Cover Page
Cover Page - shares | 3 Months Ended | |
Mar. 31, 2020 | Apr. 30, 2020 | |
Entity Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2020 | |
Document Transition Report | false | |
Entity File Number | 001-37697 | |
Entity Registrant Name | CENTENNIAL RESOURCE DEVELOPMENT, INC. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 47-5381253 | |
Entity Address, Address Line One | 1001 Seventeenth Street | |
Entity Address, Address Line Two | Suite 1800 | |
Entity Address, City or Town | Denver | |
Entity Address, State or Province | CO | |
Entity Address, Postal Zip Code | 80202 | |
City Area Code | 720 | |
Local Phone Number | 499-1400 | |
Title of 12(b) Security | Class A Common Stock, par value $0.0001 per share | |
Trading Symbol | CDEV | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Smaller Reporting Company | false | |
Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 277,082,141 | |
Entity Central Index Key | 0001658566 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Current assets | ||
Cash and cash equivalents | $ 3,841 | $ 10,223 |
Accounts receivable, net | 62,892 | 101,912 |
Prepaid and other current assets | 6,997 | 7,994 |
Total current assets | 73,730 | 120,129 |
Oil and natural gas properties, successful efforts method | ||
Unproved properties | 1,350,287 | 1,470,903 |
Proved properties | 4,238,784 | 3,962,175 |
Accumulated depreciation, depletion and amortization | (1,623,671) | (931,737) |
Total oil and natural gas properties, net | 3,965,400 | 4,501,341 |
Other property and equipment, net | 14,240 | 14,612 |
Total property and equipment, net | 3,979,640 | 4,515,953 |
Noncurrent assets | ||
Operating lease right-of-use assets | 8,333 | 11,841 |
Other noncurrent assets | 44,547 | 40,365 |
TOTAL ASSETS | 4,106,250 | 4,688,288 |
Current liabilities | ||
Accounts payable and accrued expenses | 223,651 | 244,309 |
Derivative instruments | 8,777 | 325 |
Operating lease liabilities | 6,440 | 9,232 |
Other current liabilities | 177 | 600 |
Total current liabilities | 239,045 | 254,466 |
Noncurrent liabilities | ||
Long-term debt, net | 1,117,919 | 1,057,389 |
Asset retirement obligations | 17,651 | 16,874 |
Deferred income taxes | 2,296 | 85,504 |
Operating lease liabilities | 2,552 | 3,354 |
Total liabilities | 1,379,463 | 1,417,587 |
Commitments and contingencies (Note 11) | ||
Shareholders’ equity | ||
Additional paid-in capital | 2,982,187 | 2,975,756 |
Retained earnings (accumulated deficit) | (265,647) | 282,336 |
Total shareholders’ equity | 2,716,568 | 3,258,120 |
Noncontrolling interest | 10,219 | 12,581 |
Total equity | 2,726,787 | 3,270,701 |
TOTAL LIABILITIES AND EQUITY | 4,106,250 | 4,688,288 |
Preferred Stock Series A | ||
Shareholders’ equity | ||
Preferred stock, $0.0001 par value, 1,000,000 shares authorized: | 0 | 0 |
Class A | ||
Shareholders’ equity | ||
Common stock, $0.0001 par value, 620,000,000 shares authorized: | 28 | 28 |
Convertible Class C | ||
Shareholders’ equity | ||
Common stock, $0.0001 par value, 620,000,000 shares authorized: | $ 0 | $ 0 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Mar. 31, 2020 | Dec. 31, 2019 | Mar. 31, 2019 | Dec. 31, 2018 |
Preferred stock, par value (USD per share) | $ 0.0001 | $ 0.0001 | ||
Preferred stock, shares authorized (shares) | 1,000,000 | 1,000,000 | ||
Common stock, par value (USD per share) | $ 0.0001 | $ 0.0001 | ||
Common stock, shares authorized (shares) | 620,000,000 | 620,000,000 | ||
Series A Preferred Stock | ||||
Preferred stock, shares issued (shares) | 1 | 1 | 1 | 1 |
Preferred stock, shares outstanding (shares) | 1 | 1 | 1 | 1 |
Class A | ||||
Common stock, shares issued (shares) | 281,530,821 | 280,650,341 | ||
Common stock, shares outstanding (shares) | 276,037,796 | 275,811,346 | ||
Convertible Class C | ||||
Common stock, shares issued (shares) | 1,034,119 | 1,034,119 | ||
Common stock, shares outstanding (shares) | 1,034,119 | 1,034,119 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Operating revenues | ||
Oil and gas sales | $ 192,769 | $ 214,569 |
Operating expenses | ||
Lease operating expenses | 32,639 | 29,862 |
Severance and ad valorem taxes | 16,573 | 16,120 |
Gathering, processing and transportation expenses | 16,939 | 15,024 |
Depreciation, depletion and amortization | 101,258 | 96,558 |
Impairment and abandonment expense | 611,300 | 31,264 |
Exploration expense | 4,009 | 2,516 |
General and administrative expenses | 18,870 | 18,118 |
Total operating expenses | 801,588 | 209,462 |
Gain (Loss) on Disposition of Property Plant Equipment | 245 | (2) |
Income (loss) from operations | (608,574) | 5,105 |
Other income (expense) | ||
Interest expense | (16,421) | (10,160) |
Net gain (loss) on derivative instruments | (8,505) | (5,871) |
Other income (expense) | (53) | 126 |
Total other income (expense) | (24,979) | (15,905) |
Income (loss) before income taxes | (633,553) | (10,800) |
Income tax benefit | 83,208 | 2,263 |
Net income (loss) | (550,345) | (8,537) |
Less: Net (income) loss attributable to noncontrolling interest | 2,362 | 425 |
Net income (loss) attributable to Class A Common Stock | $ (547,983) | $ (8,112) |
Income (loss) per share of Class A Common Stock: | ||
Basic (USD per share) | $ (1.99) | $ (0.03) |
Diluted (USD per share) | $ (1.99) | $ (0.03) |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Cash flows from operating activities: | ||
Net income (loss) | $ (550,345) | $ (8,537) |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation, depletion and amortization | 101,258 | 96,558 |
Stock-based compensation expense | 6,409 | 6,483 |
Impairment and abandonment expense | 611,300 | 31,264 |
Deferred tax benefit | (83,208) | (2,263) |
Net (gain) loss on sale of long-lived assets | (245) | 2 |
Non-cash portion of derivative (gain) loss | 8,452 | 5,494 |
Amortization of debt issuance costs and discount | 799 | 512 |
Changes in operating assets and liabilities: | ||
(Increase) decrease in accounts receivable | 41,026 | (18,708) |
(Increase) decrease in prepaid and other assets | (263) | (205) |
Increase (decrease) in accounts payable and other liabilities | (34,365) | (9,572) |
Net cash provided by operating activities | 100,818 | 101,028 |
Cash flows from investing activities: | ||
Acquisition of oil and natural gas properties | (5,795) | (25,691) |
Drilling and development capital expenditures | (161,895) | (217,158) |
Purchases of other property and equipment | (486) | (1,738) |
Proceeds from sales of oil and natural gas properties | 1,200 | 25,709 |
Net cash used in investing activities | (166,976) | (218,878) |
Cash flows from financing activities: | ||
Proceeds from borrowings under revolving credit facility | 195,000 | 130,000 |
Repayment of borrowings under revolving credit facility | (135,000) | (430,000) |
Proceeds from issuance of Senior Notes | 0 | 496,175 |
Debt issuance costs | 0 | (6,698) |
Restricted stock used for tax withholdings | (208) | (291) |
Net cash provided by financing activities | 59,792 | 189,186 |
Net increase (decrease) in cash, cash equivalents and restricted cash | (6,366) | 71,336 |
Cash, cash equivalents and restricted cash, beginning of period | 15,543 | 21,422 |
Cash, cash equivalents and restricted cash, end of period | 9,177 | 92,758 |
Supplemental cash flow information | ||
Cash paid for interest | 12,977 | 15,210 |
Cash used in operating activities | 2,657 | 4,905 |
Cash used in investing activities | 2,019 | 5,682 |
Supplemental non-cash activity | ||
Accrued capital expenditures included in accounts payable and accrued expenses | 108,282 | 136,113 |
Asset retirement obligations incurred, including revisions to estimates | 413 | 264 |
Right-of-use assets recognized (derecognized) with offsetting operating lease liabilities | (829) | 34,385 |
Total cash, cash equivalents and restricted cash | $ 9,177 | $ 92,758 |
CONSOLIDATED STATEMENTS OF SHAR
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY - USD ($) $ in Thousands | Total | Class A | Class C | Series A Preferred Stock | Common StockClass A | Common StockClass C | Preferred StockSeries A Preferred Stock | Additional Paid-In Capital | Retained Earnings (Accumulated Deficit) | Total Shareholder's Equity | Non-controlling Interest |
Common shares outstanding at beginning of period (in shares) at Dec. 31, 2018 | 265,859,000 | 12,003,000 | |||||||||
Balance at beginning of period at Dec. 31, 2018 | $ 3,243,869 | $ 27 | $ 1 | $ 0 | $ 2,833,611 | $ 266,538 | $ 3,100,177 | $ 143,692 | |||
Preferred shares outstanding at beginning of period (in shares) at Dec. 31, 2018 | 1 | 0 | |||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Restricted stock issued (in shares) | 436,000 | ||||||||||
Stock Issued During Period, Value, Restricted Stock Award, Gross | $ 0 | 0 | |||||||||
Restricted stock forfeited (in shares) | 0 | ||||||||||
Restricted Stock Award, Forfeitures | $ 0 | 0 | |||||||||
Restricted stock used for tax withholding (in shares) | (24,000) | ||||||||||
Restricted stock used for tax withholding | (291) | $ 0 | (291) | (291) | |||||||
Stock-based compensation | 6,483 | 6,483 | 6,483 | ||||||||
Net income (loss) | (8,537) | (8,112) | (8,112) | (425) | |||||||
Common shares outstanding at end of period (in shares) at Mar. 31, 2019 | 266,271,000 | 12,003,000 | |||||||||
Balance at end of period at Mar. 31, 2019 | 3,241,524 | $ 27 | $ 1 | $ 0 | 2,839,803 | 258,426 | 3,098,257 | 143,267 | |||
Preferred shares outstanding at end of period (in shares) at Mar. 31, 2019 | 1 | 0 | |||||||||
Common shares outstanding at beginning of period (in shares) at Dec. 31, 2019 | 275,811,346 | 1,034,119 | 280,650,000 | 1,034,000 | |||||||
Balance at beginning of period at Dec. 31, 2019 | 3,270,701 | $ 28 | $ 0 | $ 0 | 2,975,756 | 282,336 | 3,258,120 | 12,581 | |||
Preferred shares outstanding at beginning of period (in shares) at Dec. 31, 2019 | 1 | 0 | |||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Restricted stock issued (in shares) | 1,305,000 | ||||||||||
Stock Issued During Period, Value, Restricted Stock Award, Gross | $ 0 | 0 | |||||||||
Restricted stock forfeited (in shares) | (406,000) | ||||||||||
Restricted Stock Award, Forfeitures | $ 0 | 0 | |||||||||
Restricted stock used for tax withholding (in shares) | (78,000) | ||||||||||
Restricted stock used for tax withholding | (208) | $ 0 | (208) | (208) | |||||||
Stock Issued During Period, Shares, Employee Stock Purchase Plans | 59,000 | ||||||||||
Stock Issued During Period, Value, Employee Stock Purchase Plan | $ 230 | $ 0 | 230 | 230 | |||||||
Option exercises (in shares) | 0 | ||||||||||
Stock-based compensation | $ 6,409 | 6,409 | 6,409 | ||||||||
Net income (loss) | (550,345) | (547,983) | (547,983) | (2,362) | |||||||
Common shares outstanding at end of period (in shares) at Mar. 31, 2020 | 276,037,796 | 1,034,119 | 281,530,000 | 1,034,000 | |||||||
Balance at end of period at Mar. 31, 2020 | $ 2,726,787 | $ 28 | $ 0 | $ 0 | $ 2,982,187 | $ (265,647) | $ 2,716,568 | $ 10,219 | |||
Preferred shares outstanding at end of period (in shares) at Mar. 31, 2020 | 1 | 0 |
Basis of Presentation
Basis of Presentation | 3 Months Ended |
Mar. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Note 1—Basis of Presentation and Summary of Significant Accounting Policies Description of Business Centennial Resource Development, Inc. 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 located in West Texas and New Mexico. Unless otherwise specified or the context otherwise requires, all references in these notes to “Centennial” or the “Company” are to Centennial Resource Development, Inc. and its consolidated subsidiary, Centennial Resource Production, LLC (“CRP”). Principles of Consolidation and Basis of Presentation The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) and the rules and regulations of the United States Securities and Exchange Commission (“SEC”) for interim financial reporting. Accordingly, certain disclosures normally included in an Annual Report on Form 10-K have been omitted. The consolidated financial statements and related notes included in this Quarterly Report should be read in conjunction with the Company’s consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K for the period ended December 31, 2019 (the “ 2019 Annual Report”). Except as disclosed herein, there have been no material changes to the information disclosed in the notes to the consolidated financial statements included in the Company’s 2019 Annual Report. In the opinion of management, all normal, recurring adjustments and accruals considered necessary to present fairly, in all material respects, the Company’s interim financial results have been included. Operating results for the periods presented are not necessarily indicative of expected results for the full year. The consolidated financial statements include the accounts of the Company and its majority owned subsidiary CRP, and CRP’s wholly-owned subsidiaries. Noncontrolling interest represents third-party ownership in CRP and is presented as a component of equity. As of March 31, 2020 and December 31, 2019 , the noncontrolling interest ownership of CRP was 0.4% . 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 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) impairment expense of unproved properties; (iv) depreciation, depletion and amortization; (v) asset retirement obligations; (vi) determining fair value and allocating purchase price in connection with business combinations and asset acquisitions; (vii) accrued revenues and related receivables; (viii) accrued liabilities; (ix) valuation of derivatives; and (x) deferred income taxes. Income Taxes Income tax expense during interim periods is based on applying an estimated annual effective income tax rate to the Company’s year-to-date income, plus any significant unusual or infrequently occurring items which are recorded in the interim period. The computation of the annual estimated effective tax rate at each interim period requires certain estimates and significant judgment including, but not limited to, the expected operating income for the year, projections of the proportion of income earned and taxed in various state jurisdictions, permanent and temporary differences and the likelihood of recovering deferred tax assets generated. The accounting estimates used to compute the provision for income taxes may change as new events occur, additional information becomes known or as the tax environment changes. As of March 31, 2020, the Company determined that it is more-likely-than-not that a portion of its deferred tax assets will not be realized. Accordingly, a valuation allowance against its deferred tax assets in the amount of $55.6 million was recognized as of March 31, 2020, which caused the Company’s provision for income taxes for the three months ended March 31, 2020 to differ from the amounts that would be provided by applying the statutory U.S. federal income tax rate of 21% to pre-tax book loss. Risks and Uncertainties |
Property Divestiture
Property Divestiture | 3 Months Ended |
Mar. 31, 2019 | |
Property Dispositions [Abstract] | |
Property Divestiture | Note 2—Property Divestiture On February 24, 2020, the Company entered into a purchase and sale agreement to sell its water disposal assets for a base sale price of approximately $150.0 million in cash at closing with up to an additional $75.0 million in deferred incentive payments based on future drilling activity (all amounts being subject to post-closing adjustments). The water disposal assets include certain saltwater disposal wells and the associated water infrastructure located in Reeves and Ward counties in Texas. The original closing date of the sale was March 31, 2020, however, the transaction has been delayed. While the transaction currently remains pending, either party may terminate the transaction if closing does not occur on or before May 15, 2020. The purchase and sale agreement required the purchaser to deposit $10.0 million |
Accounts Receivable, Accounts P
Accounts Receivable, Accounts Payable and Accrued Expenses | 3 Months Ended |
Mar. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Accounts Receivable, Accounts Payable and Accrued Expenses | Note 3—Accounts Receivable, Accounts Payable and Accrued Expenses Accounts receivable are comprised of the following: (in thousands) March 31, 2020 December 31, 2019 Accrued oil and gas sales receivable, net $ 36,105 $ 76,578 Joint interest billings, net 26,530 25,136 Other 257 198 Accounts receivable, net $ 62,892 $ 101,912 Accounts payable and accrued expenses are comprised of the following: (in thousands) March 31, 2020 December 31, 2019 Accounts payable $ 50,659 $ 21,484 Accrued capital expenditures 70,241 83,002 Revenues payable 51,729 82,539 Accrued interest 22,563 19,405 Accrued employee compensation and benefits 4,906 12,979 Accrued expenses and other 23,553 24,900 Accounts payable and accrued expenses $ 223,651 $ 244,309 |
Long-Term Debt
Long-Term Debt | 3 Months Ended |
Mar. 31, 2020 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | Note 4—Long-Term Debt The following table provides information about the Company’s long-term debt as of the dates indicated: (in thousands) March 31, 2020 December 31, 2019 Credit Facility due 2023 $ 235,000 $ 175,000 5.375% Senior Notes due 2026 400,000 400,000 6.875% Senior Notes due 2027 500,000 500,000 Unamortized debt issuance costs on Senior Notes (13,626 ) (14,061 ) Unamortized debt discount (3,455 ) (3,550 ) Senior Notes, net 882,919 882,389 Total long-term debt, net $ 1,117,919 $ 1,057,389 Credit Agreement On May 4, 2018 , CRP, the Company’s consolidated subsidiary, entered into an amended and restated credit agreement with a syndicate of banks that as of March 31, 2020 , had a borrowing base of $1.2 billion and elected commitments of $800.0 million . The credit agreement provides for a five -year secured revolving credit facility, maturing on May 4, 2023 . As of March 31, 2020 , the Company had $235.0 million in borrowings outstanding and $564.2 million in available borrowing capacity, which was net of $0.8 million in letters of credit outstanding. Refer to Note 14—Subsequent Events for additional information on the spring 2020 redetermination and the amendments to the credit facility, inclusive of its redetermined borrowing base and corresponding level of elected commitments. The amount available to be borrowed under CRP’s credit agreement is equal to the lesser of (i) the borrowing base, (ii) aggregate elected commitments, or (iii) $1.5 billion . The borrowing base is redetermined semi-annually in the spring and fall by the lenders in their sole discretion. It also allows for two optional borrowing base redeterminations on January 1 and July 1. The borrowing base depends on, among other things, the quantities of CRP’s proved oil and natural gas reserves, estimated cash flows from these reserves, and the Company’s commodity hedge positions. Upon a redetermination of the borrowing base, if actual borrowings exceed the revised borrowing capacity, 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. Borrowings under CRP’s revolving credit facility may be base rate loans or LIBOR loans. Interest is payable quarterly for base rate loans and at the end of the applicable interest period for LIBOR loans. LIBOR loans bear interest at LIBOR (adjusted for statutory reserve requirements) plus an applicable margin, which ranged from 125 to 225 basis points as of March 31, 2020 , depending on the percentage of the borrowing base utilized. Base rate loans bear interest at a rate per annum equal to the greatest of: (i) the agent bank’s prime rate; (ii) the federal funds effective rate plus 50 basis points; or (iii) the adjusted LIBOR rate for a one-month interest period plus 100 basis points, plus an applicable margin, which ranged from 25 to 125 basis points as of March 31, 2020 , depending on the percentage of the borrowing base utilized. CRP also pays a commitment fee of 37.5 to 50 basis points on unused amounts under its facility. The applicable margins for the LIBOR loans and base rate loans referenced above reflect interest rate reductions that became effective on April 26, 2019 and are applicable as long as CRP’s total leverage ratio (as described below) is less than or equal to 3.0 to 1.0 . If CRP’s total leverage ratio exceeds 3.0 to 1.0 in the future, the original applicable margins under the credit agreement would revert to the range from 150 to 250 basis points for LIBOR loans and 50 to 150 basis points for base rate loans, in each case depending on the percentage of the borrowing base utilized. CRP’s credit agreement contains restrictive covenants that limit its ability to, among other things: (i) incur additional indebtedness; (ii) make investments and loans; (iii) enter into mergers; (iv) make or declare dividends; (v) enter into commodity hedges exceeding a specified percentage of the Company’s expected production; (vi) enter into interest rate hedges exceeding a specified percentage of its outstanding indebtedness; (vii) incur liens; (viii) sell assets; and (ix) 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 derivative assets and certain restricted cash) to its consolidated current liabilities (excluding the current portion of long-term debt under the credit agreement and non-cash derivative liabilities), 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 March 31, 2020 and through the filing of this Quarterly Report. Senior Unsecured Notes On March 15, 2019 , CRP issued $500.0 million of 6.875% senior notes due 2027 (the “2027 Senior Notes”) in a 144A private placement at a price equal to 99.235% of par that resulted in net proceeds to CRP of $489.0 million , after deducting the original issuance discount of $3.8 million and debt issuance costs of $7.2 million . Interest is payable on the 2027 Senior Notes semi-annually in arrears on each April 1 and October 1 , commencing October 1, 2019 . On November 30, 2017 , CRP issued at par $400.0 million of 5.375% senior notes due 2026 (the “2026 Senior Notes” and collectively with the 2027 Senior Notes, the “Senior Notes”) in a 144A private placement that resulted in net proceeds to CRP of $391.0 million , after deducting $9.0 million in debt issuance costs. Interest is payable on the 2026 Senior Notes semi-annually in arrears on each January 15 and July 15 , which commenced on 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 indentures governing the Senior Notes. At any time prior to January 15, 2021 (for the 2026 Senior Notes) and April 1, 2022 (for the 2027 Senior Notes), the “Optional Redemption Dates,” CRP may, on any one or more occasions, redeem up to 35% of the aggregate principal amount of either series of 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% (for the 2026 Senior Notes) and 106.875% (for the 2027 Senior Notes) of the principal amount of the Senior Notes of the applicable series redeemed, plus any accrued and unpaid interest to the date of redemption; provided that at least 65% of the aggregate principal amount of each such series of 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 the Optional Redemption Dates, 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, and any accrued and unpaid interest as of the date of redemption. On and after the Optional Redemption Dates, CRP may redeem the Senior Notes, in whole or in part, at redemption prices expressed as percentages of principal amount plus accrued and unpaid interest to the redemption date. If CRP experiences certain defined changes of control (and, in some cases, followed by a ratings decline), 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 indentures governing the Senior Notes contain 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 these covenants as of March 31, 2020 and through the filing of this Quarterly Report. Upon an Event of Default (as defined in the indentures 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. In addition, 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. On April 22, 2020, the Company commenced exchange offers to all eligible holders of its Senior Notes. Refer to Note 14—Subsequent Events |
Asset Retirement Obligations
Asset Retirement Obligations | 3 Months Ended |
Mar. 31, 2020 | |
Asset Retirement Obligation Disclosure [Abstract] | |
Asset Retirement Obligations | Note 5—Asset Retirement Obligations The following table summarizes the changes in the Company’s asset retirement obligations (“ARO”) associated with its working interests in oil and gas properties for the three months ended March 31, 2020 : (in thousands) Asset retirement obligations, beginning of period $ 16,874 Liabilities incurred and acquired 560 Liabilities divested and settled (35 ) Accretion expense 252 Asset retirement obligations, end of period $ 17,651 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 plug and abandonment 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 gas property balance. Changes in the liability due to the passage of time are recognized as an increase in the carrying amount of the liability and as accretion expense. |
Stock-Based Compensation
Stock-Based Compensation | 3 Months Ended |
Mar. 31, 2020 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-Based Compensation | Note 6—Stock-Based Compensation 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 March 31, 2020 , the Company had 4,196,761 shares of Class A Common Stock available for future grants. The LTIP provides for grants of restricted stock, stock options (including incentive stock options and nonqualified stock options), restricted stock units, stock appreciation rights and other stock or cash-based awards. Stock-based compensation expense is recognized within both General and administrative expenses and Exploration expense in the Consolidated Statements of Operations. The Company accounts for forfeitures of awards granted under the LTIP as they occur in determining compensation expense. The following table summarizes stock-based compensation expense recognized for the periods presented: Three Months Ended March 31, (in thousands) 2020 2019 Restricted stock awards $ 4,354 $ 3,182 Stock option awards 984 2,584 Performance stock units 1,003 717 Other stock-based compensation expense (1) 68 — Total stock-based compensation expense $ 6,409 $ 6,483 (1) Includes expenses related to the Company’s Employee Stock Purchase Plan (the “ESPP”). In May 2019, an aggregate of 2,000,000 shares were authorized by stockholders for issuance under the ESPP, which became effective on July 1, 2019. As of March 31, 2020 , the Company had 1,940,801 shares of Class A Common Stock available for future issuance. Restricted Stock The following table provides information about restricted stock activity during the three months ended March 31, 2020 : Awards Weighted Average Grant-Date Fair Value Unvested balance as of December 31, 2019 4,838,996 $ 8.51 Granted 1,305,473 2.76 Vested (245,909 ) 15.47 Forfeited (405,535 ) 5.69 Unvested balance as of March 31, 2020 5,493,025 7.04 The Company grants service-based restricted stock awards to executive officers and employees, which vest ratably over a three -year service period, and to directors, which vest over a one -year service period. Compensation cost for the service-based restricted stock awards is based on the closing market price of the Company’s Class A common stock on the grant date, and such costs are recognized ratably over the applicable vesting period. The weighted average grant-date fair value for restricted stock awards granted was $2.76 and $12.51 per share for the three months ended March 31, 2020 and 2019 , respectively. The total fair value of restricted stock awards that vested during the three months ended March 31, 2020 and 2019 was $3.8 million and $1.4 million , respectively. Unrecognized compensation cost related to restricted shares that were unvested as of March 31, 2020 was $29.0 million , which the Company expects to recognize over a weighted average period of 2.1 years. Stock Options Stock options that have been granted under the LTIP expire ten years from the grant date and vest ratably over a three -year service period. The exercise price for an option granted under the LTIP is the closing market price of the Company’s Class A Common Stock on the grant date. Compensation cost for stock options is based on the grant-date fair value of the award which is then recognized ratably over the vesting period of three years . The Company estimates the fair value using the Black-Scholes option-pricing model. Expected volatilities are based on the weighted average asset volatility of the Company and an identified set of comparable companies. Expected term is based on the simplified method and is estimated as the mid-point between 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 three months ended March 31, 2020 and 2019 : Three Months Ended March 31, 2020 2019 Weighted average grant-date fair value per share $ 2.37 $ 5.22 Expected term (in years) 6 6 Expected stock volatility 52 % 45 % Dividend yield — % — % Risk-free interest rate 1.7 % 2.5 % The following table provides information about stock option awards outstanding during the three months ended March 31, 2020 : Options Weighted Average Exercise Price Weighted Average Remaining Term (in years) Aggregate Intrinsic Value (in thousands) Outstanding as of December 31, 2019 4,764,167 $ 15.99 Granted 52,500 4.69 Exercised — — Forfeited (22,502 ) 18.74 Expired (42,666 ) 18.99 Outstanding as of March 31, 2020 4,751,499 15.82 4.3 $ — Exercisable as of March 31, 2020 3,987,631 16.15 3.5 $ — The total fair value of stock options that vested during the three months ended March 31, 2020 and 2019 was $3.5 million and $3.4 million , respectively. There were no stock options exercised during either the three months ended March 31, 2020 or 2019 . As of March 31, 2020 , there was $3.1 million of unrecognized compensation cost related to unvested stock options, which the Company expects to recognize on a pro-rata basis over a weighted-average period of 1.6 years . Performance Stock Units During the three months ended March 31, 2020 and 2019 , there was no significant performance stock units activity. As of March 31, 2020 , there was $4.7 million of unrecognized compensation cost related to performance stock units that were unvested, which the Company expects to recognize on a pro-rata basis over a weighted average period of 1.7 |
Derivative Instruments
Derivative Instruments | 3 Months Ended |
Mar. 31, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Instruments | Note 7—Derivative Instruments The Company is exposed to certain risks relating to its ongoing business operations and may use 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 may periodically use 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 flows 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 may use commodity derivative instruments known as fixed price swaps to realize a known price for a specific volume of production as well as basis swaps to hedge the difference between the index price and a local index price. All transactions are settled in cash with one party paying the other for the resulting difference in price multiplied by the contract volume. The following table summarizes the approximate volumes and average contract prices of swap contracts the Company had in place as of March 31, 2020 : Period Volume (Bbls) Volume Weighted Average Fixed Price ($/Bbl) (1) Crude oil swaps April 2020 - June 2020 2,730,000 30,000 $ 25.88 July 2020 - September 2020 2,208,000 24,000 26.58 Period Volume (Bbls) Volume (Bbls/d) Weighted Average Differential ($/Bbl) (2) Crude oil basis swaps April 2020 - June 2020 273,000 3,000 $ 0.67 July 2020 - September 2020 276,000 3,000 0.67 October 2020 - December 2020 276,000 3,000 0.67 (1) These crude oil swap transactions are settled based on the NYMEX WTI price as of the specified settlement date. (2) These oil basis swap transactions are settled based on the difference between the arithmetic average of ARGUS MIDLAND WTI and ARGUS WTI CUSHING indices, during each applicable settlement period. Period Volume (MMBtu) Volume (MMBtu/d) Weighted Average Fixed Price ($/MMBtu) (1) Natural gas swaps April 2020 - June 2020 2,730,000 30,000 $ 2.03 July 2020 - September 2020 2,760,000 30,000 2.03 October 2020 - December 2020 930,000 10,109 2.03 Period Volume (MMBtu) Volume (MMBtu/d) Weighted Average Differential ($/MMBtu) (2) Natural gas basis swaps April 2020 - June 2020 2,730,000 30,000 $ (1.62 ) July 2020 - September 2020 2,760,000 30,000 (1.62 ) October 2020 - December 2020 930,000 10,109 (1.62 ) (1) These natural gas swap contracts are settled based on NYMEX Henry Hub price as of the specified settlement date. (2) These natural gas basis swap contracts are settled based on the difference between the Inside FERC’s West Texas WAHA price and the NYMEX price of natural gas during each applicable settlement 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 in the Consolidated Balance Sheets, other than derivative instruments that meet the “normal purchase normal sale” exclusion, and any fair value gains and losses are recognized in current period earnings. The following table presents the impact of the Company’s derivative instruments in its Consolidated Statements of Operations for the periods presented: Three Months Ended March 31, (in thousands) 2020 2019 Net gain (loss) on derivative instruments $ (8,505 ) $ (5,871 ) Offsetting of Derivative Assets and Liabilities. The Company’s commodity derivatives 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 tables below summarizes the fair value amounts and the classification in the Consolidated Balance Sheets of the Company’s derivative contracts outstanding at the respective balance dates, as well as the gross recognized derivative assets, liabilities and offset amounts: Balance Sheet Classification Gross Fair Value Asset/Liability Amounts Gross Amounts Offset (1) Net Recognized Fair Value Assets/Liabilities (in thousands) March 31, 2020 Derivative Assets Commodity contracts Current assets - Derivative instruments $ 8,589 $ (8,589 ) $ — Derivative Liabilities Commodity contracts Current liabilities - Derivative instruments 17,366 (8,589 ) 8,777 December 31, 2019 Derivative Liabilities Commodity contracts Current liabilities - Derivative instruments $ 325 $ — $ 325 (1) The Company has agreements in place with all of its counterparties that allow for the financial right of offset for derivative assets against 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 under CRP’s credit facility as referenced above. |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2020 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Note 8—Fair Value Measurements Recurring Fair Value Measurements The Company follows the Financial Accounting Standards Board’s Accounting Standard Codification (“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 presents, for each applicable level within the fair value hierarchy, the Company’s net derivative assets and liabilities, including both current and noncurrent portions, measured at fair value on a recurring basis: (in thousands) Level 1 Level 2 Level 3 March 31, 2020 Total assets $ — $ — $ — Total liabilities — 8,777 — December 31, 2019 Total assets $ — $ — $ — Total liabilities — 325 — 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 judgment 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 its 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. Refer to Note 7—Derivative Instruments for details of the gross and net derivatives assets, liabilities and offset amounts presented in the Consolidated Balance Sheets. Nonrecurring Fair Value Measurements The Company applies the provisions of the fair value measurement standard on a nonrecurring basis to its non-financial assets and liabilities, including proved oil and gas properties. These assets and liabilities are not measured at fair value on an ongoing basis but are subject to fair value adjustments in certain circumstances. Impairment of Oil and Natural Gas Properties. The Company reviews its proved oil and natural gas properties for impairment whenever events and circumstances indicate that the fair value of these assets may be below their carrying value. The significant decrease in the forward price curves for crude oil and natural gas in March of 2020 resulted in a triggering event which required the Company to reassess its proved oil and natural gas properties for impairment as of March 31, 2020. An impairment loss is indicated if the sum of the expected undiscounted future net cash flows from oil and gas properties is less than the carrying amount of the assets. In this circumstance, the Company then recognizes impairment expense for the amount by which the carrying amount of proved properties exceeds their estimated fair value. The Company reviews its oil and natural gas properties on a field-by-field basis. The Company calculates the estimated fair values of its oil and natural gas properties using an income approach that is based on inputs that are not observable in the market and therefore represent Level 3 inputs. Significant inputs to the expected future net cash flows used for the impairment review and the related fair value measurement of oil and natural gas proved properties include estimates of: (i) reserves; (ii) future production decline rates; (iii) future operating and development costs; (iv) future commodity prices, including price differentials; and (v) a market participant-based weighted average cost of capital rate. These inputs require significant judgments and estimates by the Company’s management and all available information was considered at the date of the review. The impairment test performed by the Company indicated that a proved property impairment had occurred with respect to certain of its oil and gas fields, and therefore a non-cash impairment charge to reduce the carrying value of the impaired property to its fair value was recorded. Proved oil and natural gas properties with a previous carrying value of $771.4 million were partially written down to their fair value of $179.6 million , resulting in a non-cash impairment charge of $591.8 million being recorded during the three months ended March 31, 2020. The Company performed an impairment assessment of all its proved oil and gas properties as of March 31, 2020. Two of the Company’s fields were subject to an impairment write-down as quantified above, but the remaining five fields were not impaired due to their undiscounted cash flows exceeding their carrying values by 30% to over 100% . The Company did not recognize any impairment write-downs with respect to its proved property during the comparable 2019 period. Impairment expense for proved properties is presented as part of Impairment and Abandonment Expense in the Consolidated Statements of Operations. Asset Retirement Obligations. 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 the estimated future costs to plug and abandon oil and gas properties and reserve lives. Refer to Note 5—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 their fair values because of the short-term maturities and/or liquid nature of these assets and liabilities. The Company’s Senior Notes and borrowings under its credit agreement are recorded at cost. The following table summarizes the fair values and carrying values of these instruments as of the dates indicated: March 31, 2020 December 31, 2019 Carrying Value Fair Value Carrying Value Fair value Credit facility due 2023 (1) $ 235,000 $ 235,000 $ 175,000 $ 175,000 5.375% Senior Notes due 2026 (2) 392,881 96,000 392,623 394,480 6.875% Senior Notes due 2027 (2) 490,038 122,500 489,766 520,000 (1) 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. (2) |
Earnings Per Share
Earnings Per Share | 3 Months Ended |
Mar. 31, 2020 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Note 9—Earnings Per Share Basic earnings per share (“EPS”) is calculated by dividing net income available to Class A Common Stock by the weighted average shares of Class A Common Stock outstanding during each period. Diluted EPS is calculated by dividing adjusted net income available to Class A Common Stock by the weighted average shares of diluted Class A Common Stock 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, withholding amounts from employee stock purchase plan 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. When a loss from continuing operations exists, all dilutive securities and potentially dilutive securities are anti-dilutive and are therefore excluded from the computation of diluted earnings per share. The following table reflects the allocation of net income to common shareholders and EPS computations for the periods indicated based on a weighted average number of common shares outstanding for the period: Three Months Ended March 31, (in thousands, except per share data) 2020 2019 Net income (loss) attributable to Class A Common Stock $ (547,983 ) $ (8,112 ) Basic weighted average shares of Class A Common Stock outstanding 275,952 264,365 Diluted weighted average shares of Class A Common Stock outstanding 275,952 264,365 Basic net earnings (loss) per share of Class A Common Stock $ (1.99 ) $ (0.03 ) Diluted net earnings (loss) per share of Class A Common Stock $ (1.99 ) $ (0.03 ) The Company recognized a net loss during the three months ended March 31, 2020 and 2019 . As a result, all potential common shares were anti-dilutive and were excluded from the calculation of diluted net earnings per share. The following table presents shares excluded from the diluted earnings per share calculation for the periods presented as their impact was anti-dilutive: Three Months Ended March 31, (in thousands) 2020 2019 Out-of-the-money stock options 4,782 4,556 Restricted stock 5,143 1,516 Employee Stock Purchase Plan 1,138 — Weighted average shares of Class C Common Stock 1,034 12,003 Warrants 8,000 8,000 |
Transactions with Related Parti
Transactions with Related Parties | 3 Months Ended |
Mar. 31, 2020 | |
Related Party Transactions [Abstract] | |
Transactions with Related Parties | Note 10—Transactions with Related Parties Riverstone and its affiliates beneficially own more than 10% equity interest in the Company and are therefore considered related parties. The Company has a marketing agreement with Lucid Energy Delaware, LLC (“Lucid”), an affiliate of Riverstone. The Company believes that the terms of the marketing agreement with Lucid are no less favorable to either party than those held with unaffiliated parties. The following table summarizes the revenues recognized and the associated processing fees incurred from this marketing agreement as presented in the Consolidated Statements of Operations for the periods indicated as well as the related net receivables outstanding as of the balance sheet dates: Three Months Ended March 31, (in thousands) 2020 2019 Oil and gas sales $ 1,088 $ 607 Gathering, processing and transportation expenses 953 317 (in thousands) March 31, 2020 December 31, 2019 Accounts receivable, net (1) $ 70 $ 91 (1) |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 11—Commitments and Contingencies Commitments The Company routinely enters into or extends operating agreements in the ordinary course of business. During the three months ended March 31, 2020, the Company amended one of its firm crude oil sales agreements, which moved the start date of its physical delivery commitments of 30,000 Bbls/d from 2020 to January 1, 2021, and affirmed May 31, 2025 as the end of the initial term of the agreement. There has been no other material, non-routine changes in commitments during the three months ended March 31, 2020 . Please refer to Note 13—Commitments and Contingencies included in Part II, Item 8 in the Company’s 2019 Annual Report. 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 a contingent liability to be recognized as of the date of these consolidated financial statements. |
Revenues
Revenues | 3 Months Ended |
Mar. 31, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Revenues | Note 12—Revenues Revenue from Contracts with Customers Crude oil, natural gas and NGL sales are recognized at the point that control of the product is transferred to the customer and collectability is reasonably assured. Virtually all of the Company’s contract pricing provisions are tied to a market index, with certain adjustments based on, among other factors, transportation costs to an active spot market and quality differentials. As a result, the Company’s realized price of oil, natural gas, and NGLs fluctuates to remain competitive with other available oil, natural gas, and NGLs supplies both globally (in the case of crude oil) and locally. Oil and gas revenues presented within the Consolidated Statements of Operations relate to the sale of oil, natural gas and NGLs as shown below: Three Months Ended March 31, 2020 2019 Operating revenues (in thousands): Oil sales $ 170,505 $ 175,554 Natural gas sales 8,358 12,497 NGL sales 13,906 26,518 Oil and gas sales $ 192,769 $ 214,569 Oil sales The Company’s crude oil sales contracts are generally structured whereby oil is delivered to the purchaser at a contractually agreed-upon delivery point at which the purchaser takes title of the product. This delivery point is usually at the wellhead or at the inlet of a transportation pipeline. Revenue is recognized when control transfers to the purchaser at the delivery point based on the net price received from the purchaser. Any downstream transportation costs incurred by crude purchasers are reflected as a net reduction to oil sales revenues. Natural gas and NGL sales Under the Company’s natural gas processing contracts, liquids rich natural gas is delivered to a midstream processing entity at the inlet of the gas plant processing system. The midstream processing entity gathers and processes the raw gas and then remits proceeds to Centennial for the resulting sales of NGLs, while the Company generally elects to take its residue gas product “in-kind” at the plant tailgate. For these contracts, the Company evaluates when control is transferred and revenue should be recognized. Where the Company has concluded that control transfers at the tailgate of the processing facility, fees incurred prior to transfer of control are presented as gathering, processing and transportation expenses (“GP&T”) within the Consolidated Statements of Operations. Any transportation and fractionation costs incurred subsequent to the point of transfer of control are reflected as a net reduction to natural gas and NGL sales revenues presented in the table above. Performance obligations For all commodity products, the Company records revenue in the month production is delivered to the purchaser. Settlement statements for natural gas and NGL sales may not be received for 30 to 90 days after the date production volumes are delivered and for crude oil, generally within 30 days after delivery has occurred. However, payment is unconditional once the performance obligations have been satisfied. At this time, the volume and price can be reasonably estimated and amounts due from customers are accrued in Accounts receivable, net in the Consolidated Balance Sheets. As of March 31, 2020 and December 31, 2019 , such receivable balances were $36.1 million and $76.6 million , respectively. The Company records any differences between its estimates and the actual amounts received for product sales in the month that payment is received from the purchaser. Historically, any identified differences between revenue estimates and actual revenue received have not been significant. For the three months ended March 31, 2020 and 2019 , revenue recognized in the reporting period related to performance obligations satisfied in prior reporting periods were not material. Transaction price allocated to remaining performance obligations For the Company’s product sales that have a contract term greater than one year, the Company has utilized the practical expedient in ASC Topic 606, Revenue from contracts with Customers, |
Leases
Leases | 3 Months Ended |
Mar. 31, 2020 | |
Leases [Abstract] | |
Leases | Note 13—Leases At contract inception, the Company determines whether or not an arrangement contains a lease. However, in connection with the implementation of ASC Topic 842, Leases (“ASC 842”), this assessment was made as of the adoption date of ASC 842. Upon determination of a lease, a lease right-of-use (ROU) asset and related liability are recorded based on the present value of the future lease payments over the lease term. ROU assets represent the Company’s right to use an underlying asset for the lease term, and lease liabilities represent the obligation to make future lease payments arising from the lease. Currently, the Company has operating leases for drilling rig contracts, office rental agreements, and other wellhead equipment. As of March 31, 2020 , these leases have remaining lease terms ranging from two months to two years , some of which include options to extend the lease term for up to five years , and some of which include options to early terminate. These options are considered in determining the lease term and are included in the present value of future payments that are recorded for leases when the Company is reasonably certain to exercise the option. Leases with an initial term of one year or less are not recorded in the Consolidated Balance Sheets. Additionally, none of the Company’s lease agreements contain any material residual value guarantees or material restrictive covenants. The present value of future lease payments is determined at the lease commencement date based upon the Company’s incremental borrowing rate. The incremental borrowing rate is calculated using a risk-free interest rate adjusted for the Company’s specific risk and the specific lease term. The table below summarizes the Company’s weighted-average discount rate and weighted-average remaining lease term as of the period presented. As of March 31, 2020 Weighted-average discount rate 4.82 % Weighted-average remaining lease term (years) 1.26 The Company’s drilling rig contracts, office rental agreements, and wellhead equipment agreements contain both lease and non-lease components, which are combined and accounted for as a single lease component. Variable lease payments are recognized in the period in which they are incurred and include operating expenses related to the office rental agreements and expenses incurred on the drilling rig contracts in excess of the contractual rate. Expenses related to short-term leases are recognized on a straight-line basis over the lease term. The following table presents the various components of the Company’s lease expenses for the periods presented. Three Months Ended March 31, (in thousands) 2020 2019 Lease costs (1) Operating lease cost $ 4,676 $ 10,587 Variable lease cost 1,352 801 Short-term lease cost (2) 19,610 12,224 Total lease cost $ 25,638 $ 23,612 (1) The majority of the Company’s operating leases relate to the operations, drilling or completion of the Company’s wells. Therefore, the lease costs presented in the above table represent the total gross costs the Company incurs, which are not comparable to the Company’s net costs recorded to the Consolidated Statements of Operations, Consolidated Statements of Cash Flows or capitalized in the Consolidated Balance Sheets, as amounts therein are reflected net of amounts billed to the Company’s working interest partners. (2) Includes drilling rig lease costs of $11.2 million which may not necessarily be recurring in these amounts in the near-term based on the Company’s current drilling plan discussed in Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Operational Highlights . Maturities of the Company’s long-term operating lease liabilities by fiscal year as of March 31, 2020 are as follows: (in thousands) Total (2) 2020 (1) $ 5,847 2021 3,033 2022 425 Total lease payments 9,305 Less: imputed interest (313 ) Present value of lease liabilities (3) $ 8,992 (1) Excludes payments made during the three months ended March 31, 2020 . (2) Total lease payments exclude variable lease payments which can be charged under the terms of the lease agreements. (3) Of the total present value of lease liabilities, $6.4 million was recorded to current Operating lease liabilities and $2.6 million was recorded in noncurrent Operating lease liabilities in the Consolidated Balance Sheets as of March 31, 2020 . |
Subsequent Events Subsequent Ev
Subsequent Events Subsequent Events | 3 Months Ended |
Mar. 31, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Events [Text Block] | Note 14—Subsequent Events Nasdaq listing Notice On April 21, 2020, the Company received written notification (the “Notice”) from the Listing Qualifications Department of the Nasdaq Stock Market LLC (“Nasdaq”) indicating that, for the last thirty consecutive business days, the bid price for the Company’s Class A Common Stock had closed below the minimum $1.00 per share requirement for continued listing on the Nasdaq Capital Market under Nasdaq Listing Rule 5550(a)(2) (the “Minimum Bid Requirement”). The Notice has no immediate effect on the listing or trading of the Company’s common stock on the Nasdaq Capital Market. The Company was provided an initial period of 180 calendar days, or until October 19, 2020, to regain compliance. However, due to recent market turmoil, Nasdaq has filed a rule change which has the effect of extending the Company’s compliance period until December 28, 2020. If the Company does not regain compliance with the Minimum Bid Requirement by December 28, 2020, the Company may be eligible for an additional 180 calendar day compliance period. The Company intends to actively monitor the closing bid price of its Common Stock and will evaluate available options to regain compliance with the Minimum Bid Requirement, as necessary. Senior Notes Exchange On April 22, 2020, the Company commenced offers to all eligible holders of its Senior Notes to exchange any and all of their Senior Notes held for up to $250.0 million aggregate principal amount of newly issued 8% Second Lien Senior Secured Notes due 2025 and up to $200.0 million aggregate principal amount of newly issued 8% Third Lien Senior Secured Notes due 2027 (the “Exchange Offers”). In accordance with the Exchange Offers, the eligible holders of the Senior Notes can early tender their holdings on or before May 5, 2020 or can normally tender on or before May 19, 2020 . The transaction is currently expected to close on May 22, 2020 , subject to customary closing conditions. Amendments to the Credit Agreement On May 1, 2020 , the Company and CRP entered into amendments to CRP’s amended and restated credit agreement (the “Amendments”) with the lenders to its existing credit agreement. Pursuant to the Amendments, the borrowing base and elected commitments were reduced to $700.0 million . In addition, to the extent that the Exchange Offers close, the Amendments introduce a minimum availability condition to borrowing at the lesser of $100.0 million and 25% of the aggregate principal amount of the new second and third lien senior secured notes outstanding from the Exchange Offers discussed above. If the minimum availability condition to borrowing were to be determined at its maximum level of $100.0 million , it would have the resulting effect of limiting the amount of borrowings that CRP could draw against its $700.0 million credit facility to $600.0 million . Among other things, the Amendments also suspended the total funded debt to EBITDAX ratio (as specified in the Company’s existing credit agreement) through year-end 2021, introduced a new financial covenant testing the ratio of first lien debt to EBITDAX, and permitted the issuance of new senior secured notes in connection with the Exchange Offers described above. Amendment to 2016 LTIP On April 29, 2020, the stockholders of the Company approved the amended and restated LTIP, which, among other things, increased the number of shares of Class A Common Stock authorized for issuance by 8,250,000 shares. Class C Common Stock Conversion to Class A Common Stock On April 2, 2020, the legacy owners of CRP exchanged all of their remaining 1,034,119 CRP Common Units (and corresponding shares of Class C Common Stock) for Class A Common Stock, and as a result, the Company currently owns all of the membership interests in CRP . No cash proceeds were received by the Company in connection with this exchange. |
Basis of Presentation (Policies
Basis of Presentation (Policies) | 3 Months Ended |
Mar. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) and the rules and regulations of the United States Securities and Exchange Commission (“SEC”) for interim financial reporting. Accordingly, certain disclosures normally included in an Annual Report on Form 10-K have been omitted. The consolidated financial statements and related notes included in this Quarterly Report should be read in conjunction with the Company’s consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K for the period ended December 31, 2019 (the “ 2019 Annual Report”). Except as disclosed herein, there have been no material changes to the information disclosed in the notes to the consolidated financial statements included in the Company’s 2019 Annual Report. In the opinion of management, all normal, recurring adjustments and accruals considered necessary to present fairly, in all material respects, the Company’s interim financial results have been included. Operating results for the periods presented are not necessarily indicative of expected results for the full year. |
Principles of Consolidation | The consolidated financial statements include the accounts of the Company and its majority owned subsidiary CRP, and CRP’s wholly-owned subsidiaries. Noncontrolling interest represents third-party ownership in CRP and is presented as a component of equity. As of March 31, 2020 and December 31, 2019 , the noncontrolling interest ownership of CRP was 0.4% . |
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 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) impairment expense of unproved properties; (iv) depreciation, depletion and amortization; (v) asset retirement obligations; (vi) determining fair value and allocating purchase price in connection with business combinations and asset acquisitions; (vii) accrued revenues and related receivables; (viii) accrued liabilities; (ix) valuation of derivatives; and (x) deferred income taxes. |
Income Taxes | Income tax expense during interim periods is based on applying an estimated annual effective income tax rate to the Company’s year-to-date income, plus any significant unusual or infrequently occurring items which are recorded in the interim period. The computation of the annual estimated effective tax rate at each interim period requires certain estimates and significant judgment including, but not limited to, the expected operating income for the year, projections of the proportion of income earned and taxed in various state jurisdictions, permanent and temporary differences and the likelihood of recovering deferred tax assets generated. The accounting estimates used to compute the provision for income taxes may change as new events occur, additional information becomes known or as the tax environment changes. As of March 31, 2020, the Company determined that it is more-likely-than-not that a portion of its deferred tax assets will not be realized. Accordingly, a valuation allowance against its deferred tax assets in the amount of $55.6 million was recognized as of March 31, 2020, which caused the Company’s provision for income taxes for the three months ended March 31, 2020 to differ from the amounts that would be provided by applying the statutory U.S. federal income tax rate of 21% to pre-tax book loss. |
Risks and Uncertainties [Policy Text Block] | The prices received for oil, natural gas and NGL production heavily influences the Company’s revenue, profitability, liquidity, access to capital, future rate of growth and carrying value of its properties. Oil, natural gas and NGLs are commodities, and their prices have been volatile in response to recent changes in global and domestic supply, the global COVID-19 pandemic and demand and market uncertainty. The Company generally funds its operations and capital expenditures with its cash flows from operations, borrowings under CRP’s credit agreement, 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 in turn impact the Company’s ability to comply with the financial covenants under CRP’s credit agreement and the Senior Notes which could also limit the amount of borrowings available to fund the Company’s capital expenditures and potential acquisitions. Additionally, if forward prices decline, the Company could incur additional impairments of its oil and gas assets and be subject to negative impacts to its production levels. |
Accounts Receivable, Accounts_2
Accounts Receivable, Accounts Payable and Accrued Expenses (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Accounts Receivable | Accounts receivable are comprised of the following: (in thousands) March 31, 2020 December 31, 2019 Accrued oil and gas sales receivable, net $ 36,105 $ 76,578 Joint interest billings, net 26,530 25,136 Other 257 198 Accounts receivable, net $ 62,892 $ 101,912 |
Schedule of Accounts Payable and Accrued Expenses | Accounts payable and accrued expenses are comprised of the following: (in thousands) March 31, 2020 December 31, 2019 Accounts payable $ 50,659 $ 21,484 Accrued capital expenditures 70,241 83,002 Revenues payable 51,729 82,539 Accrued interest 22,563 19,405 Accrued employee compensation and benefits 4,906 12,979 Accrued expenses and other 23,553 24,900 Accounts payable and accrued expenses $ 223,651 $ 244,309 |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt | The following table provides information about the Company’s long-term debt as of the dates indicated: (in thousands) March 31, 2020 December 31, 2019 Credit Facility due 2023 $ 235,000 $ 175,000 5.375% Senior Notes due 2026 400,000 400,000 6.875% Senior Notes due 2027 500,000 500,000 Unamortized debt issuance costs on Senior Notes (13,626 ) (14,061 ) Unamortized debt discount (3,455 ) (3,550 ) Senior Notes, net 882,919 882,389 Total long-term debt, net $ 1,117,919 $ 1,057,389 |
Asset Retirement Obligations (T
Asset Retirement Obligations (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Asset Retirement Obligation Disclosure [Abstract] | |
Schedule of Asset Retirement Obligations | The following table summarizes the changes in the Company’s asset retirement obligations (“ARO”) associated with its working interests in oil and gas properties for the three months ended March 31, 2020 : (in thousands) Asset retirement obligations, beginning of period $ 16,874 Liabilities incurred and acquired 560 Liabilities divested and settled (35 ) Accretion expense 252 Asset retirement obligations, end of period $ 17,651 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of Stock-based Compensation Expense | The following table summarizes stock-based compensation expense recognized for the periods presented: Three Months Ended March 31, (in thousands) 2020 2019 Restricted stock awards $ 4,354 $ 3,182 Stock option awards 984 2,584 Performance stock units 1,003 717 Other stock-based compensation expense (1) 68 — Total stock-based compensation expense $ 6,409 $ 6,483 (1) Includes expenses related to the Company’s Employee Stock Purchase Plan (the “ESPP”). In May 2019, an aggregate of 2,000,000 shares were authorized by stockholders for issuance under the ESPP, which became effective on July 1, 2019. As of March 31, 2020 , the Company had 1,940,801 shares of Class A Common Stock available for future issuance. |
Schedule of Restricted Stock Activity | The following table provides information about restricted stock activity during the three months ended March 31, 2020 : Awards Weighted Average Grant-Date Fair Value Unvested balance as of December 31, 2019 4,838,996 $ 8.51 Granted 1,305,473 2.76 Vested (245,909 ) 15.47 Forfeited (405,535 ) 5.69 Unvested balance as of March 31, 2020 5,493,025 7.04 |
Summary of Stock Option Valuation Inputs | The following table summarizes the assumptions and related information used to determine the grant-date fair value of stock options awarded during the three months ended March 31, 2020 and 2019 : Three Months Ended March 31, 2020 2019 Weighted average grant-date fair value per share $ 2.37 $ 5.22 Expected term (in years) 6 6 Expected stock volatility 52 % 45 % Dividend yield — % — % Risk-free interest rate 1.7 % 2.5 % |
Summary of Stock Option Activity | The following table provides information about stock option awards outstanding during the three months ended March 31, 2020 : Options Weighted Average Exercise Price Weighted Average Remaining Term (in years) Aggregate Intrinsic Value (in thousands) Outstanding as of December 31, 2019 4,764,167 $ 15.99 Granted 52,500 4.69 Exercised — — Forfeited (22,502 ) 18.74 Expired (42,666 ) 18.99 Outstanding as of March 31, 2020 4,751,499 15.82 4.3 $ — Exercisable as of March 31, 2020 3,987,631 16.15 3.5 $ — |
Derivative Instruments (Tables)
Derivative Instruments (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
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 March 31, 2020 : Period Volume (Bbls) Volume Weighted Average Fixed Price ($/Bbl) (1) Crude oil swaps April 2020 - June 2020 2,730,000 30,000 $ 25.88 July 2020 - September 2020 2,208,000 24,000 26.58 Period Volume (Bbls) Volume (Bbls/d) Weighted Average Differential ($/Bbl) (2) Crude oil basis swaps April 2020 - June 2020 273,000 3,000 $ 0.67 July 2020 - September 2020 276,000 3,000 0.67 October 2020 - December 2020 276,000 3,000 0.67 (1) These crude oil swap transactions are settled based on the NYMEX WTI price as of the specified settlement date. (2) These oil basis swap transactions are settled based on the difference between the arithmetic average of ARGUS MIDLAND WTI and ARGUS WTI CUSHING indices, during each applicable settlement period. Period Volume (MMBtu) Volume (MMBtu/d) Weighted Average Fixed Price ($/MMBtu) (1) Natural gas swaps April 2020 - June 2020 2,730,000 30,000 $ 2.03 July 2020 - September 2020 2,760,000 30,000 2.03 October 2020 - December 2020 930,000 10,109 2.03 Period Volume (MMBtu) Volume (MMBtu/d) Weighted Average Differential ($/MMBtu) (2) Natural gas basis swaps April 2020 - June 2020 2,730,000 30,000 $ (1.62 ) July 2020 - September 2020 2,760,000 30,000 (1.62 ) October 2020 - December 2020 930,000 10,109 (1.62 ) (1) These natural gas swap contracts are settled based on NYMEX Henry Hub price as of the specified settlement date. (2) These natural gas basis swap contracts are settled based on the difference between the Inside FERC’s West Texas WAHA price and the NYMEX price of natural gas during each applicable settlement period. |
Schedule of Gains and Losses from Derivative Instruments | The following table presents the impact of the Company’s derivative instruments in its Consolidated Statements of Operations for the periods presented: Three Months Ended March 31, (in thousands) 2020 2019 Net gain (loss) on derivative instruments $ (8,505 ) $ (5,871 ) |
Schedule of Derivative Instruments in Statement of Financial Position, Fair Value | The tables below summarizes the fair value amounts and the classification in the Consolidated Balance Sheets of the Company’s derivative contracts outstanding at the respective balance dates, as well as the gross recognized derivative assets, liabilities and offset amounts: Balance Sheet Classification Gross Fair Value Asset/Liability Amounts Gross Amounts Offset (1) Net Recognized Fair Value Assets/Liabilities (in thousands) March 31, 2020 Derivative Assets Commodity contracts Current assets - Derivative instruments $ 8,589 $ (8,589 ) $ — Derivative Liabilities Commodity contracts Current liabilities - Derivative instruments 17,366 (8,589 ) 8,777 December 31, 2019 Derivative Liabilities Commodity contracts Current liabilities - Derivative instruments $ 325 $ — $ 325 (1) The Company has agreements in place with all of its counterparties that allow for the financial right of offset for derivative assets against 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) | 3 Months Ended |
Mar. 31, 2020 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value Measurement of Financial Instruments | The Company’s Senior Notes and borrowings under its credit agreement are recorded at cost. The following table summarizes the fair values and carrying values of these instruments as of the dates indicated: March 31, 2020 December 31, 2019 Carrying Value Fair Value Carrying Value Fair value Credit facility due 2023 (1) $ 235,000 $ 235,000 $ 175,000 $ 175,000 5.375% Senior Notes due 2026 (2) 392,881 96,000 392,623 394,480 6.875% Senior Notes due 2027 (2) 490,038 122,500 489,766 520,000 (1) 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. (2) The following table presents, for each applicable level within the fair value hierarchy, the Company’s net derivative assets and liabilities, including both current and noncurrent portions, measured at fair value on a recurring basis: (in thousands) Level 1 Level 2 Level 3 March 31, 2020 Total assets $ — $ — $ — Total liabilities — 8,777 — December 31, 2019 Total assets $ — $ — $ — Total liabilities — 325 — |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |
Schedule of Earnings Per Share, Basic and Diluted | The following table reflects the allocation of net income to common shareholders and EPS computations for the periods indicated based on a weighted average number of common shares outstanding for the period: Three Months Ended March 31, (in thousands, except per share data) 2020 2019 Net income (loss) attributable to Class A Common Stock $ (547,983 ) $ (8,112 ) Basic weighted average shares of Class A Common Stock outstanding 275,952 264,365 Diluted weighted average shares of Class A Common Stock outstanding 275,952 264,365 Basic net earnings (loss) per share of Class A Common Stock $ (1.99 ) $ (0.03 ) Diluted net earnings (loss) per share of Class A Common Stock $ (1.99 ) $ (0.03 ) |
Schedule of Shares Excluded from Diluted Earnings Per Share Calculation | The following table presents shares excluded from the diluted earnings per share calculation for the periods presented as their impact was anti-dilutive: Three Months Ended March 31, (in thousands) 2020 2019 Out-of-the-money stock options 4,782 4,556 Restricted stock 5,143 1,516 Employee Stock Purchase Plan 1,138 — Weighted average shares of Class C Common Stock 1,034 12,003 Warrants 8,000 8,000 |
Transactions with Related Par_2
Transactions with Related Parties (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Related Party Transactions [Abstract] | |
Schedule of Revenues Recognized and Processing Fees Incurred with Related Parties | The following table summarizes the revenues recognized and the associated processing fees incurred from this marketing agreement as presented in the Consolidated Statements of Operations for the periods indicated as well as the related net receivables outstanding as of the balance sheet dates: Three Months Ended March 31, (in thousands) 2020 2019 Oil and gas sales $ 1,088 $ 607 Gathering, processing and transportation expenses 953 317 (in thousands) March 31, 2020 December 31, 2019 Accounts receivable, net (1) $ 70 $ 91 (1) This accounts receivable represents amounts due from Lucid and are presented net of unpaid processing fees due Lucid as of the indicated period end date. |
Revenues (Tables)
Revenues (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Summary of Oil and Gas Revenues | Oil and gas revenues presented within the Consolidated Statements of Operations relate to the sale of oil, natural gas and NGLs as shown below: Three Months Ended March 31, 2020 2019 Operating revenues (in thousands): Oil sales $ 170,505 $ 175,554 Natural gas sales 8,358 12,497 NGL sales 13,906 26,518 Oil and gas sales $ 192,769 $ 214,569 |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Leases [Abstract] | |
Schedule of Discount Rate and Remaining Lease Term, Components of Lease Expenses, and Other Information | The following table presents the various components of the Company’s lease expenses for the periods presented. Three Months Ended March 31, (in thousands) 2020 2019 Lease costs (1) Operating lease cost $ 4,676 $ 10,587 Variable lease cost 1,352 801 Short-term lease cost (2) 19,610 12,224 Total lease cost $ 25,638 $ 23,612 (1) The majority of the Company’s operating leases relate to the operations, drilling or completion of the Company’s wells. Therefore, the lease costs presented in the above table represent the total gross costs the Company incurs, which are not comparable to the Company’s net costs recorded to the Consolidated Statements of Operations, Consolidated Statements of Cash Flows or capitalized in the Consolidated Balance Sheets, as amounts therein are reflected net of amounts billed to the Company’s working interest partners. (2) Includes drilling rig lease costs of $11.2 million which may not necessarily be recurring in these amounts in the near-term based on the Company’s current drilling plan discussed in Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Operational Highlights . As of March 31, 2020 Weighted-average discount rate 4.82 % Weighted-average remaining lease term (years) 1.26 |
Schedule of Maturities of Operating Lease Liabilities | (2) Includes drilling rig lease costs of $11.2 million which may not necessarily be recurring in these amounts in the near-term based on the Company’s current drilling plan discussed in Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Operational Highlights . Maturities of the Company’s long-term operating lease liabilities by fiscal year as of March 31, 2020 are as follows: (in thousands) Total (2) 2020 (1) $ 5,847 2021 3,033 2022 425 Total lease payments 9,305 Less: imputed interest (313 ) Present value of lease liabilities (3) $ 8,992 (1) Excludes payments made during the three months ended March 31, 2020 . (2) Total lease payments exclude variable lease payments which can be charged under the terms of the lease agreements. (3) Of the total present value of lease liabilities, $6.4 million was recorded to current Operating lease liabilities and $2.6 million was recorded in noncurrent Operating lease liabilities in the Consolidated Balance Sheets as of March 31, 2020 . |
Basis of Presentation Additiona
Basis of Presentation Additional Information (Details) | Mar. 31, 2020 | Dec. 31, 2019 |
Centennial Resource Production, LLC | ||
Noncontrolling Interest [Line Items] | ||
Ownership interest of non-controlling interest | 0.40% | 0.40% |
Basis of Presentation Income Ta
Basis of Presentation Income Taxes (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2020USD ($) | |
Income Tax Disclosure [Abstract] | |
Valuation allowance | $ 55.6 |
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 21.00% |
Property Divestiture (Details)
Property Divestiture (Details) - USD ($) $ in Thousands | Feb. 24, 2020 | Mar. 31, 2020 | Mar. 31, 2019 |
Property Dispositions [Abstract] | |||
Proceeds from sales of oil and natural gas properties | $ 150,000 | $ 1,200 | $ 25,709 |
Proceeds from Sale of Oil and Gas Property and Equipment, Deferred Incentive Payments | $ 75,000 | ||
Escrow Deposit | $ 10,000 |
Accounts Receivable, Accounts_3
Accounts Receivable, Accounts Payable and Accrued Expenses - Schedule of Accounts Receivable (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Accrued oil and gas sales receivable, net | $ 36,105 | $ 76,578 |
Joint interest billings, net | 26,530 | 25,136 |
Other | 257 | 198 |
Accounts receivable, net | $ 62,892 | $ 101,912 |
Accounts Receivable, Accounts_4
Accounts Receivable, Accounts Payable and Accrued Expenses - Schedule of Accounts Payable and Accrued Expenses (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Accounts payable | $ 50,659 | $ 21,484 |
Accrued capital expenditures | 70,241 | 83,002 |
Revenues payable | 51,729 | 82,539 |
Accrued interest | 22,563 | 19,405 |
Accrued employee compensation and benefits | 4,906 | 12,979 |
Accrued expenses and other | 23,553 | 24,900 |
Accounts payable and accrued expenses | $ 223,651 | $ 244,309 |
Long-Term Debt - Schedule of Lo
Long-Term Debt - Schedule of Long-Term Debt (Details) - USD ($) $ in Thousands | Mar. 15, 2019 | Nov. 30, 2017 | Mar. 31, 2020 | Dec. 31, 2019 |
Debt Instrument [Line Items] | ||||
Document Period End Date | Mar. 31, 2020 | |||
Total long-term debt, net | $ 1,117,919 | $ 1,057,389 | ||
Senior Notes | ||||
Debt Instrument [Line Items] | ||||
Unamortized debt discount | (3,455) | (3,550) | ||
Unamortized debt issuance costs on Senior Notes | (13,626) | (14,061) | ||
Total long-term debt, net | 882,919 | 882,389 | ||
Senior Notes | Senior Notes Due 2026 | ||||
Debt Instrument [Line Items] | ||||
Percentage of principal amount, change in control | 101.00% | |||
Long-term Debt, Gross | $ 400,000 | $ 400,000 | ||
Interest rate, stated percentage | 5.375% | 5.375% | 5.375% | |
Senior Notes | Senior Notes Due 2027 | ||||
Debt Instrument [Line Items] | ||||
Percentage of principal amount, change in control | 101.00% | |||
Long-term Debt, Gross | $ 500,000 | $ 500,000 | ||
Unamortized debt discount | $ (3,800) | |||
Interest rate, stated percentage | 6.875% | 6.875% | 6.875% | |
Revolving Credit Facility | Line of Credit | ||||
Debt Instrument [Line Items] | ||||
Long-term Debt, Gross | $ 235,000 | $ 175,000 |
Long-Term Debt - Additional Inf
Long-Term Debt - Additional Information (Details) | Apr. 26, 2019 | Apr. 25, 2019 | Mar. 15, 2019USD ($) | May 04, 2018 | Nov. 30, 2017USD ($) | Mar. 31, 2020USD ($)redetermination | Mar. 31, 2020USD ($) | Dec. 31, 2019USD ($) |
Debt Instrument [Line Items] | ||||||||
Document Period End Date | Mar. 31, 2020 | |||||||
Senior Notes | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt discount | $ 3,455,000 | $ 3,455,000 | $ 3,550,000 | |||||
Percentage of principal amount, eligible to be redeemed | 35.00% | |||||||
Redemption price percentage | 100.00% | |||||||
Percentage of principal amount, redeemable | 65.00% | |||||||
Percentage of principal amount, event of default | 25.00% | |||||||
Revolving Credit Facility | Line of Credit | ||||||||
Debt Instrument [Line Items] | ||||||||
Borrowing base | $ 1,200,000,000 | 1,200,000,000 | 1,200,000,000 | |||||
Elected commitments | 800,000,000 | 800,000,000 | 800,000,000 | |||||
Line of credit, term | 5 years | |||||||
Borrowings, outstanding amount | 235,000,000 | 235,000,000 | ||||||
Remaining borrowing capacity, net of current borrowings outstanding | 564,200,000 | 564,200,000 | ||||||
Maximum borrowing base | $ 1,500,000,000 | 1,500,000,000 | $ 1,500,000,000 | |||||
Number of optional borrowing base redeterminations | redetermination | 2 | |||||||
Letter of Credit | Line of Credit | ||||||||
Debt Instrument [Line Items] | ||||||||
Letters of credit outstanding | $ 800,000 | $ 800,000 | ||||||
Minimum | Revolving Credit Facility | Line of Credit | ||||||||
Debt Instrument [Line Items] | ||||||||
Line of Credit Facility, Commitment Fee Percentage | 0.375% | 0.375% | ||||||
Debt instrument, covenant, minimum current ratio | 1 | |||||||
Maximum | Revolving Credit Facility | Line of Credit | ||||||||
Debt Instrument [Line Items] | ||||||||
Line of Credit Facility, Commitment Fee Percentage | 0.50% | 0.50% | ||||||
Debt instrument, covenant, maximum leverage ratio | 3 | 4 | ||||||
Senior Notes Due 2027 | Senior Notes | ||||||||
Debt Instrument [Line Items] | ||||||||
Long-term debt | $ 500,000,000 | |||||||
Interest rate, stated percentage | 6.875% | 6.875% | 6.875% | 6.875% | ||||
Private placement price as percentage of par | 99.235% | |||||||
Proceeds from borrowings, net of issuance costs | $ 489,000,000 | |||||||
Debt discount | 3,800,000 | |||||||
Debt issuance costs | $ 7,200,000 | |||||||
Redemption price percentage | 106.875% | |||||||
Percentage of principal amount, change in control | 101.00% | |||||||
Senior Notes Due 2026 | Senior Notes | ||||||||
Debt Instrument [Line Items] | ||||||||
Long-term debt | $ 400,000,000 | |||||||
Interest rate, stated percentage | 5.375% | 5.375% | 5.375% | 5.375% | ||||
Proceeds from borrowings, net of issuance costs | $ 391,000,000 | |||||||
Debt issuance costs | $ 9,000,000 | |||||||
Redemption price percentage | 105.375% | |||||||
Percentage of principal amount, change in control | 101.00% | |||||||
Adjusted For Statutory Reserve Requirements - London Interbank Offered Rate (LIBOR) | Minimum | Revolving Credit Facility | Line of Credit | ||||||||
Debt Instrument [Line Items] | ||||||||
Basis spread on variable rate | 1.50% | 1.25% | ||||||
Adjusted For Statutory Reserve Requirements - London Interbank Offered Rate (LIBOR) | Maximum | Revolving Credit Facility | Line of Credit | ||||||||
Debt Instrument [Line Items] | ||||||||
Basis spread on variable rate | 2.50% | 2.25% | ||||||
Federal Funds Effective Swap Rate | Revolving Credit Facility | Line of Credit | ||||||||
Debt Instrument [Line Items] | ||||||||
Basis spread on variable rate | 0.50% | 0.50% | ||||||
One-Month London Interbank Offered Rate (LIBOR) | Revolving Credit Facility | Line of Credit | ||||||||
Debt Instrument [Line Items] | ||||||||
Basis spread on variable rate | 1.00% | 1.00% | ||||||
London Interbank Offered Rate (LIBOR) | Minimum | Revolving Credit Facility | Line of Credit | ||||||||
Debt Instrument [Line Items] | ||||||||
Basis spread on variable rate | 0.50% | 0.25% | ||||||
London Interbank Offered Rate (LIBOR) | Maximum | Revolving Credit Facility | Line of Credit | ||||||||
Debt Instrument [Line Items] | ||||||||
Basis spread on variable rate | 1.50% | 1.25% |
Asset Retirement Obligations (D
Asset Retirement Obligations (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2020USD ($) | |
Asset Retirement Obligation, Roll Forward Analysis [Roll Forward] | |
Asset retirement obligations, beginning of period | $ 16,874 |
Liabilities incurred and acquired | 560 |
Liabilities divested and settled | (35) |
Accretion expense | 252 |
Asset retirement obligations, end of period | $ 17,651 |
Stock-Based Compensation - Addi
Stock-Based Compensation - Additional Information (Details) - USD ($) | 3 Months Ended | |||
Mar. 31, 2020 | Mar. 31, 2019 | May 01, 2019 | Oct. 07, 2016 | |
Restricted stock awards | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Weighted average grant-date fair value (in dollars per share) | $ 2.76 | $ 12.51 | ||
Fair value of vested restricted stock awards | $ 3,800,000 | $ 1,400,000 | ||
Unrecognized compensation costs | $ 29,000,000 | |||
Unrecognized compensation costs, period for recognition | 2 years 1 month 6 days | |||
Stock option awards | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Unrecognized compensation costs, period for recognition | 1 year 7 months 6 days | |||
Fair value of stock options vested | $ 3,500,000 | 3,400,000 | ||
Intrinsic value of options exercised | 0 | $ 0 | ||
Unrecognized compensation costs for stock options | $ 3,100,000 | |||
Performance stock units | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting period | 3 years | |||
Unrecognized compensation costs | $ 4,700,000 | |||
Unrecognized compensation costs, period for recognition | 1 year 8 months 12 days | |||
2016 Long Term Incentive Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of shares authorized (in shares) | 16,500,000 | |||
Number of shares available for grant (in shares) | 4,196,761 | |||
2016 Long Term Incentive Plan | Stock option awards | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting period | 3 years | |||
Option expiration period | 10 years | |||
2019 Employee Stock Purchase Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of shares authorized (in shares) | 2,000,000 | |||
Number of shares available for grant (in shares) | 1,940,801 | |||
Officer and employees | Restricted stock awards | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
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 - Comp
Stock-Based Compensation - Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Total equity based compensation expense | $ 6,409 | $ 6,483 |
Restricted stock awards | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Total equity based compensation expense | 4,354 | 3,182 |
Stock option awards | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Total equity based compensation expense | 984 | 2,584 |
Performance stock units | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Total equity based compensation expense | 1,003 | 717 |
Employee Stock [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Total equity based compensation expense | $ 68 | $ 0 |
Stock-Based Compensation - Rest
Stock-Based Compensation - Restricted Stock (Details) - Restricted stock awards - $ / shares | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Awards | ||
Unvested balance, beginning of period (in shares) | 4,838,996 | |
Granted (in shares) | 1,305,473 | |
Vested (in shares) | (245,909) | |
Forfeited (in shares) | (405,535) | |
Unvested balance, end of period (in shares) | 5,493,025 | |
Weighted Average Grant-Date Fair Value | ||
Beginning of period (in dollars per share) | $ 8.51 | |
Granted (in dollars per share) | 2.76 | $ 12.51 |
Vested (in dollars per share) | 15.47 | |
Forfeited (in dollar per share) | 5.69 | |
End of period (in dollars per share) | $ 7.04 |
Stock-Based Compensation - Assu
Stock-Based Compensation - Assumptions Used For Stock Options (Details) - Stock option awards - $ / shares | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Weighted average grant-date fair value per share (in dollars per share) | $ 2.37 | $ 5.22 |
Expected term (in years) | 6 years | 6 years |
Expected stock volatility | 52.00% | 45.00% |
Dividend yield | 0.00% | 0.00% |
Risk-free interest rate | 1.70% | 2.50% |
Stock-Based Compensation - Opti
Stock-Based Compensation - Option Activity (Details) | 3 Months Ended |
Mar. 31, 2020USD ($)$ / sharesshares | |
Options | |
Outstanding, beginning of period (in shares) | shares | 4,764,167 |
Granted (in shares) | shares | 52,500 |
Exercised (in shares) | shares | 0 |
Forfeited (in shares) | shares | (22,502) |
Expired (in shares) | shares | (42,666) |
Outstanding, end of period (in shares) | shares | 4,751,499 |
Weighted Average Exercise Price | |
Outstanding, beginning of period (in dollars per share) | $ / shares | $ 15.99 |
Granted (in dollars per share) | $ / shares | 4.69 |
Exercised (in dollars per share) | $ / shares | 0 |
Forfeited (in dollars per share) | $ / shares | 18.74 |
Expired (in dollars per share) | $ / shares | 18.99 |
Outstanding, end of period (in dollars per share) | $ / shares | $ 15.82 |
Exercisable (in shares) | shares | 3,987,631 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Weighted Average Exercise Price | $ / shares | $ 16.15 |
Outstanding, weighted average remaining term | 4 years 3 months 18 days |
Exercisable, weighted average remaining term | 3 years 6 months |
Outstanding, aggregate intrinsic value | $ | $ 0 |
Exercisable, aggregate intrinsic value | $ | $ 0 |
Stock-Based Compensation - As_2
Stock-Based Compensation - Assumptions For Performance Stock Units (Details) | 3 Months Ended |
Mar. 31, 2020 | |
Performance stock units | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Vesting period | 3 years |
Derivative Instruments - Schedu
Derivative Instruments - Schedule of Derivative Instruments (Details) - Not Designated as Hedging Instrument bbl / d in Thousands, bbl in Thousands, MMBTU in Thousands | 3 Months Ended |
Mar. 31, 2020MMBTUbbl / d$ / MMBTU$ / bblbbl | |
Crude Oil Swap - Period One [Member] | |
Derivative [Line Items] | |
Volume (Bbls) | bbl | 2,730 |
Volume (Bbls/d) | bbl / d | 30 |
Weighted Average Differential ($/Bbl or $/MMBtu) | (25.88) |
Crude Oil Swap - Period Two [Domain] | |
Derivative [Line Items] | |
Volume (Bbls) | bbl | 2,208 |
Volume (Bbls/d) | bbl / d | 24 |
Weighted Average Differential ($/Bbl or $/MMBtu) | (26.58) |
Crude Oil Basis Swap - Period One | |
Derivative [Line Items] | |
Volume (Bbls) | bbl | 273 |
Volume (Bbls/d) | bbl / d | 3 |
Weighted Average Differential ($/Bbl or $/MMBtu) | (0.67) |
Crude Oil Basis Swap - Period Two [Member] | |
Derivative [Line Items] | |
Volume (Bbls) | bbl | 276 |
Volume (Bbls/d) | bbl / d | 3 |
Weighted Average Differential ($/Bbl or $/MMBtu) | (0.67) |
Crude Oil Basis Swap - Period Three [Member] | |
Derivative [Line Items] | |
Volume (Bbls) | bbl | 276 |
Volume (Bbls/d) | bbl / d | 3 |
Weighted Average Differential ($/Bbl or $/MMBtu) | (0.67) |
Natural Gas Swaps - Henry Hub - Period One | |
Derivative [Line Items] | |
Volume (MMBtu) | MMBTU | 2,730 |
Volume (MMBtu/d) | MMBTU | 30 |
Weighted Average Fixed Price ($/MMBtu) | $ / MMBTU | 2.03 |
Natural Gas Basis Swap - Period One | |
Derivative [Line Items] | |
Weighted Average Differential ($/Bbl or $/MMBtu) | (1.62) |
Volume (MMBtu) | MMBTU | 2,730 |
Volume (MMBtu/d) | MMBTU | 30 |
Derivative Instruments - Gains
Derivative Instruments - Gains and Losses from Derivative Instruments (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||
Net gain (loss) on derivative instruments | $ (8,505) | $ (5,871) |
Derivative Instruments - Fair V
Derivative Instruments - Fair Value of Derivative Instruments Balance Sheet Classification (Details) - Not Designated as Hedging Instrument - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Current assets - Derivative instruments | ||
Derivative Assets | ||
Gross Fair Value Asset/Liability Amounts | $ 8,589 | |
Gross Amounts Offset | (8,589) | |
Net Recognized Fair Value Assets/Liabilities | 0 | |
Current liabilities - Derivative instruments | ||
Derivative Liabilities | ||
Gross Fair Value Asset/Liability Amounts | 17,366 | $ 325 |
Gross Amounts Offset | (8,589) | 0 |
Net Recognized Fair Value Assets/Liabilities | $ 8,777 | $ 325 |
Fair Value Measurements - Sched
Fair Value Measurements - Schedule of Fair Value of Derivative Assets and Liabilities (Details) - Fair Value, Measurements, Recurring - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative Asset | $ 0 | $ 0 |
Derivative Liability | 0 | 0 |
Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative Asset | 0 | 0 |
Derivative Liability | 8,777 | 325 |
Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative Asset | 0 | 0 |
Derivative Liability | $ 0 | $ 0 |
Fair Value Measurements - Sch_2
Fair Value Measurements - Schedule of Fair Value of Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 | Mar. 15, 2019 | Nov. 30, 2017 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Long-term debt, net | $ 1,117,919 | $ 1,057,389 | ||
Senior Notes | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Long-term debt, net | 882,919 | 882,389 | ||
Senior Notes Due 2026 | Senior Notes | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Long-term Debt, Gross | 400,000 | 400,000 | ||
Fair value of debt instrument | $ 96,000 | $ 394,480 | ||
Interest rate, stated percentage | 5.375% | 5.375% | 5.375% | |
Senior Notes Due 2027 | Senior Notes | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Long-term Debt, Gross | $ 500,000 | $ 500,000 | ||
Fair value of debt instrument | $ 122,500 | $ 520,000 | ||
Interest rate, stated percentage | 6.875% | 6.875% | 6.875% | |
Carrying Value | Senior Notes Due 2026 | Senior Notes | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Long-term debt, net | $ 392,881 | $ 392,623 | ||
Carrying Value | Senior Notes Due 2027 | Senior Notes | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Long-term debt, net | 490,038 | 489,766 | ||
Revolving Credit Facility | Line of Credit | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Long-term Debt, Gross | 235,000 | 175,000 | ||
Fair value of debt instrument | 235,000 | 175,000 | ||
Revolving Credit Facility | Carrying Value | Line of Credit | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Long-term Debt, Gross | $ 235,000 | $ 175,000 |
Fair Value Measurements - Sch_3
Fair Value Measurements - Schedule of Nonrecurring Fair Value Measurements (Details) - Proved Property [Member] - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Dec. 31, 2019 | |
Fair Value, Measurements, Nonrecurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Property, Plant, and Equipment, Fair Value Disclosure | $ 179.6 | $ 771.4 |
Asset Impairment Charges | $ 591.8 | |
Minimum | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Percentage of Undiscounted cash flows exceeding carrying values | 30.00% | |
Maximum | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Percentage of Undiscounted cash flows exceeding carrying values | 100.00% |
Earnings Per Share - Schedule o
Earnings Per Share - Schedule of Earnings Per Share, Basic and Diluted (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Earnings Per Share [Abstract] | ||
Net income (loss) attributable to Class A Common Stock | $ (547,983) | $ (8,112) |
Basic net earnings per share of Class A Common Stock (USD per share) | $ (1.99) | $ (0.03) |
Diluted net earnings per share of Class A Common Stock (USD per share) | $ (1.99) | $ (0.03) |
Basic weighted average shares of Class A Common Stock outstanding (in shares) | 275,952 | 264,365 |
Diluted weighted average shares of Class A Common Stock outstanding (in shares) | 275,952 | 264,365 |
Earnings Per Share - Summary of
Earnings Per Share - Summary of Shares Excluded From Diluted Earnings Per Share Calculation (Details) - shares shares in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Out-of-the-money stock options | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Anti-diluted shares excluded from computation of earnings per share (in shares) | 4,782 | 4,556 |
Warrants | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Anti-diluted shares excluded from computation of earnings per share (in shares) | 8,000 | 8,000 |
Restricted stock | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Anti-diluted shares excluded from computation of earnings per share (in shares) | 5,143 | 1,516 |
Weighted average shares of Class C Common Stock | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Anti-diluted shares excluded from computation of earnings per share (in shares) | 1,034 | 12,003 |
Employee Stock [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Anti-diluted shares excluded from computation of earnings per share (in shares) | 1,138 | 0 |
Transactions with Related Par_3
Transactions with Related Parties - Schedule of Revenues Recognized and Processing Fees Incurred with Related Parties (Details) - Lucid Energy Delaware, LLC - Affiliated Entity - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Related Party Transaction [Line Items] | |||
Oil and gas sales | $ 1,088 | $ 607 | |
Gathering, processing and transportation expenses | 953 | $ 317 | |
Accounts receivable, net(1) | $ 70 | $ 91 |
Commitments and Contingencies C
Commitments and Contingencies Commitments and Contingencies (Details) bbl / d in Thousands | 3 Months Ended |
Mar. 31, 2020bbl / d | |
Permian Basin Agreement [Member] | |
Supply Commitment [Line Items] | |
Supply Commitment, Barrels Required To Be Committed Per Day | 30 |
Revenues - Schedule of Disaggre
Revenues - Schedule of Disaggregated Revenues (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Disaggregation of Revenue [Line Items] | ||
Oil and gas sales | $ 192,769 | $ 214,569 |
Oil sales | ||
Disaggregation of Revenue [Line Items] | ||
Oil and gas sales | 170,505 | 175,554 |
Natural gas sales | ||
Disaggregation of Revenue [Line Items] | ||
Oil and gas sales | 8,358 | 12,497 |
NGL sales | ||
Disaggregation of Revenue [Line Items] | ||
Oil and gas sales | $ 13,906 | $ 26,518 |
Revenues - Additional Informati
Revenues - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Dec. 31, 2019 | |
Disaggregation of Revenue [Line Items] | ||
Accrued oil and gas sales receivable, net | $ 36.1 | $ 76.6 |
Natural Gas and NGL sales | Minimum | ||
Disaggregation of Revenue [Line Items] | ||
Performance obligations billing cycle | 30 days | |
Natural Gas and NGL sales | Maximum | ||
Disaggregation of Revenue [Line Items] | ||
Performance obligations billing cycle | 90 days | |
Oil sales | ||
Disaggregation of Revenue [Line Items] | ||
Performance obligations billing cycle | 30 days |
Leases - Additional Information
Leases - Additional Information (Details) | 3 Months Ended |
Mar. 31, 2020 | |
Minimum | |
Lessee, Lease, Description [Line Items] | |
Remaining lease term | 2 months |
Maximum | |
Lessee, Lease, Description [Line Items] | |
Remaining lease term | 2 years |
Renewal term (up to) | 5 years |
Leases - Schedule of Lease Expe
Leases - Schedule of Lease Expenses and Other Information (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Lessee, Lease, Description [Line Items] | ||
Weighted-average discount rate | 4.82% | |
Weighted-average remaining lease term (years) | 1 year 3 months 3 days | |
Lease costs | ||
Operating lease cost | $ 4,676 | $ 10,587 |
Variable lease cost | 1,352 | 801 |
Short-term lease cost(2) | 19,610 | 12,224 |
Total lease cost | 25,638 | $ 23,612 |
Drill Rig Lease Costs | ||
Lease costs | ||
Short-term lease cost(2) | $ 11,200 |
Leases - Schedule of Maturities
Leases - Schedule of Maturities of Operating Lease Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Operating Lease Liabilities, Payments Due After Adoption of 842 [Abstract] | ||
2020 | $ 5,847 | |
2021 | 3,033 | |
2022 | 425 | |
Total | 9,305 | |
Less: Imputed Interest | (313) | |
Present value of lease liabilities | 8,992 | |
Operating lease liability, current | 6,440 | $ 9,232 |
Operating lease liability, noncurrent | $ 2,552 | $ 3,354 |
Subsequent Events (Details)
Subsequent Events (Details) | Apr. 29, 2020shares | May 01, 2020USD ($) | Apr. 22, 2020USD ($) | Apr. 21, 2020$ / shares | Apr. 02, 2020shares | Mar. 31, 2020USD ($)shares | Dec. 31, 2019USD ($)shares |
Line of Credit | Revolving Credit Facility | |||||||
Subsequent Event [Line Items] | |||||||
Maximum borrowing base | $ 1,500,000,000 | $ 1,500,000,000 | |||||
Elected commitments | $ 800,000,000 | $ 800,000,000 | |||||
Subsequent Event [Member] | |||||||
Subsequent Event [Line Items] | |||||||
Minimum Bid Price Requirement | $ / shares | $ 1 | ||||||
Calendar Days to Regain Compliance | 180 | ||||||
Subsequent Event [Member] | Line of Credit | Revolving Credit Facility | |||||||
Subsequent Event [Line Items] | |||||||
Maximum borrowing base | $ 700,000,000 | ||||||
Maximum Borrowing Capacity if Minimum Availability Condition Met | 600,000,000 | ||||||
Minimum Availability Condition | $ 100,000,000 | ||||||
Minimum Availability Condition (aggregate principal percent) | 25.00% | ||||||
2016 Long Term Incentive Plan | Subsequent Event [Member] | |||||||
Subsequent Event [Line Items] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Additional Shares Authorized | shares | 8,250,000 | ||||||
8% Second Lien Senior Secured Note Due 2025 [Member] | Subsequent Event [Member] | |||||||
Subsequent Event [Line Items] | |||||||
Long-term debt | $ 250,000,000 | ||||||
Interest rate, stated percentage | 8.00% | ||||||
8% Third Lien Senior Secured Note Due 2027 [Member] | Subsequent Event [Member] | |||||||
Subsequent Event [Line Items] | |||||||
Long-term debt | $ 200,000,000 | ||||||
Interest rate, stated percentage | 8.00% | ||||||
Convertible Class C | |||||||
Subsequent Event [Line Items] | |||||||
Common stock, shares issued (shares) | shares | 1,034,119 | 1,034,119 | |||||
Convertible Class C | Subsequent Event [Member] | |||||||
Subsequent Event [Line Items] | |||||||
Common stock, shares issued (shares) | shares | 1,034,119 |
Uncategorized Items - cdev03312
Label | Element | Value | [1] |
Restricted Cash | us-gaap_RestrictedCash | $ 5,336,000 | |
Restricted Cash | us-gaap_RestrictedCash | $ 3,276,000 | |
[1] | Included in Prepaid and other current assets and Other noncurrent assets line items in the Consolidated Balance Sheets. |