable. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Tax Disclosure | Note 6—Income Taxes In 2016, the Company became the sole managing member of CRP, and as a result, began consolidating the financial results of CRP. CRP is treated as a partnership for U.S. federal and most applicable state and local income tax purposes. As a partnership, CRP is not subject to U.S. federal and certain state and local income taxes. Any taxable income or loss generated by CRP is passed through to and included in the taxable income or loss of its members, including the Company, on a pro rata basis. The Company is subject to U.S. federal income taxes, in addition to state and local income taxes with respect to its allocable share of any taxable income or loss of CRP, as well as any stand-alone income or loss generated by the Company. Income tax expenses and benefits included in the consolidated statements of operations are detailed below: Successor Predecessor Year Ended December 31, 2017 October 11, 2016 January 1, 2016 Year Ended December 31, 2015 (in thousands) Current taxes Federal $ — $ — $ — $ — State — — — — — — — — Deferred taxes Federal (26,713 ) — — — State (3,217 ) — 406 572 (29,930 ) — 406 572 Income tax benefit (expense) $ (29,930 ) $ — $ 406 $ 572 A reconciliation of the statutory federal income tax expense to the income tax expense or benefit from continuing operations provided at December 31, 2017 , is as follows: Successor Predecessor Year Ended December 31, 2017 October 11, 2016 January 1, 2016 Year Ended December 31, 2015 (in thousands) Income tax (expense) benefit at the federal statutory rate $ (39,720 ) $ 3,145 $ — $ — State income tax (expense) benefit - net of federal income tax benefits (2,788 ) — 406 572 Change in Federal tax rate (net of state benefit and VA) 4,425 — — — Excess depletion — — — — Noncontrolling interest in partnership 2,795 (273 ) — — Equity based compensation 241 — — — Nondeductible expenses (31 ) (4 ) — — Change in valuation allowance 5,148 (2,868 ) — — Other — — — — Income tax benefit (expense) $ (29,930 ) $ — $ 406 $ 572 The change in the Federal tax rate was due to the passage of Public Law No. 115-97, commonly referred to as the Jobs Act. The passage of this legislation resulted in the Company generating a deferred tax benefit primarily due to the reduction in the U.S. statutory rate from 35% to 21% . Based on the Company's current interpretation and subject to the release of the related regulations and any future interpretive guidance, the Company believes the effects of the change in tax law incorporated herein are substantially complete. The tax effects of temporary differences that give rise to significant positions of the deferred income tax assets and liabilities are presented below: (in thousands) December 31, 2017 December 31, 2016 Deferred tax assets: Net operating loss carryforwards $ 88,968 $ 2,590 Capitalized intangible drilling cost 5,137 10,314 Equity-based compensation 2,631 467 Other assets 288 291 Total deferred tax assets 97,024 13,662 Deferred tax liabilities: Investment in Centennial Resource Production, LLC (106,923 ) (8,514 ) Other liabilities — — Total deferred tax liabilities (106,923 ) (8,514 ) Valuation allowance — (5,148 ) Net deferred tax asset (liabilities) $ (9,899 ) $ — During 2017 in connection with the conversion of shares from a noncontrolling interest owner, a tax benefit was recorded in equity of $20.0 million . For the period from October 11, 2016 through December 31, 2016 (Successor) , equity was debited $5.6 million in connection with the issuance of shares from a noncontrolling interest owner. No tax benefit was recorded in equity as a $2.0 million valuation allowance fully offset the attendant tax benefit. As of December 31, 2017 , the Company had approximately $415.9 million and $82.0 million of U.S. federal and state net operating loss carryovers, respectively, which expire variously from 2035 to 2037. The Company periodically assesses whether it is more likely than not that it will generate sufficient taxable income to realize its deferred income tax assets, including net operating loss carry forwards. In making this determination, the Company considers all available positive and negative evidence and makes certain assumptions. The Company considers, among other things, its deferred tax liabilities, the overall business environment, its historical earnings and losses, current industry trends, and its outlook for future years. As of December 31, 2017 , in part because the Company achieved cumulative pre-tax income, management determined that sufficient positive evidence exists as of December 31, 2017 , to conclude that it is more likely than not deferred tax assets will be realized prior to their expiration. The calculation of the Company’s tax liabilities involves uncertainties in the application of complex tax laws and regulations. The Company gives financial statement recognition to those tax positions that it believes are more-likely-than-not to be sustained upon the examination by the Internal Revenue Service or other governmental agency. As of December 31, 2017 , the Company did not have any accrued liability for uncertain tax positions and does not anticipate recognition of any significant liabilities for uncertain tax positions during the next 12 months. Interest and penalties related to uncertain tax positions are reported in income tax expense. The Company is subject to the following material taxing jurisdictions: U.S., Colorado, New Mexico, and Texas. As of December 31, 2017 , the Company has no current tax years under audit. The Company remains subject to examination for federal income taxes and state income taxes for tax years 2015 through 2017. |
Shareholders' Equity and Noncon
Shareholders' Equity and Noncontrolling Interest | 12 Months Ended |
Dec. 31, 2017 | |
Equity [Abstract] | |
Shareholders' Equity and Noncontrolling Interest | Note 7—Shareholders' Equity and Noncontrolling Interest On November 9, 2017, Silver Run Sponsor, LLC (“Silver Run Sponsor”), the Riverstone Purchasers and Celero completed an underwritten public offering of 25,000,000 shares of Class A Common Stock. No cash proceeds were received by the Company in connection with this offering and 3,494,583 shares of Class C Common Stock were converted to shares of Class A Common Stock on a one -to-one basis. In addition, a tax benefit of $20.0 million was recorded in equity as a result of the conversion of shares from a noncontrolling interest owner. On May 25, 2017, the Company’s stockholders approved at a special meeting the issuance of 26,100,000 shares of Class A Common Stock upon the conversion of 104,400 shares of Series B Preferred Stock that were held by affiliates of Riverstone Investment Group LLC in a private placement. There were no cash proceeds received by the Company in connection with this issuance. On May 4, 2017, the Company entered into subscription agreements with certain investors pursuant to which such investors agreed to purchase, in the aggregate, 23,500,000 shares of Class A Common Stock at a purchase price of $14.50 per share, for gross proceeds of approximately $340.8 million . The closing under the subscription agreements occurred concurrently with the closing of the GMT Acquisition on June 8, 2017, and the proceeds were used to fund a majority of the purchase price of that acquisition. On December 28, 2016, in connection with the Silverback Acquisition, the Company issued and sold in private placements (i) 3,473,590 shares of Class A Common Stock and 104,400 shares of Series B Preferred Stock to affiliates of Riverstone Investment Group LLC and (ii) 33,012,380 shares of Class A Common Stock to certain other investors, resulting in net cash proceeds of approximately $889.6 million . The Company used the proceeds from the private placements to fund the cash consideration for the Silverback Acquisition and the remaining proceeds for general corporate purposes. The shares of Series B Preferred Stock were subsequently converted into shares of the Company’s Class A Common Stock on a 250 -to- one basis in 2017 as discussed above. On October 11, 2016, in connection with Business combination, the Company issued and sold in private placements (i) 81,005,000 shares of Class A Common Stock to Riverstone Centennial Holdings, L.P. and (ii) 20,000,000 shares of Class A Common Stock to certain other accredited investors, resulting in net cash proceeds of approximately $1.0 billion . The outstanding shares of Class B Common Stock converted into shares of Class A Common Stock on a one -for- one basis in connection with the Business Combination. Additionally, the Company issued 20,000,000 shares of Class C Common Stock to the Centennial Contributors and one share of Series A Preferred Stock to CRD in connection with the Business Combination. Class A Common Stock Holders of the Company's Class A Common Stock are entitled to one vote for each share held on all matters to be voted on by the Company's stockholders. Holders of the Class A Common Stock and holders of the Class C Common Stock vote together as a single class on all matters submitted to a vote of the Company's stockholders, except as required by law. Unless specified in the Charter (including any certificate of designation of preferred stock) or Bylaws, or as required by applicable provisions of the Delaware General Corporation Law or applicable stock exchange rules, the affirmative vote of a majority of the Company’s shares of common stock that are voted is required to approve any such matter voted on by the Company’s stockholders. There is no cumulative voting with respect to the election of directors, with the result that the holders of more than 50% of the shares voted for the election of directors can elect all of the directors (subject to the right of the holder of the Company’s Series A Preferred Stock to nominate and elect one director). Subject to the rights of the holders of any outstanding series of preferred stock, the Company’s stockholders are entitled to receive ratable dividends when, as and if declared by the board of directors out of funds legally available therefor. In the event of a liquidation, dissolution or winding up of the Company, the holders of the Class A Common Stock are entitled to share ratably in all assets remaining available for distribution to them after payment of liabilities and after provision is made for each class of stock, if any, having preference over the Class A Common Stock. The Company’s stockholders have no preemptive or other subscription rights. There are no sinking fund provisions applicable to the Class A Common Stock. Class C Common Stock The Company had 15,661,338 shares of Class C Common Stock outstanding as of December 31, 2017 , which represent the remaining portion of the 20,000,000 shares of Class C Common Stock issued to the Centennial Contributors in connection with the Business Combination that had not been redeemed or exchanged as of such date. Holders of Class C Common Stock have the right to vote on all matters properly submitted to a vote of the stockholders and vote together as a single class with the holders of Class A Common Stock. In addition, the holders of Class C Common Stock, voting as a separate class, are entitled to approve any amendment, alteration or repeal of any provision of the Company’s Charter that would alter or change the powers, preferences or relative, participating, optional, other or special rights of the Class C Common Stock. Holders of Class C Common Stock are not entitled to any dividends from the Company and are not entitled to receive any of its assets in the event of any voluntary or involuntary liquidation, dissolution or winding up of its affairs. Shares of Class C Common Stock may be issued only to the Centennial Contributors, their respective successors and assigns, as well as any permitted transferees of the Centennial Contributors. A holder of Class C Common Stock may transfer shares of Class C Common Stock to any transferee (other than the Company) only if such holder also simultaneously transfers an equal number of such holder’s CRP Common Units to such transferee in compliance with the A&R LLC Agreement (as defined below). Holders of Class C Common Stock generally have the right to cause CRP to redeem all or a portion of their CRP Common Units in exchange for shares of the Company’s Class A Common Stock or, at CRP’s option, an equivalent amount of cash. The Company may, however, at its option, effect a direct exchange of cash or Class A Common Stock for such CRP Common Units in lieu of such a redemption by CRP. Upon the future redemption or exchange of CRP Common Units held by a Centennial Contributor, a corresponding number of shares of Class C Common Stock will be canceled. Preferred Stock As of December 31, 2017 and 2016, the Company had one share of Series A Preferred Stock outstanding which was issued to CRD in connection with the Business Combination. CRD, as the holder of the Series A Preferred Stock, is not entitled to any dividends from the Company, but is entitled to preferred distributions in liquidation in the amount of $0.0001 per share of Series A Preferred Stock and has a limited voting right as described below. The Series A Preferred Stock is redeemable by the Company (i) at such time as CRD and its affiliates cease to own, in the aggregate, at least 5,000,000 CRP Common Units and/or shares of Class A Common Stock (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and other similar transactions), (ii) at any time at CRD’s option or (iii) upon a breach by CRD of the transfer restrictions relating to the Series A Preferred Stock. In addition, for so long as the Series A Preferred Stock remains outstanding, CRD will be entitled to nominate one director for election to the Company’s board of directors in connection with any vote of the Company’s stockholders for the election of directors, and the vote of CRD will be the only vote required to elect such nominee to the Company’s board of directors. Warrants The Company’s Public Warrants were originally issued in connection with the IPO of Silver Run Acquisition Corporation. On March 1, 2017, the Company delivered a notice of redemption to all holders of its Public Warrants announcing its intention to redeem any Public Warrants that remained unexercised and outstanding after March 31, 2017 for $0.01 per Public Warrant. As of December 31, 2017 , all of the Company’s Public Warrants have been either exercised for shares of Class A Common Stock or redeemed for $0.01 per Public Warrant. As a result of all such Warrants exercised, the Company issued in aggregate 6,235,790 shares of Class A common stock to holders of Public Warrants. As of December 31, 2017 , 8,000,000 Private Placement Warrants remained outstanding. Private Placement Warrants are non-redeemable so long as they are held by Riverstone or its permitted transferees. Each whole Private Placement Warrant is exercisable for one whole share of Class A Common Stock at a price of $11.50 per share. The warrants became exercisable on March 1, 2017 and will expire five years after the completion of the Business Combination or earlier upon redemption or liquidation. Noncontrolling Interest The noncontrolling interest relates to CRP Common Units that were originally issued to the Centennial Contributors in connection with the Business Combination and continue to be held by holders other than the Company. At the date of the Business Combination, the noncontrolling interest held 10.9% of the ownership in CRP. The noncontrolling interest percentage is affected by various equity transactions such as, Class C Common Stock conversions and Class A Common Stock activities. As a result of the exchange of the CRP Common Units (and corresponding shares of Class C Common Stock) for Class A Common Stock on October 11, 2016 and the issuance of shares of Class A Common Stock and Series B Preferred stock on December 28, 2016 (as discussed in the preceding section above), the noncontrolling interest ownership of CRP decreased to 7.8% as of December 31, 2016. As of December 31, 2017, the noncontrolling interest ownership of CRP decreased to 5.7% . The decrease was the result of Class A Common Stock issuance in May and the exchange of CRP Common Units (and corresponding shares of Class C Common Stock) for Class A Common Stock in November as discussed in preceding sections above. The Company has consolidated the financial position, results of operations and cash flows of CRP and reflected that portion retained by other holders of CRP Common Units as a noncontrolling interest. Refer to the Consolidated Statements of Shareholders’ Equity for a summary of the activity attributable to the noncontrolling interest during the period. Owners’ Equity (Predecessor) At October 10, 2016 (prior to the Business Combination), members included Centennial HoldCo, Celero and Follow-On, owning an approximate 61.2% , 21.2% and 17.6% membership interest in Centennial OpCo, respectively. CRP had two classes of membership interests outstanding: Class A, which consisted of membership interests held by CRD and Follow-On; and Class B, which consisted of membership interests held by Celero. On October 10, 2016 CRP recorded a deemed contribution attributable to the consummation of the Business Combination, which resulted in the achievement of the payout conditions with respect to the incentive units and CRP recorded $165.4 million of compensation expense. Refer to Note 7—Shareholders' Equity and Noncontrolling Interest . Additionally, CRP recorded a deemed contribution of $14.0 million attributable to certain transaction costs related to the Business Combination paid by the Centennial Contributors. Refer to Note 2—Business Combination . As of December 31, 2015, CRD had contributed $289.4 million and had a remaining capital commitment of $32.5 million , Follow-On had contributed $84.2 million and had a remaining capital commitment of $100.3 million , and Celero had contributed $125.4 million and has no remaining capital commitment. In 2015 Follow-On contributed $84.2 million to Centennial OpCo in exchange for membership interests in Centennial CRP. In addition, CRD contributed approximately $27.2 million to CRP in exchange for additional membership interests in CRP. |
Stock-Based Compensation
Stock-Based Compensation | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-Based Compensation | Note 8—Stock-Based Compensation Long Term Incentive Plan On October 7, 2016, the stockholders of the Company approved the Centennial Resource Development, Inc. 2016 Long Term Incentive Plan (the “LTIP”). An aggregate of 16,500,000 shares of Class A Common Stock were authorized for issuance under the LTIP, and as of December 31, 2017 , the Company had 10,851,807 shares of Class A Common Stock available for future grants. The LTIP provides for grant of stock options (including incentive stock options and nonqualified stock options), stock appreciation rights, restricted stock, dividend equivalents, restricted stock units and other stock or cash-based awards. Stock-based compensation expense is recognized within General and administrative expenses and Exploration expense on the Consolidated Statements of Operations as shown below. Historical amounts may not be representative of future amounts as the value of future awards may vary from historical amounts. Upon adoption of ASU 2016-09 in October 2016, the Company elected to account for forfeitures of awards granted under the LTIP as they occur in determining compensation expense. Year Ended December 31, 2017 October 11, 2016 (in thousands) Restricted stock awards $ 5,008 $ 405 Stock option awards 8,160 928 Performance Stock Units 591 — Total stock-based compensation expense $ 13,759 $ 1,333 Restricted Stock The following table provides information about restricted stock awards outstanding during the year ended December 31, 2017 : Awards Weighted Average Grant-Date Fair Value Unvested balance as of December 31, 2016 256,597 $ 20.03 Granted 902,111 $ 17.33 Vested (137,177 ) $ 19.98 Forfeited (11,815 ) $ 18.29 Unvested balance as of December 31, 2017 1,009,716 $ 17.64 The Company grants service-based restricted stock awards to executive officers and employees, which generally vest ratably over a three -year service period, and to directors, which generally vest over a one -year service period. Compensation cost for the service-based restricted stock awards is based upon the grant-date market value of the award and such costs are recognized ratably over the applicable vesting period. Weighted average grant-date fair value for restricted stock award granted was $17.33 per share and $20.03 per share for the years ended December 31, 2017 and 2016 , respectively. Total fair value of restricted stock awards that vested during the year ended December 31, 2017 was $2.7 million . Unrecognized compensation cost related to unvested restricted shares at December 31, 2017 was $15.1 million , which the Company expects to recognize over a weighted average period of 2.3 years. Stock Options Stock options that have been granted under the LTIP expire ten years from the grant date and have service-based vesting schedules of three years. The exercise price for an option under the LTIP is the closing price of the Company’s Class A Common Stock as reported by NASDAQ on the date of grant. Compensation cost related to stock options is based on the grant-date fair value of the award, recognized ratably over the applicable vesting period. The Company estimates the fair value using the Black-Scholes option-pricing model. Expected volatilities are based on the re-levered asset volatility implied by a set of comparable companies. Expected term is based on the simplified method and is estimated as the average of the weighted average vesting term and the time to expiration as of the grant date. The Company uses U.S. Treasury bond rates in effect at the grant date for its risk-free interest rates. The following table summarizes the assumptions and related information used to determine the grant-date fair value of stock options awarded during the year ended December 31, 2017 : Year Ended December 31, 2017 October 11, 2016 through December 31, 2016 Weighted average grant-date fair value per share $ 7.15 $ 5.93 Expected term (in years) 6 6 Expected stock volatility 38 % 40 % Dividend yield — % — % Risk-free interest rate 2.0 % 1.5 % The following table provides information about stock option awards outstanding during the year ended December 31, 2017 : Options Weighted Average Exercise Price Weighted Average Remaining Term (in years) Aggregate Intrinsic Value (in thousands) Outstanding as of December 31, 2016 2,735,500 $ 14.67 Granted 1,884,500 $ 18.02 Exercised (58,499 ) $ 15.02 Forfeited (279,000 ) $ 14.54 Outstanding as of December 31, 2017 4,282,501 $ 16.15 9.0 $ 15,633 Exercisable as of December 31, 2017 760,997 $ 14.67 8.8 $ 3,907 As of December 31, 2017 , there was $18.9 million of unrecognized compensation cost related to non-vested stock options, which the Company expects to recognize on a pro rata basis over a weighted average period of 2.0 years. Performance Stock Units The Company grants to executive officers performance stock units that are subject to market-based vesting criteria as well as a three -year service period. Vesting at the end of the three -year service period is subject to the condition that the Company’s stock price increases by a greater percentage, or decreases by a lesser percentage, than the average percentage increase or decrease, respectively, of the stock prices of a peer group of companies. The market-based conditions must be met in order for the stock awards to vest, and it is, therefore, possible that no shares could vest. However, the Company recognizes compensation expense for the performance stock units subject to market conditions regardless of whether it becomes probable that these conditions will be achieved or not and compensation expense is not reversed if vesting does not actually occur. The grant-date fair value was estimated using a Monte Carlo valuation model. The Monte Carlo valuation model is based on random projections of stock price paths and must be repeated numerous times to achieve a probabilistic assessment. Expected volatility was calculated based on the historical volatility of the common stock, and the risk-free interest rate is based on U.S. Treasury yield curve rates with maturities consistent with the three -year vesting period. The following table summarizes the key assumptions and related information used to determine the grant-date fair value of performance stock units awarded during the year ended December 31, 2017 : Year Ended December 31, 2017 Number of simulations 1,000,000 Expected stock volatility 41.6 % Dividend yield — % Risk-free interest rate 1.5 % The following table provides information about performance stock units outstanding during the year ended December 31, 2017 : Awards Weighted Average Grant-Date Fair Value Unvested balance as of December 31, 2016 — $ — Granted 193,391 $ 21.53 Vested — $ — Forfeited — $ — Unvested balance as of December 31, 2017 193,391 $ 21.53 As of December 31, 2017 , there was $3.6 million of unrecognized compensation cost related to unvested performance stock units, which the Company expects to recognize on a pro rata basis over a weighted average period of 2.5 years Incentive Unit Compensation (Predecessor) Certain employees of Centennial Resource Management, LLC, a wholly owned subsidiary of CRD at the time of grant, received awards of CRD and NGP Follow-On incentive units, or profits interests. The incentive units were issued to employees in return for services provided and cash payout was based, in part, on the value of Centennial’s equity. The incentive units were accounted for as liability awards under ASC 718, with compensation expense based on period-end fair value and recognized at such time that the payout terms were probable of being met. The consummation of the Business Combination resulted in the achievement of the payout conditions with respect to the incentive units and CRP recorded $165.4 million of compensation expense. No incentive compensation expense was recorded at December 31, 2015, because it was not probable that the performance criterion would be met. |
Derivative Instruments
Derivative Instruments | 12 Months Ended |
Dec. 31, 2017 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Instruments | Note 9—Derivative Instruments The Company is exposed to certain risks relating to its ongoing business operations and uses derivative instruments to manage its exposure to commodity price risk from time to time. Commodity Derivative Contracts Historically, prices received for crude oil and natural gas production have been volatile because of supply and demand factors, worldwide political factors, general economic conditions and seasonal weather patterns. The Company periodically uses derivative instruments, such as swaps, costless collars and basis swaps, to mitigate its exposure to declines in commodity prices and to the corresponding negative impacts such declines can have on its cash flow from operations, returns on capital and other financial results. While the use of these instruments limits the downside risk of adverse price changes, their use may also limit future revenues from favorable price changes. The Company does not enter into derivative contracts for speculative or trading purposes. Commodity Swap Contracts. The Company opportunistically uses commodity derivative instruments known as fixed price swaps to realize a known price for a specific volume of production. All transactions are settled in cash with one party paying the other for the net difference in the agreed upon published third-party index price (“index price”) and the swap fixed price, multiplied by the contract volume. The Company also utilizes basis swaps contracts to hedge the difference between the index price and a local index price. The following table summarizes the approximate volumes and average contract prices of swap contracts the Company had in place as of December 31, 2017 : Period Volume (Bbl) Weighted Average Differential ($/Bbl) (1) Crude oil basis swaps January 2018 - June 2018 905,000 $ 0.18 January 2018 - December 2018 1,825,000 $ 0.00 (1) The oil basis swap transactions are settled based on the difference between the arithmetic average of the ARGUS MIDLAND WTI and ARGUS WTI CUSHING settlements, during the relevant calculation period. Period Volume (MMBtu) Weighted Average Differential ($/MMBtu) (1) Natural gas basis swaps January 2018 - December 2018 1,825,000 $ (0.43 ) January 2019 - December 2019 1,825,000 $ (0.43 ) (1) The natural gas basis swap contracts are settled based on the difference between Inside FERC’s West Texas WAHA price of natural gas and the NYMEX price of Natural Gas during the relevant calculation period. Derivative Instrument Reporting. The Company’s oil and natural gas derivative instruments have not been designated as hedges for accounting purposes; therefore, all gains and losses are recognized in the Company’s Consolidated Statements of Operations. All derivative instruments are recorded at fair value on the Consolidated Balance Sheets, other than derivative instruments that meet the “normal purchase normal sale” exclusion, and any gains and losses are recognized in current period earnings. The following table presents gains and losses for derivative instruments not designated as hedges for accounting purposes for the periods presented: Successor Predecessor Year Ended October 11, 2016 January 1, 2016 Year Ended (in thousands) Net gain (loss) on derivative instruments 5,138 (1,548 ) (6,838 ) 20,756 Offsetting of Derivative Assets and Liabilities. The Company’s commodity derivatives are measured at fair value and are included in the accompanying Consolidated Balance Sheets as derivative assets and liabilities. The Company nets its financial derivative instrument fair value amounts executed with the same counterparty pursuant to ISDA master netting agreements, which provide for net settlement over the term of the contract and in the event of default or termination of the contract. The following tables summarize the location and fair value amounts of all the Company’s derivative instruments in the Consolidated Balance Sheets, as well as the gross recognized derivative assets, liabilities and amounts offset in the Consolidated Balance Sheets: December 31, 2017 Balance Sheet Classification Gross Fair Value Asset/Liability Amounts Gross Amounts Offset (1) Net Recognized Fair Value Assets/Liabilities Derivative Assets Derivative instruments Current assets $ 720 $ (287 ) $ 433 Derivative instruments Noncurrent assets 662 — 662 Total derivative assets $ 1,382 $ (287 ) $ 1,095 Derivative Liabilities Derivative instruments Current liabilities $ 527 $ (287 ) $ 240 (1) The Company has agreements in place with all of its counterparties that allow for the financial right of offset for derivative assets and derivative liabilities at settlement or in the event of a default under the agreements or contract termination. December 31, 2016 Balance Sheet Classification Gross Fair Value Asset/Liability Amounts Gross Amounts Offset (1) Net Recognized Fair Value Assets/Liabilities Derivative Assets Derivative instruments Current assets $ 739 $ (308 ) $ 431 Derivative Liabilities Derivative instruments Current liabilities 5,669 (308 ) 5,361 Derivative instruments Noncurrent Liabilities 20 — 20 Total derivative liabilities $ 5,689 $ (308 ) $ 5,381 (1) The Company has agreements in place with all of its counterparties that allow for the financial right of offset for derivative assets and derivative liabilities at settlement or in the event of a default under the agreements or contract termination. Contingent Features in Financial Derivative Instruments. None of the Company’s derivative instruments contain credit-risk-related contingent features. Counterparties to the Company’s financial derivative contracts are high credit-quality financial institutions that are lenders under CRP’s credit agreement. The Company uses only credit agreement participants to hedge with, since these institutions are secured equally with the holders of any CRP bank debt, which eliminates the potential need to post collateral when Centennial is in a derivative liability position. As a result, the Company is not required to post letters of credit or corporate guarantees for its derivative counterparties in order to secure contract performance obligations. In addition, the Company is exposed to credit risk associated with its derivative contracts from non-performance by its counterparties. The Company mitigates its exposure to any single counterparty by contracting with a number of financial institutions, each of which has a high credit rating and is a member of CRP’s credit facility as referenced above. |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2017 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Note 10—Fair Value Measurements Recurring Fair Value Measurements The Company follows FASB ASC Topic 820, Fair Value Measurement and Disclosure, which establishes a three-level valuation hierarchy for disclosure of fair value measurements. The valuation hierarchy categorizes assets and liabilities measured at fair value into one of three different levels depending on the observability of the inputs employed in the measurement. The three levels are defined as follows: • Level 1: Quoted Prices in Active Markets for Identical Assets – inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets. • Level 2: Significant Other Observable Inputs – inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument. • Level 3: Significant Unobservable Inputs – inputs to the valuation methodology are unobservable and significant to the fair value measurement. The following table is a listing of the Company’s assets and liabilities that are measured at fair value and where they were classified within the fair value hierarchy as of December 31, 2017 and December 31, 2016 (in thousands): (in thousands) Level 1 Level 2 Level 3 Commodity derivative asset (liability), net December 31, 2017 $ — $ 855 $ — December 31, 2016 $ — $ (4,950 ) $ — Both financial and non-financial assets and liabilities are categorized within the above fair value hierarchy 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 in its entirety requires judgement and considers factors specific to the asset or liability. The following is a description of the valuation methodologies used by the Company as well as the general classification of such instruments pursuant to the above fair value hierarchy. There were no transfers between any of the fair value levels during any period presented. Derivatives The Company uses Level 2 inputs to measure the fair value of oil and natural gas commodity derivatives. The Company uses industry-standard models that consider various assumptions including current market and contractual prices for the underlying instruments, implied market volatility, time value, nonperformance risk, as well as other relevant economic measures. Substantially all of these inputs are observable in the marketplace throughout the full term of the instrument and can be supported by observable data. The Company utilizes its counterparties’ valuations to assess the reasonableness of its own valuations. Nonrecurring Fair Value Measurements The fair value measurements of assets acquired and liabilities assumed are measured on a nonrecurring basis on the acquisition date using an income valuation technique based on inputs that are not observable in the market and therefore represent Level 3 inputs. Significant inputs to the valuation of acquired oil and gas properties include estimates of: (i) reserves; (ii) production rates; (iii) future operating and development costs; (iv) future commodity prices, including price differentials; (v) future cash flows; and (vi) a market participant-based weighted average cost of capital rate. These inputs require significant judgments and estimates by the Company’s management at the time of the valuation. Refer to Note 2—Business Combination and Note 3—Property Acquisitions for additional information on the fair value of assets acquired during 2017 and 2016 . The initial measurement of ARO at fair value is calculated using discounted cash flow techniques and is based on internal estimates of future retirement costs associated with property, plant and equipment. Significant Level 3 inputs used in the calculation of ARO include plugging costs and reserve lives. Refer to Note 11—Asset Retirement Obligations for additional information on the Company’s ARO. Other Financial Instruments The carrying amounts of the Company’s cash, cash equivalents, accounts receivable, accounts payable, and accrued liabilities approximate fair value because of the short-term maturities and/or liquid nature of these assets and liabilities. The carrying values of the amounts outstanding under CRP’s credit agreement approximate fair value because its variable interest rates are tied to current market rates and the applicable credit spreads represent current market rates for the credit risk profile of the Company. As of December 31, 2017 , the fair value of the Senior Notes was $407.5 million , which was determined using the quoted market price, a Level 1 classification in the fair value hierarchy. |
Asset Retirement Obligations
Asset Retirement Obligations | 12 Months Ended |
Dec. 31, 2017 | |
Asset Retirement Obligation Disclosure [Abstract] | |
Asset Retirement Obligations | Note 11—Asset Retirement Obligations The following table summarizes the changes in the Company’s asset retirement obligations for the periods presented: Successor Predecessor Year Ended October 11, 2016 January 1, 2016 (in thousands) Asset retirement obligations, beginning of period 7,226 4,989 2,288 Additional liabilities incurred 2,219 2,189 240 Liabilities disposed (336 ) — — Liabilities settled (65 ) (1 ) (42 ) Accretion expense 516 49 134 Revision to estimated cash flows 2,601 — 32 Asset retirement obligations, end of period $ 12,161 $ 7,226 $ 2,652 ARO reflect the present value of the estimated future costs associated with the plugging and abandonment of oil and natural gas wells, removal of equipment and facilities from leased acreage and land restoration in accordance with applicable local, state and federal laws. Inherent in the fair value calculation of ARO are numerous assumptions and judgments including the ultimate settlement amounts, inflation factors, credit adjusted discount rates and timing of settlement. To the extent future revisions to these assumptions impact the value of the existing ARO liability, a corresponding offsetting adjustment is made to the oil and natural gas property balance. |
Transactions with Related Parti
Transactions with Related Parties | 12 Months Ended |
Dec. 31, 2017 | |
Related Party Transactions [Abstract] | |
Transactions with Related Parties | Note 12—Transactions with Related Parties Founder Shares On November 6, 2015, Riverstone purchased 11,500,000 shares of Class B Common Stock (the “founder shares”) from the Company, for an aggregate purchase price of $25,000 , or approximately $0.002 per share. In February 2016, Riverstone transferred 40,000 founder shares to each of the Company’s then independent directors (together with Riverstone, the “initial stockholders”) at their original purchase price. On February 24, 2016, the Company effected a stock dividend of approximately 0.125 shares for each outstanding share of Class B Common Stock, resulting in the initial stockholders holding an aggregate of 12,937,000 founder shares. On April 8, 2016, following the expiration of the underwriters’ remaining over-allotment option in connection with the Company’s IPO, Riverstone forfeited 437,500 founder shares, so that the remaining 12,500,000 founder shares held by the initial stockholders would represent 20% of the Company’s then issued and outstanding shares of common stock. On October 11, 2016, all of the outstanding founder shares were automatically converted into shares of Class A Common Stock on a one -for-one basis in connection with the closing of the Business Combination. Private Placement Warrants On February 29, 2016, Riverstone purchased 8,000,000 Private Placement Warrants from the Company at a price of $1.50 per whole warrant ( $12.0 million in the aggregate) in a private placement that occurred simultaneously with the closing of the Company’s IPO. Each whole Private Placement Warrant is exercisable for one whole share of Class A Common Stock at a price of $11.50 per share. A portion of the purchase price of the Private Placement Warrants was placed in the Company’s trust account along with the proceeds from its IPO. The Private Placement Warrants will expire at 5:00 p.m., New York City time, on October 11, 2021, or earlier upon redemption or our liquidation. Additionally, the Private Placement Warrants are non-redeemable and exercisable on a cashless basis so long as they are held by Riverstone or its permitted transferees. If such Private Placement Warrants are not held by Riverstone or its permitted transferees, we may call the Private Placement Warrants for redemption, in whole and not in part, at a price of $0.01 per Private Placement Warrant, upon not less than 30 days’ prior written notice of such redemption to each holder if the reported last sale price of our Class A Common Stock equals or exceeds $18.00 per share for any 20 trading days within a 30 -day trading period ending three business days before we send the notice of redemption. Amended and Restated Limited Liability Company Agreement of CRP In connection with the closing of the Business Combination, on October 11, 2016, the Company and the Centennial Contributors entered into CRP’s fifth amended and restated limited liability company agreement (as amended to date, the “A&R LLC Agreement”) to, among other things, set forth our rights and obligations as holders of common membership interests in CRP (the “CRP Common Units”). Under the A&R LLC Agreement, the Centennial Contributors generally have the right to cause CRP to redeem all or a portion of their CRP Common Units in exchange for shares of our Class A Common Stock or, at CRP’s option, an equivalent amount of cash; provided that we may, at our option, effect a direct exchange of cash or Class A Common Stock for such CRP Common Units in lieu of such a redemption by CRP. Upon the future redemption or exchange of CRP Common Units held by a Centennial Contributor, a corresponding number of shares of Class C Common Stock held by such Centennial Contribution will be cancelled. The A&R LLC Agreement also includes provisions intended to ensure that we at all times maintain a one-to-one ratio between (a) the number of outstanding shares of Class A Common Stock and the number of CRP Common Units owned by us (subject to certain exceptions) and (b) the number of outstanding shares of our Class C Common Stock and the number of CRP Common Units owned by the Centennial Contributors. This construct is intended to result in the Centennial Contributors having a voting interest in the Company that is identical to the Centennial Contributors’ economic interest in CRP. Exchange Right On October 11, 2016, following the closing of the Business Combination, the Company issued 844,079 shares of its Class A Common Stock to an accredited investor at the direction of certain Centennial Contributors affiliated with such investor, in exchange for 844,079 CRP Common Units held by such Centennial Contributors. The exchange was affected in accordance with the A&R LLC Agreement. Upon the exchange of the CRP Common Units, the Company canceled 844,079 shares of its Class C Common Stock held by the Centennial Contributors. Amended and Restated Registration Rights Agreement In connection with the closing of the Business Combination, on October 11, 2016, the Company entered into an amended and restated registration rights agreement (the “Registration Rights Agreement”) with certain Riverstone entities, certain of its former and current directors and the Centennial Contributors, pursuant to which such parties are entitled to certain registration rights relating to the resale of certain securities held by them. In connection with the Registration Rights Agreement, the Company filed a Registration Statement on Form S-3 that was declared effective on April 17, 2017. Subscription Agreements In connection with the Business Combination, on July 21, 2016, the Company entered into a subscription agreement with Riverstone, pursuant to which Riverstone purchased 81,005,000 shares of Class A Common Stock at the closing of the Business Combination for an aggregate purchase price of approximately $810.0 million . In connection with the Silverback Acquisition, on November 27, 2016, the Company entered into a subscription agreement with Riverstone, pursuant to which Riverstone agreed to purchase an aggregate of 3,473,590 shares of Class A Common Stock and 104,400 shares of Series B Preferred Stock at the closing for an aggregate purchase price of approximately $430.0 million . Pursuant to the terms thereof, the Series B Preferred Stock converted into 26,100,000 shares of Class A Common Stock on May 25, 2017. Customer and Supplier Relationships NGP Affiliated Companies Beginning December 28, 2016, NGP and entities affiliated with NGP were no longer considered related parties of the Company, and any expenses incurred on or after December 28, 2016 with NGP or its affiliates are no longer classified as related party expenses. However, expenses incurred before December 28, 2016 with NGP or its affiliates were classified as related party expenses as NGP beneficially owned more than 10% of equity interest in the Company. Such transactions are detailed below. In May 2016, the Company acquired acreage in close proximity to its operating area in Reeves County, Texas and wellbore only rights in an uncompleted horizontal wellbore for approximately $9.8 million from Caird DB, LLC, an affiliate of NGP. In addition, the Company paid approximately $ 3.3 million during the year ended December 31, 2016 , to RockPile Energy Services, LLC (“Rockpile”). On July 3, 2017, Rockpile was acquired by an unrelated third party and is no longer an affiliate of NGP. Riverstone Affiliated Companies Riverstone and its affiliates beneficially own more than 10% of equity interest in the Company and are therefore considered related parties. From time to time, the Company obtains services related to its drilling and completion activities from affiliates of Riverstone. In particular, the Company has paid the following amounts to the following affiliates of Riverstone for such services: (i) approximately $ 72.6 million and $ 8.2 million during the years ended December 31, 2017 and December 31, 2016 , respectively, to Liberty Oilfield Services, LLC (“Liberty”); and (ii) approximately $ 6.4 million and $ 1.4 million during the years ended December 31, 2017 and December 31, 2016 , respectively, to Permian Tank and Manufacturing, Inc. (“Permian”). Included in Accounts payable and accrued expenses was $0.3 million and $ 0.4 million due to Permian as of December 31, 2017 and December 31, 2016 , respectively, and $ 3.1 million due to Liberty as of December 31, 2016 . Other Affiliated Companies Mark G. Papa, President, Chief Executive Officer and Chairman of the Board, serves as a director and Chairman of the Board of Oil States International, Inc., an energy services company publicly traded on the New York Stock Exchange (“Oil States”). From time to time, the Company obtains services related to drilling and completion activities from Oil States. In particular, the Company paid approximately $10.5 million and $ 1.2 million during the years ended December 31, 2017 and December 31, 2016 , respectively, to Oil States. Included in Accounts payable and accrued expenses was $ 1.5 million and $ 0.2 million due to Oil States as of December 31, 2017 and December 31, 2016 , respectively. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 13—Commitments and Contingencies Operating Leases and Other Commitments The following is a schedule of the Company’s future minimum lease payments with commitments that have initial or remaining non-cancelable lease terms in excess of one year as of December 31, 2017 : (in thousands) 2018 2019 2020 2021 2022 Thereafter Total Drilling rig commitments $ 19,714 $ 1,620 $ — $ — $ — $ — $ 21,334 Office leases 2,360 2,322 2,163 2,073 274 — 9,192 Water disposal agreement 1,825 1,825 1,825 1,825 — — 7,300 Purchase obligations 4,400 13,200 8,800 — — — 26,400 Transportation and gathering 2,044 2,044 — — — — 4,088 Total $ 30,343 $ 21,011 $ 12,788 $ 3,898 $ 274 $ — $ 68,314 Drilling Rig Contracts As of December 31, 2017 , the Company had six drilling rigs under contract and its obligations under these agreements are included in the above schedule. Early termination of these contracts would require termination penalties of $ 14.7 million to be paid as of December 31, 2017 , which would be paid in lieu of paying the remaining drilling commitments under these contracts. The Company recognized $38.0 million , $1.0 million and $2.0 million for the year ended December 31, 2017 , the periods from October 11, 2016, through December 31, 2016 , and January 1, 2016, through October 10, 2016 , respectively, under these long-term contracts, which are initially capitalized as a component of oil and gas properties and either depleted in future periods or written off as exploration expense. Office Leases The Company leases office space in Colorado, Texas, and New Mexico. The Company recognized rent expense of $ 1.1 million , $0.1 million , $0.4 million , and $0.4 million for the year ended December 31, 2017 , the periods from October 11, 2016, through December 31, 2016 , and January 1, 2016, through October 10, 2016 , and for the year ended December 31, 2015 , respectively. Water Disposal Agreement In January 2017, the Company entered into a water disposal agreement for transportation and disposal of produced water from its operated wells. Under the terms of the agreement, Centennial is obligated to provide a minimum volume of produced water or else pay for any deficiencies at the price stipulated in the contract. The obligations reported above represent the minimum financial commitments pursuant to the terms of this contract as of December 31, 2017 . Actual expenditures under this contract may exceed the minimum commitments presented above. The Company recognized water disposal costs of $2.4 million for the year ended December 31, 2017 related to this contract. Purchase Obligations In July 2017, the Company entered into a supply agreement to purchase frac and sand product for a term of three years. Under the terms of the agreement, Centennial is obligated to purchase a minimum volume of frac and sand product at a fixed sales price. A prepayment of $13.2 million was made during 2017 and will be used as a partial credit against monthly purchases. The obligations reported above represent our minimum financial commitments pursuant to the terms of this contract as of December 31, 2017 . Actual expenditures under this contract may exceed the minimum commitments presented above. The Company paid $13.2 million for the year ended December 31, 2017 under this contract for advance purchases of frac and sand product of which $1.6 million was capitalized as incurred during the year. Transportation and Gathering Agreement In June 2017, the Company entered into a transportation service agreement through December 31, 2019 whereby it is required to deliver 40,000 MMBtu per day or pay for any deficiencies at the price stipulated in the contract. This delivery commitment is tied to the Company’s natural gas production in Reeves and Ward counties, Texas. The obligations reported above represent the minimum financial commitments pursuant to the terms of this contract as of December 31, 2017 . Actual expenditures under this contract may exceed the minimum commitments presented above. The Company recognized transportation and gathering expenses of $1.2 million for the year ended December 31, 2017 related to this contract. In December 2015, the Company entered into a transportation and gathering services agreement by which a transporter agreed to construct a crude oil gathering and transportation system capable of transporting crude oil from certain Company wells in Pecos, Reeves and Ward Counties, Texas to destination points in Crane and Midland, Texas (the “Transportation System”), and the Company agreed to dedicate and ship on the Transportation System all crude oil owned or controlled by the Company from oil and gas leases covering approximately 62,913 gross acres located within a designated area of mutual interest in Pecos, Reeves and Ward Counties. The agreement has a primary term of 12 years from October 1, 2016, the date the Transportation System was first put into service and may be extended at the Company’s option for two successive two -year terms and, thereafter, is automatically extended for successive one -year terms unless terminated by the Company or the transporter upon 60 days’ prior notice. Contingencies The Company may at times be subject to various commercial or regulatory claims, litigation or other legal proceedings that arise in the ordinary course of business. While the outcome of these lawsuits and claims cannot be predicted with certainty, management believes it is remote that the impact of such matters that are reasonably possible to occur will have a material adverse effect on the Company’s financial position, results of operations or cash flows. Management is unaware of any pending litigation brought against the Company requiring the reserve of a contingent liability as of the date of these consolidated financial statements. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2017 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 14—Subsequent events On January 5, 2018 , the Company entered into a purchase and sale agreement to sell approximately 8,600 undeveloped net acres and 12 gross producing wells located in Reeves County, Texas for a total sale price of $140.7 million , subject to certain post-closing adjustments. The divested acreage represents a largely non-operated position (average 32% WI) on the western portion of Centennial’s position in Reeves County. The net book value of the properties being sold approximates the sales price as of December 31, 2017, which primarily consists of oil and gas properties and property, plant and equipment included in the Consolidated Balance Sheet. The transaction is expected to close on March 1, 2018 . On February 8, 2018 , the Company completed the acquisition of approximately 4,000 undeveloped net acres, as well as certain producing properties, in the Northern Delaware Basin in Lea County, New Mexico for an unadjusted purchase price of $94.7 million . The operated acreage position contains an average 95% working interest and is largely contiguous to Centennial’s existing position. Pursuant to the agreements, the Company placed $8.6 million cash in escrow accounts one business day after the signing of the agreements on December 21, 2017 and such deposits were applied as part of the payment of the purchase price upon closing of the transactions. The Company presented the cash in escrow as restricted cash within the line item Other Noncurrent Assets on the Consolidated Balance Sheet as of December 31, 2017. |
Basis of Presentation and Sum22
Basis of Presentation and Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Principles of Consolidation | Principles of Consolidation and Basis of Presentation The consolidated financial statements include the accounts of the Company and its majority owned subsidiary CRP, and CRP’s wholly-owned subsidiaries and have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and the rules and regulations of the Securities and Exchange Commission (“SEC”). All intercompany balances and transactions have been eliminated in consolidation. Noncontrolling interests represent third-party ownership in the Company’s consolidated subsidiary and is presented as a component of equity. See Note 7—Shareholders' Equity and Noncontrolling Interest for further discussion of noncontrolling interest. Certain prior period amounts have been reclassified to conform to the current presentation on the accompanying consolidated financial statements. Such reclassifications had no impact on net income, cash flows or shareholders’ equity previously reported. As a result of the Business Combination, the Company is the acquirer for accounting purposes, and CRP is the acquiree and accounting Predecessor. The Company’s financial statement presentation distinguishes CRP as an accounting “Predecessor” for periods prior to the Business Combination. The Company is the “Successor” for periods after the Business Combination, which includes consolidation of CRP subsequent to the Business Combination on October 11, 2016. The Business Combination was accounted for as a business combination using the acquisition method of accounting, and the Successor financial statements reflect a new basis of accounting that is based on the fair value of CRP’s net assets acquired. Refer to Note 2—Business Combination for further information related to the Business Combination. As a result of the application of the acquisition method of accounting as of the Business Combination, the financial statements for the Predecessor periods and for the Successor periods are presented on a different basis of accounting. |
Basis of Presentation | Basis of Presentation The consolidated financial statements include the accounts of the Company and its majority owned subsidiary CRP, and CRP’s wholly-owned subsidiaries and have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and the rules and regulations of the Securities and Exchange Commission (“SEC”). All intercompany balances and transactions have been eliminated in consolidation. Noncontrolling interests represent third-party ownership in the Company’s consolidated subsidiary and is presented as a component of equity. See Note 7—Shareholders' Equity and Noncontrolling Interest for further discussion of noncontrolling interest. Certain prior period amounts have been reclassified to conform to the current presentation on the accompanying consolidated financial statements. Such reclassifications had no impact on net income, cash flows or shareholders’ equity previously reported. As a result of the Business Combination, the Company is the acquirer for accounting purposes, and CRP is the acquiree and accounting Predecessor. The Company’s financial statement presentation distinguishes CRP as an accounting “Predecessor” for periods prior to the Business Combination. The Company is the “Successor” for periods after the Business Combination, which includes consolidation of CRP subsequent to the Business Combination on October 11, 2016. The Business Combination was accounted for as a business combination using the acquisition method of accounting, and the Successor financial statements reflect a new basis of accounting that is based on the fair value of CRP’s net assets acquired. Refer to Note 2—Business Combination for further information related to the Business Combination. As a result of the application of the acquisition method of accounting as of the Business Combination, the financial statements for the Predecessor periods and for the Successor periods are presented on a different basis of accounting. |
Use of Estimates | Use of Estimates The preparation of the Company’s consolidated financial statements requires the Company’s management to make various assumptions, judgments and estimates to determine the reported amounts of assets, liabilities, revenues and expenses, and in the disclosures of commitments and contingencies. Changes in these assumptions, judgments, and estimates will occur as a result of the passage of time and the occurrence of future events and, accordingly, actual results could differ from amounts previously established. The more significant areas requiring the use of assumptions, judgments and estimates include: (i) oil and natural gas reserves; (ii) cash flow estimates used in impairment tests of long-lived assets; (iii) depreciation, depletion and amortization; (iv) asset retirement obligations; (v) determining fair value and allocating purchase price in connection with business combinations and asset acquisitions; (vi) accrued revenue and related receivables; and (vii) accrued liabilities. |
Risks and Uncertainties | Risks and Uncertainties The prices received for oil, natural gas and NGLs production heavily influences the Company’s revenue, profitability, access to capital, future rate of growth and carrying value of our properties. Oil, natural gas and NGLs are commodities, and their prices can be volatile in response to changes in global and domestic supply and demand and market uncertainty. The Company generally funds its operations and capital expenditures with cash flow from its operations, borrowings under CRP’s revolving credit facility and offerings of debt and equity securities. The Company expects to be able to fund its operations, planned capital expenditures and working capital requirements during the next 12 months and the foreseeable future. However, continued volatility of oil and gas prices could have an adverse effect on the Company’s future business, financial condition, results of operations, operating cash flows, liquidity and quantities of oil and gas reserves that may be economically produced, which could impact the Company’s ability to comply with the financial covenants under CRP’s credit facility and limit further borrowings to fund capital expenditures and potential acquisitions. Additionally, if forward prices decline, the Company could incur additional impairment of its oil and gas assets. |
Cash and Cash Equivalents and Restricted Cash | Cash and Cash Equivalents and Restricted Cash The Company considers all highly liquid instruments with an original maturity of three months or less at the time of issuance to be cash equivalents. The carrying value of cash and cash equivalents approximates fair value because of the short-term maturity of these investments. From time to time, the Company is required to maintain cash in separate accounts, the use of which, is restricted by the terms of contracted arrangements. Such amounts are included in Other Noncurrent Assets on the Consolidated Balance Sheets. |
Accounts Receivable | Accounts Receivable Accounts receivable consists mainly of receivables from oil and natural gas purchasers and from joint interest owners on properties the Company operates. For receivables from joint interest owners, the Company typically has the ability to withhold future revenue disbursements to recover non-payment of joint interest billings. Accordingly, oil and natural gas receivables are collected, and the Company has minimal bad debts. Although diversified among many companies, collectability is dependent upon the financial wherewithal of each individual company and is influenced by the general economic conditions of the industry. Receivables are not collateralized. The Company establishes an allowance for doubtful accounts equal to the estimable portions of accounts receivable for which failure to collect is probable. |
Oil and Natural Gas Properties | Oil and Natural Gas Properties The Company’s oil and natural gas producing activities are accounted for using the successful efforts method of accounting. Under the successful efforts method, the costs incurred to acquire, drill, and complete productive development wells are capitalized. Oil and gas lease acquisition costs are also capitalized. Exploration costs, including personnel and other internal costs, geological and geophysical expenses, delay rentals for gas and oil leases, and costs associated with unsuccessful lease acquisitions are charged to expense as incurred. Costs of drilling exploratory wells are initially capitalized but are charged to expense if the well is determined to be unsuccessful. Costs to operate and maintain wells and field equipment are expensed as incurred. The Company capitalizes interest on expenditures made in connection with exploration and development projects that are not subject to current amortization. Interest is capitalized only for the period that activities are in process to bring the projects to their intended use. Capitalized interest cannot exceed interest expense for the period capitalized. The Company capitalized interest of $1.2 million during the year ended December 31, 2017. The Company did not have any capitalized interest for the periods October 11, 2016 through December 31, 2016 (Successor) and January 1, 2016 through October 10, 2016 (Predecessor) and for the year ended December 31, 2015 (Predecessor) . Proved Oil and Natural Gas Properties. Costs incurred to obtain access to proved reserves and to provide facilities for extracting, treating, gathering and storing oil, natural gas and NGLs are capitalized. All costs incurred to drill and equip successful exploratory wells, development wells, development-type stratigraphic test wells and service wells, including unsuccessful development wells, are capitalized. Capitalized costs are depleted on a unit-of production method based on proved oil and gas reserves. Net carrying values of retired, sold or abandoned properties that constitute less than a complete unit of depreciable property are charged or credited, net of proceeds, to accumulated depreciation, depletion and amortization unless doing so significantly affects the unit-of-production amortization rate, in which case a gain or loss is recognized. Gains or losses from the disposal of complete units of depreciable property are recognized to income. The Company reviews it proved oil and natural gas properties for impairment when events and circumstances indicate a possible decline in the recoverability of the carrying amount of such property. The Company estimates the expected future cash flows of its oil and natural gas properties and compares these undiscounted cash flows to the carrying amount of the oil and natural gas properties to determine if the carrying amount is recoverable. If the carrying amount exceeds the estimated undiscounted future cash flows, the Company will write down the carrying amount of the oil and natural gas properties to fair value. The factors used to determine fair value include, but are not limited to, estimates of reserves, future commodity prices, future production estimates, estimated future capital expenditures and discount rates commensurate with the risk associated with realizing the projected cash flows. There were no impairments of proved oil and natural gas properties for the year ended December 31, 2017 (Successor) , for the periods October 11, 2016 through December 31, 2016 (Successor) and January 1, 2016 through October 10, 2016 (Predecessor) and for the year ended December 31, 2015 (Predecessor) . Unproved Properties. Unproved properties consist of costs to acquire undeveloped leases as well as costs to acquire unproved reserves. Acquisition costs associated with the acquisition of non-producing leaseholds are recorded as unproved leasehold costs and capitalized as incurred. These consist of costs incurred in obtaining a mineral interest or right in a property, such as a lease in addition to options to lease, broker fees, recording fees and other similar costs related to acquiring properties. Leasehold costs are classified as unproved until proved reserves are discovered, at which time related costs are transferred to proved oil and natural gas properties. Unproved properties and the related costs are transferred to proved properties when reserves are discovered on or otherwise attributed to the property. The Company evaluates significant unproved properties for impairment based on remaining lease term, drilling results, reservoir performance, seismic interpretation or future plans to develop acreage. There was no unproved property impairment expense for the year ended December 31, 2017 (Successor) or for the period from October 11, 2016 through December 31, 2016 (Successor) . For the period from January 1, 2016, through October 10, 2016 (Predecessor) , the Predecessor recorded unproved property impairment expense of $2.5 million for leases which have expired, or were expected to expire. For the year ended December 31, 2015 (Predecessor) , the Predecessor recorded unproved property impairment expense of $7.6 million for leases which have expired, or were expected to expire. |
Other Property and Equipment | Other Property and Equipment Other property and equipment such as office furniture and equipment, buildings, vehicles, and computer hardware and software is recorded at cost. Depreciation is calculated using the straight-line method over the estimated useful lives of the assets ranging from three to twenty years. Major renewals and improvements are capitalized while expenditures for maintenance and repairs are expensed as incurred. When other property and equipment is sold or retired, the capitalized costs and related accumulated depreciation are removed from the accounts. |
Deferred Loan Costs | Deferred Loan Costs Deferred loan costs related to the Company’s revolving credit facility are included in the line item Other Noncurrent Assets on the Consolidated Balance Sheets and are stated at cost, net of amortization. These costs are amortized to interest expense on a straight-line basis over the borrowing term. Costs incurred in connection with the 5.375% Senior Notes Offering are also deferred and charged to interest expense over the term of the agreement; however, these amounts are reflected as a reduction of the related obligation in the line item Long-term Debt on the Consolidated Balance Sheets. |
Derivative Financial Instruments | Derivative Financial Instruments In order to manage its exposure to oil and natural gas price volatility, the Company opportunistically utilizes derivative transactions from time to time, including commodity swap, basis swap, collar, and other similar agreements. To the extent legal right of offset exists with a counterparty, the Company reports derivative assets and liabilities on a net basis. The Company has exposure to credit risk to the extent the counterparty is unable to satisfy its settlement obligation. The Company actively monitors the creditworthiness of counterparties and assesses the impact, if any, on its derivative position. The Company records derivative instruments on the Consolidated Balance Sheets as either an asset or liability measured at fair value and records changes in the fair value of derivatives in current earnings as they occur. The Company’s derivatives have not been designated as hedges for accounting purposes. For additional discussion on derivatives, please refer to Note 9—Derivative Instruments . |
Asset Retirement Obligations | Asset Retirement Obligations The Company recognizes an estimated liability for future costs associated with abandonment of its oil and natural gas properties. A liability for the fair value of an asset retirement obligation and corresponding increase to the carrying value of the related long-lived asset are recorded at the time a well is drilled or acquired. The fair value of the liability recognized is based on the present value of the estimated future cash outflows associated with its plug and abandonment obligations. The Company depletes the amount added to proved oil and natural gas property costs and recognizes expense in connection with the accretion of the discounted liability over the remaining estimated economic lives of the respective oil and natural gas properties. Revisions typically occur due to changes in estimated abandonment costs or well economic lives, or if federal or state regulators enact new requirements regarding the abandonment of wells. For additional discussion, please refer to Note 11—Asset Retirement Obligations . |
Revenue Recognition | Revenue Recognition The Company derives revenue primarily from the sale of produced oil, natural gas, and NGLs. Revenue is recognized when the Company’s production is delivered to the purchaser, but payment is generally received between 30 and 90 days after the date of production. No revenue is recognized unless it is determined that title to the product has transferred to the purchaser. At the end of each month, the Company estimates the amount of production delivered to the purchaser and the price the Company will receive. The Company follows the sales method of accounting for its oil and natural gas revenue, whereby revenue is recorded based on the Company’s share of volume sold, regardless of whether the Company has taken its proportional share of volume produced. A receivable or liability is recognized only to the extent that the Company has an imbalance on a specific property greater than the expected remaining proved reserves. |
Income Taxes | Income Taxes Income taxes and uncertain tax positions are accounted for in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 740, Accounting for Income Taxes (“ASC 740”). Deferred income taxes are provided for the differences between the bases of assets and liabilities for financial reporting and income tax purposes. Tax positions meeting the more-likely-than-not recognition threshold are measured pursuant to the guidance set forth in ASC 740. We routinely assess the realizability of deferred income tax assets based on several factors and a valuation allowance is established if it’s more likely that not that some portion or all of deferred income tax assets will not be realized. |
Stock Based and Incentive Unit Compensation | Stock-Based Compensation (Successor) The Company grants various types of stock-based awards including stock options, restricted stock awards and performance stock units. The Company recognizes compensation related to all stock-based awards in the financial statements based on their estimated grant-date fair value and is recognized ratably over the applicable vesting period. The fair value of stock option awards is determined using the Black-Scholes option pricing model. Stock options typically expire ten years from the grant date and have service-based vesting schedules of three years. Service-based restricted stock awards are valued using the market price of the Company’s common stock on the grant date and generally vest ratably over a three -year service period. Performance stock units are subject to market-based vesting criteria as well as a three -year service period and the grant-date fair value is estimated using a Monte Carlo valuation model. See Note 8—Stock-Based Compensation for additional information regarding the Company’s stock-based compensation. Incentive Unit Compensation (Predecessor) Pursuant to the LLC Agreement of CRP (prior to the Business Combination), certain incentive units were available to be issued to the Company’s management and employees, consisting of Tier I, Tier I A, Tier II, Tier III and Tier IV units. The incentive units were intended to be compensation for services rendered to CRP. Tier Incentive units are accounted for as liability awards under FASB ASC Topic 718, Compensation: Stock Compensation (“ASC 718”) , with compensation expense based on period-end fair value. Refer to Note 8—Stock-Based Compensation for additional information regarding the CRP’s incentive unit compensation (Predecessor). |
Earnings (Loss) Per Share | Earnings (Loss) Per Share The two-class method of computing earnings per share is required for entities that have participating securities. The two-class method is an earnings allocation formula that determines earnings per share for participating securities according to dividends declared (or accumulated) and participation rights in undistributed earnings. Basic earnings per share (“EPS”) is calculated by dividing net income available to common shareholders by the weighted average shares outstanding during each period. Dilutive EPS is calculated by dividing adjusted 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 EPS calculation consists of (i) unvested restricted stock and performance stock units, outstanding stock options and warrants using the treasury stock method, and (ii) the Company’s Class C common stock using the “if-converted” method, which is net of tax. Shares of the Company’s unvested restricted stock and performance stock units are eligible to receive dividends; however, dividend rights will be forfeited if the award does not vest. Accordingly, these shares are not considered participating securities. Shares of the Company’s Class C Common Stock and warrants do not share in earnings or losses and are therefore not participating securities as well. In addition, the Company’s shares of Series B Preferred Stock were converted into shares of Class A Common Stock on May 25, 2017 as a result of shareholder vote. |
Segment Reporting | Segment Reporting The Company operates in only one industry segment which is the exploration and production of oil and natural gas. All of its operations are conducted in one geographic area of the United States. All revenues are derived from customers located in the United States. |
Recently Issued Accounting Standards | Recently Issued Accounting Standards In January 2017, the FASB issued Accounting Standards Update (“ASU”) 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business . This update affects all reporting entities and the objective of the guidance is to assist with evaluation of whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The mandatory effective date for this update is for financial statements issued for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. The amendments should be applied prospectively on or after the effective date and disclosures are not required at transition. Early adoption is permitted for transactions for which the acquisition date occurs before the issuance date or effective date of the amendments, only when the transaction has not been reported in financial statements that have been issued or made available for issuance. The Company early adopted ASU 2017-01 in the second quarter of 2017. Refer to Note 3—Property Acquisitions for details of the GMT Acquisition. In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows: Restricted Cash . This update applies to all entities that are required to present a statement of cash flows. This update expands the statement of cash flows to explain changes in restricted cash as well cash and cash equivalents. This update will be effective for financial statements issued for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years with early adoption permitted. This update should be applied using the retrospective transition method. The Company early adopted ASU 2016-18 in the fourth quarter of 2017 and the only impact was related to presentation. Refer to the Consolidated Statements of Cash Flows for presentation. In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows: Classification of Certain Cash Receipts and Cash Payments . This update applies to all entities that are required to present a statement of cash flows. This update provides guidance on eight specific cash flow issues: debt prepayment or debt extinguishment costs, settlement of zero-coupon debt instruments or other debt instruments with coupon interest rates that are insignificant in relation to the effective interest rate of the borrowing, contingent consideration payments made after a business combination, proceeds from the settlement of insurance claims, proceeds from the settlement of corporate-owned life insurance policies, including bank-owned life insurance policies, distributions received from equity method investees, beneficial interests in securitization transactions and separately identifiable cash flows and application of the predominance principle. This update will be effective for financial statements issued for fiscal years beginning after December 31, 2017, including interim periods within those fiscal years with early adoption permitted. This update should be applied using the retrospective transition method. Adoption of this standard will only affect the presentation of the Company’s statements of cash flows and will not have a material impact on its consolidated financial statements. In March 2016, the FASB issued ASU 2016-09, Compensation-Stock Compensation . This update applies to all entities that issue equity-based payment awards to their employees. Under this update, there were several areas that were simplified including the income tax consequences, classification of awards as either equity or liabilities and classification on the statement of cash flows. This update will be effective for financial statements issued for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years with early adoption permitted. The Company elected to early adopt this guidance in October 2016 in conjunction with the issuance of its equity awards. In February 2016, the FASB issued ASU 2016-02, Leases, which created Topic ASC 842, Leases (“Topic ASC 842”), superseding current lease requirements under Topic ASC 840. S ubsequently, in January 2018, the FASB issued ASU 2018-01, which provides a practical expedient to the evaluation of existing land easement agreements under ASU 2016-02. ASU 2016-02 and its amendments applies to any entity that enters into a lease, with some specified scope exemptions. Under Topic ASC 842, a lessee should recognize in the statement of financial position a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term. While there were no major changes to the lessor accounting, changes were made to align key aspects with the revenue recognition guidance. Topic ASC 842 will be effective for public entities for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years, with early adoption permitted. Entities will be required to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach. Although the Company is still in the process of evaluating the effect of adopting ASU 2016-02 and related amendments, the adoption is expected to result in the recognition of assets and liabilities on its Consolidated Balance Sheet for current operating leases. The Company is evaluating existing arrangements to determine if they qualify for lease accounting under Topic ASC 842. In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers , which supersedes the revenue recognition requirements in ASC Topic 605, Revenue Recognition , and most industry-specific guidance. The FASB subsequently issued various ASUs which deferred the effective date of ASU 2014-09 and provided additional implementation guidance. ASU 2014-09 and its amendments provides companies with a single model for use in accounting for revenue arising from contracts with customers and supersedes current revenue recognition guidance, including industry-specific revenue guidance. The core principle of the model is to recognize revenue when control of the goods or services transfers to the customer, as opposed to recognizing revenue when the risks and rewards transfer to the customer under the existing revenue guidance. In addition, new qualitative and quantitative disclosure requirements aim to enable financial statement users to understand the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. ASU 2014-09 and its amendments are effective for fiscal years, and interim periods within those years, beginning after December 15, 2017. The standards permit retrospective application using either of the following methodologies: (i) restatement of each prior reporting period presented or (ii) recognition of a cumulative-effect adjustment as of the date of initial application. The Company has selected the modified retrospective method and has adopted this guidance as of January 1, 2018, the effective date. The Company has substantially completed its review of the impact of the new standard on its significant contracts. However, the Company will finalize the adoption of ASU No. 2014-09 during the first quarter of 2018, but at this time, management does not believe there will be a material impact to net income or cash flows upon adoption of the new standard. Where the Company delivers raw gas to midstream processing companies and retains control of its natural gas and plant products until tailgate of the plant, the cost of such processing will continue to be reflected in the Company’s gathering, processing and transportation expenses as has been our practice historically. The Company has evaluated the expected disclosure requirements, changes to relevant business practices, accounting policies and control activities as a result of the adoption of the ASU and does not expect a material quantitative impact to the Company's consolidated financial statements, other than additional disclosures. Additionally, the Company will account for any gas imbalances based on the entitlement method rather than the sales method. This change will not have impact on the Company’s results of operations or financial position in 2018. |
Basis of Presentation and Sum23
Basis of Presentation and Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Concentration Risk, Percentage of Sales | The Company normally sells production to a relatively small number of customers, as is customary in its business. The table below presents percentages by purchaser that accounted for 10% or more of our total oil, natural gas and NGL sales for each year as presented: Year Ended December 31, 2017 Shell Trading (US) Company 33 % BP America 16 % Eagleclaw Midstream Ventures, LLC 14 % Year Ended December 31, 2016 Plains Marketing, LP 48 % Shell Trading (US) Company 22 % Permian Transport and Trading 11 % Year Ended December 31, 2015 Plains Marketing, LP 64 % |
Schedule of Earnings Per Share, Basic and Diluted | The following table reflects the allocation of net income to common stockholders and EPS computations for the periods indicated based on a weighted average number of common stock outstanding for the period: Successor Year Ended December 31, 2017 October 11, 2016 (in thousands, except per share data) Net income (loss) attributable to common shareholders $ 75,568 $ (8,081 ) Add: Income from conversion of Class C Common Stock — — Less: Loss allocable to participating securities — (46 ) Adjusted net income (loss) attributable to common shareholders $ 75,568 $ (8,035 ) Basic net earnings (loss) per share $ 0.32 $ (0.05 ) Diluted net earnings (loss) per share $ 0.32 $ (0.05 ) Basic weighted average share outstanding 235,447 165,684 Add: Dilutive effect of potential common shares 4,307 — Diluted weighted average shares outstanding 239,754 165,684 |
Business Combination (Tables)
Business Combination (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Business Combinations [Abstract] | |
Schedule of Business Acquisitions, by Acquisition | The purchase price consideration for the Business Combination was as follows: (in thousands) October 11, 2016 Purchase price consideration: Cash $ 1,186,744 Repayment of CRP long-term debt (1) 189,000 Total purchase price consideration 1,375,744 Fair value of non-controlling interest (2) 184,779 Total purchase price consideration and fair value of non-controlling interest $ 1,560,523 (1) Represents the additional contribution made by Silver Run to CRP in exchange for CRP Common Units to repay CRP’s outstanding indebtedness at the Closing Date. (2) Represents the fair value of the non-controlling interest (“NCI”) attributable to the Centennial Contributors. NCI is the portion of equity (net assets) in a subsidiary not attributable, directly or indirectly, to Silver Run. In a business combination the NCI is recognized at its acquisition date fair value. The fair value of the NCI at the Closing represented an 11% membership interest in CRP. The assets include four operated producing horizontal wells and approximately 1,580 net acres that directly offset the Company’s existing acreage in Reeves County, Texas. Predecessor (in thousands) June 3, 2016 Cash consideration $ 32,979 Fair value of assets and liabilities acquired: Proved oil and natural gas properties 15,374 Unproved oil and natural gas properties 18,071 Total fair value of oil and natural gas properties acquired 33,445 Revenue Suspense (400 ) Asset retirement obligation (66 ) Total fair value of net assets acquired $ 32,979 |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The following table summarizes the allocation of the purchase price to the assets acquired and liabilities assumed: (in thousands) October 11, 2016 Fair value of assets acquired: Other current assets $ 13,341 Derivative instruments 1,052 Oil and natural gas properties: Proved properties 444,551 Unproved properties 1,138,423 Other property and equipment 1,764 Goodwill — Total fair value of assets acquired 1,599,131 Fair value of liabilities assumed: Accounts payable and accrued expenses 30,156 Other current liabilities 63 Derivative instruments 3,400 Asset retirement obligation 4,989 Fair value of net assets acquired $ 1,560,523 The table below summarizes the allocation of the $867.8 million adjusted purchase price, based on the acquisition date fair value of the assets acquired and the liabilities assumed as of December 31, 2017 : (in thousands) Silverback Acquisition Purchase price $ 867,772 Allocation of purchase price: Unproved properties 753,763 Proved properties 116,700 Other property and equipment 56 Liabilities (2,747 ) Total $ 867,772 |
Business Acquisition, Pro Forma Information | The pro forma condensed combined financial information has been included for comparative purposes and is not necessarily indicative of the results that might have actually occurred had the Business Combination taken place on January 1, 2015; furthermore, the financial information is not intended to be a projection of future results. (Unaudited Pro Forma) Year Ended December 31, (in thousands) 2016 2015 Total net revenues $ 98,833 $ 90,460 Total operating expenses 86,490 123,702 Net income (loss) attributable to common shareholders 1,666 (6,397 ) Basic and diluted net income (loss) per share $ 0.01 $ (0.04 ) |
Property Acquisitions (Tables)
Property Acquisitions (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Business Combinations [Abstract] | |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The following table summarizes the allocation of the purchase price to the assets acquired and liabilities assumed: (in thousands) October 11, 2016 Fair value of assets acquired: Other current assets $ 13,341 Derivative instruments 1,052 Oil and natural gas properties: Proved properties 444,551 Unproved properties 1,138,423 Other property and equipment 1,764 Goodwill — Total fair value of assets acquired 1,599,131 Fair value of liabilities assumed: Accounts payable and accrued expenses 30,156 Other current liabilities 63 Derivative instruments 3,400 Asset retirement obligation 4,989 Fair value of net assets acquired $ 1,560,523 The table below summarizes the allocation of the $867.8 million adjusted purchase price, based on the acquisition date fair value of the assets acquired and the liabilities assumed as of December 31, 2017 : (in thousands) Silverback Acquisition Purchase price $ 867,772 Allocation of purchase price: Unproved properties 753,763 Proved properties 116,700 Other property and equipment 56 Liabilities (2,747 ) Total $ 867,772 |
Schedule of Business Acquisitions, by Acquisition | The purchase price consideration for the Business Combination was as follows: (in thousands) October 11, 2016 Purchase price consideration: Cash $ 1,186,744 Repayment of CRP long-term debt (1) 189,000 Total purchase price consideration 1,375,744 Fair value of non-controlling interest (2) 184,779 Total purchase price consideration and fair value of non-controlling interest $ 1,560,523 (1) Represents the additional contribution made by Silver Run to CRP in exchange for CRP Common Units to repay CRP’s outstanding indebtedness at the Closing Date. (2) Represents the fair value of the non-controlling interest (“NCI”) attributable to the Centennial Contributors. NCI is the portion of equity (net assets) in a subsidiary not attributable, directly or indirectly, to Silver Run. In a business combination the NCI is recognized at its acquisition date fair value. The fair value of the NCI at the Closing represented an 11% membership interest in CRP. The assets include four operated producing horizontal wells and approximately 1,580 net acres that directly offset the Company’s existing acreage in Reeves County, Texas. Predecessor (in thousands) June 3, 2016 Cash consideration $ 32,979 Fair value of assets and liabilities acquired: Proved oil and natural gas properties 15,374 Unproved oil and natural gas properties 18,071 Total fair value of oil and natural gas properties acquired 33,445 Revenue Suspense (400 ) Asset retirement obligation (66 ) Total fair value of net assets acquired $ 32,979 |
Accounts Receivable, Accounts26
Accounts Receivable, Accounts Payable and Accrued Expenses (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Accounts, Notes, Loans and Financing Receivable | Accounts receivable are comprised of the following: (in thousands) December 31, 2017 December 31, 2016 Oil and natural gas $ 52,891 $ 11,596 Joint interest billings 25,256 2,942 Other 639 196 Accounts receivable, net $ 78,786 $ 14,734 |
Schedule of Accounts Payable and Accrued Liabilities | Accounts payable and accrued expenses are comprised of the following: (in thousands) December 31, 2017 December 31, 2016 Accounts payable $ 64,004 $ 11,210 Accrued capital expenditures 90,511 24,038 Revenues payable 23,390 3,815 Accrued employee compensation and benefits 8,350 4,221 Accrued interest 1,936 230 Payable to Silverback — 32,293 Accrued underwriting fees — 7,719 Other 11,342 2,574 Accounts payable and accrued expenses $ 199,533 $ 86,100 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Schedule of Components of Income Tax Expense (Benefit) | Income tax expenses and benefits included in the consolidated statements of operations are detailed below: Successor Predecessor Year Ended December 31, 2017 October 11, 2016 January 1, 2016 Year Ended December 31, 2015 (in thousands) Current taxes Federal $ — $ — $ — $ — State — — — — — — — — Deferred taxes Federal (26,713 ) — — — State (3,217 ) — 406 572 (29,930 ) — 406 572 Income tax benefit (expense) $ (29,930 ) $ — $ 406 $ 572 |
Schedule of Effective Income Tax Rate Reconciliation | A reconciliation of the statutory federal income tax expense to the income tax expense or benefit from continuing operations provided at December 31, 2017 , is as follows: Successor Predecessor Year Ended December 31, 2017 October 11, 2016 January 1, 2016 Year Ended December 31, 2015 (in thousands) Income tax (expense) benefit at the federal statutory rate $ (39,720 ) $ 3,145 $ — $ — State income tax (expense) benefit - net of federal income tax benefits (2,788 ) — 406 572 Change in Federal tax rate (net of state benefit and VA) 4,425 — — — Excess depletion — — — — Noncontrolling interest in partnership 2,795 (273 ) — — Equity based compensation 241 — — — Nondeductible expenses (31 ) (4 ) — — Change in valuation allowance 5,148 (2,868 ) — — Other — — — — Income tax benefit (expense) $ (29,930 ) $ — $ 406 $ 572 |
Schedule of Deferred Tax Assets and Liabilities | The tax effects of temporary differences that give rise to significant positions of the deferred income tax assets and liabilities are presented below: (in thousands) December 31, 2017 December 31, 2016 Deferred tax assets: Net operating loss carryforwards $ 88,968 $ 2,590 Capitalized intangible drilling cost 5,137 10,314 Equity-based compensation 2,631 467 Other assets 288 291 Total deferred tax assets 97,024 13,662 Deferred tax liabilities: Investment in Centennial Resource Production, LLC (106,923 ) (8,514 ) Other liabilities — — Total deferred tax liabilities (106,923 ) (8,514 ) Valuation allowance — (5,148 ) Net deferred tax asset (liabilities) $ (9,899 ) $ — |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of Compensation Cost for Share-based Payment Arrangements, Allocation of Share-based Compensation Costs by Plan | Year Ended December 31, 2017 October 11, 2016 (in thousands) Restricted stock awards $ 5,008 $ 405 Stock option awards 8,160 928 Performance Stock Units 591 — Total stock-based compensation expense $ 13,759 $ 1,333 |
Nonvested Restricted Stock Shares Activity | The following table provides information about restricted stock awards outstanding during the year ended December 31, 2017 : Awards Weighted Average Grant-Date Fair Value Unvested balance as of December 31, 2016 256,597 $ 20.03 Granted 902,111 $ 17.33 Vested (137,177 ) $ 19.98 Forfeited (11,815 ) $ 18.29 Unvested balance as of December 31, 2017 1,009,716 $ 17.64 |
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions | The following table summarizes the assumptions and related information used to determine the grant-date fair value of stock options awarded during the year ended December 31, 2017 : Year Ended December 31, 2017 October 11, 2016 through December 31, 2016 Weighted average grant-date fair value per share $ 7.15 $ 5.93 Expected term (in years) 6 6 Expected stock volatility 38 % 40 % Dividend yield — % — % Risk-free interest rate 2.0 % 1.5 % |
Schedule of Share-based Compensation, Stock Options, Activity | The following table provides information about stock option awards outstanding during the year ended December 31, 2017 : Options Weighted Average Exercise Price Weighted Average Remaining Term (in years) Aggregate Intrinsic Value (in thousands) Outstanding as of December 31, 2016 2,735,500 $ 14.67 Granted 1,884,500 $ 18.02 Exercised (58,499 ) $ 15.02 Forfeited (279,000 ) $ 14.54 Outstanding as of December 31, 2017 4,282,501 $ 16.15 9.0 $ 15,633 Exercisable as of December 31, 2017 760,997 $ 14.67 8.8 $ 3,907 |
Schedule of Share-based Payment Award, Equity Instruments Other Than Options, Valuation Assumptions | The following table summarizes the key assumptions and related information used to determine the grant-date fair value of performance stock units awarded during the year ended December 31, 2017 : Year Ended December 31, 2017 Number of simulations 1,000,000 Expected stock volatility 41.6 % Dividend yield — % Risk-free interest rate 1.5 % |
Share-based Compensation, Performance Shares Award Outstanding Activity | The following table provides information about performance stock units outstanding during the year ended December 31, 2017 : Awards Weighted Average Grant-Date Fair Value Unvested balance as of December 31, 2016 — $ — Granted 193,391 $ 21.53 Vested — $ — Forfeited — $ — Unvested balance as of December 31, 2017 193,391 $ 21.53 |
Derivative Instruments (Tables)
Derivative Instruments (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Derivative Instruments | The following table summarizes the approximate volumes and average contract prices of swap contracts the Company had in place as of December 31, 2017 : Period Volume (Bbl) Weighted Average Differential ($/Bbl) (1) Crude oil basis swaps January 2018 - June 2018 905,000 $ 0.18 January 2018 - December 2018 1,825,000 $ 0.00 (1) The oil basis swap transactions are settled based on the difference between the arithmetic average of the ARGUS MIDLAND WTI and ARGUS WTI CUSHING settlements, during the relevant calculation period. Period Volume (MMBtu) Weighted Average Differential ($/MMBtu) (1) Natural gas basis swaps January 2018 - December 2018 1,825,000 $ (0.43 ) January 2019 - December 2019 1,825,000 $ (0.43 ) (1) The natural gas basis swap contracts are settled based on the difference between Inside FERC’s West Texas WAHA price of natural gas and the NYMEX price of Natural Gas during the relevant calculation period. |
Derivative Instruments, Gain (Loss) | The following table presents gains and losses for derivative instruments not designated as hedges for accounting purposes for the periods presented: Successor Predecessor Year Ended October 11, 2016 January 1, 2016 Year Ended (in thousands) Net gain (loss) on derivative instruments 5,138 (1,548 ) (6,838 ) 20,756 |
Schedule of Derivative Instruments in Statement of Financial Position, Fair Value | The following tables summarize the location and fair value amounts of all the Company’s derivative instruments in the Consolidated Balance Sheets, as well as the gross recognized derivative assets, liabilities and amounts offset in the Consolidated Balance Sheets: December 31, 2017 Balance Sheet Classification Gross Fair Value Asset/Liability Amounts Gross Amounts Offset (1) Net Recognized Fair Value Assets/Liabilities Derivative Assets Derivative instruments Current assets $ 720 $ (287 ) $ 433 Derivative instruments Noncurrent assets 662 — 662 Total derivative assets $ 1,382 $ (287 ) $ 1,095 Derivative Liabilities Derivative instruments Current liabilities $ 527 $ (287 ) $ 240 (1) The Company has agreements in place with all of its counterparties that allow for the financial right of offset for derivative assets and derivative liabilities at settlement or in the event of a default under the agreements or contract termination. December 31, 2016 Balance Sheet Classification Gross Fair Value Asset/Liability Amounts Gross Amounts Offset (1) Net Recognized Fair Value Assets/Liabilities Derivative Assets Derivative instruments Current assets $ 739 $ (308 ) $ 431 Derivative Liabilities Derivative instruments Current liabilities 5,669 (308 ) 5,361 Derivative instruments Noncurrent Liabilities 20 — 20 Total derivative liabilities $ 5,689 $ (308 ) $ 5,381 (1) The Company has agreements in place with all of its counterparties that allow for the financial right of offset for derivative assets and derivative liabilities at settlement or in the event of a default under the agreements or contract termination. |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Fair Value Disclosures [Abstract] | |
Fair Value, Liabilities Measured on Recurring Basis | The following table is a listing of the Company’s assets and liabilities that are measured at fair value and where they were classified within the fair value hierarchy as of December 31, 2017 and December 31, 2016 (in thousands): (in thousands) Level 1 Level 2 Level 3 Commodity derivative asset (liability), net December 31, 2017 $ — $ 855 $ — December 31, 2016 $ — $ (4,950 ) $ — |
Asset Retirement Obligations (T
Asset Retirement Obligations (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Asset Retirement Obligation Disclosure [Abstract] | |
Schedule of Asset Retirement Obligations | The following table summarizes the changes in the Company’s asset retirement obligations for the periods presented: Successor Predecessor Year Ended October 11, 2016 January 1, 2016 (in thousands) Asset retirement obligations, beginning of period 7,226 4,989 2,288 Additional liabilities incurred 2,219 2,189 240 Liabilities disposed (336 ) — — Liabilities settled (65 ) (1 ) (42 ) Accretion expense 516 49 134 Revision to estimated cash flows 2,601 — 32 Asset retirement obligations, end of period $ 12,161 $ 7,226 $ 2,652 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Future Minimum Rental Payments for Operating Leases | The following is a schedule of the Company’s future minimum lease payments with commitments that have initial or remaining non-cancelable lease terms in excess of one year as of December 31, 2017 : (in thousands) 2018 2019 2020 2021 2022 Thereafter Total Drilling rig commitments $ 19,714 $ 1,620 $ — $ — $ — $ — $ 21,334 Office leases 2,360 2,322 2,163 2,073 274 — 9,192 Water disposal agreement 1,825 1,825 1,825 1,825 — — 7,300 Purchase obligations 4,400 13,200 8,800 — — — 26,400 Transportation and gathering 2,044 2,044 — — — — 4,088 Total $ 30,343 $ 21,011 $ 12,788 $ 3,898 $ 274 $ — $ 68,314 |
Basis of Presentation and Sum33
Basis of Presentation and Summary of Significant Accounting Policies - Narrative (Details) | Oct. 07, 2016 | Feb. 29, 2016shares | Dec. 31, 2016USD ($) | Oct. 10, 2016USD ($) | Dec. 31, 2017USD ($)segmentgeographic_area | Dec. 31, 2015USD ($) | Nov. 30, 2017 | Oct. 11, 2016 |
Organization, Consolidation and Presentation of Financial Statements [Line Items] | ||||||||
Capitalized interest | $ 0 | $ 1,200,000 | ||||||
Allowance for doubtful accounts | 0 | 0 | ||||||
Impairment of proved properties | 0 | 0 | ||||||
Impairment of unproved properties | $ 0 | $ 0 | ||||||
Number of industry segments | segment | 1 | |||||||
Number of geographic areas | geographic_area | 1 | |||||||
Minimum | ||||||||
Organization, Consolidation and Presentation of Financial Statements [Line Items] | ||||||||
PP&E, useful life | 3 years | |||||||
Revenue collection period | 30 days | |||||||
Maximum | ||||||||
Organization, Consolidation and Presentation of Financial Statements [Line Items] | ||||||||
PP&E, useful life | 20 years | |||||||
Revenue collection period | 90 days | |||||||
Predecessor | ||||||||
Organization, Consolidation and Presentation of Financial Statements [Line Items] | ||||||||
Capitalized interest | $ 0 | $ 0 | ||||||
Impairment of proved properties | 0 | 0 | ||||||
Impairment of unproved properties | $ 2,500,000 | $ 7,600,000 | ||||||
Centennial Resource Production, LLC | ||||||||
Organization, Consolidation and Presentation of Financial Statements [Line Items] | ||||||||
Voting interest acquired | 89.00% | |||||||
Common Class A | IPO | Predecessor | ||||||||
Organization, Consolidation and Presentation of Financial Statements [Line Items] | ||||||||
Stock issued during period (in shares) | shares | 1 | |||||||
Warrants To Purchase Class A Common Stock, IPO | IPO | Predecessor | ||||||||
Organization, Consolidation and Presentation of Financial Statements [Line Items] | ||||||||
Warrants issued (in shares) | shares | 0.3333333333 | |||||||
2016 Long Term Incentive Plan | Stock option awards | Common Class A | ||||||||
Organization, Consolidation and Presentation of Financial Statements [Line Items] | ||||||||
Option expiration period | 10 years | |||||||
Vesting period | 3 years | |||||||
Officer | Restricted stock awards | ||||||||
Organization, Consolidation and Presentation of Financial Statements [Line Items] | ||||||||
Vesting period | 3 years | |||||||
Senior Notes | Senior Notes Due 2026 | ||||||||
Organization, Consolidation and Presentation of Financial Statements [Line Items] | ||||||||
Interest rate, stated percentage | 5.375% |
Basis of Presentation and Sum34
Basis of Presentation and Summary of Significant Accounting Policies - Credit Risk and Other Concentrations (Details) - Customer Concentration Risk - Sales Revenue, Net | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Shell Trading (US) Company | |||
Concentration Risk [Line Items] | |||
Concentration risk percent | 33.00% | 22.00% | |
BP America | |||
Concentration Risk [Line Items] | |||
Concentration risk percent | 16.00% | ||
Eagleclaw Midstream Ventures, LLC | |||
Concentration Risk [Line Items] | |||
Concentration risk percent | 14.00% | ||
Plains Marketing, LP | |||
Concentration Risk [Line Items] | |||
Concentration risk percent | 48.00% | ||
Plains Marketing, LP | Predecessor | |||
Concentration Risk [Line Items] | |||
Concentration risk percent | 64.00% | ||
Permian Transport and Trading | |||
Concentration Risk [Line Items] | |||
Concentration risk percent | 11.00% |
Basis of Presentation and Sum35
Basis of Presentation and Summary of Significant Accounting Policies - Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended |
Dec. 31, 2016 | Dec. 31, 2017 | |
Schedule of Earnings Per Share [Line Items] | ||
Net income (loss) attributable to common shareholders | $ (8,081) | $ 75,568 |
Add: Income from conversion of Class C Common Stock | 0 | 0 |
Less: Loss allocable to participating securities | (46) | 0 |
Adjusted net income (loss) attributable to common shareholders | $ (8,035) | $ 75,568 |
Basic net earnings (loss) per share (in dollars per share) | $ (0.05) | $ 0.32 |
Diluted net earnings (loss) per share (in dollars per share) | $ (0.05) | $ 0.32 |
Weighted Average Number of Shares Outstanding, Diluted [Abstract] | ||
Basic weighted average share outstanding (in shares) | 165,684,000 | 235,447,000 |
Add: Dilutive effects of equity awards (in shares) | 0 | 4,307,000 |
Diluted weighted average shares outstanding (in shares) | 165,684,000 | 239,754,000 |
Stock option awards | ||
Weighted Average Number of Shares Outstanding, Diluted [Abstract] | ||
Antidilutive securities excluded from weighted average shares-dilutive calculation (in shares) | 818,595 | |
Common Class C | ||
Weighted Average Number of Shares Outstanding, Diluted [Abstract] | ||
Antidilutive securities excluded from weighted average shares-dilutive calculation (in shares) | 18,629,340 |
Business Combination - Narrativ
Business Combination - Narrative (Details) $ in Thousands | Oct. 11, 2016USD ($)shares |
Centennial Resource Production, LLC | |
Business Acquisition [Line Items] | |
Voting interest acquired | 89.00% |
Total cash contribution | $ | $ 1,490,000 |
Cash consideration | $ | $ 1,186,744 |
Centennial Contributors | Centennial Resource Production, LLC | |
Business Acquisition [Line Items] | |
Common units outstanding (in shares) | shares | 20,000,000 |
Centennial Resource Development | Centennial Resource Production, LLC | |
Business Acquisition [Line Items] | |
Common units outstanding (in shares) | shares | 163,505,000 |
Business Combination - Purchase
Business Combination - Purchase Consideration (Details) - USD ($) $ in Thousands | Oct. 11, 2016 | Dec. 31, 2017 | Dec. 31, 2016 |
Business Acquisition [Line Items] | |||
Ownership interest of non-controlling interest | 5.70% | 7.80% | |
Centennial Resource Production, LLC | |||
Business Acquisition [Line Items] | |||
Cash consideration | $ 1,186,744 | ||
Repayment of CRP long-term de | 189,000 | ||
Total purchase price consideration | 1,375,744 | ||
Fair value of non-controlling interest | 184,779 | ||
Total purchase price consideration and fair value of non-controlling interest | $ 1,560,523 | ||
Ownership interest of non-controlling interest | 11.00% |
Business Combination - Allocati
Business Combination - Allocation of Purchase Consideration (Details) - Centennial Resource Production, LLC $ in Thousands | Oct. 11, 2016USD ($) |
Fair value of assets acquired: | |
Other current assets | $ 13,341 |
Derivative instruments | 1,052 |
Proved properties | 444,551 |
Unproved properties | 1,138,423 |
Other property and equipment | 1,764 |
Goodwill | 0 |
Total fair value of assets acquired | 1,599,131 |
Fair value of liabilities assumed: | |
Accounts payable and accrued expenses | 30,156 |
Other current liabilities | 63 |
Derivative instruments | 3,400 |
Asset retirement obligation | 4,989 |
Fair value of net assets acquired | $ 1,560,523 |
Business Combination - Pro Form
Business Combination - Pro Forma Information (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Business Acquisition [Line Items] | ||||
Incentive unit compensation | $ 0 | $ 0 | ||
Centennial Resource Production, LLC | ||||
Business Acquisition [Line Items] | ||||
Total net revenues | $ 98,833 | $ 90,460 | ||
Total operating expenses | 86,490 | 123,702 | ||
Net income (loss) attributable to common shareholders | $ 1,666 | $ (6,397) | ||
Basic net income (loss) per share (in dollars per share) | $ 0.01 | $ (0.04) | ||
Diluted net income (loss) per share (in dollars per share) | $ 0.01 | $ (0.04) | ||
Acquisition-related Costs | ||||
Business Acquisition [Line Items] | ||||
Transaction related costs | $ 18,700 | |||
Adjustment of Incentive Unit Compensation | ||||
Business Acquisition [Line Items] | ||||
Incentive unit compensation | $ 165,400 |
Property Acquisitions - Narrati
Property Acquisitions - Narrative (Details) $ in Thousands | Jun. 08, 2017USD ($)aWells | Dec. 28, 2016USD ($)aWells | Jun. 03, 2016USD ($)aWells | Dec. 31, 2016USD ($) | Oct. 10, 2016USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2015USD ($) |
Business Acquisition [Line Items] | |||||||
Acquisition of oil and natural gas properties | $ 849,642 | $ 435,547 | |||||
Allocated to unproved properties | 1,905,661 | 1,952,680 | |||||
Allocated to proved properties | 604,022 | 1,602,002 | |||||
Payable to silverback | 32,293 | 0 | |||||
Undeveloped Acreage and Oil and Gas Producing Properties From Silverback Exploration, LLC | |||||||
Business Acquisition [Line Items] | |||||||
Number of horizontal wells acquired (in wells) | Wells | 31 | ||||||
Gas and oil area, area offset by existing acreage (in acres) | a | 35,500 | ||||||
Gas and oil area, gross offset existing acreage (in acres) | a | 43,500 | ||||||
Gas and oil area, operated by company, percent | 90.00% | ||||||
Gas and oil area, working interest, percent | 90.00% | ||||||
Purchase price | $ 855,000 | 867,772 | |||||
Payable to silverback | $ 32,293 | ||||||
Adjustment to provisional amounts | 300 | ||||||
Proved oil and natural gas properties | $ 116,700 | ||||||
Predecessor | |||||||
Business Acquisition [Line Items] | |||||||
Acquisition of oil and natural gas properties | $ 55,564 | $ 43,223 | |||||
Predecessor | Unproved And Proved Properties In The Delaware Basin | |||||||
Business Acquisition [Line Items] | |||||||
Number of horizontal wells acquired (in wells) | Wells | 4 | ||||||
Cash consideration | $ 32,979 | ||||||
Proved oil and natural gas properties | $ 15,374 | ||||||
Undeveloped net acres acquired | a | 1,580 | ||||||
Northern Delaware Basin | |||||||
Business Acquisition [Line Items] | |||||||
Number of horizontal wells acquired (in wells) | Wells | 36 | ||||||
Gas and oil area, area offset by existing acreage (in acres) | a | 11,850 | ||||||
Gas and oil area, gross offset existing acreage (in acres) | a | 14,770 | ||||||
Acquisition of oil and natural gas properties | $ 350,100 | ||||||
Gas and oil area, operated by company, percent | 79.00% | ||||||
Gas and oil area, working interest, percent | 85.00% | ||||||
Allocated to proved properties | $ 53,200 | ||||||
Transaction costs | 500 | ||||||
Northern Delaware Basin | Scenario, Previously Reported | |||||||
Business Acquisition [Line Items] | |||||||
Acquisition of oil and natural gas properties | 350,000 | ||||||
Northern Delaware Basin | Restatement Adjustment | |||||||
Business Acquisition [Line Items] | |||||||
Acquisition of oil and natural gas properties | (100) | ||||||
Allocated to unproved properties | $ 296,900 |
Property Acquisitions - Silberb
Property Acquisitions - Silberback Acquisition, Schedule of Assets Acquired and Liabilities Assumed (Details) - Undeveloped Acreage and Oil and Gas Producing Properties From Silverback Exploration, LLC - USD ($) $ in Thousands | Dec. 28, 2016 | Dec. 31, 2017 |
Business Acquisition [Line Items] | ||
Purchase price | $ 855,000 | $ 867,772 |
Unproved properties | 753,763 | |
Proved properties | 116,700 | |
Other property and equipment | 56 | |
Liabilities | $ (2,747) |
Property Acquisitions - Reeves
Property Acquisitions - Reeves County, Texas Purchase Price Allocation (Details) - Predecessor - Unproved And Proved Properties In The Delaware Basin $ in Thousands | Jun. 03, 2016USD ($) |
Business Acquisition [Line Items] | |
Cash consideration | $ 32,979 |
Fair value of assets and liabilities acquired: | |
Proved oil and natural gas properties | 15,374 |
Unproved oil and natural gas properties | 18,071 |
Total fair value of oil and natural gas properties acquired | 33,445 |
Revenue Suspense | (400) |
Asset retirement obligation | (66) |
Total fair value of net assets acquired | $ 32,979 |
Accounts Receivable, Accounts43
Accounts Receivable, Accounts Payable and Accrued Expenses - Schedule of Receivables (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Oil and natural gas | $ 52,891 | $ 11,596 |
Joint interest billings | 25,256 | 2,942 |
Other | 639 | 196 |
Accounts receivable, net | $ 78,786 | $ 14,734 |
Accounts Receivable, Accounts44
Accounts Receivable, Accounts Payable and Accrued Expenses - Schedule of Payables and Accrued Expenses (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Accounts payable | $ 64,004 | $ 11,210 |
Accrued capital expenditures | 90,511 | 24,038 |
Revenues payable | 23,390 | 3,815 |
Accrued employee compensation and benefits | 8,350 | 4,221 |
Accrued interest | 1,936 | 230 |
Payable to Silverback | 0 | 32,293 |
Accrued underwriting fees | 0 | 7,719 |
Other | 11,342 | 2,574 |
Accounts payable and accrued expenses | $ 199,533 | $ 86,100 |
Long-Term Debt - Narrative (Det
Long-Term Debt - Narrative (Details) | Nov. 30, 2017USD ($) | Dec. 28, 2016redetermination | Dec. 31, 2017USD ($) | Nov. 02, 2017USD ($) | Nov. 01, 2017USD ($) |
Revolving Credit Facility | Line of Credit | |||||
Debt Instrument [Line Items] | |||||
Borrowing base amount | $ 475,000,000 | $ 575,000,000 | $ 350,000,000 | ||
Outstanding amount | 0 | ||||
Remaining borrowing capacity | 474,100,000 | ||||
Number of optional borrowing base redeterminations | redetermination | 2 | ||||
Borrowing base redeterminations, automatic decrease in borrowing capacity unless waived by lenders | 25.00% | ||||
Revolving Credit Facility | Line of Credit | Minimum | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, covenant, minimum current ratio | 1 | ||||
Revolving Credit Facility | Line of Credit | Maximum | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, covenant, maximum leverage ratio | 4 | ||||
Letter of Credit | Line of Credit | |||||
Debt Instrument [Line Items] | |||||
Amount available to issue letters of credit | 15,000,000 | ||||
Letters of credit outstanding | $ 900,000 | ||||
Senior Notes Due 2026 | Senior Notes | |||||
Debt Instrument [Line Items] | |||||
Long-term debt | $ 400,000,000 | ||||
Interest rate, stated percentage | 5.375% | ||||
Proceeds from borrowings | $ 390,764,000 | ||||
Debt issuance costs | $ 9,000,000 | ||||
Percentage of principal amount, eligible to be redeemed | 35.00% | ||||
Percentage of principal amount, redeemable | 65.00% | ||||
Percentage of principal amount, changes in control | 101.00% | ||||
Percentage of principal amount, event of default | 25.00% | ||||
Senior Notes Due 2026 | Redemption Period One | Senior Notes | |||||
Debt Instrument [Line Items] | |||||
Redemption price percentage | 105.375% | ||||
Senior Notes Due 2026 | Redemption Period Two | Senior Notes | |||||
Debt Instrument [Line Items] | |||||
Redemption price percentage | 102.688% | ||||
Senior Notes Due 2026 | Redemption Period Three | Senior Notes | |||||
Debt Instrument [Line Items] | |||||
Redemption price percentage | 101.344% | ||||
Senior Notes Due 2026 | Redemption Period Four | Senior Notes | |||||
Debt Instrument [Line Items] | |||||
Redemption price percentage | 100.00% |
Income Taxes - Schedule of Inco
Income Taxes - Schedule of Income Tax Expense and Benefits (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | |
Dec. 31, 2016 | Oct. 10, 2016 | Dec. 31, 2017 | Dec. 31, 2015 | |
Current taxes | ||||
Federal | $ 0 | $ 0 | ||
State | 0 | 0 | ||
Current taxes | 0 | 0 | ||
Deferred taxes | ||||
Federal | 0 | (26,713) | ||
State | 0 | (3,217) | ||
Deferred taxes | 0 | (29,930) | ||
Income tax benefit (expense) | $ 0 | $ (29,930) | ||
Predecessor | ||||
Current taxes | ||||
Federal | $ 0 | $ 0 | ||
State | 0 | 0 | ||
Current taxes | 0 | 0 | ||
Deferred taxes | ||||
Federal | 0 | 0 | ||
State | 406 | 572 | ||
Deferred taxes | 406 | 572 | ||
Income tax benefit (expense) | $ 406 | $ 572 |
Income Taxes - Effective Income
Income Taxes - Effective Income Tax Rate Reconciliation (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | |
Dec. 31, 2016 | Oct. 10, 2016 | Dec. 31, 2017 | Dec. 31, 2015 | |
Income Tax [Line Items] | ||||
Income tax (expense) benefit at the federal statutory rate | $ 3,145 | $ (39,720) | ||
State income tax (expense) benefit - net of federal income tax benefits | 0 | (2,788) | ||
Change in Federal tax rate (net of state benefit and VA) | 0 | 4,425 | ||
Excess depletion | 0 | 0 | ||
Noncontrolling interest in partnership | (273) | 2,795 | ||
Equity based compensation | 0 | 241 | ||
Nondeductible expenses | (4) | (31) | ||
Change in valuation allowance | (2,868) | 5,148 | ||
Other | 0 | 0 | ||
Income tax benefit (expense) | $ 0 | $ (29,930) | ||
Predecessor | ||||
Income Tax [Line Items] | ||||
Income tax (expense) benefit at the federal statutory rate | $ 0 | $ 0 | ||
State income tax (expense) benefit - net of federal income tax benefits | 406 | 572 | ||
Change in Federal tax rate (net of state benefit and VA) | 0 | 0 | ||
Excess depletion | 0 | 0 | ||
Noncontrolling interest in partnership | 0 | 0 | ||
Equity based compensation | 0 | 0 | ||
Nondeductible expenses | 0 | 0 | ||
Change in valuation allowance | 0 | 0 | ||
Other | 0 | 0 | ||
Income tax benefit (expense) | $ 406 | $ 572 |
Income Taxes - Components of De
Income Taxes - Components of Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Deferred tax assets: | ||
Net operating loss carryforwards | $ 88,968 | $ 2,590 |
Capitalized intangible drilling cost | 5,137 | 10,314 |
Equity-based compensation | 2,631 | 467 |
Other assets | 288 | 291 |
Total deferred tax assets | 97,024 | 13,662 |
Deferred tax liabilities: | ||
Investment in Centennial Resource Production, LLC | (106,923) | (8,514) |
Other liabilities | 0 | 0 |
Total deferred tax liabilities | (106,923) | (8,514) |
Valuation allowance | 0 | (5,148) |
Net deferred tax asset (liabilities) | $ (9,899) | $ 0 |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) | 3 Months Ended | 12 Months Ended |
Dec. 31, 2016 | Dec. 31, 2017 | |
Income Tax [Line Items] | ||
Decrease in noncontrolling interest | $ 5,600,000 | |
Income tax benefit | 0 | $ (29,930,000) |
Valuation allowance | 5,148,000 | 0 |
Tax Benefit for Issuance of Shares to Noncontrolling Interest | ||
Income Tax [Line Items] | ||
Income tax benefit | 0 | |
Valuation allowance | $ 2,000,000 | |
Domestic Tax Authority | ||
Income Tax [Line Items] | ||
Operating loss carryforwards | 415,900,000 | |
State | ||
Income Tax [Line Items] | ||
Operating loss carryforwards | $ 82,000,000 |
Shareholders' Equity and Nonc50
Shareholders' Equity and Noncontrolling Interest - Common and Preferred Stock (Details) | Nov. 09, 2017USD ($)shares | May 25, 2017shares | May 04, 2017USD ($)$ / sharesshares | Dec. 28, 2016USD ($)shares | Oct. 11, 2016USD ($)shares | Dec. 31, 2016votedirector$ / sharesshares | Dec. 31, 2017USD ($)votedirector$ / sharesshares |
Conversion of Class B Common Stock to Class A Common Stock | |||||||
Class of Stock [Line Items] | |||||||
Stock conversion ratio | 1 | ||||||
Private Placement | |||||||
Class of Stock [Line Items] | |||||||
Proceeds from issuance of stock | $ | $ 889,600,000 | ||||||
Common Class A | |||||||
Class of Stock [Line Items] | |||||||
Common stock, number of votes per share (in votes) | vote | 1 | 1 | |||||
Common stock, threshold for election of directors | 50.00% | 50.00% | |||||
Common stock, shares outstanding (in shares) | 200,835,049 | 260,327,920 | |||||
Common Class A | Conversion of common shares from Class C to Class A | |||||||
Class of Stock [Line Items] | |||||||
Conversion of common shares (in shares) | 3,494,583 | ||||||
Income tax benefit | $ | $ 20,000,000 | ||||||
Perferred stock conversion ratio | 1 | ||||||
Common Class A | Conversion of Class B Preferred Stock to Class A Common Stock | |||||||
Class of Stock [Line Items] | |||||||
Conversion of common shares (in shares) | 26,100,000 | ||||||
Common Class A | Public Offering | |||||||
Class of Stock [Line Items] | |||||||
Stock issued during period (in shares) | 25,000,000 | ||||||
Proceeds from issuance of stock | $ | $ 0 | ||||||
Common Class A | Subscription Agreements | |||||||
Class of Stock [Line Items] | |||||||
Stock issued during period (in shares) | 23,500,000 | ||||||
Proceeds from issuance of stock | $ | $ 340,800,000 | ||||||
Purchase price (in dollars per share) | $ / shares | $ 14.50 | ||||||
Common Class A | Private Placement | |||||||
Class of Stock [Line Items] | |||||||
Proceeds from issuance of stock | $ | $ 1,000,000,000 | ||||||
Common Class A | Private Placement | Affiliates of Riverstone Investment Group, LLC | |||||||
Class of Stock [Line Items] | |||||||
Stock issued during period (in shares) | 3,473,590 | ||||||
Common Class A | Private Placement | Other Investors | |||||||
Class of Stock [Line Items] | |||||||
Stock issued during period (in shares) | 33,012,380 | ||||||
Common Class A | Private Placement | Riverstone Centennial Holdings, L.P. | |||||||
Class of Stock [Line Items] | |||||||
Stock issued during period (in shares) | 81,005,000 | ||||||
Common Class A | Private Placement | Other Accredited Investors | |||||||
Class of Stock [Line Items] | |||||||
Stock issued during period (in shares) | 20,000,000 | ||||||
Series B Preferred Stock | |||||||
Class of Stock [Line Items] | |||||||
Preferred stock, shares outstanding (in shares) | 104,400 | 0 | |||||
Series B Preferred Stock | Conversion of Class B Preferred Stock to Class A Common Stock | |||||||
Class of Stock [Line Items] | |||||||
Conversion of common shares (in shares) | 104,400 | ||||||
Series B Preferred Stock | Conversion of Series B Preferred Stock to Class A Common Stock | |||||||
Class of Stock [Line Items] | |||||||
Perferred stock conversion ratio | 250 | ||||||
Series B Preferred Stock | Private Placement | Affiliates of Riverstone Investment Group, LLC | |||||||
Class of Stock [Line Items] | |||||||
Stock issued during period (in shares) | 104,400 | ||||||
Common Class C | |||||||
Class of Stock [Line Items] | |||||||
Common stock, shares outstanding (in shares) | 19,155,921 | 15,661,338 | |||||
Common Class C | Centennial Contributors | |||||||
Class of Stock [Line Items] | |||||||
Stock issued during period (in shares) | 20,000,000 | ||||||
Series A Preferred Stock | |||||||
Class of Stock [Line Items] | |||||||
Preferred stock, number of directed nominated and elected | director | 1 | 1 | |||||
Preferred stock, shares outstanding (in shares) | 1 | 1 | |||||
Series A Preferred Stock | Centennial Resource Development | |||||||
Class of Stock [Line Items] | |||||||
Preferred stock, shares outstanding (in shares) | 1 | 1 | |||||
Preferred stock, liquidation preference per share (in dollars per share) | $ / shares | $ 0.0001 | $ 0.0001 | |||||
Preferred stock, redemption terms, threshold for CRP common units and/or shares of Class A common shares | 5,000,000 | 5,000,000 |
Shareholders' Equity and Nonc51
Shareholders' Equity and Noncontrolling Interest - Warrants (Details) - $ / shares | Mar. 01, 2017 | Dec. 31, 2017 |
Class of Warrant or Right [Line Items] | ||
Warrants, expiration period | 5 years | |
Public Warrants | ||
Class of Warrant or Right [Line Items] | ||
Warrant exercise price (in dollars per share) | $ 0.01 | |
Warrant, cashless exercise, average common stock price per share (in dollars per share) | $ 11.50 | |
Warrants To Purchase Class A Common Stock, Private Placement | ||
Class of Warrant or Right [Line Items] | ||
Warrants outstanding (in shares) | 8,000,000 | |
Warrants To Purchase Class A Common Stock, Silver Run | ||
Class of Warrant or Right [Line Items] | ||
Warrants, number of class A shares per warrant (in shares) | 1 | |
Common Class A | Common Stock | ||
Class of Warrant or Right [Line Items] | ||
Warrants exercised (in shares) | 6,235,790 |
Shareholders' Equity and Nonc52
Shareholders' Equity and Noncontrolling Interest - Noncontrolling Interest (Details) | Dec. 31, 2017 | Dec. 31, 2016 | Oct. 10, 2016 |
Noncontrolling Interest [Line Items] | |||
Ownership interest of non-controlling interest | 5.70% | 7.80% | |
Predecessor | |||
Noncontrolling Interest [Line Items] | |||
Acquired noncontrolling interest percentage | 10.90% |
Shareholders' Equity and Nonc53
Shareholders' Equity and Noncontrolling Interest - Owners' Equity (Predecessor) (Details) | Oct. 10, 2016USD ($) | Dec. 31, 2016USD ($)class | Oct. 10, 2016USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2015USD ($) |
Class of Stock [Line Items] | |||||
Incentive unit compensation | $ 0 | $ 0 | |||
Predecessor | |||||
Class of Stock [Line Items] | |||||
Number of classes of membership interests | class | 2 | ||||
Incentive unit compensation | $ 165,394,000 | $ 0 | |||
Deemed contribution from payment of transaction Costs | $ 14,000,000 | ||||
Members' equity, contributions | $ 179,442,000 | 111,396,000 | |||
Centennial HoldCo | Predecessor | |||||
Class of Stock [Line Items] | |||||
Ownership interest | 61.20% | ||||
Members' equity, contributions | 27,200,000 | ||||
Centennial HoldCo | Predecessor | Class A | |||||
Class of Stock [Line Items] | |||||
Members' equity, contributed capital | 289,400,000 | ||||
Members' equity, remaining capital contribution commitment | 32,500,000 | ||||
Celero | Predecessor | |||||
Class of Stock [Line Items] | |||||
Ownership interest | 21.20% | ||||
Celero | Predecessor | Class B | |||||
Class of Stock [Line Items] | |||||
Members' equity, contributed capital | 125,400,000 | ||||
Members' equity, remaining capital contribution commitment | 0 | ||||
Follow-On | Predecessor | |||||
Class of Stock [Line Items] | |||||
Ownership interest | 17.60% | ||||
Members' equity, contributions | 84,200,000 | ||||
Follow-On | Predecessor | Class A | |||||
Class of Stock [Line Items] | |||||
Members' equity, contributed capital | 84,200,000 | ||||
Members' equity, remaining capital contribution commitment | $ 100,300,000 |
Stock-Based Compensation - Narr
Stock-Based Compensation - Narrative (Details) - USD ($) | Oct. 07, 2016 | Dec. 31, 2016 | Oct. 10, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Equity based compensation expense | $ 0 | $ 0 | ||||
Restricted stock awards | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Granted (in dollars per share) | $ 17.33 | $ 20.03 | ||||
Fair value of vested restricted stock awards | $ 2,700,000 | |||||
Unrecognized compensation costs | $ 15,100,000 | |||||
Unrecognized compensation costs, period for recognition | 2 years 3 months 18 days | |||||
Stock option awards | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Unrecognized compensation costs, period for recognition | 2 years 4 days | |||||
Unrecognized compensation costs | $ 18,900,000 | |||||
Performance Shares | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Share-based compensation requisite service period | 3 years | |||||
Granted (in dollars per share) | $ 21.53 | |||||
Unrecognized compensation costs, period for recognition | 2 years 6 months | |||||
Vesting period | 3 years | |||||
Unrecognized compensation costs | $ 3,600,000 | |||||
2016 Long Term Incentive Plan | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Shares available for future grants (in shares) | 10,851,807 | |||||
2016 Long Term Incentive Plan | Stock option awards | Common Class A | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Option expiration period | 10 years | |||||
Vesting period | 3 years | |||||
Predecessor | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Equity based compensation expense | $ 165,394,000 | $ 0 | ||||
Predecessor | 2016 Long Term Incentive Plan | Common Class A | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Shares available for issuance under LTIP (in shares) | 16,500,000 | |||||
Officer | Restricted stock awards | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Share-based compensation requisite service period | 3 years | |||||
Vesting period | 3 years | |||||
Director | Restricted stock awards | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Vesting period | 1 year |
Stock-Based Compensation - Sche
Stock-Based Compensation - Schedule of Total Stock-Based Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Dec. 31, 2016 | Dec. 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Equity based compensation expense | $ 1,333 | $ 13,759 |
Restricted stock awards | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Equity based compensation expense | 405 | 5,008 |
Stock option awards | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Equity based compensation expense | 928 | 8,160 |
Performance Stock Units | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Equity based compensation expense | $ 0 | $ 591 |
Stock-Based Compensation - Rest
Stock-Based Compensation - Restricted Stock (Details) - Restricted stock awards - $ / shares | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Awards | ||
Outstanding, beginning of period (in shares) | 256,597 | |
Granted (in shares) | 902,111 | |
Vested (in shares) | (137,177) | |
Forfeited (in shares) | (11,815) | |
Outstanding, end of period (in shares) | 1,009,716 | 256,597 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract] | ||
Granted (in dollars per share) | $ 17.33 | $ 20.03 |
Vested (in dollars per share) | 19.98 | |
Canceled (in dollar per share) | 18.29 | |
Outstanding, end of period (in dollars per share) | $ 17.64 | $ 20.03 |
Stock-Based Compensation - Assu
Stock-Based Compensation - Assumptions Used in Granting Stock Options (Details) - Stock option awards - $ / shares | 3 Months Ended | 12 Months Ended |
Dec. 31, 2016 | Dec. 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Weighted average grant date fair value (in dollars per share) | $ 5.93 | $ 7.15 |
Expected term (in years) | 6 years | 6 years |
Expected stock volatility | 40.00% | 38.00% |
Dividend yield | 0.00% | 0.00% |
Risk-free interest rate | 1.50% | 2.00% |
Stock-Based Compensation - Opti
Stock-Based Compensation - Option Activity (Details) - Stock option awards $ / shares in Units, $ in Thousands | 12 Months Ended |
Dec. 31, 2017USD ($)$ / sharesshares | |
Options | |
Outstanding, beginning of period (in shares) | shares | 2,735,500 |
Granted (in shares) | shares | 1,884,500 |
Exercised (in shares) | shares | (58,499) |
Forfeited (in shares) | shares | (279,000) |
Outstanding, end of period (in shares) | shares | 4,282,501 |
Exercisable (in shares) | shares | 760,997 |
Weighted Average Exercise Price | |
Outstanding, beginning of period (In dollars per share) | $ / shares | $ 14.67 |
Exercised (in dollars per share) | $ / shares | 15.02 |
Granted (in dollars per share) | $ / shares | 18.02 |
Forfeited (in dollars per share) | $ / shares | 14.54 |
Outstanding, end of period (In dollars per share) | $ / shares | 16.15 |
Exercisable (in dollars per share) | $ / shares | $ 14.67 |
Outstanding, weighted average remaining term (in years) | 9 years 4 days |
Exercisable, weighted average remaining term (in years) | 8 years 9 months 29 days |
Outstanding, aggregate intrinsic value | $ | $ 15,633 |
Exercisable, aggregate intrinsic value | $ | $ 3,907 |
Stock-Based Compensation - As59
Stock-Based Compensation - Assumptions Used For Performance Shares (Details) - Performance Shares | 12 Months Ended |
Dec. 31, 2017simulation | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number of simulations | 1,000,000 |
Expected stock volatility | 41.60% |
Dividend yield | 0.00% |
Risk-free interest rate | 1.50% |
Stock-Based Compensation - Perf
Stock-Based Compensation - Performance Stock Units Outstanding Activity (Details) - Performance Shares | 12 Months Ended |
Dec. 31, 2017$ / sharesshares | |
Awards | |
Unvested beginning balance (in shares) | shares | 0 |
Granted (in shares) | shares | 193,391 |
Vested (in shares) | shares | 0 |
Forfeited (in shares) | shares | 0 |
Unvested ending balance (in shares) | shares | 193,391 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract] | |
Outstanding, beginning of period (in dollars per share) | $ / shares | $ 0 |
Granted (in dollars per share) | $ / shares | 21.53 |
Vested (in dollars per share) | $ / shares | 0 |
Forfeited | $ / shares | 0 |
Outstanding, end of period (in dollars per share) | $ / shares | $ 21.53 |
Derivative Instruments - Schedu
Derivative Instruments - Schedule of Swap Contracts (Details) - Not Designated as Hedging Instrument bbl in Thousands, MMBTU in Thousands | 12 Months Ended |
Dec. 31, 2017MMBTU$ / MMBTU$ / bblbbl | |
Crude oil basis swaps, January 2018 - June 2018 | |
Derivative [Line Items] | |
Volume (Bbl) | bbl | 905 |
Derivative weighted average floor price (in dollars per bbl) | $ / bbl | 0.18 |
Derivative weighted average floor price (in dollars per MMBtu) | $ / bbl | (0.18) |
Crude oil basis swaps, January 2018 - December 2018 | |
Derivative [Line Items] | |
Volume (Bbl) | bbl | 1,825 |
Derivative weighted average floor price (in dollars per bbl) | $ / bbl | 0 |
Derivative weighted average floor price (in dollars per MMBtu) | $ / bbl | 0 |
Natural gas basis swaps, January 2018 - December 2018 | |
Derivative [Line Items] | |
Volume (MMBtu) | MMBTU | 1,825 |
Derivative weighted average floor price (in dollars per bbl) | $ / MMBTU | 0.43 |
Derivative weighted average floor price (in dollars per MMBtu) | $ / MMBTU | (0.43) |
Natural gas basis swaps, January 2019 - December 2019 | |
Derivative [Line Items] | |
Volume (MMBtu) | MMBTU | 1,825 |
Derivative weighted average floor price (in dollars per bbl) | $ / MMBTU | 0.43 |
Derivative weighted average floor price (in dollars per MMBtu) | $ / MMBTU | (0.43) |
Derivative Instruments - Gain (
Derivative Instruments - Gain (Loss) On Derivative Instruments (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | |
Dec. 31, 2016 | Oct. 10, 2016 | Dec. 31, 2017 | Dec. 31, 2015 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Net gain (loss) on derivative instruments | $ (1,548) | $ 5,138 | ||
Predecessor | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Net gain (loss) on derivative instruments | $ (6,838) | $ 20,756 |
Derivative Instruments - Fair V
Derivative Instruments - Fair Value of Derivative Instruments Balance Sheet Classification (Details) - Not Designated as Hedging Instrument - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Derivative Asset, Fair Value, Amount Not Offset Against Collateral [Abstract] | ||
Gross Fair Value Asset/Liability Amounts | $ 1,382 | |
Gross Amounts Offset | (287) | |
Net Recognized Fair Value Assets/Liabilities | 1,095 | |
Derivative Liability, Fair Value, Amount Not Offset Against Collateral [Abstract] | ||
Gross Fair Value Asset/Liability Amounts | $ 5,689 | |
Gross Amounts Offset | (308) | |
Net Recognized Fair Value Assets/Liabilities | 5,381 | |
Current assets | ||
Derivative Asset, Fair Value, Amount Not Offset Against Collateral [Abstract] | ||
Gross Fair Value Asset/Liability Amounts | 720 | 739 |
Gross Amounts Offset | (287) | (308) |
Net Recognized Fair Value Assets/Liabilities | 433 | 431 |
Noncurrent assets | ||
Derivative Asset, Fair Value, Amount Not Offset Against Collateral [Abstract] | ||
Gross Fair Value Asset/Liability Amounts | 662 | |
Gross Amounts Offset | 0 | |
Net Recognized Fair Value Assets/Liabilities | 662 | |
Current liabilities | ||
Derivative Liability, Fair Value, Amount Not Offset Against Collateral [Abstract] | ||
Gross Fair Value Asset/Liability Amounts | 527 | 5,669 |
Gross Amounts Offset | (287) | (308) |
Net Recognized Fair Value Assets/Liabilities | $ 240 | 5,361 |
Noncurrent Liabilities | ||
Derivative Liability, Fair Value, Amount Not Offset Against Collateral [Abstract] | ||
Gross Fair Value Asset/Liability Amounts | 20 | |
Gross Amounts Offset | 0 | |
Net Recognized Fair Value Assets/Liabilities | $ 20 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Fair Value, Measurements, Recurring | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Commodity derivative asset (liability), net | $ 0 | $ 0 |
Fair Value, Measurements, Recurring | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Commodity derivative asset (liability), net | 855,000 | (4,950,000) |
Fair Value, Measurements, Recurring | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Commodity derivative asset (liability), net | 0 | $ 0 |
Senior Notes | Senior Notes Due 2026 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value of senior notes | $ 407,500,000 |
Asset Retirement Obligations (D
Asset Retirement Obligations (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended |
Dec. 31, 2016 | Oct. 10, 2016 | Dec. 31, 2017 | |
Asset Retirement Obligation, Roll Forward Analysis [Roll Forward] | |||
Asset retirement obligations, beginning of period | $ 4,989 | $ 7,226 | |
Liabilities incurred | 2,189 | 2,219 | |
Liabilities disposed | 0 | (336) | |
Liabilities settled | (1) | (65) | |
Accretion expense | 49 | 516 | |
Revision of estimated liabilities | 0 | 2,601 | |
Asset retirement obligations, end of period | 7,226 | $ 4,989 | $ 12,161 |
Predecessor | |||
Asset Retirement Obligation, Roll Forward Analysis [Roll Forward] | |||
Asset retirement obligations, beginning of period | $ 2,652 | 2,288 | |
Liabilities incurred | 240 | ||
Liabilities disposed | 0 | ||
Liabilities settled | (42) | ||
Accretion expense | 134 | ||
Revision of estimated liabilities | 32 | ||
Asset retirement obligations, end of period | $ 2,652 |
Transactions with Related Par66
Transactions with Related Parties - Founder Shares (Details) $ / shares in Units, $ in Thousands | Oct. 11, 2016USD ($) | Apr. 08, 2016shares | Feb. 24, 2016$ / sharesshares | Nov. 06, 2015USD ($)$ / sharesshares | Feb. 29, 2016shares | Dec. 31, 2016USD ($)shares | Dec. 31, 2017USD ($)shares |
Related Party Transaction [Line Items] | |||||||
Stock issued during period | $ | $ 0 | ||||||
Common Class A | |||||||
Related Party Transaction [Line Items] | |||||||
Stock issued during period | $ | $ 1,010,050 | $ 530,507 | $ 340,750 | ||||
Common stock, shares outstanding (in shares) | 200,835,049 | 260,327,920 | |||||
Silver Run | Common Class B | |||||||
Related Party Transaction [Line Items] | |||||||
Stock dividend (in dollars per share) | $ / shares | $ 0.125 | ||||||
Silver Run | Company Sponsors | Common Class B | Affiliated Entity | |||||||
Related Party Transaction [Line Items] | |||||||
Stock issued during period (in shares) | 11,500,000 | ||||||
Stock issued during period | $ | $ 25 | ||||||
Share price (in dollars per share) | $ / shares | $ 0.002 | ||||||
Stock forfeited in period (in shares) | 437,500 | ||||||
Silver Run | Company Sponsors | Common Class B | Affiliated Entity | Transfer of Shares from Sponsors to Directors | |||||||
Related Party Transaction [Line Items] | |||||||
Stock transferred per director (in shares) | 40,000 | ||||||
Silver Run | Initial Stockholders | Affiliated Entity | |||||||
Related Party Transaction [Line Items] | |||||||
Ownership percentage | 20.00% | ||||||
Silver Run | Initial Stockholders | Common Class B | Affiliated Entity | |||||||
Related Party Transaction [Line Items] | |||||||
Common stock, shares outstanding (in shares) | 12,500,000 | 12,937,000 | |||||
Silver Run | Conversion of Founder Shares To Class A Common Stock | Common Class A | |||||||
Related Party Transaction [Line Items] | |||||||
Stock conversion ratio | 1 |
Transactions with Related Par67
Transactions with Related Parties - Additional Information (Details) $ / shares in Units, $ in Thousands | May 25, 2017shares | Nov. 27, 2016USD ($)shares | Oct. 11, 2016shares | Jul. 21, 2016USD ($)shares | Feb. 29, 2016USD ($)day$ / sharesshares | May 31, 2016USD ($) | Dec. 31, 2016USD ($) | Oct. 10, 2016USD ($) | Dec. 31, 2017USD ($)shares | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) |
Related Party Transaction [Line Items] | |||||||||||
Issuance of Class A common shares | $ 1,540,556 | $ 340,750 | |||||||||
Acquisition of oil and natural gas properties | 849,642 | 435,547 | |||||||||
Liberty Oilfield Services, LLC | Affiliated Entity | |||||||||||
Related Party Transaction [Line Items] | |||||||||||
Expenses to related party | 72,600 | $ 8,200 | |||||||||
Due to related parties | 3,100 | ||||||||||
Permian Tank And Manufacturing, Inc | Affiliated Entity | |||||||||||
Related Party Transaction [Line Items] | |||||||||||
Expenses to related party | 6,400 | 1,400 | |||||||||
Due to related parties | 400 | 300 | 400 | ||||||||
Oil States Energy Services, LLC | Affiliated Entity | |||||||||||
Related Party Transaction [Line Items] | |||||||||||
Expenses to related party | 10,500 | 1,200 | |||||||||
Due to related parties | $ 200 | $ 1,500 | 200 | ||||||||
Predecessor | |||||||||||
Related Party Transaction [Line Items] | |||||||||||
Issuance of Class A common shares | $ 0 | $ 0 | |||||||||
Acquisition of oil and natural gas properties | $ 55,564 | $ 43,223 | |||||||||
Predecessor | Caird DB, LLC | Affiliated Entity | |||||||||||
Related Party Transaction [Line Items] | |||||||||||
Acquisition of oil and natural gas properties | $ 9,800 | ||||||||||
Predecessor | RockPile Energy Services, LLC | Affiliated Entity | Drilling and Completion Activities | |||||||||||
Related Party Transaction [Line Items] | |||||||||||
Expenses to related party | $ 3,300 | ||||||||||
Warrants To Purchase Class A Common Stock | |||||||||||
Related Party Transaction [Line Items] | |||||||||||
Warrants, number of class A shares per warrant (in shares) | shares | 1 | ||||||||||
Capital Units | |||||||||||
Related Party Transaction [Line Items] | |||||||||||
Shares converted (in shares) | shares | 844,079 | ||||||||||
Common Class C | |||||||||||
Related Party Transaction [Line Items] | |||||||||||
Stock canceled during period (in shares) | shares | 844,079 | ||||||||||
Conversion of CRP Common Units for Class A Common Stock | Common Class A | |||||||||||
Related Party Transaction [Line Items] | |||||||||||
Share issued during conversion of units (in shares) | shares | 844,079 | ||||||||||
Stock Subscription Agreement | Riverstone Purchasers | Affiliated Entity | |||||||||||
Related Party Transaction [Line Items] | |||||||||||
Issuance of Class A common shares | $ 430,000 | ||||||||||
Stock Subscription Agreement | Common Class A | Riverstone Purchasers | Affiliated Entity | |||||||||||
Related Party Transaction [Line Items] | |||||||||||
Stock issued during period (in shares) | shares | 3,473,590 | 81,005,000 | |||||||||
Issuance of Class A common shares | $ 810,000 | ||||||||||
Stock Subscription Agreement | Series B Preferred Stock | Riverstone Purchasers | Affiliated Entity | |||||||||||
Related Party Transaction [Line Items] | |||||||||||
Stock issued during period (in shares) | shares | 104,400 | ||||||||||
Silver Run | Warrants To Purchase Class A Common Stock | |||||||||||
Related Party Transaction [Line Items] | |||||||||||
Warrant exercise price (in dollars per share) | $ / shares | $ 0.01 | ||||||||||
Last sale price of Class A common stock | $ / shares | $ 18 | ||||||||||
Silver Run | Warrants To Purchase Class A Common Stock | Company Sponsors | Affiliated Entity | |||||||||||
Related Party Transaction [Line Items] | |||||||||||
Warrants issued (in shares) | shares | 8,000,000 | ||||||||||
Warrants issued, price per warrant (in dollars per share) | $ / shares | $ 1.5 | ||||||||||
Warrants issued | $ 12,000 | ||||||||||
Warrants, number of class A shares per warrant (in shares) | shares | 1 | ||||||||||
Warrant exercise price (in dollars per share) | $ / shares | $ 11.5 | ||||||||||
Silver Run | Common Class A | Initial Stockholders | Affiliated Entity | |||||||||||
Related Party Transaction [Line Items] | |||||||||||
Limitation on sale of class A common stock, sale price threshold, number of trading days | day | 20 | ||||||||||
Limitation on sale of class A common stock, sale price threshold, trading period | day | 30 | ||||||||||
Common Stock | Common Class A | |||||||||||
Related Party Transaction [Line Items] | |||||||||||
Conversion of common shares (in shares) | shares | 26,100,000 |
Commitments and Contingencies -
Commitments and Contingencies - Future Minimum Lease Payments (Details) | Dec. 31, 2017USD ($) |
Operating Lease, Future Minimum Payments Due [Line Items] | |
2,018 | $ 30,343,000 |
2,019 | 21,011,000 |
2,020 | 12,788,000 |
2,021 | 3,898,000 |
2,022 | 274,000 |
Thereafter | 0 |
Total | 68,314,000 |
Drill Rig Commitments | |
Operating Lease, Future Minimum Payments Due [Line Items] | |
2,018 | 19,714,000 |
2,019 | 1,620,000 |
2,020 | 0 |
2,021 | 0 |
2,022 | 0 |
Thereafter | 0 |
Total | 21,334,000 |
Office Leases | |
Operating Lease, Future Minimum Payments Due [Line Items] | |
2,018 | 2,360,000 |
2,019 | 2,322,000 |
2,020 | 2,163,000 |
2,021 | 2,073,000 |
2,022 | 274,000 |
Thereafter | 0 |
Total | 9,192,000 |
Water Disposal Agreement | |
Operating Lease, Future Minimum Payments Due [Line Items] | |
2,018 | 1,825,000 |
2,019 | 1,825,000 |
2,020 | 1,825,000 |
2,021 | 1,825,000 |
2,022 | 0 |
Thereafter | 0 |
Total | 7,300,000 |
Purchase Obligations | |
Operating Lease, Future Minimum Payments Due [Line Items] | |
2,018 | 4,400,000 |
2,019 | 13,200,000 |
2,020 | 8,800,000 |
2,021 | 0 |
2,022 | 0 |
Thereafter | 0 |
Total | 26,400,000 |
Transportation and Gathering | |
Operating Lease, Future Minimum Payments Due [Line Items] | |
2,018 | 2,044,000 |
2,019 | 2,044,000 |
2,020 | 0 |
2,021 | 0 |
2,022 | 0 |
Thereafter | 0 |
Total | $ 4,088,000 |
Commitments and Contingencies69
Commitments and Contingencies (Details) a in Thousands, $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Jul. 31, 2017 | Jun. 30, 2017MMBTU | Dec. 31, 2015aextension_option | Dec. 31, 2016USD ($) | Oct. 10, 2016USD ($) | Dec. 31, 2017USD ($)drilling_rig | Dec. 31, 2015USD ($) | |
Related Party Transaction [Line Items] | |||||||
Number of drilling rigs under contract | drilling_rig | 6 | ||||||
Potential termination penalties | $ 14,700 | ||||||
Depletion and exploration expense | $ 1,000 | 38,000 | |||||
Rent expense | 100 | 1,100 | |||||
Water disposal costs | 0 | 2,405 | |||||
Purchase obligation term | 3 years | ||||||
Prepayment for purchase obligations | 13,200 | ||||||
Capitalization costs | 1,600 | ||||||
Gathering, processing and transportation expenses | $ 2,187 | 34,259 | |||||
Transportation Service Agreement | |||||||
Related Party Transaction [Line Items] | |||||||
Daily supply commitment amount | MMBTU | 40,000 | ||||||
Transportation and Gathering Agreement | |||||||
Related Party Transaction [Line Items] | |||||||
Gathering, processing and transportation expenses | $ 1,200 | ||||||
Predecessor | |||||||
Related Party Transaction [Line Items] | |||||||
Depletion and exploration expense | $ 2,000 | ||||||
Rent expense | 400 | $ 400 | |||||
Water disposal costs | 0 | 0 | |||||
Gathering, processing and transportation expenses | $ 4,583 | $ 5,732 | |||||
Predecessor | Transportation And Gathering Services Agreement | |||||||
Related Party Transaction [Line Items] | |||||||
Transportation and gathering agreement, term of agreement | 12 years | ||||||
Transportation and gathering agreement, number of extension options | extension_option | 2 | ||||||
Transportation and gathering agreement, term of extension options | 2 years | ||||||
Transportation and gathering agreement, term of automatic extensions | 1 year | ||||||
Transportation and gathering agreement, termination notice period | 60 days | ||||||
Gas Gathering Agreement | PennTex Permian, LLC | Affiliated Entity | Predecessor | Transportation And Gathering Services Agreement | |||||||
Related Party Transaction [Line Items] | |||||||
Transportation and gathering agreement, number of acres | a | 63 |
Subsequent Events (Details)
Subsequent Events (Details) $ in Thousands | Feb. 08, 2018USD ($)a | Jan. 05, 2018USD ($)aWells | Jun. 08, 2017USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2017USD ($) | Dec. 21, 2017USD ($) |
Subsequent Event [Line Items] | ||||||
Proceeds from sale | $ 0 | $ 22,496 | ||||
Acquisition of oil and natural gas properties | $ 849,642 | $ 435,547 | ||||
Reeves County | Subsequent Event | ||||||
Subsequent Event [Line Items] | ||||||
Undeveloped net acres acquired | a | 8,600 | |||||
Number of horizontal wells sold (in wells) | Wells | 12 | |||||
Proceeds from sale | $ 140,700 | |||||
Non-operated position | 32.00% | |||||
Northern Delaware Basin | ||||||
Subsequent Event [Line Items] | ||||||
Acquisition of oil and natural gas properties | $ 350,100 | |||||
Unproved And Proved Properties In The Delaware Basin | Northern Delaware Basin | ||||||
Subsequent Event [Line Items] | ||||||
Amount placed in escrow | $ 8,600 | |||||
Unproved And Proved Properties In The Delaware Basin | Northern Delaware Basin | Subsequent Event | ||||||
Subsequent Event [Line Items] | ||||||
Undeveloped net acres acquired | a | 4,000 | |||||
Acquisition of oil and natural gas properties | $ 94,700 | |||||
Gas and oil area, working interest, percent | 95.00% |
Uncategorized Items - cdev-2017
Label | Element | Value | |
Restricted Cash and Cash Equivalents | us-gaap_RestrictedCashAndCashEquivalents | $ 0 | [1] |
Restricted Cash and Cash Equivalents | us-gaap_RestrictedCashAndCashEquivalents | 8,600,000 | [1] |
Predecessor [Member] | |||
Cash and Cash Equivalents, at Carrying Value | us-gaap_CashAndCashEquivalentsAtCarryingValue | 1,768,000 | |
Cash and Cash Equivalents, at Carrying Value | us-gaap_CashAndCashEquivalentsAtCarryingValue | 0 | |
Restricted Cash and Cash Equivalents | us-gaap_RestrictedCashAndCashEquivalents | 0 | [1] |
Restricted Cash and Cash Equivalents | us-gaap_RestrictedCashAndCashEquivalents | $ 0 | [1] |
[1] | Included in Other Noncurrent Assets line item on the Consolidated Balance Sheets |