Cover Page
Cover Page - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Mar. 24, 2021 | Jun. 30, 2020 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2020 | ||
Document Transition Report | false | ||
Entity File Number | 001-37670 | ||
Entity Registrant Name | Lonestar Resources US Inc. | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 81-0874035 | ||
Entity Address, Address Line One | 111 Boland Street | ||
Entity Address, Address Line Two | Suite 301 | ||
Entity Address, City or Town | Fort Worth | ||
Entity Address, State or Province | TX | ||
Entity Address, Postal Zip Code | 76107 | ||
City Area Code | 817 | ||
Local Phone Number | 921-1889 | ||
Title of 12(b) Security | Common Stock,par value $0.001 | ||
Trading Symbol | LONE | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | true | ||
Entity Ex Transition Period | false | ||
Entity Shell Company | false | ||
ICFR Auditor Attestation Flag | false | ||
Entity Public Float | $ 9.5 | ||
Entity Common Stock, Shares Outstanding | 10,000,149 | ||
Amendment Flag | false | ||
Document Fiscal Year Focus | 2020 | ||
Document Fiscal Period Focus | FY | ||
Entity Central Index Key | 0001661920 | ||
Current Fiscal Year End Date | --12-31 | ||
Documents Incorporated by Reference | DOCUMENTS INCORPORATED BY REFERENCE Portions of the definitive proxy statement relating to the Registrant’s 2021 Annual Meeting of Shareholders are incorporated by reference into Part III of this Annual Report on Form 10-K. |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Current assets | ||
Cash and cash equivalents | $ 17,474 | $ 3,137 |
Restricted cash | 8,972 | 0 |
Accounts receivable | ||
Oil, natural gas liquid and natural gas sales | 11,635 | 15,991 |
Joint interest owners and other, net | 4,076 | 1,310 |
Derivative financial instruments | 1,703 | 5,095 |
Prepaid expenses and other | 1,118 | 2,208 |
Total current assets | 44,978 | 27,741 |
Oil and gas properties, using the successful efforts method of accounting | ||
Proved properties | 314,685 | 1,050,168 |
Unproved properties | 34,929 | 76,462 |
Other property and equipment | 19,680 | 21,401 |
Less accumulated depreciation, depletion, amortization and impairment | (2,056) | (464,671) |
Property and equipment, net | 367,238 | 683,360 |
Accounts receivable | 6,053 | 0 |
Accounts receivable related party | 0 | 5,816 |
Derivative financial instruments | 395 | 1,754 |
Other non-current assets | 4,651 | 2,108 |
Total assets | 423,315 | 720,779 |
Current liabilities | ||
Accounts payable | 7,651 | 33,355 |
Accounts payable – related parties | 0 | 189 |
Oil, natural gas liquid and natural gas sales payable | 18,760 | 14,811 |
Accrued liabilities | 15,983 | 26,905 |
Derivative financial instruments | 7,938 | 8,564 |
Current maturities of long-term debt | 20,000 | 247,000 |
Total current liabilities | 70,332 | 330,824 |
Long-term liabilities | ||
Long-term debt | 255,328 | 255,068 |
Asset retirement obligations | 4,573 | 7,055 |
Deferred tax liability, net | 0 | 931 |
Equity warrant liability | 0 | 129 |
Equity warrant liability - related parties | 0 | 235 |
Derivative financial instruments | 835 | 1,898 |
Other non-current liabilities | 0 | 3,752 |
Total long-term liabilities | 260,736 | 269,068 |
Commitments and contingencies | ||
Stockholders' Equity Attributable to Parent [Abstract] | ||
Common stock, $0.001 par value | 10 | 142,655 |
Predecessor preferred stock, $0.001 par value, 100,328 shares issued and outstanding | 0 | |
Additional paid-in Capital | 92,953 | 175,738 |
Retained Earnings (Accumulated Deficit) | (716) | (197,506) |
Total stockholders’ equity | 92,247 | 120,887 |
Total liabilities and stockholders’ equity | $ 423,315 | $ 720,779 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2020 | Dec. 31, 2019 |
Statement of Financial Position [Abstract] | ||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 90,000,000 | 100,000,000 |
Common stock, shares issued (in shares) | 10,000,149 | 24,945,594 |
Common stock, shares outstanding (in shares) | 10,000,149 | 24,945,594 |
Preferred stock, par value (in dollars per share) | $ 0.001 | |
Preferred stock, shares issued (in shares) | 100,328 | |
Preferred stock, shares outstanding (in shares) | 100,328 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) $ in Thousands | 1 Months Ended | 11 Months Ended | 12 Months Ended |
Dec. 31, 2020 | Nov. 30, 2020 | Dec. 31, 2019 | |
Revenues | |||
Revenues | $ 10,901 | $ 105,326 | $ 195,152 |
Expenses | |||
Lease operating | 1,418 | 20,435 | 31,925 |
Production and ad valorem taxes | 667 | 6,508 | 11,169 |
Depreciation, depletion and amortization | 2,093 | 70,122 | 88,618 |
Loss on sale of oil and gas properties | 0 | 1,337 | 33,508 |
Impairment of oil and gas properties | 0 | 199,908 | 48,412 |
General and administrative | 1,505 | 28,444 | 16,489 |
Acquisition costs and other | 254 | 330 | 1,840 |
Total expenses | 6,398 | 333,266 | 236,617 |
Income (loss) from operations | 4,503 | (227,940) | (41,465) |
Other (expense) income | |||
Interest expense | (1,476) | (35,411) | (43,879) |
Unrealized gain on warrants | 0 | 363 | 691 |
(Loss) gain on derivative financial instruments | (3,743) | 66,699 | (30,861) |
Reorganization items, net | 0 | 73,471 | 0 |
Total other (expense) income, net | (5,219) | 105,122 | (74,049) |
Loss before income taxes | (716) | (122,818) | (115,514) |
Income tax benefit | 0 | 4,679 | 12,495 |
Net loss | (716) | (118,139) | (103,019) |
Preferred stock dividends | 0 | (4,566) | (8,544) |
Undeclared cumulative preferred stock dividends | 0 | (3,671) | 0 |
Net loss attributable to common stockholders | $ (716) | $ (126,376) | $ (111,563) |
Net loss per common share attributable to common stockholders | |||
Basic (in dollars per share) | $ (0.07) | $ (5) | $ (4.48) |
Diluted (in dollars per share) | $ (0.07) | $ (5) | $ (4.48) |
Weighted Average Shares Outstanding | |||
Basic (in shares) | 10,000,149 | 25,262,136 | 24,875,793 |
Diluted (in shares) | 10,000,149 | 25,262,136 | 24,875,793 |
Oil sales | |||
Revenues | |||
Revenues | $ 8,112 | $ 80,244 | $ 157,873 |
Natural gas liquid sales | |||
Revenues | |||
Revenues | 1,083 | 9,982 | 15,668 |
Natural gas sales | |||
Revenues | |||
Revenues | 1,706 | 15,100 | 21,611 |
Gas gathering, processing and transportation | |||
Expenses | |||
Cost of Goods and Services Sold | $ 461 | $ 6,182 | $ 4,656 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholders' Equity - USD ($) $ in Thousands | Total | Common Stock | Preferred stock | Additional Paid-in Capital | Accumulated Deficit |
Beginning balance (in shares) at Dec. 31, 2018 | 24,645,825 | 91,784 | |||
Beginning balance at Dec. 31, 2018 | $ 222,547 | $ 142,655 | $ 174,379 | $ (94,487) | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Shares issued pursuant to stock-based compensation plan (in shares) | 299,769 | ||||
Payment-in-kind dividends (in shares) | 8,544 | ||||
Stock-based compensation | 1,359 | 1,359 | |||
Net loss | (103,019) | (103,019) | |||
Ending balance (in shares) at Dec. 31, 2019 | 24,945,594 | 100,328 | |||
Ending balance at Dec. 31, 2019 | 120,887 | $ 142,655 | 175,738 | (197,506) | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Shares issued pursuant to stock-based compensation plan (in shares) | 366,617 | ||||
Shares issued pursuant to stock-based compensation plan | 274 | 274 | |||
Payment-in-kind dividends (in shares) | 4,566 | ||||
Net loss | (118,139) | (118,139) | |||
Cancellation of Predecessor equity (in shares) | (25,312,211) | (104,894) | |||
Cancellation of Predecessor equity | (3,022) | $ (142,655) | (176,012) | 315,645 | |
Issuance of Successor common stock (in shares) | 10,000,149 | ||||
Issuance of Successor common stock | 91,874 | $ 10 | 91,864 | ||
Issuance of Successor warrants | 1,089 | 1,089 | |||
Ending balance (in shares) at Nov. 30, 2020 | 10,000,149 | 0 | |||
Ending balance at Nov. 30, 2020 | 92,963 | $ 10 | 92,953 | 0 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net loss | (716) | (716) | |||
Ending balance (in shares) at Dec. 31, 2020 | 10,000,149 | 0 | |||
Ending balance at Dec. 31, 2020 | $ 92,247 | $ 10 | $ 92,953 | $ (716) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 1 Months Ended | 11 Months Ended | 12 Months Ended |
Dec. 31, 2020 | Nov. 30, 2020 | Dec. 31, 2019 | |
Cash flows from operating activities | |||
Net loss | $ (716) | $ (118,139) | $ (103,019) |
Adjustments to reconcile net loss to net cash provided by operating activities | |||
Unamortized discounts and debt issuance costs | 0 | (85,483) | 0 |
Depreciation, depletion and amortization | 2,093 | 70,122 | 88,618 |
Stock-based compensation | 0 | (2,091) | 1,822 |
Deferred taxes | 0 | (931) | (11,440) |
Loss (gain) on derivative financial instruments | 3,743 | (66,699) | 30,861 |
Settlements of derivative financial instruments | 0 | 66,761 | (3,550) |
Impairment of oil and natural gas properties | 0 | 199,908 | 48,412 |
Loss on sale or abandonment of property and equipment | 0 | 1,337 | 34,560 |
Non-cash interest expense | 131 | 2,002 | 2,652 |
Unrealized gain on warrants | 0 | (363) | (691) |
Changes in operating assets and liabilities | |||
Accounts receivable | 3,499 | (2,146) | (4,481) |
Prepaid expenses and other assets | (49) | 2,233 | (623) |
Accounts payable and accrued expenses | 4,286 | 21,725 | (2,799) |
Net cash provided by operating activities | 12,987 | 88,236 | 80,322 |
Cash flows from investing activities | |||
Acquisition of oil and gas properties | (53) | (2,902) | (5,642) |
Development of oil and gas properties | (247) | (100,436) | (148,438) |
Proceeds from sales of oil and gas properties | 0 | 11,913 | 11,470 |
Purchases of other property and equipment | (5) | (1,007) | (3,682) |
Net cash used in investing activities | (305) | (92,432) | (146,292) |
Cash flows from financing activities | |||
Proceeds from borrowings | 0 | 332,759 | 139,000 |
Payments on borrowings | (5,021) | (308,205) | (75,248) |
Payments of financing fees | 0 | (4,710) | 0 |
Net cash (used) provided by financing activities | (5,021) | 19,844 | 63,752 |
Increase (decrease) in cash, cash equivalents and restricted cash | 7,661 | 15,648 | (2,218) |
Cash, cash equivalents and restricted cash at beginning of the period | 18,785 | 3,137 | 5,355 |
Cash, cash equivalents and restricted cash at end of the period | 26,446 | 18,785 | 3,137 |
Supplemental information: | |||
Cash paid for taxes | 0 | 0 | 38 |
Cash received for income tax refunds | 4,690 | 0 | 0 |
Cash paid for interest | 0 | 28,081 | 41,217 |
Non-cash investing and financing activities: | |||
Asset retirement obligation | 177 | (3,013) | (440) |
Increase (decrease) in liabilities for capital expenditures | 239 | (39,501) | 17,993 |
Conversion of senior notes and preferred stock into common stock | $ 0 | $ 91,864 | $ 0 |
Basis of Presentation
Basis of Presentation | 12 Months Ended |
Dec. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation Organization and Nature of Operations Lonestar Resources US Inc. (“Lonestar” or the “Company”) is an independent oil and natural gas company focused on the exploration, development and production of unconventional oil, natural gas liquids and natural gas in the Eagle Ford Shale play in South Texas. Emergence from Voluntary Reorganization Under Chapter 11 of the Bankruptcy Code On September 30, 2020 (the “Petition Date”), Lonestar Resources US Inc. and 21 of its directly and indirectly owned subsidiaries (collectively, the “Debtors”), filed voluntary petitions (“Bankruptcy Petitions”) for relief under Chapter 11 (“Chapter 11”) of the U.S. Bankruptcy Code (“Bankruptcy Code”) in the U.S. Bankruptcy Court for the Southern District of Texas (“Bankruptcy Court”). The Debtors’ Chapter 11 cases were administered jointly under the caption In re Lonestar Resources US Inc., et al., Case No. 20-34805 (collectively, the “Chapter 11 Proceedings”). During the pendency of the Chapter 11 Proceedings, the debtors in the Chapter 11 Proceedings (the “Debtors”), operated their businesses as “debtors-in-possession” under the jurisdiction of the Bankruptcy Court and in accordance with the applicable provisions of the Bankruptcy Code. On November 12, 2020, the Bankruptcy Court entered an order (the “Confirmation Order”) confirming the chapter 11 plan of reorganization (the “Plan”) and approving the Disclosure Statement. The Company emerged from bankruptcy and went effective with its plan of reorganization on November 30, 2020 (the “Effective Date”). In January 2021, the Successor's new common stock commenced trading on the OTCQX Best Market under the ticker symbol "LONE". Bankruptcy Accounting The consolidated financial statements have been prepared in accordance with the provisions of the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 852, Reorganizations (“ASC 852”). ASC 852 requires that the financial statements, for periods subsequent to filing of the Chapter 11 Proceedings, distinguish transactions and events that are directly associated with the reorganization from the ongoing operations of the business. Accordingly, certain expenses, gains and losses that are realized or incurred in the bankruptcy proceedings are recorded in “reorganization items, net” on the consolidated statements of operations. In accordance with ASC 852, the Company qualified for and adopted fresh start accounting (“Fresh Start Accounting”) upon emergence from Chapter 11, at which point the Company became a new entity for financial reporting because (i) the holders of the then existing voting shares of the Predecessor company received less than 50% of the voting shares of the Successor company outstanding upon emergence and (ii) the reorganization value of the Company’s assets immediately prior to confirmation of the Plan was less than the total of all post-petition liabilities and allowed claims. Upon adoption of Fresh Start Accounting as reflected in Note 3. Fresh Start Accounting , the reorganization value derived from the enterprise value associated with the Plan was allocated to the Company’s identifiable tangible and intangible assets and liabilities in conformity with the procedures specified by ASC 805, Business Combinations . Deferred income tax amounts were determined in accordance with ASC 740 Income Taxes . References to “Predecessor” relate to the Consolidated Balance Sheets as of December 31, 2019, and Consolidated Statements of Operations for the year ended December 31, 2019 and for the period from January 1, 2020 through and including the adjustments from the application of Fresh Start Accounting on November 30, 2020 (“Predecessor Period”). References to “Successor” relate to the Consolidated Balance Sheets of the reorganized Company as of December 31, 2020 and Consolidated Statements of Operations from December 1, 2020 through December 31, 2020 (“Successor Period”) and are not comparable to the Consolidated Financial Statements of the Predecessor as indicated by the “black line” division in the financials and footnote tables, which emphasizes the lack of comparability between amounts presented. In addition, Note 3. Fresh Start Accounting provides a summary of the Consolidated Balance Sheets as of November 30, 2020 in the first column, and then presents adjustments to reflect the Plan and fresh start impacts to derive the opening Successor Consolidated Balance Sheets as of November 30, 2020. The Company’s financial results for future periods following the application of Fresh Start Accounting will be different from historical trends and the differences may be material. See Note 2. Emergence from Chapter 11 Bankruptcy Proceedings and Note 3. Fresh Start Accounting for additional details regarding the bankruptcy. Principles of Reporting and Consolidation The consolidated financial statements have been prepared using the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America ("GAAP”) and include the accounts of Lonestar and entities in which we hold a controlling financial interest. Undivided interests in oil and gas joint ventures are consolidated on a proportionate basis. All intercompany balances and transactions have been eliminated. Use of Estimates The preparation of the accompanying consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Depletion of oil and gas properties and impairment of proved and unproved oil and gas properties, in part, is determined using estimates of proved oil and gas reserves. There are numerous uncertainties inherent in the estimation of quantities of proved reserves and the projection of future rates of production and the timing of development expenditures. Similarly, evaluations for impairment of proved and unproved oil and gas properties are subject to numerous uncertainties including, among others, estimates of future recoverable reserves and commodity price outlooks. Significant estimates underlying these financial statements also include the estimated costs and timing of asset retirement obligations, the fair value of commodity derivatives, the fair value of warrants, restricted stock units and stock appreciation rights, accruals related to oil and natural gas volumes and revenues, estimates related to income taxes, estimates used in determination of the reorganization values, enterprise value and the fair value assets and liabilities recorded as a result of fresh-start accounting . Changes in facts and circumstances or additional information may result in revised estimates, actual results may differ from these estimates. Reclassifications Certain prior period amounts have been reclassified to conform to the current year presentation. Such reclassifications had no impact on the Company's reported total revenues, expenses, net income, current assets, total assets, current liabilities, total liabilities or stockholders’ equity. Cash, Cash Equivalents and Restricted Cash The Company considers all highly-liquid investments to be cash equivalents if they have maturities of three months or less when purchased. The following table provides a reconciliation of cash, cash equivalents and restricted cash as reported within the Consolidated Balance Sheets to "Cash, cash equivalents and restricted cash at the end of the period" as reported within the Consolidated Statements of Cash Flows: Successor Predecessor In thousands December 31, 2020 December 31, 2019 Cash and cash equivalents $ 17,474 $ 3,137 Restricted cash, current 8,972 — Total cash, cash equivalents and restricted cash shown in the Consolidated Statements of Cash Flows $ 26,446 $ 3,137 Restricted cash, current in the table above represents escrow funds maintained by the Successor in accordance with the Plan, as well as funds reserved to cover the balance of the PPP Loan until the Successor receives the final loan forgiveness determination from the Small Business Administration (“SBA”), in accordance with SBA guidance, or until the PPP loan is repaid. Concentrations and Credit Risk Lonestar's financial instruments exposed to concentrations of credit risk consist primarily of cash and cash equivalents, accounts receivable and derivative receivables (see Note 4. Commodity Price Risk Activities ). At times, the balances deposited may exceed amounts covered by insurance provided by the U.S. Federal Deposit Insurance Corporation (“FDIC”). The Company has not incurred any losses related to amounts in excess of FDIC limits. Substantially all of the Company’s accounts receivable are due from either purchasers of oil, NGL and natural gas or working interest partners in oil and natural gas wells for which a subsidiary of the Company serves as the operator. Generally, operators of oil and natural gas properties have the right to offset future revenues against unpaid charges related to operated wells. The Company’s receivables are generally unsecured. For the month ended December 31, 2020 (Successor), three purchasers accounted for 10% or more of the Company's oil and natural gas revenues: Ace Gathering Inc. (31%), Texla Energy Management Inc. (24%) and Enterprise Crude Oil, LLC (24%), and for the eleven months ended November 30, 2020 (Predecessor), five purchasers accounted for 10% or more of the Company's oil and natural gas revenues: Enterprise Crude Oil, LLC (23%), Texla Energy Management Inc. (22%), Ace Gathering Inc. (21%), NGL Crude Logistics, LLC (14%) and Shell Trading (US) Company (10%). For the year ended December 31, 2019 (Predecessor), six purchasers accounted for 10% or more of the Company's oil and natural gas revenues: Shell Tr ading (US) Company (23%), Texla Energy Management (17%), Enterprise Crude Oil LLC (16%), Ace Gathering, Inc. (14%), GulfMark Energy, Inc. (13%) and NGL Crude Logistics LLC (10%). As of December 31, 2020 (Successor), five purchasers accounted for 10% or more of the Company's receivables related to oil and natural gas sales: Enterprise Crude Oil, LLC (24%), Ace Gathering, Inc. (23%), Texla Energy Management Inc. (19%), NGL Crude Logistics LLC (14%), and Shell Trading (US) Company (10%). As of December 31, 2019 (Predecessor), three purchasers accounted for 10% or more of the Company's receivables related to oil and natural gas sales: Texla Energy Management Inc. (59%), Ace Gathering, Inc. (13%) and Shell Trading (US) Company (11%). Oil and Natural Gas Properties Lonestar uses the successful efforts method of accounting to account for its oil and natural gas properties. Under this method, costs of acquiring properties, costs of drilling successful exploration wells, and development costs are capitalized. The costs of exploratory wells are initially capitalized pending a determination of whether proved reserves have been found. At the completion of drilling activities, the costs of exploratory wells remain capitalized if a determination is made that proved reserves have been found. If no proved reserves have been found, the costs of each of the related exploratory wells are charged to expense. In some cases, a determination of proved reserves cannot be made at the completion of drilling, requiring additional testing and evaluation of the wells. The Company’s policy is to expense the costs of such exploratory wells if a determination of proved reserves has not been made within a 12-month period after drilling is complete. As of December 31, 2020 (Successor) the Company did not have any capitalized exploratory well costs that were pending determination of proved reserves. All costs related to development wells, including related production equipment and lease acquisition costs, are capitalized when incurred, whether productive or nonproductive. Capitalized costs attributed to the proved properties are subject to depreciation and depletion. Depreciation and depletion of the cost of oil and gas properties is calculated using the units-of-production method aggregating properties on a field basis. For leasehold acquisition costs and the cost to acquire proved properties, the reserve base used to calculate depreciation and depletion is the sum of proved developed reserves and proved undeveloped reserves. For well costs, the reserve base used to calculate depletion and depreciation is proved developed reserves only. Unproved properties consist of costs incurred to acquire unproved leases. Unproved lease acquisition costs are capitalized until the leases expire or when the Company specifically identifies leases that will revert to the lessor, at which time the Company expenses the associated unproved lease acquisition costs. The expensing of the unproved lease acquisition costs is recorded as an impairment of oil and gas properties in the consolidated statement of operations, as applicable. Unproved oil and gas property costs are transferred to proven oil and gas properties if the properties are subsequently determined to be productive or are assigned proved reserves. Unproved oil and gas properties are assessed periodically for impairment based on remaining lease terms, drilling results, reservoir performance, future plans to develop acreage, and other relevant factors. On the sale or retirement of a complete unit of a proved property, the cost and related accumulated depreciation, depletion, and amortization are eliminated from the property accounts, and any gain or loss is recognized. On the sale or retirement of a partial unit of a proved property, a pro-rata portion of the cost and related accumulated depreciation, depletion and amortization may be eliminated from the property accounts if the field depletion rate is significantly altered. Other Property and Equipment Other property and equipment, consisting primarily of office, transportation and computer equipment, as well as our new corporate headquarters, is carried at cost. Depreciation is calculated using the straight-line method over the estimated useful lives of the assets, ranging from 3 to 5 years, with the exception of our corporate headquarters, which is 30 years. Major renewals and improvements are capitalized, while expenditures for maintenance and repairs are expensed as incurred. Upon sale or abandonment, the cost of the equipment and related accumulated depreciation are removed from the accounts, and any gain or loss is recognized. Impairment of Long-Lived Assets The carrying value of long-lived assets and certain identifiable intangibles are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. When it is determined that the estimated future net cash flows of an asset will not be sufficient to recover its carrying amount, an impairment loss must be recorded to reduce the carrying amount to its estimated fair value. Judgments and assumptions are inherent in management’s estimate of undiscounted future cash flows and an asset’s fair value. These judgments and assumptions include such matters as the estimation of oil and gas reserve quantities, risks associated with the different categories of oil and gas reserves, the timing of development and production, expected future commodity prices, capital expenditures, production costs, and appropriate discount rates. The Company evaluates impairment of proved and unproved oil and gas properties on a region basis. On this basis, certain regions may be impaired because they are not expected to recover their entire carrying value from future net cash flows. As a result of this evaluation, the Predecessor recorded impairment oil and gas properties of $199.9 million for the three months ended March 31, 2020, of which $199.0 million was proved and $0.9 million was unproved. The impairment was the result of removing development of PUD and probable reserves from future net cash flows as the Predecessor could not assure that they would be developed going forward in light of continued depressed commodity prices and uncertainty regarding the Predecessor's liquidity situation at the time. Upon emergence from bankruptcy, the Company adopted fresh start accounting which resulted in our long-lived assets being recorded at their estimated fair value at the Effective Date (see Note 3, Fresh Start Accounting , to the consolidated financial statements for additional information). There were no material changes to our key cash flow assumptions and no triggering events since the Company’s assets were revalued in fresh start accounting as of November 30, 2020; therefore, no impairment was identified in December 2020. Asset Retirement Obligations Asset retirement obligations are recognized at their fair value at the time that the obligations are incurred. Oil and gas producing companies incur such a liability upon acquiring or drilling a well. Under ASC 410, an asset retirement obligation is recorded as a liability at its estimated present value at the asset’s inception, with an offsetting increase to producing properties in the accompanying consolidated balance sheets, which is allocated to expense over the useful life of the asset. Periodic accretion of the discount on asset retirement obligations is recorded as part of depreciation, depletion and amortization ("DD&A") expense in the accompanying consolidated statement of operations. See Note 8. Asset Retirement Obligations , for more information. Revenue Recognition Lonestar recognizes revenue at an amount that reflects the consideration to which we expect to be entitled in exchange for transferring goods or services to a customer, using a five-step process, in accordance with ASC 606, Revenue from Contracts with Customers. See Note 6. Revenue Recognition . Derivatives The Company utilizes oil and natural gas derivative contracts to mitigate its exposure to commodity price risk associated with its future oil and natural gas production. These derivative contracts have historically consisted of fixed-price swaps, basis swaps, and collars. We do not apply hedge accounting; accordingly, all derivatives are recorded in the accompanying consolidated balance sheets at estimated fair value. The Company recognizes all changes in the fair values of its derivative contracts as gains or losses in the earnings of the periods in which they occur. See Note 4. Commodity Price Risk Activities for more information. Income Taxes Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, operating losses and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which these temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. The Company periodically evaluates the realizable tax benefits of deferred tax assets and records a valuation allowance, if required, based on an estimate of the amount of deferred tax assets the Company believes does not meet the more likely than not criteria of being realized. See Note 11. Income Taxes for more information. The Company evaluates uncertain tax positions, which requires significant judgments and estimates regarding the recoverability of deferred tax assets, the likelihood of the outcome of examinations of tax positions that may or may not be currently under review, and potential scenarios involving settlements of such matters. Changes in these estimates could materially impact the consolidated financial statements. No liability for material uncertain tax positions existed as of December 31, 2020 (Successor) or December 31, 2019 (Predecessor). Share-Based Payments Lonestar accounts for equity-based awards in accordance with ASC 718, Compensation-Stock Compensation, which requires companies to recognize in the statement of operations all share-based payments granted to employees based on their fair value. Share-based compensation is recognized by the Company on the graded vesting method over the requisite service period, which approximates the option vesting period of three years. Grants that can be settled in either cash or shares are treated as liabilities on the accompanying consolidated balance sheets. All stock compensation plans and awards in effect during the Predecessor periods were cancelled on the Effective Date and no new stock compensation plans have been adopted by the Successor as of December 31, 2020. COVID-19 The Company considered the impact of the ongoing COVID-19 pandemic on the assumptions and estimates used in the consolidated financial statements. The effects of COVID-19 and concerns regarding its global spread have negatively impacted global demand for crude oil and natural gas, which has and could continue to contribute to price volatility, impact prices the Company receives for crude oil, natural gas and NGLs, and materially and adversely affect the demand for and marketability of its production, as well as lead to temporary curtailment or shut-ins of production due to lack of downstream demand or storage capacity. The Company's estimates and assumptions were based on historical data and consideration of future market conditions. The potential additional impacts from COVID-19 on the Company’s financial position, results of operations and cash flows will depend on uncertain factors, including future developments and new information that may emerge regarding the severity and duration of COVID-19, the actions taken by authorities to contain it or treat its impact, and the availability and acceptance of vaccines, all of which are beyond the Company’s control and difficult to predict. CARES Act On March 27, 2020, Congress enacted the Coronavirus Aid, Relief, and Economic Security Act (the "CARES Act”) to provide certain taxpayer relief as a result of the COVID-19 pandemic. The CARES Act included several favorable provisions that impacted income taxes, primarily the modified rules on the deductibility of business interest expense for 2019 and 2020, a five-year carryback period for net operating losses generated after 2017 and before 2021, and the acceleration of refundable alternative minimum tax credits. The CARES Act did not materially impact the Predecessor's or Successor's effective tax rates for the eleven months ended November 30, 2020 and one month ended December 31, 2020, respectively. The Predecessor applied for, and received, a loan under the Paycheck Protection Program ("PPP") during the second quarter of 2020 in the amount of $2.2 million. The application for this loan required the Predecessor to, in good faith, certify that the current economic uncertainty made the loan request necessary to support the ongoing operations of the Company. This certification further required the Predecessor to take into account our current business activity and our ability to access other sources of liquidity sufficient to support ongoing operations in a manner that is not significantly detrimental to the business. The receipt of this loan, and the forgiveness of the loan, is dependent on the Company having initially qualified for the loan and qualifying for the forgiveness of such loan based on our future adherence to the forgiveness criteria. The PPP loan bears interest of 1% and, if not forgiven, has a maturity date of May 8, 2022. Prior to emergence from Chapter 11, the Predecessor applied for loan forgiveness and placed cash equal to the outstanding principal balance of the PPP loan in escrow pending the final forgiveness determination by the SBA, in accordance with SBA guidelines. Net Loss per Common Share Prior to the Effective Date, the Predecessor company used the two-class method is utilized to compute earnings per common share as our Class A Participating Preferred Stock (the "Preferred Stock") was considered a participating security. Under the two-class method, losses are allocated only to those securities that have a contractual obligation to share in the losses of the Company. The Preferred Stock was not obligated to absorb Company losses and accordingly was not allocated losses. Net income attributable to common stockholders is allocated between common stock and participating securities based on the weighted average number of common shares and participating securities outstanding for the period. Upon the Effective Date, the Preferred Stock was extinguished and the two-class method is no longer necessary to compute earnings per share for the Successor starting with the month ended December 31, 2020. Basic earnings per share is computed by dividing the allocated net loss attributable to common stockholders by the weighted-average number of shares of common stock outstanding for the period. Diluted earnings per share is computed similarly except that the denominator is increased to include dilutive potential common shares. Potential common shares for the Predecessor consisted of warrants, equity compensation awards and preferred stock, while potential common shares for the Successor consist of warrants. In certain circumstances adjustment to the numerator is also required for changes in income or loss resulting from the potential common shares. Basic weighted average common shares exclude shares of non-vested restricted stock. As these restricted shares vest, they will be included in the shares outstanding used to calculate basic earnings per share. For the periods presented, there were no differences between the basic and diluted weighted average common shares. The following securities were excluded from the computation of diluted net loss per share, as their effect would have been antidilutive: Successor Predecessor Month Ended December 31, 2020 Eleven Months Ended November 30, 2020 Year Ended December 31, 2019 Preferred stock — 17,173,272 15,828,683 Warrants 1,111,110 760,000 760,000 Stock appreciation rights — 1,010,000 1,010,000 Restricted stock units — 1,344,006 1,555,676 Predecessor Divestiture On March 22, 2019, the Predecessor completed the divestiture of its Pirate assets in Wilson County for an adjusted cash purchase price of $11.5 million, after closing adjustments, to a private third-party. The assets were comprised of 3,400 net undeveloped acres, six producing wells, held seven proved undeveloped locations as of the closing date, and were producing approximately 200 BOE/d. The Predecessor recognized a loss of $33.5 million during the first quarter of 2019 in conjunction with the sale of the assets. Recent Accounting Pronouncements Income Taxes. In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740) – Simplifying the Accounting for Income Taxes ("ASU 2019-12”). The objective of ASU 2019-12 is to simplify the accounting for income taxes by removing certain exceptions to the general principles in Topic 740 and to provide more consistent application to improve the comparability of financial statements. The amendments in this ASU are effective for fiscal years beginning after December 15, 2020, and early adoption is permitted. The Company is currently evaluating the impact this guidance may have on its consolidated financial statements and related footnote disclosures. Financial Instruments — Credit Losses. In June 2016, the Financial Accounting Standards Board ("FASB”) issued ASU 2016-13, Financial Instruments – Credit Losses ("ASU 2016-13”). ASU 2016-13 changes the impairment model for most financial assets and certain other instruments, including trade and other receivables, and requires the use of a new forward-looking expected loss model that will result in the earlier recognition of allowances for losses. The amendments in this ASU are effective for fiscal years beginning after December 15, 2022 for Smaller Reporting Companies, which the Company currently is classified as, and interim periods within those fiscal years, and early adoption is permitted. Entities must adopt the amendment using a modified retrospective approach to the first reporting period in which the guidance is effective. The adoption of ASU 2016-13 is currently not expected to have a material effect on the Company's consolidated financial statements. Reference Rate Reform. In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848) (“ASU 2020-04”). ASU 2020-04 provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions to ease financial reporting burdens related to the expected market transition from the London Interbank Offered Rate (“LIBOR”) or another reference rate to alternative reference rates. The amendments in this ASU were effective upon issuance and generally can be applied to applicable contract modifications through December 31, 2022. Currently, the Company's Successor Credit Agreements are the Company's only contracts that makes reference to a LIBOR rate and the agreements outline the specific procedures that will be undertaken once an appropriate alternative benchmark is identified. The Company does not expect this guidance to have a significant impact on its consolidated financial statements and related footnote disclosures. |
Emergence from Voluntary Reorga
Emergence from Voluntary Reorganization under Chapter 11 | 12 Months Ended |
Dec. 31, 2020 | |
Reorganizations [Abstract] | |
Emergence from Voluntary Reorganization under Chapter 11 | Emergence from Voluntary Reorganization under Chapter 11 As noted above, on the Petition Date, Lonestar Resources US Inc. and 21 of its directly and indirectly owned subsidiaries filed Bankruptcy Petitions for relief under Chapter 11. In addition, on the Petition Date, the Debtors filed their Joint Prepackaged Plan of Reorganization with the Bankruptcy Court (the “Plan”). On November 12, 2020, the Bankruptcy Court entered its confirmation order (the “Confirmation Order”) approving and confirming the Plan. On November 30, 2020, (the “Effective Date”) the Plan became effective and was implemented in accordance with its terms. Plan of Reorganization On the Effective Date, the Company consummated the following reorganization transactions in accordance with the Plan: • Adopted an amended and restated its certificate of incorporation and bylaws, which reserved for issuance 90,000,000 shares of common stock, par value $0.001 per share, (the “New Common Stock”) and 10,000,000 shares of preferred stock, par value $0.001 per share; • Cancelled all outstanding common and preferred shares of the Predecessor and the Predecessor's equity compensation plan and related unvested shares. • Provided for the following settlement of claims and interests in the Predecessor as follows: ◦ Holders of claims on the Predecessor Senior Secured Credit Facility (the "Prepetition RBL Claims") received distributions of: ▪ Cash in the amount of all accrued and unpaid interest; ▪ A first-out senior secured revolving credit facility with total aggregate commitments of $225 million; ▪ A second-out senior secured term loan credit facility in an amount equal to $60 million; ▪ 555,555 Tranche 1 warrants and 555,555 Tranche 2 warrants, reflecting up to a 10% ownership stake in the Successor company's equity interests; • Holders of the 11.25% Senior Notes due 2023 (the "Prepetition Notes Claims") received distributions of a pro rata share of 96% of 10,000,149 shares of New Common Stock issued on the Effective Date, subject to dilution by a to-be-adopted management incentive plan (the "MIP") and the new warrants); • Holders of Predecessor preferred equity interests received distributions of a pro rata share of 3% of the New Common Stock in the Successor company (subject to dilution by the MIP and the new warrants); • Holders of Predecessor Class A common stock received distributions of a pro rata share of 1% of the New Common Stock in the Successor company (subject to dilution by the MIP and new warrants); and • General unsecured creditors were paid in full in cash. • Incurred “success fees” of $4.7 million; and • Reserved approximately $6.8 million to pay professional fees associated with the Chapter 11 Proceedings that were yet to be approved by the Bankruptcy Court. Reorganization Items, Net Any expenses, gains and losses that are realized or incurred as of or subsequent to the Petition Date and as a direct result of the bankruptcy proceedings and adjustments to reflect the carrying value of certain liabilities subject to compromise at their estimated allowed claim amounts, as such adjustments were determined, are recorded under “Reorganization Items, Net” on our Consolidated Statements of Operations for the Predecessor and consist of the following: Predecessor In Thousands Period from September 30, 2020 through November 30, 2020 Unamortized discounts and debt issuance costs $ (3,243) Professional fees and other (11,847) Fresh start valuation adjustments (93,282) Gain on settlement of liabilities subject to compromise 181,843 Total reorganization items, net $ 73,471 Liabilities Subject to Compromise Liabilities and obligations whose treatment and satisfaction were dependent on the outcome of the Chapter 11 Proceedings and have been segregated and classified as liabilities subject to compromise on the Predecessor’s consolidated balance sheets at the amounts that were allowed, or that the Company estimated would be allowed, as claims in the Chapter 11 Proceedings. See Note 3. Fresh Start Accounting for further information on the composition of liabilities subject to compromise and satisfaction pursuant to the Plan. All conditions required for the adoption of fresh-start accounting were met when the Plan became effective, November 30, 2020. The implementation of the Plan and the application of fresh-start accounting materially changed the carrying amounts and classifications reported in the Company’s consolidated financial statements and resulted in the Company becoming a new entity for financial reporting purposes. As a result of the application of fresh-start accounting and the effects of the implementation of the Plan, the financial statements on or prior to the Effective Date are not comparable with the financial statements after the Effective Date. Upon the application of fresh-start accounting, the Company allocated the reorganization value to its individual assets and liabilities in conformity with ASC 805, Business Combinations (“ASC 805”). The amount of deferred income taxes recorded was determined in accordance with ASC 74 Income Taxes . Reorganization value represents the fair value of the Successor Company’s assets before considering liabilities. Reorganization Value Under ASC 852, the Successor Company must determine an enterprise value to be assigned to the debt and equity of the emerging company as of the date of adoption of fresh-start accounting. In the disclosure statement associated with the Plan, which was confirmed by the Bankruptcy Court, the Company estimated a range of enterprise values to be approximately $290 million to $415 million, with a midpoint of $353 million. The Company deemed it appropriate to use the midpoint between the low end and high end of the range to determine the final enterprise value of $353 million. The enterprise value was derived using an asset-based valuation methodology of estimated proved reserves, undeveloped acreage, and other financial information, considerations and projections, applying a combination of the income, cost and market approaches as of the fresh-start reporting date of November 30, 2020. The Company’s principal assets are its oil and natural gas properties. For purposes of estimating the fair value of the Company’s proved, probable, and possible reserves, an income approach was used which estimated fair value based on the anticipated cash flows associated with the Company’s reserves, including future operating and development costs. Within the income approach, the reserve categories were risked and discounted using a weighted average cost of capital rate of 10.5%. The proved reserve locations were limited to wells expected to be drilled, at that time, in the Company’s 5-year development plan while the probable and possible reserves included wells that are expected to be drilled in year 2025 and beyond. Commodity prices utilized in the determination of the fair value of oil and natural gas properties were based on the New York Mercantile Exchange (“NYMEX”) strip as of the Effective Date for years 2020 through 2022 and then escalated at an inflation rate of 2% through the end of the life of the reserves. In estimating the fair value of the Company’s undeveloped acreage, a market approach was used in which a review of recent transactions was considered. See further discussion below in the Fresh-start accounting adjustments for the specific assumptions used in the valuation of the Company’s various other assets. The fair value of the Successor’s exit financing (revolving credit facility and term loan facility) was estimated based on the Discounted Cash Flow (“DCF”) approach, taking into consideration credit quality of the Company and the yield of the instruments. The Company concluded that the terns of the exit financing are at fair value. The fair value of the Successor warrants was estimated by applying a Monte Carlo simulation model (“MCSM”) to incorporate the Minimum Equity Value hurdle of $100 million for the Warrants. The MCSM approach was employed to simulate future equity value in a risk-neutral framework. For each simulation path, the equity value for Lonestar was simulated from the Valuation Date to the Expiration Date to see if the simulated equity value met the Minimum Equity Value Threshold during the 3-year measurement period for each tranche of the Warrants. The volatility input used in the simulation was based on a set of guideline public companies (“GPC”). Specifically, the GPC’s equity volatilities were calculated as the average of the 3-year historical volatility and implied volatility, which was then adjusted for leverage. The risk-free interest rate was based on the yields on U.S. Treasury Strips with a remaining term of 3.0-year, which is commensurate with the remaining contractual term of the Warrants as sourced from Capital IQ. Although the Company believes the assumptions and estimates used to develop enterprise value and reorganization value are reasonable and appropriate, different assumptions and estimates could materially impact the analysis and resulting conclusions. The assumptions used in estimating these values are inherently uncertain and require judgment. The following table reconciles the Company’s Enterprise value to the estimated fair value of the Successor’s common stock as of November 30, 2020: In thousands As of November 30, 2020 Enterprise value $ 353,000 Plus: Cash and cash equivalents and restricted cash (excluding funds held in the professional fee escrow of $6.8 million) 11,970 Less: Fair value of debt (272,007) Fair Value of Successor equity $ 92,963 The following table reconciles the enterprise value to its reorganization value of Successor’s assets to be allocated to the Company’s individual assets as of the Effective Date: In thousands As of November 30, 2020 Enterprise value $ 353,000 Plus: Cash and cash equivalents and restricted cash (excluding funds held in the professional fee escrow of $6.8 million) 11,970 Current liabilities (excluding current portion of long-term debt) 41,459 Non-current liabilities excluding long-term debt 4,846 Mortgage obligations related to Boland Building LLC 8,328 Reorganization value of Successor's assets to be allocated $ 419,603 Balance Sheet The adjustments included in the following fresh start consolidated balance sheet reflect the effects of the transactions contemplated by the Plan and executed by the Company on the Effective Date (reflected in the column “Reorganization Adjustments”) as well as fair value and other required accounting adjustments resulting from the implementation of fresh start accounting (reflected in the column “Fresh Start Adjustments”). The explanatory notes provide additional information with regard to the adjustments recorded, the methods used to determine the estimated fair values and significant assumptions. As of November 30, 2020 In thousands Predecessor Reorganization Adjustments (1) Fresh Start Adjustments Successor Current assets Cash and cash equivalents $ 40,565 $ (30,752) (2) $ — $ 9,813 Restricted Cash 2,157 6,815 (3) — 8,972 Accounts receivable Oil, natural gas liquid and natural gas sales 10,354 — — 10,354 Joint interest owners and other, net 1,458 — — 1,458 Derivative financial instruments 916 — — 916 Prepaid expenses and other 8,403 100 (4) — 8,503 Total current assets 63,853 (23,837) — 40,016 Property and equipment Oil and gas properties, using the successful efforts method of accounting Proved properties 1,100,211 — (786,239) (16) 313,972 Unproved properties 77,382 — (42,457) (16) 34,925 Other property and equipment 21,862 — (2,188) (16) 19,674 Less accumulated depreciation, depletion, amortization and impairment (734,231) — 734,231 (16) — Property and equipment, net 465,224 — (96,653) 368,571 Accounts receivable 6,053 — — 6,053 Derivative financial instruments 216 — — 216 Other non-current assets 209 4,538 (5) — 4,747 Total assets $ 535,555 $ (19,299) $ (96,653) $ 419,603 As of November 30, 2020 In thousands Predecessor Reorganization Adjustments (1) Fresh Start Adjustments Successor Liabilities and Stockholders’ Equity Current liabilities Accounts payable $ 8,606 $ (1,898) (6) $ — $ 6,708 Oil, natural gas liquid and natural gas sales payable 17,507 — — 17,507 Accrued liabilities 8,972 3,951 (7) — 12,923 Derivative financial instruments 4,321 — — 4,321 Current maturities of long-term debt 286,759 (264,602) (8) — 22,157 Total current liabilities 326,165 (262,549) — 63,616 Long-term liabilities Long-term debt 8,991 249,602 (9) (402) (17) 258,191 Asset retirement obligations 7,327 — (2,969) (18) 4,358 Deferred tax liability, net — — — — Equity warrant liability — — — — Derivative financial instruments 485 — — 485 Other non-current liabilities (10) — — (10) Total long-term liabilities 16,793 249,602 (3,371) 263,024 Liabilities subject to compromise 271,110 (271,110) (10) — — Total liabilities 614,068 (284,057) (3,371) 326,640 Stockholders’ equity Predecessor common stock 142,655 (142,655) (11) — — Predecessor preferred stock — — (11) — — Predecessor additional paid-in capital 176,012 138,980 (12) (314,992) (19) — Successor common stock — 10 (13) — 10 Successor additional paid-in capital — 92,953 (14) — 92,953 Accumulated deficit (397,180) 175,470 (15) 221,710 (19) — Total stockholders’ equity (78,513) 264,758 (93,282) 92,963 Total liabilities and stockholders’ equity $ 535,555 $ (19,299) $ (96,653) $ 419,603 |
Fresh-Start Accounting
Fresh-Start Accounting | 12 Months Ended |
Dec. 31, 2020 | |
Reorganizations [Abstract] | |
Fresh-Start Accounting | Emergence from Voluntary Reorganization under Chapter 11 As noted above, on the Petition Date, Lonestar Resources US Inc. and 21 of its directly and indirectly owned subsidiaries filed Bankruptcy Petitions for relief under Chapter 11. In addition, on the Petition Date, the Debtors filed their Joint Prepackaged Plan of Reorganization with the Bankruptcy Court (the “Plan”). On November 12, 2020, the Bankruptcy Court entered its confirmation order (the “Confirmation Order”) approving and confirming the Plan. On November 30, 2020, (the “Effective Date”) the Plan became effective and was implemented in accordance with its terms. Plan of Reorganization On the Effective Date, the Company consummated the following reorganization transactions in accordance with the Plan: • Adopted an amended and restated its certificate of incorporation and bylaws, which reserved for issuance 90,000,000 shares of common stock, par value $0.001 per share, (the “New Common Stock”) and 10,000,000 shares of preferred stock, par value $0.001 per share; • Cancelled all outstanding common and preferred shares of the Predecessor and the Predecessor's equity compensation plan and related unvested shares. • Provided for the following settlement of claims and interests in the Predecessor as follows: ◦ Holders of claims on the Predecessor Senior Secured Credit Facility (the "Prepetition RBL Claims") received distributions of: ▪ Cash in the amount of all accrued and unpaid interest; ▪ A first-out senior secured revolving credit facility with total aggregate commitments of $225 million; ▪ A second-out senior secured term loan credit facility in an amount equal to $60 million; ▪ 555,555 Tranche 1 warrants and 555,555 Tranche 2 warrants, reflecting up to a 10% ownership stake in the Successor company's equity interests; • Holders of the 11.25% Senior Notes due 2023 (the "Prepetition Notes Claims") received distributions of a pro rata share of 96% of 10,000,149 shares of New Common Stock issued on the Effective Date, subject to dilution by a to-be-adopted management incentive plan (the "MIP") and the new warrants); • Holders of Predecessor preferred equity interests received distributions of a pro rata share of 3% of the New Common Stock in the Successor company (subject to dilution by the MIP and the new warrants); • Holders of Predecessor Class A common stock received distributions of a pro rata share of 1% of the New Common Stock in the Successor company (subject to dilution by the MIP and new warrants); and • General unsecured creditors were paid in full in cash. • Incurred “success fees” of $4.7 million; and • Reserved approximately $6.8 million to pay professional fees associated with the Chapter 11 Proceedings that were yet to be approved by the Bankruptcy Court. Reorganization Items, Net Any expenses, gains and losses that are realized or incurred as of or subsequent to the Petition Date and as a direct result of the bankruptcy proceedings and adjustments to reflect the carrying value of certain liabilities subject to compromise at their estimated allowed claim amounts, as such adjustments were determined, are recorded under “Reorganization Items, Net” on our Consolidated Statements of Operations for the Predecessor and consist of the following: Predecessor In Thousands Period from September 30, 2020 through November 30, 2020 Unamortized discounts and debt issuance costs $ (3,243) Professional fees and other (11,847) Fresh start valuation adjustments (93,282) Gain on settlement of liabilities subject to compromise 181,843 Total reorganization items, net $ 73,471 Liabilities Subject to Compromise Liabilities and obligations whose treatment and satisfaction were dependent on the outcome of the Chapter 11 Proceedings and have been segregated and classified as liabilities subject to compromise on the Predecessor’s consolidated balance sheets at the amounts that were allowed, or that the Company estimated would be allowed, as claims in the Chapter 11 Proceedings. See Note 3. Fresh Start Accounting for further information on the composition of liabilities subject to compromise and satisfaction pursuant to the Plan. All conditions required for the adoption of fresh-start accounting were met when the Plan became effective, November 30, 2020. The implementation of the Plan and the application of fresh-start accounting materially changed the carrying amounts and classifications reported in the Company’s consolidated financial statements and resulted in the Company becoming a new entity for financial reporting purposes. As a result of the application of fresh-start accounting and the effects of the implementation of the Plan, the financial statements on or prior to the Effective Date are not comparable with the financial statements after the Effective Date. Upon the application of fresh-start accounting, the Company allocated the reorganization value to its individual assets and liabilities in conformity with ASC 805, Business Combinations (“ASC 805”). The amount of deferred income taxes recorded was determined in accordance with ASC 74 Income Taxes . Reorganization value represents the fair value of the Successor Company’s assets before considering liabilities. Reorganization Value Under ASC 852, the Successor Company must determine an enterprise value to be assigned to the debt and equity of the emerging company as of the date of adoption of fresh-start accounting. In the disclosure statement associated with the Plan, which was confirmed by the Bankruptcy Court, the Company estimated a range of enterprise values to be approximately $290 million to $415 million, with a midpoint of $353 million. The Company deemed it appropriate to use the midpoint between the low end and high end of the range to determine the final enterprise value of $353 million. The enterprise value was derived using an asset-based valuation methodology of estimated proved reserves, undeveloped acreage, and other financial information, considerations and projections, applying a combination of the income, cost and market approaches as of the fresh-start reporting date of November 30, 2020. The Company’s principal assets are its oil and natural gas properties. For purposes of estimating the fair value of the Company’s proved, probable, and possible reserves, an income approach was used which estimated fair value based on the anticipated cash flows associated with the Company’s reserves, including future operating and development costs. Within the income approach, the reserve categories were risked and discounted using a weighted average cost of capital rate of 10.5%. The proved reserve locations were limited to wells expected to be drilled, at that time, in the Company’s 5-year development plan while the probable and possible reserves included wells that are expected to be drilled in year 2025 and beyond. Commodity prices utilized in the determination of the fair value of oil and natural gas properties were based on the New York Mercantile Exchange (“NYMEX”) strip as of the Effective Date for years 2020 through 2022 and then escalated at an inflation rate of 2% through the end of the life of the reserves. In estimating the fair value of the Company’s undeveloped acreage, a market approach was used in which a review of recent transactions was considered. See further discussion below in the Fresh-start accounting adjustments for the specific assumptions used in the valuation of the Company’s various other assets. The fair value of the Successor’s exit financing (revolving credit facility and term loan facility) was estimated based on the Discounted Cash Flow (“DCF”) approach, taking into consideration credit quality of the Company and the yield of the instruments. The Company concluded that the terns of the exit financing are at fair value. The fair value of the Successor warrants was estimated by applying a Monte Carlo simulation model (“MCSM”) to incorporate the Minimum Equity Value hurdle of $100 million for the Warrants. The MCSM approach was employed to simulate future equity value in a risk-neutral framework. For each simulation path, the equity value for Lonestar was simulated from the Valuation Date to the Expiration Date to see if the simulated equity value met the Minimum Equity Value Threshold during the 3-year measurement period for each tranche of the Warrants. The volatility input used in the simulation was based on a set of guideline public companies (“GPC”). Specifically, the GPC’s equity volatilities were calculated as the average of the 3-year historical volatility and implied volatility, which was then adjusted for leverage. The risk-free interest rate was based on the yields on U.S. Treasury Strips with a remaining term of 3.0-year, which is commensurate with the remaining contractual term of the Warrants as sourced from Capital IQ. Although the Company believes the assumptions and estimates used to develop enterprise value and reorganization value are reasonable and appropriate, different assumptions and estimates could materially impact the analysis and resulting conclusions. The assumptions used in estimating these values are inherently uncertain and require judgment. The following table reconciles the Company’s Enterprise value to the estimated fair value of the Successor’s common stock as of November 30, 2020: In thousands As of November 30, 2020 Enterprise value $ 353,000 Plus: Cash and cash equivalents and restricted cash (excluding funds held in the professional fee escrow of $6.8 million) 11,970 Less: Fair value of debt (272,007) Fair Value of Successor equity $ 92,963 The following table reconciles the enterprise value to its reorganization value of Successor’s assets to be allocated to the Company’s individual assets as of the Effective Date: In thousands As of November 30, 2020 Enterprise value $ 353,000 Plus: Cash and cash equivalents and restricted cash (excluding funds held in the professional fee escrow of $6.8 million) 11,970 Current liabilities (excluding current portion of long-term debt) 41,459 Non-current liabilities excluding long-term debt 4,846 Mortgage obligations related to Boland Building LLC 8,328 Reorganization value of Successor's assets to be allocated $ 419,603 Balance Sheet The adjustments included in the following fresh start consolidated balance sheet reflect the effects of the transactions contemplated by the Plan and executed by the Company on the Effective Date (reflected in the column “Reorganization Adjustments”) as well as fair value and other required accounting adjustments resulting from the implementation of fresh start accounting (reflected in the column “Fresh Start Adjustments”). The explanatory notes provide additional information with regard to the adjustments recorded, the methods used to determine the estimated fair values and significant assumptions. As of November 30, 2020 In thousands Predecessor Reorganization Adjustments (1) Fresh Start Adjustments Successor Current assets Cash and cash equivalents $ 40,565 $ (30,752) (2) $ — $ 9,813 Restricted Cash 2,157 6,815 (3) — 8,972 Accounts receivable Oil, natural gas liquid and natural gas sales 10,354 — — 10,354 Joint interest owners and other, net 1,458 — — 1,458 Derivative financial instruments 916 — — 916 Prepaid expenses and other 8,403 100 (4) — 8,503 Total current assets 63,853 (23,837) — 40,016 Property and equipment Oil and gas properties, using the successful efforts method of accounting Proved properties 1,100,211 — (786,239) (16) 313,972 Unproved properties 77,382 — (42,457) (16) 34,925 Other property and equipment 21,862 — (2,188) (16) 19,674 Less accumulated depreciation, depletion, amortization and impairment (734,231) — 734,231 (16) — Property and equipment, net 465,224 — (96,653) 368,571 Accounts receivable 6,053 — — 6,053 Derivative financial instruments 216 — — 216 Other non-current assets 209 4,538 (5) — 4,747 Total assets $ 535,555 $ (19,299) $ (96,653) $ 419,603 As of November 30, 2020 In thousands Predecessor Reorganization Adjustments (1) Fresh Start Adjustments Successor Liabilities and Stockholders’ Equity Current liabilities Accounts payable $ 8,606 $ (1,898) (6) $ — $ 6,708 Oil, natural gas liquid and natural gas sales payable 17,507 — — 17,507 Accrued liabilities 8,972 3,951 (7) — 12,923 Derivative financial instruments 4,321 — — 4,321 Current maturities of long-term debt 286,759 (264,602) (8) — 22,157 Total current liabilities 326,165 (262,549) — 63,616 Long-term liabilities Long-term debt 8,991 249,602 (9) (402) (17) 258,191 Asset retirement obligations 7,327 — (2,969) (18) 4,358 Deferred tax liability, net — — — — Equity warrant liability — — — — Derivative financial instruments 485 — — 485 Other non-current liabilities (10) — — (10) Total long-term liabilities 16,793 249,602 (3,371) 263,024 Liabilities subject to compromise 271,110 (271,110) (10) — — Total liabilities 614,068 (284,057) (3,371) 326,640 Stockholders’ equity Predecessor common stock 142,655 (142,655) (11) — — Predecessor preferred stock — — (11) — — Predecessor additional paid-in capital 176,012 138,980 (12) (314,992) (19) — Successor common stock — 10 (13) — 10 Successor additional paid-in capital — 92,953 (14) — 92,953 Accumulated deficit (397,180) 175,470 (15) 221,710 (19) — Total stockholders’ equity (78,513) 264,758 (93,282) 92,963 Total liabilities and stockholders’ equity $ 535,555 $ (19,299) $ (96,653) $ 419,603 |
Commodity Price Risk Activities
Commodity Price Risk Activities | 12 Months Ended |
Dec. 31, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Commodity Price Risk Activities | Commodity Price Risk Activities Lonestar enters into certain commodity derivative instruments to mitigate commodity price risk associated with a portion of its future oil and natural gas production and related cash flows. The oil and natural gas revenues and cash flows are affected by changes in commodity product prices, which are volatile and cannot be accurately predicted. The objective for entering into these commodity derivatives is to protect the operating revenues and cash flows related to a portion of the future oil and natural gas sales from the risk of significant declines in commodity prices, which helps ensure the Company’s ability to fund the capital budget. Inherent in Lonestar's fixed price contracts are certain business risks, including market risk and credit risk. Market risk is the risk that the price of oil and natural gas will change, either favorably or unfavorably, in response to changing market conditions. Credit risk is the risk of loss from non-performance by the Company’s counterparty to a contract. The Company does not currently require cash collateral from any of its counterparties nor does its counterparties require cash collateral from the Company. As of December 31, 2020 (Successor), the Company had no open physical delivery obligations. Under the terms of Company's Successor Credit Facility, by no later than 90 days following the Effective Date, which can be extended at the discretion of the Lenders, the Company is required to have hedges in place covering a minimum of 80% of its anticipated production for the period of 36 consecutive calendar months following the Effective Date and 75% of its anticipated production for the 24 months immediately following the date of each Swap Agreement Certificate (as defined in the Agreement). As of December 31, 2020 (Successor), all of the Company's outstanding derivative contracts were subject to enforceable master netting arrangements whereby payables on those contracts can be offset against receivables from separate derivative contracts with the same counterparty. It is the Company's policy to classify derivative assets and liabilities on a gross basis on its balance sheets, even if the contracts are subject to enforceable master netting arrangements. The following table summarizes Lonestar's commodity derivative contracts as of December 31, 2020 (Successor): Contract Volume Hedged Weighted Commodity Type Period Range (1) (Bbls/Mcf per day) Average Price Oil - WTI Swaps Jan - Dec 2021 $42.20 - $47.09 4,146 $ 43.05 Oil - WTI Swaps Jan - Dec 2022 $44.83 - $47.09 2,000 45.62 Natural Gas - Henry Hub Swaps Jan - Dec 2021 $2.86 - $3.28 11,991 3.03 Natural Gas - Henry Hub Swaps Jan - Dec 2022 $2.70 - $3.14 6,233 2.77 (1) Ranges presented for fixed-price swaps and basis swaps represent the lowest and highest fixed prices of all open contracts for the period presented. During January 2021, the Company entered into additional WTI swaps of 184,000 (1,000 barrels per day) at an average strike price of $50.37 for the period of July through December 2021, in addition the company entered into additional WTI swaps of 90,500 (500 barrels per day) at an average strike of $49.17 for the period of January through June 2022. During February 2021, the company entered into additional WTI swaps of 221,000 (722 barrels per day) at an average strike price of $55.50 for the period of March through December 2021, in addition the company entered into additional WTI swaps of 297,000 (814 barrels per day) at an average strike of $49.82 for the period of January through December 2022 and entered into Henry Hub swaps for 460,000 MMBtu (5,000 MMBtu/d) at an average strike price of $2.93 per MMBtu. As of December 31, 2020 (Successor), all of the Company’s derivative hedge positions were with large financial institutions, which are not known to the Company to be in default on their derivative positions. The Company is exposed to credit risk to the extent of non-performance by the counterparties in the derivative contracts discussed above. None of the Company’s derivative instruments contain credit-risk related contingent features. |
Leases
Leases | 12 Months Ended |
Dec. 31, 2020 | |
Leases [Abstract] | |
Leases | LeasesOperating lease ROU assets are presented within Other Property and Equipment on the consolidated balance sheets as of December 31, 2019. The current portion of operating lease liabilities are presented within Accrued Liabilities, and the non-current portion of operating lease liabilities are presented within Other Non-Current Liabilities on the consolidated balance sheet. Operating lease ROU assets and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date. As most of the Company's leases do not provide an implicit rate, the Company uses an incremental collateralized borrowing rate based on the information available at commencement date, including lease term, in determining the present value of future payments. The operating lease ROU asset also includes any lease payments made and excludes lease incentives and initial direct costs incurred. The Company's lease terms may include options to extend or terminate the lease when it is reasonably certain that the option will be exercised. Operating lease expense is recognized on a straight-line basis over the lease term. The Company's operating lease portfolio includes field equipment such as compressors and amine units, office space and office equipment. The Company currently does not have any financing leases. Our compressor and amine unit arrangements are typically structured with a non-cancelable primary term of one The Company enters into daywork contracts for drilling rigs with third parties to support its drilling activities. The drilling rig arrangements are typically structured with a term that is in effect until drilling operations are completed on a contractually-specified well or well pad. Upon mutual agreement with the contractor, the Company typically has the option to extend the contract term for additional wells or well pads by providing thirty days notice prior to the end of the original contract term. Drilling rig arrangements represent short-term operating leases. The accounting guidance requires the Company to make an assessment at contract commencement if it is reasonably certain that it will exercise the option to extend the term. Due to the continuously evolving nature of the Company's drilling schedules and the potential volatility in commodity prices in an annual period, the Company's strategy to enter into shorter term drilling rig arrangements allows it the flexibility to respond to changes in our operating and economic environment. The Company exercises its discretion in choosing to extend or not extend contracts on a rig-by-rig basis depending on the conditions present at the time the contract expires. At the time of contract commencement, the Company has determined it cannot conclude with reasonable certainty if it will choose to extend the contract beyond its original term. Pursuant to the successful efforts method of accounting, these costs are capitalized as part of natural gas and oil properties on our balance sheet when paid. The Company leases a small part of the corporate building it owns to a third-party, with a lease term that ends in 2023 and is non-cancelable. Third-party leasing income is insignificant and is included in Acquisition Costs and Other on the consolidated statements of operations. The components of our total lease expense for 2020 and 2019 are as follows: Successor Predecessor In thousands Month Ended December 31, 2020 Eleven Months Ended November 30, 2020 Year ended December 31, 2019 Operating Leases $ — $ 45 $ 273 Short-term leases (1) 246 2,665 2,766 Total lease expense $ 246 $ 2,710 $ 3,039 Short-term lease costs capitalized to oil and gas properties (2) $ 9 $ 4,704 $ 11,747 (1) Short-term leases represent expenses related to leases with a contract term of one year or less. The majority of these leases relate to field operating equipment and are included in lease operating expense and gas gathering, processing and transportation expense on the consolidated statement of operations. (2) Short-term lease costs represent leases with a contract term of one year or less, the majority of which are related to drilling rigs and are capitalized as part of Oil and Gas Properties on the consolidated balance sheets. Supplemental balance sheet information related to leases follows: Successor Predecessor In thousands, except lease term and discount rate data December 31, 2020 December 31, 2019 Operating leases Assets Other property and equipment $ — $ 45 Liabilities Accrued liabilities $ — $ 45 Weighted-average remaining lease term (years) — 0.2 Weighted-average discount rate — 5.0 % Supplemental cash flow information related to leases follows: Successor Predecessor In thousands Month Ended December 31, 2020 Eleven Months Ended November 30, 2020 Year ended December 31, 2019 Cash paid for amounts included in the measurement of lease liabilities Operating cash flows for operating leases $ — $ 45 $ 273 Right-of-use assets obtained in exchange for lease obligations: Operating leases $ — $ 45 $ 273 |
Revenue Recognition
Revenue Recognition | 12 Months Ended |
Dec. 31, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Revenue Recognition | Revenue Recognition Operating revenues are comprised of sales of crude oil, NGLs and natural gas. Revenue is recognized when performance obligations under the terms of a contract with a customer are satisfied. The Company recognizes revenue when control has been transferred to the customer, generally at the time commodities reach an agreed-upon delivery point. Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring products and is generally based upon a negotiated formula, list or fixed price based on a market index. Typically, the Company sells its products directly to customers generally under agreements with payment terms less than 30 days. Oil Revenues Oil is sold at a contractually-specified index price plus or minus a differential; title and control of the product generally transfers at the delivery point specified in the contract, at which point related revenue is recognized. For those leases in which Lonestar operates with other working interest owners, the Company recognizes oil revenue proportionate to its entitled share of volumes sold. Currently, all of Lonestar’s oil production comes from the Eagle Ford Shale play in South Texas, and direct sales to four purchasers account for the majority of its oil sales. The Company’s oil purchase contracts are generally written to provide month-to-month terms with a 30-day cancellation notice. Sales of Lonestar’s oil production are typically invoiced monthly based on actual volumes measured at the agreed-upon delivery point and stated contract pricing for the month. NGLs and Natural Gas Revenues The Company’s NGL and natural gas purchase contracts are generally structured such that Lonestar commits and dedicates for sale a specified volume of NGL and/or natural gas production per day from agreed-upon leases to a purchaser. NGLs and natural gas are sold at a percentage of index prices of each component less any stated deductions. Control transfers at the delivery point specified in the contract, which typically is stated as the inlet or tailgate of a plant where the produced NGLs and natural gas are processed for subsequent transportation and consumption. In certain situations, Lonestar takes processed natural gas in-kind from a processing plant for sale under a separate purchase agreement with a different delivery point. The stated delivery point determines whether certain conditioning, treating, transportation and fractionation fees associated with the sold NGLs and natural gas are treated as operating expenses (occurring before the delivery point) or as deductions to revenues (occurring after the delivery point). For those leases in which Lonestar operates with other working interest owners, the Company recognizes NGL and natural gas revenue proportionate to its entitled share of volumes sold. Currently, all of Lonestar’s NGL and natural gas production comes from the Eagle Ford Shale play in South Texas. Sales of Lonestar’s NGL and natural gas production is typically invoiced monthly based on actual volumes at the agreed-upon delivery point and stated contract pricing and allocations for the month. Lonestar uses a third-party broker for its NGL and natural gas marketing. In this capacity, the third-party is responsible for carrying out marketing activities such as submission of nominations, receipt of payments, submission of invoices and negotiation of contracts. In this agreement, Lonestar retains final approval of contracts and is not entitled to sales proceeds from the third-party until they are collected from the related purchasers. Commissions payable to the third-party broker for these services are treated as operating expenses in the financial statements. Production Imbalances Revenue is recorded based on the Company’s share of volumes sold, regardless of whether the Company has taken its proportional share of volumes produced. A receivable or liability is recognized only to the extent that the Company has an imbalance on a specific property greater than the expected remaining proved reserves. There were no imbalances at December 31, 2020 (Successor) and 2019 (Predecessor). Significant Judgements As noted above, the Company engages in various types of transactions in which midstream entities process its gas and subsequently market resulting NGLs and residue gas to third-party customers on Lonestar’s behalf. These types of transactions require judgement to determine whether Lonestar is the principal or the agent in the contract and, as a result, whether revenues are recorded gross or net. The Company has determined that each unit of product represents a separate performance obligation under the terms of its purchase contracts, and therefore, future volumes are wholly unsatisfied. Therefore, the Company has utilized the practical expedient exempting a Company from disclosure of the transaction price allocated to remaining performance obligations if the variable consideration is allocated entirely to a wholly unsatisfied performance obligation. Prior-Period Performance Obligations The Company records revenue in the month production is delivered to the purchaser. Settlement statements for certain NGL and natural gas sales may not be received for 30 to 60 days after the date production is delivered, and as a result, Lonestar is required to estimate the amount of production that was delivered to the purchaser and the price that will be received for the sale of the product. The Company records the differences between its estimates and the actual amounts received for product sales in the month that payment is received from the purchaser. Any identified differences between its revenue estimates and actual revenue received historically have not been significant. For the month ended December 31, 2020 (Successor), eleven months ended November 30, 2020 (Predecessor) and year ended December 31, 2019 (Predecessor), revenue recognized in the reporting period related to performance obligations satisfied in prior reporting periods was not material. Accounts Receivable and Other Accounts receivable – Oil, natural gas liquid and natural gas sales consist of amounts due from purchasers for commodity sales from our Eagle Ford fields. Payments from purchasers are typically due by the last day of the month following the month of delivery. There was no bad debt expense for any period presented, and an allowance for uncollectible accounts is unnecessary. The Company’s operations do not result in any contract assets or liabilities on the accompanying consolidated balance sheets. |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2020 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements Fair value measurements are based upon inputs that market participants use in pricing an asset or liability, which are classified into two categories: observable inputs and unobservable inputs. Observable inputs represent market data obtained from independent sources, whereas unobservable inputs reflect a company’s own market assumptions, which are used if observable inputs are not reasonably available without undue cost and effort. ASC 820 prioritizes the inputs used in measuring fair value into the following fair value hierarchy: • Level 1 – Quoted prices for identical assets or liabilities in active markets. • Level 2 – Quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability, and inputs derived principally from or corroborated by observable market data by correlation or other means. • Level 3 – Unobservable inputs for the asset or liability. The fair value input hierarchy level to which an asset or liability measurement falls in its entirety is determined based on the lowest level input that is significant to the measurement in its entirety. Assets and liabilities measured at fair value on a recurring basis The following table presents Lonestar's assets and liabilities that are measured at fair value on a recurring basis as of December 31, 2020 (Successor) and 2019 (Predecessor): Fair Value Measurements Using In thousands Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs Significant Unobservable Inputs Total December 31, 2020 (Successor) Assets: Commodity derivatives $ — $ 2,098 $ — $ 2,098 Liabilities: Commodity derivatives — (8,773) — (8,773) Total $ — $ (6,675) $ — $ (6,675) December 31, 2019 (Predecessor) Assets: Commodity derivatives $ — $ 6,849 $ — $ 6,849 Liabilities: Commodity derivatives — (10,462) — (10,462) Warrants — — (364) (364) Stock-based compensation (1,792) — (573) (2,365) Total $ (1,792) $ (3,613) $ (937) $ (6,342) Commodity Derivatives The Company's commodity derivatives represent non-exchange-traded oil and natural gas fixed-price swaps that are based on NYMEX pricing and fixed-price basis swaps that are based on regional pricing other than NYMEX (e.g., Louisiana Light Sweet). The asset and liability measurements for the Company's commodity derivative contracts represent Level 2 inputs in the hierarchy, as they are valued based on observable inputs other than quoted prices. Warrants The fair value of the Predecessor's warrants is based on Black-Scholes valuations. In addition to the Predecessor's observable stock price, other significant inputs are considered unobservable, and the Company has designated these estimates as Level 3. Stock-Based Compensation The Predecessor's stock-based compensation includes the liability associated with restricted stock units ("RSUs") and stock appreciation rights ("SARs") dependent on the fair value of the Predecessor's publicly-traded common stock. The fair value of RSUs is measured based on measurable prices on a major exchange; the significant inputs to these asset exchange values represented Level 1 independent active exchange market price inputs. The Black-Scholes model used to determine the fair value of the SARs uses inputs, in addition to the Predecessor's observable stock price, that are considered unobservable; to this end the Predecessor has designated these estimates as Level 3. See Note 13. Stock-Based Compensation below for more information. Level 3 gains and losses The table below sets forth a summary of changes in the fair value of the Company’s Level 3 liabilities for the year ended December 31, 2020. Successor Predecessor In thousands Month Ended December 31, 2020 Eleven Months Ended November 30, 2020 Year Ended December 31, 2019 Fair value of Level 3 instruments, beginning of period $ — $ (937) $ (1,691) Unrealized gains — — 754 Extinguishment of Level 3 instruments on Effective Date — 937 — Fair value of Level 3 instruments, end of period $ — $ — $ (937) Assets and liabilities measured at fair value on a nonrecurring basis Non-recurring fair value measurements include certain non-financial assets and liabilities as may be acquired in a business combination and thereby measured at fair value; impaired oil and natural gas property assessments; warrants issued in debt or equity offerings and the initial recognition of asset retirement obligations for which fair value is used. Non-recurring fair value measurements also include certain non-financial assets and liabilities as part of fresh-start accounting on the Effective Date (see Note 3. Fresh-Start Accounting ). These estimates are derived from historical costs as well as management’s expectation of future cost environments. As there is no corroborating market activity to support the assumptions used, the Company has designated these estimates as Level 3. Other fair value measurements The book values of cash and cash equivalents, accounts receivable and accounts payable approximate fair value due to the short-term nature of these instruments. The carrying value of debt approximates fair value since it is subject to a short-term floating interest rate that approximates the rate available to the Company. |
Asset Retirement Obligations
Asset Retirement Obligations | 12 Months Ended |
Dec. 31, 2020 | |
Asset Retirement Obligation Disclosure [Abstract] | |
Asset Retirement Obligations | Asset Retirement Obligations Lonestar recognizes its asset retirement obligations related to the plugging, abandonment and remediation of oil and gas producing properties. The present value of the estimated asset retirement costs has been capitalized as part of the carrying amount of the related long-lived assets. The liability has been accreted to its present value as of December 31, 2020 (Successor). The following provides a reconciliation of activity in the asset retirement obligations for 2020 and 2019: Successor Predecessor In thousands Month Ended December 31, 2020 Eleven Months Ended November 30, 2020 Year Ended December 31, 2019 Beginning asset retirement obligations $ 4,358 $ 7,055 $ 7,195 Wells drilled during the year — 4 26 Wells sold during the year — — (388) Accretion expense 38 316 300 Revisions in estimated retirement obligations (1) 177 (3,017) 191 Wells plugged and abandoned during the year — — (269) Ending asset retirement obligations $ 4,573 $ 4,358 $ 7,055 (1) Revisions of previous estimates during months ended December 31, 2020 (Successor) and the year ended December 31, 2019 (Predecessor) are primarily attributable to changes in estimates of the timing of future costs for oilfield services required to plug and abandon wells. Revisions of previous estimates during the eleven months ended November 30, 2020 (Predecessor) are primarily due to the change in fair value resulting from the Company's fresh-start accounting (see Note 3. Fresh-Start Accounting ) |
Accrued Liabilities
Accrued Liabilities | 12 Months Ended |
Dec. 31, 2020 | |
Payables and Accruals [Abstract] | |
Accrued Liabilities | Accrued Liabilities The following table provides detail of Lonestar's accrued liabilities as of December 31, 2020 (Successor) and 2019 (Predecessor): Successor Predecessor In thousands December 31, 2020 December 31, 2019 Bonus payable $ 1,363 $ 2,353 Accrued interest - 11.25% Senior Notes — 14,063 Accrued well costs 1,752 8,932 Third party payments for joint interest expenditures 5,178 — Accrued professional fees (success fees) 4,710 — Other 2,980 1,557 Total accrued liabilities $ 15,983 $ 26,905 |
Long-Term Debt
Long-Term Debt | 12 Months Ended |
Dec. 31, 2020 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | Long-Term Debt The following long-term debt obligations were outstanding as of December 31, 2020 (Successor) and 2019 (Predecessor): Successor Predecessor In thousands December 31, 2020 December 31, 2019 Successor Senior Secured Credit Facility $ 209,600 $ — Successor Second-Out Term Loan 55,000 — Predecessor Senior Secured Credit Facility — 247,000 11.25% Senior Notes due 2023 — 250,000 Mortgage debt 8,712 8,931 PPP loan 2,157 — Other 261 271 Total 275,730 506,202 Less unamortized discount (402) (3,375) Less unamortized debt issuance costs — (759) Total net of discount and debt issuance costs 275,328 502,068 Less current obligations (1) (20,000) (247,000) Long-term debt $ 255,328 $ 255,068 (1) Current obligations for the Successor represent four quarterly $5.0 million principal payments due in 2021 and, for the Predecessor, the Senior Secured Credit Facility obligations which were classified as current liabilities as of December 31, 2019. Successor Senior Secured Credit Agreements On the Effective Date, the Successor, through its subsidiary Lonestar Resources America Inc., entered into a new first-out senior secured revolving credit facility with Citibank, N.A., as administrative agent, and the other lenders from time to time party thereto (the “Successor Credit Facility”) and a second-out senior secured term loan credit facility (the “Successor Term Loan Facility” and, together with the Successor Credit Facility, the “Successor Credit Agreements”) by amending and restating the Company’s existing credit agreement (as so amended and restated, the “Predecessor Credit Facility”). The Successor Credit Facility provides for revolving loans in an aggregate amount of up to $225 million, subject to borrowing base capacity. Letters of credit are available up to the lesser of (a) $2.5 million and (b) the aggregate unused amount of commitments under the Successor Credit Facility then in effect. On the Effective Date, Lonestar Resources America Inc. borrowed $60.0 million in term loans under the Successor Term Loan Facility. The Successor Credit Agreements will mature on November 30, 2023. The term loans under the Successor Term Loan Facility amortize on a quarterly basis in an amount equal to $5.0 million, payable on the last day of March, June, September and December of each year. The Successor's obligations under the Successor Credit Agreements are guaranteed by all of the Successor's direct and indirect subsidiaries (subject to certain permitted exceptions) and will be secured by a lien on substantially all of the Successor's, Lonestar Resources America Inc.’s and the guarantors’ assets (subject to certain exceptions). Borrowings and letters of credit under the Successor Credit Facility are limited by borrowing base calculations set forth therein. The initial borrowing base is $225 million, subject to redetermination. The borrowing base will be redetermined semiannually on or around May 1 and November 1 of each year, with one interim “wildcard” redetermination available between scheduled redeterminations. The first wildcard redetermination occurred on February 1, 2021, which reaffirmed the initial borrowing base of $225 million. The Successor Credit Agreements contain customary covenants, including, but not limited to, restrictions on the Successor's ability and that of its subsidiaries to merge and consolidate with other companies, incur indebtedness, grant liens or security interests on assets, make acquisitions, loans, advances or investments, pay dividends, sell or otherwise transfer assets, or enter into transactions with affiliates. The Successor Credit Facility contains certain financial performance covenants including the following: • A Consolidated Total Debt to Consolidated EBITDAX covenant, with such ratio not to exceed 3.5 times; and • A requirement to maintain a current ratio (i.e., Consolidated Current Assets to Consolidated Current Liabilities) of at least 0.95 times for the three months ended December 31, 2020 and 1.0 times each fiscal quarter thereafter. The current ratio excludes current derivative assets and liabilities, as well as the current amounts due under the Successor Term Loan Facility, from the ratio. Borrowings under the Successor Credit Agreements bear interest at a floating rate at the Successor's option, which can be either an adjusted Eurodollar rate (the Adjusted LIBOR, subject to a 1% floor) plus an applicable margin of 4.50% per annum or a base rate determined under the Successor Credit Facility (the "ABR", subject to a 2% floor) plus an applicable margin of 3.50% per annum. The weighted average interest rate on borrowings under the Successor Credit Agreements was 5.8% for the month ended December 31, 2020. The undrawn portion of the aggregate lender commitments under the Successor Credit Facility is subject to a commitment fee of 1.0%. As of December 31, 2020, the Successor was in compliance with all debt covenants under the Successor Credit Facilities. Predecessor Senior Secured Bank Credit Facility From July 2015 through November 30, 2020, the Predecessor maintained a senior secured revolving credit facility with Citibank, N.A., as administrative agent, and other lenders party thereto. All of the Predecessor Credit Facility was refinanced by the Successor Credit Agreements on the Effective Date. Extinguishment of Predecessor 11.25% Senior Notes On the Effective Date, the Predecessor's 11.25% Senior Notes due 2023 (the "11.25% Senior Notes") were fully extinguished by issuing equity in the Successor to the holders of that debt. The contractual interest expense on the 11.25% Notes is in excess of recorded interest expense by $4.7 million from the Petition Date until the Effective Date and was not included as interest expense on the Consolidated Statements of Operations for the Predecessor period because the Company discontinued accruing interest on the 11.25% Senior Notes subsequent to the Petition Date in accordance with ASC 852. The Company did not make any interest payments on the 11.25% Senior Notes subsequent to the Petition Date. Debt Issuance Costs The Company capitalizes certain direct costs associated with the issuance of long-term debt and amortizes such costs over the lives of the respective debt. At December 31, 2020 (Successor) and 2019 (Predecessor), the Company had approximately $4.6 million and $0.8 million, respectively, of debt issuance costs associated with the Successor Credit Facility and Predecessor Credit Facility, respectively, remaining that are being amortized over the lives of the respective debt which are recorded as Other Non-Current Assets in the accompanying unaudited condensed consolidated balance sheets. Indebtedness Repayment Schedule As of December 31, 2020 (Successor), debt is payable over the next five years and thereafter as follows: Successor In thousands December 31, 2020 2021 $ 20,083 2022 24,019 2023 224,606 2024 7 2025 7 Thereafter 7,008 Total debt $ 275,730 |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The income tax provision is as follows: Successor Predecessor In thousands Month Ended December 31, 2020 Eleven Months Ended November 30, 2020 Year Ended December 31, 2019 Current income tax benefit Federal $ — $ (3,748) $ (591) State — — (464) Total current income tax benefit — (3,748) (1,055) Deferred tax expense (benefit) Federal $ — 882 (20,989) State — (1,813) 673 Valuation allowance — — 8,876 Total deferred income tax benefit — (931) (11,440) Total income tax benefit $ — $ (4,679) $ (12,495) The following table provides a reconciliation of Lonestar's actual income tax provision amounts from the expected income tax provision amount by applying the U.S. federal statutory corporate income tax rate of 21% for the period from December 1, 2020 through December 31, 2020 (Successor), the period from January 1, 2020 through November 30, 2020 (Predecessor) and the year ended December 31, 2019 (Predecessor), as follows: Successor Predecessor In thousands Month Ended December 31, 2020 Eleven Months Ended November 30, 2020 Year Ended December 31, 2019 Expected income tax benefit at statutory rate $ (150) $ (25,791) $ (24,258) Permanent differences 2 4,895 (48) State taxes, net of Federal benefit 16 (2,514) 307 Fresh start valuation adjustments — 19,589 — Gain on settlement of liabilities subject to compromise — (38,187) — Reduction in deferred tax assets — 12,537 — Return to provision adjustment — — 2,567 Change in valuation allowance 132 28,541 8,876 Net operating loss carryback — (3,749) Other — — 61 Actual income tax benefit $ — $ (4,679) $ (12,495) Significant components of the Company's deferred tax assets and liabilities as of December 31, 2020 (Successor) and 2019 (Predecessor) are as follows: Successor Predecessor In thousands December 31, 2020 December 31, 2019 Deferred tax assets Net operating loss carryforward $ 5,196 $ 27,025 Oil and gas properties, and other property and equipment 17,828 — Stock-based compensation — 922 Intangibles 183 257 Derivative instruments 2,036 606 Interest expense limitation 11,753 19,243 Organizational expenses and other 553 3,306 Total deferred tax assets $ 37,549 $ 51,359 Deferred tax liabilities Oil and gas properties, and other property and equipment, principally due to intangible drilling assets $ — $ (43,414) Net deferred tax assets 37,549 7,945 Valuation allowance for deferred tax assets (37,549) (8,876) Net deferred tax liability, net of valuation allowance $ — $ (931) We have evaluated the income tax impact of the Plan, including the change in control, resulting from our emergence from Chapter 11 Bankruptcy on November, 30, 2020. Under the Plan, a substantial portion of the Company’s pre-petition debt securities were extinguished. When the debt was extinguished, the Company realized CODI for U.S. federal income tax purposes of approximately $181.9 million, which is excludable from taxable income. The CODI exclusion resulted in a partial elimination of or our federal net operating loss carryforwards, as well as a partial reduction in tax basis in assets, in accordance with the attribute reduction and ordering rules of Section 108 of the Code. The deferred tax balances disclosed above for the Successor period ended December 31, 2020 reflect the estimated impact of the reduction of these attributes. Section 382 of the Code provides an annual limitation with respect to the ability of a corporation to utilize its tax attributes, as well as certain built-in-losses, against future U.S. taxable income in the event of a change in ownership. The Company's emergence from chapter 11 bankruptcy proceedings is considered a change in ownership for purposes of Section 382. The limitation under Section 382 is based on the value of the corporation as of the emergence date. The ownership change and resulting annual limitation resulted in the expiration of approximately $46.6 million of net operating losses generated prior to the emergence date. The expiration of these tax attributes was fully offset by a corresponding decrease in the Company's U.S. valuation allowance, which results in no net tax provision. The amount of U.S.consolidated net operating losses available as of December 31, 2020 (Successor), after attribute reduction and expiration due to Section 382, is estimated to be approximately $24.7 million. Of this amount, $10.0 million is subject to a 20 year carry forward period and will start to expire in 2034. The remaining $14.7 million may be carried forward indefinitely but is subject to a Section 382 limitation. The Company assesses the recoverability of its deferred tax assets each period by considering whether it is more likely than not that all or a portion of the deferred tax assets will not be realized. The Company considers all available evidence (both positive and negative) in determining whether a valuation allowance is required. The Company evaluated possible sources of taxable income that may be available to realize the benefit of deferred tax assets, including income projections, the reversal of existing taxable temporary differences, taxable income in carryback years and available tax planning strategies in making this assessment. We also considered other available evidence as of the balance sheet date, including the tax impacts of the Chapter 11 Proceedings and the partial reduction of tax attributes. Given our cumulative loss position and the continued low oil price environment, management concluded that as of December 31, 2020 (Successor), a valuation allowance should to be applied against the Company’s net deferred tax asset. The Company recorded a valuation allowance as of December 31, 2020 (Successor) of $37.5 million, an increase of $28.7 million from December 31, 2019 (Predecessor). The Company will continue to monitor facts and circumstances surrounding the likelihood that NOL carryforwards and other deferred tax assets will be utilized. We record uncertain tax positions on the basis of a two-step process in which (1) we determine whether it is more-likely-than-not the tax positions will be sustained on the basis of the technical merits of the position and (2) for those tax positions meeting the more-likely-than-not recognition threshold, we recognize the largest amount of tax benefit that is more than 50% likely to be realized upon ultimate settlement with the related tax authority. The Company has no unrecognized tax benefits for the years ended December 31, 2020 (Successor) and December 31, 2019 (Predecessor). Likewise, the Company has not recorded any interest or penalties associated with uncertain tax positions. As of December 31, 2020, there are no examinations of federal or state jurisdictions in progress. The Company’s income tax returns related to fiscal years ended December 31, 2010 through December 31, 2020 remain open to possible examination by the tax authorities. |
Stockholders_ Equity
Stockholders’ Equity | 12 Months Ended |
Dec. 31, 2020 | |
Equity [Abstract] | |
Stockholders’ Equity | Stockholders’ Equity Registration Rights Agreement On the Effective Date, the Successor entered into a registration rights agreement (the “Registration Rights Agreement”) with certain parties who received certain shares of New Common Stock on the Effective Date (the “Holders”). The Registration Rights Agreement provides resale registration rights for the Holders’ registrable securities of the Successor. Pursuant to the Registration Rights Agreement, Holders have customary underwritten offering and piggyback registration rights, subject to the limitations set forth in the Registration Rights Agreement. Under their underwritten offering registration rights, Holders have the right to demand the Successor to effectuate the distribution of any or all of its Registrable Securities by means of an underwritten offering pursuant to an effective registration statement; provided, however, that the expected gross offering price is equal to or greater than $50.0 million in the aggregate. The Successor is not obligated to effect an underwritten demand notice upon certain circumstances, including within 180 days of closing an underwritten offering. Under their piggyback registration rights, if at any time the Successor proposes to undertake a registered offering of New Common Stock for its own account, the Successor must give at least five These registration rights are subject to certain conditions and limitations, including the right of the underwriters to limit the number of shares to be included in an offering and the Successor’s right to delay or withdraw a registration statement under certain circumstances. The Successor will generally pay all registration expenses in connection with its obligations under the Registration Rights Agreement, regardless of whether a registration statement is filed or becomes effective. The registration rights granted in the Registration Rights Agreement are subject to customary indemnification and contribution provisions, as well as customary restrictions such as blackout periods and, if an underwritten offering is contemplated, limitations on the number of shares to be included in the underwritten offering that may be imposed by the managing underwriter. Warrant Agreements On the Effective Date, pursuant to the terms of the Plan, the Successor entered into a Tranche 1 Warrant Agreement (the “Tranche 1 Warrant Agreement”) and issued warrants (the “Tranche 1 Warrants”) to holders of Allowed Prepetition RBL Claims (as defined in the Plan) or their permitted designees, as applicable, to purchase up to an aggregate of 555,555 shares of common stock in the Successor, par value $0.001 (the “New Common Stock”), at an exercise price of $0.001 per share of New Common Stock, subject to adjustment. The Tranche 1 Warrants may only be exercised at any time after the equity value of the Successor, as calculated pursuant to the Tranche 1 Warrant Agreement, shall have been greater than $100 million (“Valuation Condition”) and expire on November 30, 2023 (the “Expiration Date”). On the Effective Date, pursuant to the terms of the Plan, the Company entered into a Tranche 2 Warrant Agreement (the “Tranche 2 Warrant Agreement” and, together with the Tranche 1 Warrant Agreement, the “Warrant Agreements”) and issued warrants (the “Tranche 2 Warrants” and, together with the Tranche 1 Warrants, the “Warrants”) to holders of Allowed Prepetition RBL Claims or their permitted designees, as applicable, to purchase up to an aggregate of 555,555 shares of the New Common Stock, at an exercise price of $0.001 per share of New Common Stock, subject to adjustment. The Tranche 2 Warrants may be exercised after the first anniversary of the issuance of the Successor Term Loan Facility if it shall not have been paid in full and if, after the first anniversary date, the Valuation Condition has been met. The Tranche 2 Warrants expire upon the Expiration Date. All warrants are considered freestanding equity-classified instruments due to their detachable and separately exercisable features. Accordingly, the warrants are presented as a component of Stockholders’ Equity in accordance with ASC 815-40-25. |
Stock-Based Compensation
Stock-Based Compensation | 11 Months Ended |
Nov. 30, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Stock-Based Compensation | Stock-Based Compensation Below is a description of stock compensation relating to the Predecessor periods (2019 and the eleven months ended November 30, 2020). All stock compensation plans and awards in effect during the Predecessor periods were cancelled on the Effective Date and no new stock compensation plans have been adopted by the Successor as of December 31, 2020. Restricted Stock Units - Predecessor The Predecessor awarded restricted stock units ("RSUs") to employees and directors as part of its long-term compensation program. The awards vested over a three-year period, with specific terms of vesting determined at the time of grant. The Predecessor determined the fair value of granted RSUs based on the market price of the Class A voting common stock of the Predecessor on the date of grant. RSUs were paid in Class A voting common stock or cash (see below) after the vesting of the applicable RSU. Compensation expense for granted RSUs was recognized over the vesting period. For the eleven months ended November 30, 2020 and the year ended December 31, 2019, the Predecessor recognized $(1.2) million and $2.6 million, respectively, of stock-based compensation costs for RSUs. The Predecessor offered cash settlement to all employees for vested RSUs and, as a result of this modification, the RSU awards are classified as a liability on the Predecessor's balance sheet in accordance with ASC 718, Compensation – Stock Compensation . The liability for RSUs on the accompanying consolidated balance sheet as of December 31, 2019 was $1.8 million. The following is a summary of the Predecessor's RSU activity: Shares Weighted Average Fair Value per Share Outstanding non-vested RSUs at December 31, 2019 (Predecessor) 1,849,676 $ 4.04 Granted — — Vested (866,800) 0.64 Forfeited (102,623) — Cancelled (880,253) $ 3.41 Outstanding non-vested RSUs at November 30, 2020 (Predecessor) — $ — In connection with the Company's emergence from bankruptcy, all RSUs outstanding as of November 30, 2020 were cancelled and there was no remaining compensation cost to be recognized in future periods related to nonvested restricted stock arrangements. Stock Appreciation Rights - Predecessor The Predecessor granted awards of stock appreciation rights (“SARs”) to employees and directors as part its long-term compensation program. The awards vested over a three-year period, with specific terms of vesting determined at the time of grant, and expired five years after the date of issuance. The SARs were granted with a strike price equal to the fair market value at the time of grant, which was generally defined as the closing price of the Predecessor's common stock on the NASDAQ on the date of grant. SARs were paid in cash or common stock at holder’s election once the SAR vested. For the eleven months ended November 30, 2020 and the year ended December 31, 2019, the Predecessor recognized $(0.6) million and $(0.1) million, respectively, of stock-based compensation costs for SARs. The liability for SARs on the accompanying consolidated balance sheet as of December 31, 2019 was approximately $0.6 million. As of December 31, 2019, there was $0.1 million of total compensation cost to be recognized in future periods related to non-vested SAR grants. The cost was expected to be recognized over a weighted-average period of 0.7 years. The following is a summary of the Predecessor's SARs activity: Shares Weighted Average Exercise Price Per Share Weighted Average Remaining Contractual Term Outstanding at December 31, 2019 (Predecessor) 1,010,000 $ 6.30 2.5 SARs vested and exercisable at December 31, 2019 (Predecessor) 606,250 6.65 2.4 Granted — — — Vested 198,750 — — Exercised — — — Forfeited — — — Cancelled (805,000) 6.79 1.4 Outstanding at November 30, 2020 (Predecessor) — $ — — SARs vested and exercisable at November 30, 2020 (Predecessor) — $ — — In connection with the Company's emergence from bankruptcy, all SARs outstanding as of November 30, 2020 were cancelled. |
Related Party Activities
Related Party Activities | 12 Months Ended |
Dec. 31, 2020 | |
Related Party Transactions [Abstract] | |
Related Party Activities | Related Party Activities New Tech Global Ventures, LLC, and New Tech Global Environmental, LLC, companies in which a director of the Predecessor owns a limited partnership interest, have provided field engineering staff and consultancy services for the Company since 2013. The total cost for such services was approximately $1.4 million and $1.7 million for the eleven months ended November 30, 2020 and year ended December 31, 2019, respectively. On the Effective Date, the director resigned from the Company's Board. In February 2019, the Predecessor purchased a property adjacent to its corporate office for approximately $2.0 million. The transaction was funded with cash from operations. The seller of the property is indebted to certain trusts established in favor of the children of one of the Predecessor's directors, who resigned on the Effective Date from the Company's Board. Both the Predecessor and Successor is party to a Joint Operating Agreement ("JOA") with an entity which was a related party through common investors and representation on the Board of Directors to the Predecessor Company. The amounts owed the Company by the related party under the JOA are reflected as accounts receivable related party on the accompanying 2019 Consolidated Balance Sheet. Upon the Effective date, the entity is no longer is considered a related party. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Chapter 11 Proceedings On September 30, 2020, Lonestar Resources US Inc. and 21 of its directly and indirectly owned subsidiaries filed petitions for reorganization in a voluntary bankruptcy under chapter 11 of the Bankruptcy Code in the United States Bankruptcy Court for the Southern District of Texas under the caption In re Lonestar Resources US Inc., et al., Case No. 20-34805. On November 12, 2020, the Bankruptcy Court entered the Confirmation Order and on November 30, 2020, the Plan became effective in accordance with its terms and the Company emerged from the Chapter 11 bankruptcy proceedings. In December 2020, the Bankruptcy Court closed the chapter 11 cases of each of Lonestar Resources US Inc. and 20 of its directly and indirectly owned subsidiaries. The chapter 11 case captioned In re Lonestar Resources US Inc., et al., Case No. 20-34805 will remain pending until the final resolution of all outstanding claims. Litigation Lonestar is subject to certain claims and litigation arising in the normal course of business. In the opinion of management, the outcome of such matters will not have a materially adverse effect on the consolidated results of operations or financial position of the Company. Environmental Remediation Various federal, state, and local laws and regulations covering the discharge of materials into the environment, or otherwise relating to the protection of the environment, may affect the Company’s operations and the costs of its oil and gas exploration, development and production operations. The Company does not anticipate that it will be required in the near future to expend significant amounts in relation to the consolidated financial statements taken as a whole by reason of environmental laws and regulations, and appropriately no reserves have been recorded. Significant Contracts Lonestar currently has one drilling rig under contract which commenced on February 1, 2021. The contract provides for a drilling rate of $16.0 thousand per day, and expires 90 days after the commencement date. Should the Company terminate the contract early, the early termination fee totals $12.0 thousand per day times the remaining number of days left on the contract after the termination date. Gonzales County AMI In February 2020, the Predecessor announced that it had entered into a Joint Development Agreement (the "JDA") in Gonzales County with one of the largest producers in the Eagle Ford which encompass an Area of Mutual Interest (the "AMI") totaling approximately 15,000 acres. The agreement calls for Lonestar to operate a minimum of three to four Eagle Ford Shale wells annually on behalf of the two companies through 2022 that are intended to hold-by-production approximately 6,000 gross acres within the AMI. The agreement gives Lonestar's partner the option to participate in each well with a 50% working interest or to participate via a carried working interest that ranges from approximately 9 to 17%, depending on location. The JDA continued to the Successor upon emergence from bankruptcy. |
Basis of Presentation (Policies
Basis of Presentation (Policies) | 12 Months Ended |
Dec. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Principles of Reporting and Consolidation | Principles of Reporting and Consolidation The consolidated financial statements have been prepared using the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America ("GAAP”) and include the accounts of Lonestar and entities in which we hold a controlling financial interest. Undivided interests in oil and gas joint ventures are consolidated on a proportionate basis. All intercompany balances and transactions have been eliminated. |
Use of Estimates | Use of Estimates The preparation of the accompanying consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Depletion of oil and gas properties and impairment of proved and unproved oil and gas properties, in part, is determined using estimates of proved oil and gas reserves. There are numerous uncertainties inherent in the estimation of quantities of proved reserves and the projection of future rates of production and the timing of development expenditures. Similarly, evaluations for impairment of proved and unproved oil and gas properties are subject to numerous uncertainties including, among others, estimates of future recoverable reserves and commodity price outlooks. Significant estimates underlying these financial statements also include the estimated costs and timing of asset retirement obligations, the fair value of commodity derivatives, the fair value of warrants, restricted stock units and stock appreciation rights, accruals related to oil and natural gas volumes and revenues, estimates related to income taxes, estimates used in determination of the reorganization values, enterprise value and the fair value assets and liabilities recorded as a result of fresh-start accounting . Changes in facts and circumstances or additional information may result in revised estimates, actual results may differ from these estimates. |
Reclassifications | Reclassifications Certain prior period amounts have been reclassified to conform to the current year presentation. Such reclassifications had no impact on the Company's reported total revenues, expenses, net income, current assets, total assets, current liabilities, total liabilities or stockholders’ equity. |
Cash Equivalents | Cash, Cash Equivalents and Restricted CashThe Company considers all highly-liquid investments to be cash equivalents if they have maturities of three months or less when purchased |
Concentrations and Credit Risk | Concentrations and Credit Risk Lonestar's financial instruments exposed to concentrations of credit risk consist primarily of cash and cash equivalents, accounts receivable and derivative receivables (see Note 4. Commodity Price Risk Activities ). At times, the balances deposited may exceed amounts covered by insurance provided by the U.S. Federal Deposit Insurance Corporation (“FDIC”). The Company has not incurred any losses related to amounts in excess of FDIC limits. Substantially all of the Company’s accounts receivable are due from either purchasers of oil, NGL and natural gas or working interest partners in oil and natural gas wells for which a subsidiary of the Company serves as the operator. Generally, operators of oil and natural gas properties have the right to offset future revenues against unpaid charges related to operated wells. The Company’s receivables are generally unsecured. |
Oil and Natural Gas Properties | Oil and Natural Gas Properties Lonestar uses the successful efforts method of accounting to account for its oil and natural gas properties. Under this method, costs of acquiring properties, costs of drilling successful exploration wells, and development costs are capitalized. The costs of exploratory wells are initially capitalized pending a determination of whether proved reserves have been found. At the completion of drilling activities, the costs of exploratory wells remain capitalized if a determination is made that proved reserves have been found. If no proved reserves have been found, the costs of each of the related exploratory wells are charged to expense. In some cases, a determination of proved reserves cannot be made at the completion of drilling, requiring additional testing and evaluation of the wells. The Company’s policy is to expense the costs of such exploratory wells if a determination of proved reserves has not been made within a 12-month period after drilling is complete. As of December 31, 2020 (Successor) the Company did not have any capitalized exploratory well costs that were pending determination of proved reserves. All costs related to development wells, including related production equipment and lease acquisition costs, are capitalized when incurred, whether productive or nonproductive. Capitalized costs attributed to the proved properties are subject to depreciation and depletion. Depreciation and depletion of the cost of oil and gas properties is calculated using the units-of-production method aggregating properties on a field basis. For leasehold acquisition costs and the cost to acquire proved properties, the reserve base used to calculate depreciation and depletion is the sum of proved developed reserves and proved undeveloped reserves. For well costs, the reserve base used to calculate depletion and depreciation is proved developed reserves only. Unproved properties consist of costs incurred to acquire unproved leases. Unproved lease acquisition costs are capitalized until the leases expire or when the Company specifically identifies leases that will revert to the lessor, at which time the Company expenses the associated unproved lease acquisition costs. The expensing of the unproved lease acquisition costs is recorded as an impairment of oil and gas properties in the consolidated statement of operations, as applicable. Unproved oil and gas property costs are transferred to proven oil and gas properties if the properties are subsequently determined to be productive or are assigned proved reserves. Unproved oil and gas properties are assessed periodically for impairment based on remaining lease terms, drilling results, reservoir performance, future plans to develop acreage, and other relevant factors. |
Other Property and Equipment | Other Property and Equipment Other property and equipment, consisting primarily of office, transportation and computer equipment, as well as our new corporate headquarters, is carried at cost. Depreciation is calculated using the straight-line method over the estimated useful lives of the assets, ranging from 3 to 5 years, with the exception of our corporate headquarters, which is 30 years. Major renewals and improvements are capitalized, while expenditures for maintenance and repairs are expensed as incurred. Upon sale or abandonment, the cost of the equipment and related accumulated depreciation are removed from the accounts, and any gain or loss is recognized. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets The carrying value of long-lived assets and certain identifiable intangibles are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. When it is determined that the estimated future net cash flows of an asset will not be sufficient to recover its carrying amount, an impairment loss must be recorded to reduce the carrying amount to its estimated fair value. Judgments and assumptions are inherent in management’s estimate of undiscounted future cash flows and an asset’s fair value. These judgments and assumptions include such matters as the estimation of oil and gas reserve quantities, risks associated with the different categories of oil and gas reserves, the timing of development and production, expected future commodity prices, capital expenditures, production costs, and appropriate discount rates. The Company evaluates impairment of proved and unproved oil and gas properties on a region basis. On this basis, certain regions may be impaired because they are not expected to recover their entire carrying value from future net cash flows. As a result of this evaluation, the Predecessor recorded impairment oil and gas properties of $199.9 million for the three months ended March 31, 2020, of which $199.0 million was proved and $0.9 million was unproved. The impairment was the result of removing development of PUD and probable reserves from future net cash flows as the Predecessor could not assure that they would be developed going forward in light of continued depressed commodity prices and uncertainty regarding the Predecessor's liquidity situation at the time. Upon emergence from bankruptcy, the Company adopted fresh start accounting which resulted in our long-lived assets being recorded at their estimated fair value at the Effective Date (see Note 3, Fresh Start Accounting , to the consolidated financial statements for additional information). There were no material changes to our key cash flow assumptions and no triggering events since the Company’s assets were revalued in fresh start accounting as of November 30, 2020; therefore, no impairment was identified in December 2020. |
Asset Retirement Obligations | Asset Retirement ObligationsAsset retirement obligations are recognized at their fair value at the time that the obligations are incurred. Oil and gas producing companies incur such a liability upon acquiring or drilling a well. Under ASC 410, an asset retirement obligation is recorded as a liability at its estimated present value at the asset’s inception, with an offsetting increase to producing properties in the accompanying consolidated balance sheets, which is allocated to expense over the useful life of the asset. Periodic accretion of the discount on asset retirement obligations is recorded as part of depreciation, depletion and amortization ("DD&A") expense in the accompanying consolidated statement of operations. |
Revenue Recognition | Revenue Recognition Lonestar recognizes revenue at an amount that reflects the consideration to which we expect to be entitled in exchange for transferring goods or services to a customer, using a five-step process, in accordance with ASC 606, Revenue from Contracts with Customers. |
Derivatives | DerivativesThe Company utilizes oil and natural gas derivative contracts to mitigate its exposure to commodity price risk associated with its future oil and natural gas production. These derivative contracts have historically consisted of fixed-price swaps, basis swaps, and collars. We do not apply hedge accounting; accordingly, all derivatives are recorded in the accompanying consolidated balance sheets at estimated fair value. The Company recognizes all changes in the fair values of its derivative contracts as gains or losses in the earnings of the periods in which they occur. |
Income Taxes | Income Taxes Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, operating losses and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which these temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. The Company periodically evaluates the realizable tax benefits of deferred tax assets and records a valuation allowance, if required, based on an estimate of the amount of deferred tax assets the Company believes does not meet the more likely than not criteria of being realized. See Note 11. Income Taxes for more information. |
Share-Based Payments | Share-Based Payments Lonestar accounts for equity-based awards in accordance with ASC 718, Compensation-Stock Compensation, which requires companies to recognize in the statement of operations all share-based payments granted to employees based on their fair value. Share-based compensation is recognized by the Company on the graded vesting method over the requisite service period, which approximates the option vesting period of three years. Grants that can be settled in either cash or shares are treated as liabilities on the accompanying consolidated balance sheets. |
Net (Loss) Income per Common Share | Net Loss per Common Share Prior to the Effective Date, the Predecessor company used the two-class method is utilized to compute earnings per common share as our Class A Participating Preferred Stock (the "Preferred Stock") was considered a participating security. Under the two-class method, losses are allocated only to those securities that have a contractual obligation to share in the losses of the Company. The Preferred Stock was not obligated to absorb Company losses and accordingly was not allocated losses. Net income attributable to common stockholders is allocated between common stock and participating securities based on the weighted average number of common shares and participating securities outstanding for the period. Upon the Effective Date, the Preferred Stock was extinguished and the two-class method is no longer necessary to compute earnings per share for the Successor starting with the month ended December 31, 2020. Basic earnings per share is computed by dividing the allocated net loss attributable to common stockholders by the weighted-average number of shares of common stock outstanding for the period. Diluted earnings per share is computed similarly except that the denominator is increased to include dilutive potential common shares. Potential common shares for the Predecessor consisted of warrants, equity compensation awards and preferred stock, while potential common shares for the Successor consist of warrants. In certain circumstances adjustment to the numerator is also required for changes in income or loss resulting from the potential common shares. Basic weighted average common shares exclude shares of non-vested restricted stock. As these restricted shares vest, they will be included in the shares outstanding used to calculate basic earnings per share. |
Recently Issued Accounting Pronouncements | Recent Accounting Pronouncements Income Taxes. In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740) – Simplifying the Accounting for Income Taxes ("ASU 2019-12”). The objective of ASU 2019-12 is to simplify the accounting for income taxes by removing certain exceptions to the general principles in Topic 740 and to provide more consistent application to improve the comparability of financial statements. The amendments in this ASU are effective for fiscal years beginning after December 15, 2020, and early adoption is permitted. The Company is currently evaluating the impact this guidance may have on its consolidated financial statements and related footnote disclosures. Financial Instruments — Credit Losses. In June 2016, the Financial Accounting Standards Board ("FASB”) issued ASU 2016-13, Financial Instruments – Credit Losses ("ASU 2016-13”). ASU 2016-13 changes the impairment model for most financial assets and certain other instruments, including trade and other receivables, and requires the use of a new forward-looking expected loss model that will result in the earlier recognition of allowances for losses. The amendments in this ASU are effective for fiscal years beginning after December 15, 2022 for Smaller Reporting Companies, which the Company currently is classified as, and interim periods within those fiscal years, and early adoption is permitted. Entities must adopt the amendment using a modified retrospective approach to the first reporting period in which the guidance is effective. The adoption of ASU 2016-13 is currently not expected to have a material effect on the Company's consolidated financial statements. Reference Rate Reform. In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848) (“ASU 2020-04”). ASU 2020-04 provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions to ease financial reporting burdens related to the expected market transition from the London Interbank Offered Rate (“LIBOR”) or another reference rate to alternative reference rates. The amendments in this ASU were effective upon issuance and generally can be applied to applicable contract modifications through December 31, 2022. Currently, the Company's Successor Credit Agreements are the Company's only contracts that makes reference to a LIBOR rate and the agreements outline the specific procedures that will be undertaken once an appropriate alternative benchmark is identified. The Company does not expect this guidance to have a significant impact on its consolidated financial statements and related footnote disclosures. |
Basis of Presentation (Tables)
Basis of Presentation (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Cash and Cash Equivalents | The following table provides a reconciliation of cash, cash equivalents and restricted cash as reported within the Consolidated Balance Sheets to "Cash, cash equivalents and restricted cash at the end of the period" as reported within the Consolidated Statements of Cash Flows: Successor Predecessor In thousands December 31, 2020 December 31, 2019 Cash and cash equivalents $ 17,474 $ 3,137 Restricted cash, current 8,972 — Total cash, cash equivalents and restricted cash shown in the Consolidated Statements of Cash Flows $ 26,446 $ 3,137 |
Restrictions on Cash and Cash Equivalents | The following table provides a reconciliation of cash, cash equivalents and restricted cash as reported within the Consolidated Balance Sheets to "Cash, cash equivalents and restricted cash at the end of the period" as reported within the Consolidated Statements of Cash Flows: Successor Predecessor In thousands December 31, 2020 December 31, 2019 Cash and cash equivalents $ 17,474 $ 3,137 Restricted cash, current 8,972 — Total cash, cash equivalents and restricted cash shown in the Consolidated Statements of Cash Flows $ 26,446 $ 3,137 |
Schedule of Antidilutive Securities | The following securities were excluded from the computation of diluted net loss per share, as their effect would have been antidilutive: Successor Predecessor Month Ended December 31, 2020 Eleven Months Ended November 30, 2020 Year Ended December 31, 2019 Preferred stock — 17,173,272 15,828,683 Warrants 1,111,110 760,000 760,000 Stock appreciation rights — 1,010,000 1,010,000 Restricted stock units — 1,344,006 1,555,676 |
Emergence from Voluntary Reor_2
Emergence from Voluntary Reorganization under Chapter 11 (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Reorganizations [Abstract] | |
Schedule of Reorganization Items, Net | Any expenses, gains and losses that are realized or incurred as of or subsequent to the Petition Date and as a direct result of the bankruptcy proceedings and adjustments to reflect the carrying value of certain liabilities subject to compromise at their estimated allowed claim amounts, as such adjustments were determined, are recorded under “Reorganization Items, Net” on our Consolidated Statements of Operations for the Predecessor and consist of the following: Predecessor In Thousands Period from September 30, 2020 through November 30, 2020 Unamortized discounts and debt issuance costs $ (3,243) Professional fees and other (11,847) Fresh start valuation adjustments (93,282) Gain on settlement of liabilities subject to compromise 181,843 Total reorganization items, net $ 73,471 |
Fresh-Start Accounting (Tables)
Fresh-Start Accounting (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Reorganizations [Abstract] | |
Schedule of Enterprise Value | Although the Company believes the assumptions and estimates used to develop enterprise value and reorganization value are reasonable and appropriate, different assumptions and estimates could materially impact the analysis and resulting conclusions. The assumptions used in estimating these values are inherently uncertain and require judgment. The following table reconciles the Company’s Enterprise value to the estimated fair value of the Successor’s common stock as of November 30, 2020: In thousands As of November 30, 2020 Enterprise value $ 353,000 Plus: Cash and cash equivalents and restricted cash (excluding funds held in the professional fee escrow of $6.8 million) 11,970 Less: Fair value of debt (272,007) Fair Value of Successor equity $ 92,963 The following table reconciles the enterprise value to its reorganization value of Successor’s assets to be allocated to the Company’s individual assets as of the Effective Date: In thousands As of November 30, 2020 Enterprise value $ 353,000 Plus: Cash and cash equivalents and restricted cash (excluding funds held in the professional fee escrow of $6.8 million) 11,970 Current liabilities (excluding current portion of long-term debt) 41,459 Non-current liabilities excluding long-term debt 4,846 Mortgage obligations related to Boland Building LLC 8,328 Reorganization value of Successor's assets to be allocated $ 419,603 |
Schedule of Fresh-Start Adjustments | The adjustments included in the following fresh start consolidated balance sheet reflect the effects of the transactions contemplated by the Plan and executed by the Company on the Effective Date (reflected in the column “Reorganization Adjustments”) as well as fair value and other required accounting adjustments resulting from the implementation of fresh start accounting (reflected in the column “Fresh Start Adjustments”). The explanatory notes provide additional information with regard to the adjustments recorded, the methods used to determine the estimated fair values and significant assumptions. As of November 30, 2020 In thousands Predecessor Reorganization Adjustments (1) Fresh Start Adjustments Successor Current assets Cash and cash equivalents $ 40,565 $ (30,752) (2) $ — $ 9,813 Restricted Cash 2,157 6,815 (3) — 8,972 Accounts receivable Oil, natural gas liquid and natural gas sales 10,354 — — 10,354 Joint interest owners and other, net 1,458 — — 1,458 Derivative financial instruments 916 — — 916 Prepaid expenses and other 8,403 100 (4) — 8,503 Total current assets 63,853 (23,837) — 40,016 Property and equipment Oil and gas properties, using the successful efforts method of accounting Proved properties 1,100,211 — (786,239) (16) 313,972 Unproved properties 77,382 — (42,457) (16) 34,925 Other property and equipment 21,862 — (2,188) (16) 19,674 Less accumulated depreciation, depletion, amortization and impairment (734,231) — 734,231 (16) — Property and equipment, net 465,224 — (96,653) 368,571 Accounts receivable 6,053 — — 6,053 Derivative financial instruments 216 — — 216 Other non-current assets 209 4,538 (5) — 4,747 Total assets $ 535,555 $ (19,299) $ (96,653) $ 419,603 As of November 30, 2020 In thousands Predecessor Reorganization Adjustments (1) Fresh Start Adjustments Successor Liabilities and Stockholders’ Equity Current liabilities Accounts payable $ 8,606 $ (1,898) (6) $ — $ 6,708 Oil, natural gas liquid and natural gas sales payable 17,507 — — 17,507 Accrued liabilities 8,972 3,951 (7) — 12,923 Derivative financial instruments 4,321 — — 4,321 Current maturities of long-term debt 286,759 (264,602) (8) — 22,157 Total current liabilities 326,165 (262,549) — 63,616 Long-term liabilities Long-term debt 8,991 249,602 (9) (402) (17) 258,191 Asset retirement obligations 7,327 — (2,969) (18) 4,358 Deferred tax liability, net — — — — Equity warrant liability — — — — Derivative financial instruments 485 — — 485 Other non-current liabilities (10) — — (10) Total long-term liabilities 16,793 249,602 (3,371) 263,024 Liabilities subject to compromise 271,110 (271,110) (10) — — Total liabilities 614,068 (284,057) (3,371) 326,640 Stockholders’ equity Predecessor common stock 142,655 (142,655) (11) — — Predecessor preferred stock — — (11) — — Predecessor additional paid-in capital 176,012 138,980 (12) (314,992) (19) — Successor common stock — 10 (13) — 10 Successor additional paid-in capital — 92,953 (14) — 92,953 Accumulated deficit (397,180) 175,470 (15) 221,710 (19) — Total stockholders’ equity (78,513) 264,758 (93,282) 92,963 Total liabilities and stockholders’ equity $ 535,555 $ (19,299) $ (96,653) $ 419,603 Reorganization Adjustments Increase / (Decrease) (1) Represent amounts recorded as of the Effective Date for the implementation of the Plan, including, among other items, issuance of new debt, settlement Predecessor’s liabilities subject to compromise and issuance of the Successor’s common stock and warrants. (2) Changes in cash and cash equivalents include the following : Proceeds from Successor Senior Secured Credit Facility $ 224,602 Proceeds from Successor Second Out Term Loan 60,000 Payment of Predecessor Senior Secured Credit Facility (284,602) Payment of Successor Senior Secured Credit Facility (15,000) Payment of Predecessor Senior Secured Credit Facility interest and fees (764) Payment of deferred financing fees for the Successor Senior Secured Credit Facility and Successor Second-Out Term Loan (4,710) Payment to fund professional fee escrow (6,815) Payment of professional fees including success fees (3,373) Payment of bank fees (90) Net change in cash and cash equivalents $ (30,752) (3) Represents the funding of the professional fee escrow associated with the Chapter 11 Proceedings. (4) Represents the overpayment of professional fees. (5) Changes in other non-current assets include the following : Payment of deferred financing fees for the Senior Secured Credit Facility and Successor Second Out Term Loan $ 4,710 Elimination of deferred financing fees on the Predecessor Senior Secured Credit Facility (172) Net change in other non-current assets $ 4,538 (6) The decrease in accounts payable represents the payment of previously accrued professional fees. (7) Net change in accrued liabilities include the following : Accrual of professional fees (success fees) $ 4,715 Payment of Predecessor Senior Secured Credit Facility interest and fees (764) Net change in other current liabilities $ 3,951 (8) Net change in current maturities of long-term debt includes the following : Proceeds from Successor Second-Out Term Loan (current portion) $ 20,000 Payment of Predecessor Senior Secured Credit Facility (284,602) Net change in current maturities of long-term debt $ (264,602) (9) Net change in long-term debt includes the following : Borrowings under Successor Senior Secured Credit Facility $ 224,602 Borrowings under Successor Second-Out Term Loan (long-term portion) 40,000 Payment of Successor Senior Secured Credit Facility (15,000) Net change in long-term debt $ 249,602 Increase / (Decrease) (10) Liabilities subject to compromise was settled in accordance with the Plan and the resulting gain were determined as follows: Liabilities subject to compromise consist of: 11.25% Senior Notes $ (250,000) Interest on 11.25% Senior Notes (21,094) Stock compensation liability (15) Acceleration of unvested predecessor stock compensation on the Effective Date (21) Predecessor warrant liability (1) Total liabilities subject to compromise $ (271,131) Liabilities subject to compromise were settled as follows: Total liabilities subject to compromise $ (271,131) Less: Distribution of Successor ordinary shares to creditors 88,199 Less: Distribution of Successor warrants to creditors 1,089 Gain on settlement of liabilities subject to compromise $ (181,843) (11) Represents the cancellation of Predecessor ordinary and preferred shares at par value pursuant to the Plan. (12) Net change in Predecessor additional paid-in capital include the following : Cancellation of Predecessor ordinary and preferred shares $ 142,655 Issuance of Successor ordinary shares to Predecessor preferred shareholders (2,756) Issuance of Successor ordinary shares to Predecessor ordinary shareholders (919) Net change in Predecessor additional paid-in capital $ 138,980 (13) Represents the issuance of Successor ordinary shares to creditors, prior ordinary and preferred shareholders at par value. (14) Successor additional paid-in capital consists of: Issuance of Successor ordinary shares to creditors $ 88,189 Issuance of Successor warrant to holders of the Predecessor Senior Secured Credit Facility 1,089 Issuance of Successor ordinary shares to Predecessor preferred shareholders 2,756 Issuance of Successor ordinary shares to Predecessor ordinary shareholders 919 Total Successor additional paid in capital $ 92,953 Increase / (Decrease) (15) Net change in accumulated deficit consists of the following : Gain on settlement of liabilities subject to compromise $ 181,843 Acceleration of Predecessor stock compensation awards (21) Accrual of professional fees (success fee) (4,715) Payment of professional fees (success fee) (1,375) Elimination of deferred financing fees on the Predecessor Senior Secured Credit Facility (172) Payment of bank fees (90) Net change in accumulated deficit $ 175,470 Fresh Start Adjustments (16) Reflects adjustments to present the proved oil and gas properties, unproved acreage and other property and equipment at their estimated fair values based on the valuation methodology discussed below as well as the elimination of accumulated depreciation, depletion, amortization and impairment. The following table summarizes the components of property, plant and equipment as of the Effective Date: Successor Fair Value Predecessor Historical Value Proved properties $ 313,972 $ 1,100,211 Unproved properties 34,925 77,382 Other property and equipment 19,674 21,862 368,571 1,199,455 Less accumulated depreciation, depletion, amortization and impairment — (734,231) Property and equipment, net $ 368,571 $ 465,224 For purposes of estimating the fair value of its other operating property and equipment, the Company used a combination of the market and cost approaches. A market approach was relied upon to value land and vehicles, and in this valuation approach, recent transactions of similar assets were utilized to determine the value from a market participant perspective. For the remaining other operating assets, a cost approach was used. The estimation of fair value under the cost approach was based on current replacement costs of the assets, less depreciation based on the estimated economic useful lives of the assets, age of the assets, physical deterioration, and obsolescence. (17) Reflects the fair value adjustment to the Boland LLC mortgage liability. The fair value of the Successor’s mortgage obligations related to Boland Building LLC (“Mortgages”) was estimated based on the DCF approach, which relies upon assumptions about the amount and timing of principal and interest payments and current market rates. In this analysis, the remaining interest and principal payments were discounted to present value using a pre-tax discount rate deemed to be reflective of a market yield for the Mortgages as of the Effective Date. (18) Adjustment to present at fair value the Company's asset retirement obligations (“ARO”) using assumptions as of the Effective Date, including an inflation factor of 2.5% and an estimated 30-year credit-adjusted risk-free rate of 10.5%. Increase / (Decrease) (19) The table below reflects the cumulative impact of Fresh Start Adjustments discussed above and the elimination of Predecessor capital in excess of par value and Predecessor accumulated deficit: Fresh start valuation adjustments $ (93,282) Elimination of Predecessor Accumulated Deficit to Additional Paid In Capital 314,992 Net Change in Accumulated Deficit $ 221,710 |
Commodity Price Risk Activiti_2
Commodity Price Risk Activities (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Derivative Transactions Outstanding | The following table summarizes Lonestar's commodity derivative contracts as of December 31, 2020 (Successor): Contract Volume Hedged Weighted Commodity Type Period Range (1) (Bbls/Mcf per day) Average Price Oil - WTI Swaps Jan - Dec 2021 $42.20 - $47.09 4,146 $ 43.05 Oil - WTI Swaps Jan - Dec 2022 $44.83 - $47.09 2,000 45.62 Natural Gas - Henry Hub Swaps Jan - Dec 2021 $2.86 - $3.28 11,991 3.03 Natural Gas - Henry Hub Swaps Jan - Dec 2022 $2.70 - $3.14 6,233 2.77 (1) Ranges presented for fixed-price swaps and basis swaps represent the lowest and highest fixed prices of all open contracts for the period presented. |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Leases [Abstract] | |
Components of Lease Expense and Supplemental Cash Flow Information | The components of our total lease expense for 2020 and 2019 are as follows: Successor Predecessor In thousands Month Ended December 31, 2020 Eleven Months Ended November 30, 2020 Year ended December 31, 2019 Operating Leases $ — $ 45 $ 273 Short-term leases (1) 246 2,665 2,766 Total lease expense $ 246 $ 2,710 $ 3,039 Short-term lease costs capitalized to oil and gas properties (2) $ 9 $ 4,704 $ 11,747 (1) Short-term leases represent expenses related to leases with a contract term of one year or less. The majority of these leases relate to field operating equipment and are included in lease operating expense and gas gathering, processing and transportation expense on the consolidated statement of operations. (2) Short-term lease costs represent leases with a contract term of one year or less, the majority of which are related to drilling rigs and are capitalized as part of Oil and Gas Properties on the consolidated balance sheets. Supplemental cash flow information related to leases follows: Successor Predecessor In thousands Month Ended December 31, 2020 Eleven Months Ended November 30, 2020 Year ended December 31, 2019 Cash paid for amounts included in the measurement of lease liabilities Operating cash flows for operating leases $ — $ 45 $ 273 Right-of-use assets obtained in exchange for lease obligations: Operating leases $ — $ 45 $ 273 |
Supplemental Balance Sheet Information | Supplemental balance sheet information related to leases follows: Successor Predecessor In thousands, except lease term and discount rate data December 31, 2020 December 31, 2019 Operating leases Assets Other property and equipment $ — $ 45 Liabilities Accrued liabilities $ — $ 45 Weighted-average remaining lease term (years) — 0.2 Weighted-average discount rate — 5.0 % |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Fair Value Disclosures [Abstract] | |
Schedule of Assets and Liabilities Measured at Fair Value on Recurring Basis | The following table presents Lonestar's assets and liabilities that are measured at fair value on a recurring basis as of December 31, 2020 (Successor) and 2019 (Predecessor): Fair Value Measurements Using In thousands Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs Significant Unobservable Inputs Total December 31, 2020 (Successor) Assets: Commodity derivatives $ — $ 2,098 $ — $ 2,098 Liabilities: Commodity derivatives — (8,773) — (8,773) Total $ — $ (6,675) $ — $ (6,675) December 31, 2019 (Predecessor) Assets: Commodity derivatives $ — $ 6,849 $ — $ 6,849 Liabilities: Commodity derivatives — (10,462) — (10,462) Warrants — — (364) (364) Stock-based compensation (1,792) — (573) (2,365) Total $ (1,792) $ (3,613) $ (937) $ (6,342) |
Summary of Changes in Fair Value for the Level 3 Liabilities | The table below sets forth a summary of changes in the fair value of the Company’s Level 3 liabilities for the year ended December 31, 2020. Successor Predecessor In thousands Month Ended December 31, 2020 Eleven Months Ended November 30, 2020 Year Ended December 31, 2019 Fair value of Level 3 instruments, beginning of period $ — $ (937) $ (1,691) Unrealized gains — — 754 Extinguishment of Level 3 instruments on Effective Date — 937 — Fair value of Level 3 instruments, end of period $ — $ — $ (937) |
Asset Retirement Obligations (T
Asset Retirement Obligations (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Asset Retirement Obligation Disclosure [Abstract] | |
Schedule of Change in Asset Retirement Obligations | The following provides a reconciliation of activity in the asset retirement obligations for 2020 and 2019: Successor Predecessor In thousands Month Ended December 31, 2020 Eleven Months Ended November 30, 2020 Year Ended December 31, 2019 Beginning asset retirement obligations $ 4,358 $ 7,055 $ 7,195 Wells drilled during the year — 4 26 Wells sold during the year — — (388) Accretion expense 38 316 300 Revisions in estimated retirement obligations (1) 177 (3,017) 191 Wells plugged and abandoned during the year — — (269) Ending asset retirement obligations $ 4,573 $ 4,358 $ 7,055 (1) Revisions of previous estimates during months ended December 31, 2020 (Successor) and the year ended December 31, 2019 (Predecessor) are primarily attributable to changes in estimates of the timing of future costs for oilfield services required to plug and abandon wells. Revisions of previous estimates during the eleven months ended November 30, 2020 (Predecessor) are primarily due to the change in fair value resulting from the Company's fresh-start accounting (see Note 3. Fresh-Start Accounting ) |
Accrued Liabilities (Tables)
Accrued Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Payables and Accruals [Abstract] | |
Schedule of Accrued Liabilities | The following table provides detail of Lonestar's accrued liabilities as of December 31, 2020 (Successor) and 2019 (Predecessor): Successor Predecessor In thousands December 31, 2020 December 31, 2019 Bonus payable $ 1,363 $ 2,353 Accrued interest - 11.25% Senior Notes — 14,063 Accrued well costs 1,752 8,932 Third party payments for joint interest expenditures 5,178 — Accrued professional fees (success fees) 4,710 — Other 2,980 1,557 Total accrued liabilities $ 15,983 $ 26,905 |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of Long-Term Debt | The following long-term debt obligations were outstanding as of December 31, 2020 (Successor) and 2019 (Predecessor): Successor Predecessor In thousands December 31, 2020 December 31, 2019 Successor Senior Secured Credit Facility $ 209,600 $ — Successor Second-Out Term Loan 55,000 — Predecessor Senior Secured Credit Facility — 247,000 11.25% Senior Notes due 2023 — 250,000 Mortgage debt 8,712 8,931 PPP loan 2,157 — Other 261 271 Total 275,730 506,202 Less unamortized discount (402) (3,375) Less unamortized debt issuance costs — (759) Total net of discount and debt issuance costs 275,328 502,068 Less current obligations (1) (20,000) (247,000) Long-term debt $ 255,328 $ 255,068 |
Schedule of Maturities of Long-term Debt | As of December 31, 2020 (Successor), debt is payable over the next five years and thereafter as follows: Successor In thousands December 31, 2020 2021 $ 20,083 2022 24,019 2023 224,606 2024 7 2025 7 Thereafter 7,008 Total debt $ 275,730 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Current and Deferred Components of Income Tax (Benefit) Expense | The income tax provision is as follows: Successor Predecessor In thousands Month Ended December 31, 2020 Eleven Months Ended November 30, 2020 Year Ended December 31, 2019 Current income tax benefit Federal $ — $ (3,748) $ (591) State — — (464) Total current income tax benefit — (3,748) (1,055) Deferred tax expense (benefit) Federal $ — 882 (20,989) State — (1,813) 673 Valuation allowance — — 8,876 Total deferred income tax benefit — (931) (11,440) Total income tax benefit $ — $ (4,679) $ (12,495) |
Difference between Income Taxes Computed at Federal Statutory Rate and Provision for Income Taxes | The following table provides a reconciliation of Lonestar's actual income tax provision amounts from the expected income tax provision amount by applying the U.S. federal statutory corporate income tax rate of 21% for the period from December 1, 2020 through December 31, 2020 (Successor), the period from January 1, 2020 through November 30, 2020 (Predecessor) and the year ended December 31, 2019 (Predecessor), as follows: Successor Predecessor In thousands Month Ended December 31, 2020 Eleven Months Ended November 30, 2020 Year Ended December 31, 2019 Expected income tax benefit at statutory rate $ (150) $ (25,791) $ (24,258) Permanent differences 2 4,895 (48) State taxes, net of Federal benefit 16 (2,514) 307 Fresh start valuation adjustments — 19,589 — Gain on settlement of liabilities subject to compromise — (38,187) — Reduction in deferred tax assets — 12,537 — Return to provision adjustment — — 2,567 Change in valuation allowance 132 28,541 8,876 Net operating loss carryback — (3,749) Other — — 61 Actual income tax benefit $ — $ (4,679) $ (12,495) |
Deferred Tax Assets and Liabilities | Significant components of the Company's deferred tax assets and liabilities as of December 31, 2020 (Successor) and 2019 (Predecessor) are as follows: Successor Predecessor In thousands December 31, 2020 December 31, 2019 Deferred tax assets Net operating loss carryforward $ 5,196 $ 27,025 Oil and gas properties, and other property and equipment 17,828 — Stock-based compensation — 922 Intangibles 183 257 Derivative instruments 2,036 606 Interest expense limitation 11,753 19,243 Organizational expenses and other 553 3,306 Total deferred tax assets $ 37,549 $ 51,359 Deferred tax liabilities Oil and gas properties, and other property and equipment, principally due to intangible drilling assets $ — $ (43,414) Net deferred tax assets 37,549 7,945 Valuation allowance for deferred tax assets (37,549) (8,876) Net deferred tax liability, net of valuation allowance $ — $ (931) |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of Outstanding Restricted Stock Units | The following is a summary of the Predecessor's RSU activity: Shares Weighted Average Fair Value per Share Outstanding non-vested RSUs at December 31, 2019 (Predecessor) 1,849,676 $ 4.04 Granted — — Vested (866,800) 0.64 Forfeited (102,623) — Cancelled (880,253) $ 3.41 Outstanding non-vested RSUs at November 30, 2020 (Predecessor) — $ — |
Schedule of Outstanding Stock Appreciation Rights | The following is a summary of the Predecessor's SARs activity: Shares Weighted Average Exercise Price Per Share Weighted Average Remaining Contractual Term Outstanding at December 31, 2019 (Predecessor) 1,010,000 $ 6.30 2.5 SARs vested and exercisable at December 31, 2019 (Predecessor) 606,250 6.65 2.4 Granted — — — Vested 198,750 — — Exercised — — — Forfeited — — — Cancelled (805,000) 6.79 1.4 Outstanding at November 30, 2020 (Predecessor) — $ — — SARs vested and exercisable at November 30, 2020 (Predecessor) — $ — — |
Basis of Presentation - Additio
Basis of Presentation - Additional Information (Details) | Mar. 22, 2019USD ($)aBoewelllocation | Dec. 31, 2020USD ($) | Jun. 30, 2020USD ($) | Mar. 31, 2020USD ($) | Mar. 31, 2019USD ($) | Nov. 30, 2020USD ($) | Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) |
Nature Of Business And Presentation [Line Items] | ||||||||
Maturity period of highly liquid investments | three months or less | |||||||
Impairment of oil and gas properties | $ 0 | $ 199,900,000 | $ 199,908,000 | $ 48,412,000 | ||||
Impairment of long-lived assets | 0 | |||||||
Liability for material uncertain tax positions | 0 | $ 0 | 0 | |||||
Option vesting period | 3 years | |||||||
Loss on sale of oil and gas properties | $ 0 | $ 1,337,000 | $ 33,508,000 | |||||
Pirate | ||||||||
Nature Of Business And Presentation [Line Items] | ||||||||
Proceeds from divestiture of businesses | $ 11,500,000 | |||||||
Gas and oil area, undeveloped, net | a | 3,400 | |||||||
Productive oil wells, number of wells, net | well | 6 | |||||||
Proved undeveloped locations | location | 7 | |||||||
Production, barrels of oil equivalents | Boe | 200 | |||||||
Loss on sale of oil and gas properties | $ 33,500,000 | |||||||
Unsecured Debt | Coronavirus Aid, Relief and Economic Security Act | ||||||||
Nature Of Business And Presentation [Line Items] | ||||||||
Debt instrument interest rate (as a percent) | 1.00% | |||||||
Proceeds from issuance of debt | $ 2,200,000 | |||||||
Corporate Headquarter | ||||||||
Nature Of Business And Presentation [Line Items] | ||||||||
Estimated useful lives | 30 years | |||||||
Proved Oil And Gas Properties | ||||||||
Nature Of Business And Presentation [Line Items] | ||||||||
Impairment of oil and gas properties | 199,000,000 | |||||||
Unproved Oil and Gas Properties | ||||||||
Nature Of Business And Presentation [Line Items] | ||||||||
Impairment of oil and gas properties | $ 900,000 | |||||||
Minimum | Other Property and Equipment | ||||||||
Nature Of Business And Presentation [Line Items] | ||||||||
Estimated useful lives | 3 years | |||||||
Maximum | Other Property and Equipment | ||||||||
Nature Of Business And Presentation [Line Items] | ||||||||
Estimated useful lives | 5 years | |||||||
Sales Revenue, Net | Customer Concentration Risk | Shell Trading (US) Company | ||||||||
Nature Of Business And Presentation [Line Items] | ||||||||
Concentration risk, percentage | 10.00% | 23.00% | ||||||
Sales Revenue, Net | Customer Concentration Risk | Texla Energy Management, Inc. | ||||||||
Nature Of Business And Presentation [Line Items] | ||||||||
Concentration risk, percentage | 24.00% | 22.00% | 17.00% | |||||
Sales Revenue, Net | Customer Concentration Risk | Enterprise Crude Oil LLC | ||||||||
Nature Of Business And Presentation [Line Items] | ||||||||
Concentration risk, percentage | 24.00% | 23.00% | 16.00% | |||||
Sales Revenue, Net | Customer Concentration Risk | Ace Gathering, Inc. | ||||||||
Nature Of Business And Presentation [Line Items] | ||||||||
Concentration risk, percentage | 31.00% | 21.00% | 14.00% | |||||
Sales Revenue, Net | Customer Concentration Risk | GulfMark Energy, Inc. | ||||||||
Nature Of Business And Presentation [Line Items] | ||||||||
Concentration risk, percentage | 13.00% | |||||||
Sales Revenue, Net | Customer Concentration Risk | NGL Crude Logistics LLC | ||||||||
Nature Of Business And Presentation [Line Items] | ||||||||
Concentration risk, percentage | 14.00% | 10.00% | ||||||
Accounts Receivable | Customer Concentration Risk | Shell Trading (US) Company | ||||||||
Nature Of Business And Presentation [Line Items] | ||||||||
Concentration risk, percentage | 10.00% | 11.00% | ||||||
Accounts Receivable | Customer Concentration Risk | Texla Energy Management, Inc. | ||||||||
Nature Of Business And Presentation [Line Items] | ||||||||
Concentration risk, percentage | 19.00% | 59.00% | ||||||
Accounts Receivable | Customer Concentration Risk | Enterprise Crude Oil LLC | ||||||||
Nature Of Business And Presentation [Line Items] | ||||||||
Concentration risk, percentage | 24.00% | |||||||
Accounts Receivable | Customer Concentration Risk | Ace Gathering, Inc. | ||||||||
Nature Of Business And Presentation [Line Items] | ||||||||
Concentration risk, percentage | 23.00% | 13.00% | ||||||
Accounts Receivable | Customer Concentration Risk | NGL Crude Logistics LLC | ||||||||
Nature Of Business And Presentation [Line Items] | ||||||||
Concentration risk, percentage | 14.00% |
Basis of Presentation - Cash, C
Basis of Presentation - Cash, Cash Equivalents and Restricted Cash (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Nov. 30, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||
Cash and cash equivalents | $ 17,474 | $ 3,137 | ||
Restricted cash | 8,972 | 0 | ||
Total cash, cash equivalents and restricted cash shown in the Consolidated Statements of Cash Flows | $ 26,446 | $ 18,785 | $ 3,137 | $ 5,355 |
Basis of Presentation - Schedul
Basis of Presentation - Schedule of Anti-dilutive Securities (Details) - shares | 1 Months Ended | 11 Months Ended | 12 Months Ended |
Dec. 31, 2020 | Nov. 30, 2020 | Dec. 31, 2019 | |
Preferred stock | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive securities excluded from computation of earnings per share, amount (in shares) | 0 | 17,173,272 | 15,828,683 |
Warrants | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive securities excluded from computation of earnings per share, amount (in shares) | 1,111,110 | 760,000 | 760,000 |
Stock appreciation rights | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive securities excluded from computation of earnings per share, amount (in shares) | 0 | 1,010,000 | 1,010,000 |
Restricted stock units | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive securities excluded from computation of earnings per share, amount (in shares) | 0 | 1,344,006 | 1,555,676 |
Emergence from Voluntary Reor_3
Emergence from Voluntary Reorganization under Chapter 11 - Additional Information (Details) - USD ($) | Nov. 30, 2020 | Dec. 31, 2020 | Nov. 30, 2020 | Dec. 31, 2019 |
Fresh-Start Adjustment [Line Items] | ||||
Common stock, shares authorized (in shares) | 90,000,000 | 90,000,000 | 90,000,000 | 100,000,000 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized (in shares) | 10,000,000 | 10,000,000 | ||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | $ 0.001 | |
Warrants ownership stake in equity | 10.00% | 10.00% | ||
Payments of financing fees | $ 4,700,000 | $ 0 | $ 4,710,000 | $ 0 |
Professional fees reserved | 6,800,000 | 6,800,000 | ||
11.25% Senior Notes | ||||
Fresh-Start Adjustment [Line Items] | ||||
Debt instrument interest rate (as a percent) | 11.25% | |||
Second-Out Senior Secured Term Loan | ||||
Fresh-Start Adjustment [Line Items] | ||||
Debt instrument face amount | $ 60,000,000 | $ 60,000,000 | ||
Holders of Prepetition Notes Claims | ||||
Fresh-Start Adjustment [Line Items] | ||||
Shares issued, pro rate share distributed | 96.00% | |||
Holders of Predecessor Preferred Equity Interest | ||||
Fresh-Start Adjustment [Line Items] | ||||
Shares issued, pro rate share distributed | 3.00% | |||
Holders of Predecessor Class A Common Stock | ||||
Fresh-Start Adjustment [Line Items] | ||||
Shares issued, pro rate share distributed | 1.00% | |||
Common Stock | ||||
Fresh-Start Adjustment [Line Items] | ||||
Issuance of Successor common stock (in shares) | 10,000,149 | |||
Common Class A | Common Stock | ||||
Fresh-Start Adjustment [Line Items] | ||||
Issuance of Successor common stock (in shares) | 10,000,149 | |||
Line of Credit | Senior Secured Credit Facility | ||||
Fresh-Start Adjustment [Line Items] | ||||
Maximum borrowing capacity | $ 225,000,000 | $ 225,000,000 | ||
Secured Debt | Second-Out Senior Secured Term Loan | ||||
Fresh-Start Adjustment [Line Items] | ||||
Debt instrument face amount | $ 60,000,000 | $ 60,000,000 | ||
Tranche 1 Warrants | ||||
Fresh-Start Adjustment [Line Items] | ||||
Warrants outstanding (in shares) | 555,555 | 555,555 | ||
Tranche 2 Warrants | ||||
Fresh-Start Adjustment [Line Items] | ||||
Warrants outstanding (in shares) | 555,555 | 555,555 |
Emergence from Voluntary Reor_4
Emergence from Voluntary Reorganization under Chapter 11 - Reorganization Items, Net (Details) - USD ($) $ in Thousands | 1 Months Ended | 2 Months Ended | 11 Months Ended | 12 Months Ended |
Dec. 31, 2020 | Nov. 30, 2020 | Nov. 30, 2020 | Dec. 31, 2019 | |
Reorganizations [Abstract] | ||||
Unamortized discounts and debt issuance costs | $ 0 | $ (3,243) | $ 85,483 | $ 0 |
Professional fees and other | (11,847) | |||
Fresh start valuation adjustments | (93,282) | |||
Gain on settlement of liabilities subject to compromise | 181,843 | |||
Reorganization items, net | $ 0 | $ 73,471 | $ 73,471 | $ 0 |
Fresh-Start Accounting - Additi
Fresh-Start Accounting - Additional Information (Details) | Nov. 30, 2020USD ($) |
Reorganizations [Abstract] | |
Enterprise value | $ 353,000,000 |
Fresh-Start Adjustment [Line Items] | |
Enterprise value | $ 353,000,000 |
Weighted average cost of capital rate | 10.50% |
Inflation rate | 2.00% |
Tranche 1 Warrants | |
Fresh-Start Adjustment [Line Items] | |
Warrants valuation condiation minimum equity value | $ 100,000,000 |
Minimum | |
Reorganizations [Abstract] | |
Enterprise value | 290,000,000 |
Fresh-Start Adjustment [Line Items] | |
Enterprise value | 290,000,000 |
Maximum | |
Reorganizations [Abstract] | |
Enterprise value | 415,000,000 |
Fresh-Start Adjustment [Line Items] | |
Enterprise value | $ 415,000,000 |
Fresh-Start Accounting - Fresh
Fresh-Start Accounting - Fresh Start and Reorganization Value (Details) $ in Thousands | 11 Months Ended | |
Nov. 30, 2020USD ($) | Dec. 31, 2020USD ($) | |
Reorganizations [Abstract] | ||
Enterprise value | $ 353,000 | |
Plus: Cash and cash equivalents and restricted cash (excluding funds held in the professional fee escrow of $6.8 million) | $ 11,970 | |
Funds held in the professional fee escrow | $ 6,800 | |
Asset Retirement Obligations, Inflation Factor, Percentage | 0.00025 | |
Asset Retirement Obligations, Estimated Credit Adjusted Risk Free, Duration | 30 years | |
Asset Retirement Obligations, Credit Adjusted Risk Free Rate, Percentage | 0.00105 | |
Less: Fair value of debt | $ (272,007) | |
Total stockholders’ equity | 92,963 | |
Enterprise Value | 353,000 | |
Plus: Cash and cash equivalents and restricted cash (excluding funds held in the professional fee escrow of $6.8 million) | 11,970 | |
Current liabilities (excluding current portion of long-term debt) | 41,459 | |
Non-current liabilities excluding long-term debt | 4,846 | |
Mortgage obligations related to Boland Building LLC | 8,328 | |
Reorganization value of Successor's assets to be allocated | $ 419,603 |
Fresh-Start Accounting - Schedu
Fresh-Start Accounting - Schedule of Fresh Start Adjustments to the Balance Sheet (Details) $ in Thousands | Nov. 30, 2020USD ($) |
Current assets | |
Cash and cash equivalents | $ 40,565 |
Restricted Cash | 2,157 |
Accounts receivable, oil, natural gas liquid and natural gas sales | 10,354 |
Accounts receivable, joint interest owners and other, net | 1,458 |
Derivative financial instruments | 916 |
Prepaid expenses and other | 8,403 |
Total current assets | 63,853 |
Property and equipment | |
Oil and gas properties, proved properties | 1,100,211 |
Oil and gas properties, unproved properties | 77,382 |
Other property and equipment | 21,862 |
Less accumulated depreciation, depletion, amortization and impairment | (734,231) |
Property and equipment, net | 465,224 |
Accounts receivable | 6,053 |
Derivative financial instruments | 216 |
Other non-current assets | 209 |
Total assets | 535,555 |
Current liabilities | |
Accounts payable | 8,606 |
Oil, natural gas liquid and natural gas sales payable | 17,507 |
Accrued liabilities | 8,972 |
Derivative financial instruments | 4,321 |
Current maturities of long-term debt | 286,759 |
Total current liabilities | 326,165 |
Long-term liabilities | |
Long-term debt | 8,991 |
Asset retirement obligations | 7,327 |
Derivative financial instruments | 485 |
Other non-current liabilities | (10) |
Total long-term liabilities | 16,793 |
Liabilities subject to compromise | 271,110 |
Total liabilities | 614,068 |
Stockholders’ equity | |
Common stock | 142,655 |
Additional paid-in capital | 176,012 |
Accumulated deficit | (397,180) |
Total stockholders’ equity | (78,513) |
Total liabilities and stockholders’ equity | 535,555 |
Current assets | |
Cash and cash equivalents | 9,813 |
Restricted Cash | 8,972 |
Accounts receivable, oil, natural gas liquid and natural gas sales | 10,354 |
Accounts receivable, joint interest owners and other, net | 1,458 |
Derivative financial instruments | 916 |
Prepaid expenses and other | 8,503 |
Total current assets | 40,016 |
Property and equipment | |
Property and equipment | 313,972 |
Oil and gas properties, unproved properties | 34,925 |
Other property and equipment | 19,674 |
Property and equipment, net | 368,571 |
Accounts receivable | 6,053 |
Derivative financial instruments | 216 |
Other non-current assets | 4,747 |
Total assets | 419,603 |
Current liabilities | |
Accounts payable | 6,708 |
Oil, natural gas liquid and natural gas sales payable | 17,507 |
Accrued liabilities | 12,923 |
Derivative financial instruments | 4,321 |
Current maturities of long-term debt | 22,157 |
Current liabilities (excluding current portion of long-term debt) | 63,616 |
Long-term liabilities | |
Long-term debt | 258,191 |
Asset retirement obligations | 4,358 |
Derivative financial instruments | 485 |
Other non-current liabilities | (10) |
Total long-term liabilities | 263,024 |
Total liabilities | 326,640 |
Stockholders’ equity | |
Common stock | 10 |
Additional paid-in capital | 92,953 |
Total stockholders’ equity | 92,963 |
Total liabilities and stockholders’ equity | 419,603 |
Reorganization Adjustments | |
Long-term liabilities | |
Liabilities subject to compromise | 271,131 |
Fresh-Start Adjustment, Increase (Decrease), Current Assets [Abstract] | |
Cash and cash equivalents | (30,752) |
Restricted Cash | 6,815 |
Prepaid expenses and other | 100 |
Total current assets | (23,837) |
Property and equipment | |
Other non-current assets | 4,538 |
Total assets | (19,299) |
Fresh-Start Adjustment, Increase (Decrease), Current Liabilities [Abstract] | |
Accounts payable | (1,898) |
Accrued liabilities | 3,951 |
Current maturities of long-term debt | (264,602) |
Total current liabilities | (262,549) |
Long-term liabilities | |
Fresh-Start Adjustment, Increase (Decrease), Long-term Debt | 249,602 |
Total long-term liabilities | 249,602 |
Liabilities subject to compromise | (271,110) |
Total liabilities | (284,057) |
Fresh-Start Adjustment, Increase (Decrease), Stockholders' Equity [Abstract] | |
Accumulated deficit | 175,470 |
Total stockholders’ equity | 264,758 |
Total liabilities and stockholders’ equity | (19,299) |
Reorganization Adjustments - Predecessor | |
Fresh-Start Adjustment, Increase (Decrease), Stockholders' Equity [Abstract] | |
Common stock | (142,655) |
Additional paid-in capital | 138,980 |
Reorganization Adjustments - Successor | |
Fresh-Start Adjustment, Increase (Decrease), Stockholders' Equity [Abstract] | |
Common stock | 10 |
Additional paid-in capital | 92,953 |
Fresh Start Adjustments | |
Property and equipment | |
Oil and gas properties, proved properties | (786,239) |
Oil and gas properties, unproved properties | (42,457) |
Other property and equipment | (2,188) |
Less accumulated depreciation, depletion, amortization and impairment | 734,231 |
Property and equipment, net | (96,653) |
Total assets | (96,653) |
Long-term liabilities | |
Fresh-Start Adjustment, Increase (Decrease), Long-term Debt | (402) |
Asset retirement obligations | (2,969) |
Total long-term liabilities | (3,371) |
Total liabilities | (3,371) |
Fresh-Start Adjustment, Increase (Decrease), Stockholders' Equity [Abstract] | |
Additional paid-in capital | (314,992) |
Accumulated deficit | 221,710 |
Total stockholders’ equity | (93,282) |
Total liabilities and stockholders’ equity | $ (96,653) |
Fresh-Start Accounting - Adjust
Fresh-Start Accounting - Adjustments Detail (Details) $ in Thousands | Nov. 30, 2020USD ($) |
Liabilities Subject to Compromise: | |
Total liabilities subject to compromise | $ (271,110) |
Fresh-Start Adjustment, Postconfirmation, Property and Equipment [Abstract] | |
Property and equipment | 313,972 |
Oil and gas properties, unproved properties | 34,925 |
Other property and equipment | 19,674 |
Postconfirmation, Property and Equipment, Gross | 368,571 |
Postconfirmation, Accumulated Depreciation and Amortization | 0 |
Property and equipment, net | 368,571 |
Fresh-Start Adjustment, Preconfirmation, Property and Equipment [Abstract] | |
Oil and gas properties, proved properties | 1,100,211 |
Oil and gas properties, unproved properties | 77,382 |
Other property and equipment | 21,862 |
Preconfirmation, Property and Equipment, Gross | 1,199,455 |
Less accumulated depreciation, depletion, amortization and impairment | (734,231) |
Property and equipment, net | 465,224 |
Reorganization Adjustments | |
Net change in cash and cash equivalents: | |
Payment of Predecessor Senior Secured Credit Facility interest and fees | (764) |
Payment of deferred financing fees for the Successor Senior Secured Credit Facility and Successor Second-Out Term Loan | (4,710) |
Payment to fund professional fee escrow | (6,815) |
Payment of professional fees including success fees | (3,373) |
Payment of bank fees | (90) |
Cash and cash equivalents | (30,752) |
Net change in other non-current assets: | |
Payment of deferred financing fees for the Senior Secured Credit Facility and Successor Second Out Term Loan | 4,710 |
Elimination of deferred financing fees on the Predecessor Senior Secured Credit Facility | (172) |
Other non-current assets | 4,538 |
Net change in other current liabilities: | |
Accrual of professional fees (success fees) | 4,715 |
Payment of Predecessor Senior Secured Credit Facility interest and fees | (764) |
Net change in other current liabilities | 3,951 |
Net change in current maturities of long-term debt: | |
Net change in current maturities of long-term debt | (264,602) |
Net change in long-term debt includes the following : | |
Net change in long-term debt | 249,602 |
Liabilities Subject to Compromise: | |
11.25% Senior Notes | (250,000) |
Interest on 11.25% Senior Notes | (21,094) |
Stock compensation liability | (15) |
Acceleration of unvested predecessor stock compensation on the Effective Date | (21) |
Predecessor warrant liability | (1) |
Total liabilities subject to compromise | (271,131) |
Less: Distribution of Successor ordinary shares to creditors | 88,199 |
Less: Distribution of Successor warrants to creditors | 1,089 |
Gain on settlement of liabilities subject to compromise | (181,843) |
Net Change in Accumulated Deficit: | |
Gain on settlement of liabilities subject to compromise | 181,843 |
Acceleration of Predecessor stock compensation awards | (21) |
Accrual of professional fees (success fee) | (4,715) |
Payment of professional fees (success fee) | (1,375) |
Elimination of deferred financing fees on the Predecessor Senior Secured Credit Facility | (172) |
Payment of bank fees | (90) |
Net Change in Accumulated Deficit | 175,470 |
Reorganization Adjustments | Senior Secured Credit Facility | Line of Credit | |
Net change in cash and cash equivalents: | |
Proceeds from debt | 224,602 |
Reorganization Adjustments | Second-Out Senior Secured Term Loan | Secured Debt | |
Net change in cash and cash equivalents: | |
Proceeds from debt | 60,000 |
Net change in current maturities of long-term debt: | |
Proceeds from Successor Second-Out Term Loan (current portion) | 20,000 |
Net change in long-term debt includes the following : | |
Borrowings of debt | 40,000 |
Reorganization Adjustments | Predecessor Senior Secured Credit Facility | Line of Credit | |
Net change in cash and cash equivalents: | |
Repayments of debt | (284,602) |
Net change in current maturities of long-term debt: | |
Payment of Predecessor Senior Secured Credit Facility | (284,602) |
Reorganization Adjustments | Successor Senior Secured Credit Facility | Line of Credit | |
Net change in cash and cash equivalents: | |
Repayments of debt | (15,000) |
Net change in long-term debt includes the following : | |
Borrowings of debt | 224,602 |
Payment of Successor Senior Secured Credit Facility | (15,000) |
Reorganization Adjustments - Predecessor | |
Additional paid in capital: | |
Cancellation of Predecessor ordinary and preferred shares | 142,655 |
Total Successor additional paid in capital | 138,980 |
Reorganization Adjustments - Predecessor | Predecessor Preferred Shareholders | |
Additional paid in capital: | |
Issuance of shares | (2,756) |
Reorganization Adjustments - Predecessor | Predecessor Ordinary Shareholders | |
Additional paid in capital: | |
Issuance of shares | (919) |
Reorganization Adjustments - Successor | |
Additional paid in capital: | |
Issuance of Successor warrant to holders of the Predecessor Senior Secured Credit Facility | 1,089 |
Total Successor additional paid in capital | 92,953 |
Reorganization Adjustments - Successor | Creditors | |
Additional paid in capital: | |
Issuance of shares | 88,189 |
Reorganization Adjustments - Successor | Predecessor Preferred Shareholders | |
Additional paid in capital: | |
Issuance of shares | 2,756 |
Reorganization Adjustments - Successor | Predecessor Ordinary Shareholders | |
Additional paid in capital: | |
Issuance of shares | 919 |
Fresh Start Adjustments | |
Net change in long-term debt includes the following : | |
Net change in long-term debt | (402) |
Additional paid in capital: | |
Total Successor additional paid in capital | (314,992) |
Net Change in Accumulated Deficit: | |
Fresh start valuation adjustments | (93,282) |
Elimination of Predecessor Accumulated Deficit to Additional Paid In Capital | 314,992 |
Net Change in Accumulated Deficit | $ 221,710 |
Commodity Price Risk Activiti_3
Commodity Price Risk Activities - Schedule of Derivative Transactions Outstanding (Details) | 12 Months Ended |
Dec. 31, 2020bblMcf$ / bbl$ / Mcf | |
Oil WTI Swaps January - December 2021 | |
Derivative [Line Items] | |
Volume hedged per day | bbl | 4,146 |
Weighted average price - swap | 43.05 |
Oil WTI Swaps January - December 2021 | Minimum | |
Derivative [Line Items] | |
Weighted average price - floor | 42.20 |
Oil WTI Swaps January - December 2021 | Maximum | |
Derivative [Line Items] | |
Weighted average price - ceiling | 47.09 |
Oil W T I Swaps January - December 2022 | |
Derivative [Line Items] | |
Volume hedged per day | bbl | 2,000 |
Weighted average price - swap | 45.62 |
Oil W T I Swaps January - December 2022 | Minimum | |
Derivative [Line Items] | |
Weighted average price - floor | 44.83 |
Oil W T I Swaps January - December 2022 | Maximum | |
Derivative [Line Items] | |
Weighted average price - ceiling | 47.09 |
Natural Gas Henry Hub Swaps January - December 2021 | |
Derivative [Line Items] | |
Volume hedged per day | Mcf | 11,991 |
Weighted average price - swap | $ / Mcf | 3.03 |
Natural Gas Henry Hub Swaps January - December 2021 | Minimum | |
Derivative [Line Items] | |
Weighted average price - floor | 2.86 |
Natural Gas Henry Hub Swaps January - December 2021 | Maximum | |
Derivative [Line Items] | |
Weighted average price - ceiling | 3.28 |
Natural Gas Henry Hub Swaps January -December 2022 | |
Derivative [Line Items] | |
Volume hedged per day | Mcf | 6,233 |
Weighted average price - swap | $ / Mcf | 2.77 |
Natural Gas Henry Hub Swaps January -December 2022 | Minimum | |
Derivative [Line Items] | |
Weighted average price - floor | 2.70 |
Natural Gas Henry Hub Swaps January -December 2022 | Maximum | |
Derivative [Line Items] | |
Weighted average price - ceiling | 3.14 |
Commodity Price Risk Activiti_4
Commodity Price Risk Activities - Additional Information (Details) MMcf in Thousands, MMBTU in Thousands | 1 Months Ended | 12 Months Ended | |
Feb. 28, 2021bblMMBTU$ / bbl$ / MMBTUMMcf | Jan. 31, 2021bbl$ / bbl | Dec. 31, 2020 | |
Successor Senior Secured Credit Facility | Line of Credit | |||
Derivative [Line Items] | |||
Debt instrument, term to hedge | 90 days | ||
Successor Senior Secured Credit Facility | Line of Credit | Debt Hedge Period One | |||
Derivative [Line Items] | |||
Debt instrument, minimum percent required to hedge | 80.00% | ||
Debt instrument, minimum percent required to hedge, period | 36 months | ||
Successor Senior Secured Credit Facility | Line of Credit | Debt Hedge Period Two | |||
Derivative [Line Items] | |||
Debt instrument, minimum percent required to hedge | 75.00% | ||
Debt instrument, minimum percent required to hedge, period | 24 months | ||
Subsequent Event | Oil W T I Swaps July through December 2021 | |||
Derivative [Line Items] | |||
Derivative contracts, aggregate volume | 184,000 | ||
Derivative contracts, aggregate volume daily rate | 1,000 | ||
Derivative contract weighted average strike price | $ / bbl | 50.37 | ||
Subsequent Event | Oil W T I Swaps January through June 2022 | |||
Derivative [Line Items] | |||
Derivative contracts, aggregate volume | 90,500 | ||
Derivative contracts, aggregate volume daily rate | 500 | ||
Derivative contract weighted average strike price | $ / bbl | 49.17 | ||
Subsequent Event | Oil W T I Swaps March through December 2021 | |||
Derivative [Line Items] | |||
Derivative contracts, aggregate volume | 221,000 | ||
Derivative contracts, aggregate volume daily rate | 722 | ||
Derivative contract weighted average strike price | $ / bbl | 55.50 | ||
Subsequent Event | Oil W T I Swaps January through December 2022 | |||
Derivative [Line Items] | |||
Derivative contracts, aggregate volume | 297,000 | ||
Derivative contracts, aggregate volume daily rate | 814 | ||
Derivative contract weighted average strike price | $ / bbl | 49.82 | ||
Subsequent Event | Natural Gas Henry Hub Swaps January through December 2022 | |||
Derivative [Line Items] | |||
Derivative contracts, aggregate volume | MMcf | 460 | ||
Derivative contracts, aggregate volume daily rate | MMBTU | 5 | ||
Derivative contract weighted average strike price | $ / MMBTU | 2.93 |
Leases - Addtional Information
Leases - Addtional Information (Details) | 12 Months Ended |
Dec. 31, 2020 | |
Minimum | |
Lessee, Lease, Description [Line Items] | |
Non-cancelable primary lease term | 1 year |
Maximum | |
Lessee, Lease, Description [Line Items] | |
Non-cancelable primary lease term | 2 years |
Leases - Components of Lease Ex
Leases - Components of Lease Expense and Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands | 1 Months Ended | 11 Months Ended | 12 Months Ended |
Dec. 31, 2020 | Nov. 30, 2020 | Dec. 31, 2019 | |
Leases [Abstract] | |||
Operating Leases | $ 0 | $ 45 | $ 273 |
Short-term leases | 246 | 2,665 | 2,766 |
Total lease expense | 246 | 2,710 | 3,039 |
Short-term lease costs capitalized to oil and gas properties | 9 | 4,704 | 11,747 |
Cash paid for amounts included in the measurement of lease liabilities | 0 | 45 | 273 |
Right-of-use assets obtained in exchange for operating lease obligations | $ 0 | $ 45 | $ 273 |
Leases - Supplemental Balance S
Leases - Supplemental Balance Sheet Information (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Leases [Abstract] | ||
Other property and equipment | $ 0 | $ 45 |
Accrued liabilities | $ 0 | $ 45 |
Weighted-average remaining lease term (years) | 0 years | 2 months 12 days |
Weighted-average discount rate | 0.00% | 5.00% |
Operating lease, right-of-use asset, statement of financial position [Extensible List] | us-gaap:PropertyPlantAndEquipmentOtherNet | us-gaap:PropertyPlantAndEquipmentOtherNet |
Operating lease, liability, statement of financial position [Extensible List] | Accrued liabilities | Accrued liabilities |
Revenue Recognition - Additiona
Revenue Recognition - Additional Information (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Disaggregation of Revenue [Line Items] | |||
Payment terms | 30 days | ||
Cancellation period | 30 days | ||
Allowance for credit loss | $ 0 | $ 0 | |
Bad debt expense (reversal) | $ 0 | $ 0 | $ 0 |
Minimum | |||
Disaggregation of Revenue [Line Items] | |||
Period after production receive revenue | 30 days | ||
Maximum | |||
Disaggregation of Revenue [Line Items] | |||
Period after production receive revenue | 60 days |
Fair Value Measurements - Sched
Fair Value Measurements - Schedule of Assets and Liabilities Measured at Fair Value on Recurring Basis (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Warrants | $ (364) | |
Stock-based compensation | (2,365) | |
Total | $ (6,675) | (6,342) |
Commodity Derivatives | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 2,098 | 6,849 |
Commodity derivatives | (8,773) | (10,462) |
Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Warrants | 0 | |
Stock-based compensation | (1,792) | |
Total | 0 | (1,792) |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Commodity Derivatives | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 0 | 0 |
Commodity derivatives | 0 | 0 |
Significant Other Observable Inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Warrants | 0 | |
Stock-based compensation | 0 | |
Total | (6,675) | (3,613) |
Significant Other Observable Inputs (Level 2) | Commodity Derivatives | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 2,098 | 6,849 |
Commodity derivatives | (8,773) | (10,462) |
Significant Unobservable Inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Warrants | (364) | |
Stock-based compensation | (573) | |
Total | 0 | (937) |
Significant Unobservable Inputs (Level 3) | Commodity Derivatives | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 0 | 0 |
Commodity derivatives | $ 0 | $ 0 |
Fair Value Measurements - Summa
Fair Value Measurements - Summary of Changes in Fair Value for the Level 3 Liability (Details) - Significant Unobservable Inputs (Level 3) - USD ($) $ in Thousands | 1 Months Ended | 11 Months Ended | 12 Months Ended |
Dec. 31, 2020 | Nov. 30, 2020 | Dec. 31, 2019 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||
Beginning balance | $ 0 | $ (937) | $ (1,691) |
Unrealized gains | 0 | 0 | 754 |
Extinguishment of Level 3 instruments on Effective Date | 0 | 937 | 0 |
Ending balance | $ 0 | $ 0 | $ (937) |
Asset Retirement Obligations -
Asset Retirement Obligations - Schedule of Change in Asset Retirement Obligations (Details) - USD ($) $ in Thousands | 1 Months Ended | 11 Months Ended | 12 Months Ended |
Dec. 31, 2020 | Nov. 30, 2020 | Dec. 31, 2019 | |
Asset Retirement Obligation, Roll Forward Analysis [Roll Forward] | |||
Beginning asset retirement obligations | $ 4,358 | $ 7,055 | $ 7,195 |
Wells drilled during the year | 0 | 4 | 26 |
Wells sold during the year | 0 | 0 | (388) |
Accretion expense | 38 | 316 | 300 |
Revisions in estimated retirement obligations | 177 | (3,017) | 191 |
Wells plugged and abandoned during the year | 0 | 0 | (269) |
Ending asset retirement obligations | $ 4,573 | $ 4,358 | $ 7,055 |
Accrued Liabilities - Schedule
Accrued Liabilities - Schedule of Accrued Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Payables and Accruals [Abstract] | ||
Bonus payable | $ 1,363 | $ 2,353 |
Accrued interest - 11.25% Senior Notes | 0 | 14,063 |
Accrued well costs | 1,752 | 8,932 |
Third party payments for joint interest expenditures | 5,178 | 0 |
Accrued professional fees (success fees) | 4,710 | 0 |
Other | 2,980 | 1,557 |
Total accrued liabilities | $ 15,983 | $ 26,905 |
Long-Term Debt - Schedule of De
Long-Term Debt - Schedule of Debt (Details) - USD ($) | Nov. 30, 2020 | Dec. 31, 2020 | Jun. 30, 2020 | Dec. 31, 2019 |
Debt Instrument [Line Items] | ||||
Total | $ 275,730,000 | $ 506,202,000 | ||
Less unamortized discount | (402,000) | (3,375,000) | ||
Less unamortized debt issuance costs | 0 | (759,000) | ||
Total net of discount and debt issuance costs | 275,328,000 | 502,068,000 | ||
Less current obligations | (20,000,000) | (247,000,000) | ||
Long-term debt | 255,328,000 | 255,068,000 | ||
Periodic payment, principal | $ 5,000,000 | |||
11.25% Senior Notes | ||||
Debt Instrument [Line Items] | ||||
Debt instrument interest rate (as a percent) | 11.25% | |||
Line of Credit | Successor Senior Secured Credit Facility | ||||
Debt Instrument [Line Items] | ||||
Total | $ 209,600,000 | |||
Periodic payment, principal | $ 5,000,000 | |||
Line of Credit | Predecessor Senior Secured Credit Facility | ||||
Debt Instrument [Line Items] | ||||
Total | 247,000,000 | |||
Secured Debt | Second-Out Senior Secured Term Loan | ||||
Debt Instrument [Line Items] | ||||
Total | 55,000,000 | |||
Senior Notes | 11.25% Senior Notes | ||||
Debt Instrument [Line Items] | ||||
Total | 250,000,000 | |||
Debt instrument interest rate (as a percent) | 11.25% | |||
Mortgages Debt | ||||
Debt Instrument [Line Items] | ||||
Total | 8,712,000 | 8,931,000 | ||
Unsecured Debt | Coronavirus Aid, Relief and Economic Security Act | ||||
Debt Instrument [Line Items] | ||||
Total | 2,157,000 | |||
Debt instrument interest rate (as a percent) | 1.00% | |||
Other | ||||
Debt Instrument [Line Items] | ||||
Total | $ 261,000 | $ 271,000 |
Long-Term Debt - Additional Inf
Long-Term Debt - Additional Information (Details) | Nov. 30, 2020USD ($) | Dec. 31, 2020USD ($) | Mar. 31, 2021 | Dec. 31, 2019USD ($) |
Debt Instrument [Line Items] | ||||
Periodic payment, principal | $ 5,000,000 | |||
Debt issuance costs, line of credit arrangements, net | $ 4,600,000 | $ 800,000 | ||
11.25% Senior Notes | ||||
Debt Instrument [Line Items] | ||||
Debt instrument interest rate (as a percent) | 11.25% | |||
Successor Senior Secured Credit Facility | ||||
Debt Instrument [Line Items] | ||||
Weighted average interest rate | 5.80% | |||
Commitment fee percentage | 1.00% | |||
Successor Senior Secured Credit Facility | Adjusted LIBOR Rate | ||||
Debt Instrument [Line Items] | ||||
Variable rate floor | 1.00% | |||
Debt instrument basis spread on variable rate | 4.50% | |||
Successor Senior Secured Credit Facility | Base Rate | ||||
Debt Instrument [Line Items] | ||||
Variable rate floor | 2.00% | |||
Debt instrument basis spread on variable rate | 3.50% | |||
Second-Out Senior Secured Term Loan | ||||
Debt Instrument [Line Items] | ||||
Debt instrument face amount | $ 60,000,000 | |||
Line of Credit | Senior Secured Credit Facility | ||||
Debt Instrument [Line Items] | ||||
Maximum borrowing capacity | 225,000,000 | |||
Line of Credit | Successor Senior Secured Credit Facility | ||||
Debt Instrument [Line Items] | ||||
Maximum borrowing capacity | 225,000,000 | |||
Periodic payment, principal | $ 5,000,000 | |||
Maximum total debt to consolidated EBITDA | 3.5 | |||
Minimum current ratio | 0.95 | |||
Line of Credit | Successor Senior Secured Credit Facility | Forecast | ||||
Debt Instrument [Line Items] | ||||
Minimum current ratio | 1 | |||
Line of Credit | Successor Senior Secured Credit Facility | Letter of Credit | ||||
Debt Instrument [Line Items] | ||||
Maximum borrowing capacity | $ 2,500,000 | |||
Senior Notes | 11.25% Senior Notes | ||||
Debt Instrument [Line Items] | ||||
Debt instrument interest rate (as a percent) | 11.25% | |||
Interest expense, debt | $ 4,700,000 |
Long Term Debt - Maturities (De
Long Term Debt - Maturities (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Debt Disclosure [Abstract] | ||
2021 | $ 20,083,000 | |
2022 | 24,019,000 | |
2023 | 224,606,000 | |
2024 | 7,000 | |
2025 | 7,000 | |
Thereafter | 7,008,000 | |
Total | $ 275,730,000 | $ 506,202,000 |
Income Taxes - Current and Defe
Income Taxes - Current and Deferred Components of Income Tax (Benefit) Expense (Details) - USD ($) $ in Thousands | 1 Months Ended | 11 Months Ended | 12 Months Ended |
Dec. 31, 2020 | Nov. 30, 2020 | Dec. 31, 2019 | |
Current income tax benefit | |||
Federal | $ 0 | $ (3,748) | $ (591) |
State | 0 | 0 | (464) |
Total current income tax benefit | 0 | (3,748) | (1,055) |
Deferred tax expense (benefit) | |||
Federal | 0 | 882 | (20,989) |
State | 0 | (1,813) | 673 |
Valuation allowance | 0 | 0 | 8,876 |
Total deferred income tax benefit | 0 | (931) | (11,440) |
Total income tax benefit | $ 0 | $ (4,679) | $ (12,495) |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) $ in Thousands | Nov. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 |
Income Tax Disclosure [Abstract] | |||
Cancellation of debt excluded from taxable income | $ 181,900 | ||
Operating Loss carryforward expired | $ 46,600 | ||
Operating loss carryforwards | $ 24,700 | ||
Operating loss carryforward, subject to expiration | 10,000 | ||
Operating loss carryforward, not subject to expiration | 14,700 | ||
Valuation allowance | 37,549 | $ 8,876 | |
Increase (decrease) in valuation allowance | $ 28,700 |
Income Taxes - Difference betwe
Income Taxes - Difference between Income Taxes Computed at Federal Statutory Rate and Provision for Income Taxes (Details) - USD ($) $ in Thousands | 1 Months Ended | 11 Months Ended | 12 Months Ended |
Dec. 31, 2020 | Nov. 30, 2020 | Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |||
Expected income tax benefit at statutory rate | $ (150) | $ (25,791) | $ (24,258) |
Permanent differences | 2 | 4,895 | (48) |
State taxes, net of Federal benefit | 16 | (2,514) | 307 |
Fresh start valuation adjustments | 0 | 19,589 | 0 |
Gain on settlement of liabilities subject to compromise | 0 | (38,187) | 0 |
Reduction in deferred tax assets | 0 | 12,537 | 0 |
Return to provision adjustment | 0 | 0 | 2,567 |
Change in valuation allowance | 132 | 28,541 | 8,876 |
Net operating loss carryback | 0 | (3,749) | |
Other | 0 | 0 | 61 |
Total income tax benefit | $ 0 | $ (4,679) | $ (12,495) |
Income Taxes - Deferred Tax Ass
Income Taxes - Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Deferred tax assets | ||
Net operating loss carryforward | $ 5,196 | $ 27,025 |
Oil and gas properties, and other property and equipment | 17,828 | 0 |
Stock-based compensation | 0 | 922 |
Intangibles | 183 | 257 |
Derivative instruments | 2,036 | 606 |
Interest expense limitation | 11,753 | 19,243 |
Organizational expenses and other | 553 | 3,306 |
Total deferred tax assets | 37,549 | 51,359 |
Deferred tax liabilities | ||
Oil and gas properties, and other property and equipment, principally due to intangible drilling assets | 0 | (43,414) |
Net deferred tax assets | 37,549 | 7,945 |
Valuation allowance for deferred tax assets | (37,549) | (8,876) |
Net deferred tax liability, net of valuation allowance | $ 0 | $ (931) |
Stockholders_ Equity - Addition
Stockholders’ Equity - Additional Information (Details) - USD ($) | Nov. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 |
Class of Stock [Line Items] | |||
Registration rights minimum offering price trigger | $ 50,000,000 | ||
Registration rights threshold period | 180 days | ||
Registration rights notice period | 5 days | ||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | $ 0.001 |
Tranche 1 Warrants | |||
Class of Stock [Line Items] | |||
Warrants outstanding (in shares) | 555,555 | ||
Warrants exercise price per share (in dollars per share) | $ 0.001 | ||
Warrants valuation condiation minimum equity value | $ 100,000,000 | ||
Tranche 2 Warrants | |||
Class of Stock [Line Items] | |||
Warrants outstanding (in shares) | 555,555 |
Stock-Based Compensation - Addi
Stock-Based Compensation - Additional Information (Details) - USD ($) $ in Millions | 11 Months Ended | 12 Months Ended | |
Nov. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock options vesting periods | 3 years | ||
Restricted stock units | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock options vesting periods | 3 years | ||
Share based compensation expense | $ (1.2) | $ 2.6 | |
Stock-based compensation liability | 1.8 | ||
Stock appreciation rights | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock options vesting periods | 3 years | ||
Share based compensation expense | $ (0.6) | (0.1) | |
Share-based compensation expiration period | 5 years | ||
Stock-based compensation liability | 0.6 | ||
Unrecognized compensation expense | $ 0.1 | ||
Period for recognition | 8 months 12 days |
Stock-Based Compensation - Sche
Stock-Based Compensation - Schedule of Outstanding Restricted Stock Units (Details) - Restricted stock units | 11 Months Ended |
Nov. 30, 2020$ / sharesshares | |
Shares: | |
Outstanding non-vested options at beginning of period (in shares) | shares | 1,849,676 |
Granted (in shares) | shares | 0 |
Vested (in shares) | shares | (866,800) |
Forfeited (in shares) | shares | (102,623) |
Cancelled (in shares) | shares | (880,253) |
Outstanding non-vested options at end of period (in shares) | shares | 0 |
Weighted Average Fair Value per Share: | |
Outstanding non-vested options at beginning of period, Weighted Average Fair Value per Share (in dollars per share) | $ / shares | $ 4.04 |
Granted, weighted average fair value per share (in dollars per share) | $ / shares | 0 |
Vested, weighted average fair value per share (in dollars per share) | $ / shares | 0.64 |
Forfeited, weighted average fair value per share (in dollars per share) | $ / shares | 0 |
Cancelled, weighted average fair value per share (in dollars per share) | $ / shares | 3.41 |
Outstanding non-vested options at ending of period, Weighted Average Fair Value per Share (in dollars per share) | $ / shares | $ 0 |
Stock-Based Compensation - Sc_2
Stock-Based Compensation - Schedule of Outstanding Stock Appreciation Rights (Details) - Stock appreciation rights - $ / shares | 11 Months Ended | 12 Months Ended |
Nov. 30, 2020 | Dec. 31, 2019 | |
SARs Outstanding: | ||
Outstanding at beginning of period (in shares) | 1,010,000 | |
Vested and exercisable at beginning of period (in share) | 606,250 | |
Granted (in shares) | 0 | |
Vested (in shares) | 198,750 | |
Exercised (in shares) | 0 | |
Forfeitures (in shares) | 0 | |
Cancelled (in shares) | (805,000) | |
Outstanding at beginning of period (in shares) | 0 | 1,010,000 |
Vested and exercisable at end of period (in shares) | 0 | 606,250 |
Weighted Average Exercise Price Per Share: | ||
Outstanding at end of period, weighted average exercise price per share (in dollars per share) | $ 6.30 | |
Vested and exercisable at beginning of period, Weighted average exercise price (in dollars per share) | 6.65 | |
Granted, weighted average exercise price per share (in dollars per share) | 0 | |
Vested, weighted average exercise price per share (in dollars per share) | 0 | |
Exercised, weighted average exercise price per share (in dollars per share) | 0 | |
Forfeitured, weighted average exercise price per share (in dollars per share) | 0 | |
Cancelled, weighted average exercise price per share (in dollars per share) | 6.79 | |
Outstanding at end of period, weighted average exercise price per share (in dollars per share) | 0 | $ 6.30 |
Vested and exercisable at end of period, Weighted average exercise price (in dollars per share) | $ 0 | $ 6.65 |
Weighted Average Remaining Contractual Term: | ||
Outstanding, weighted average remaining contractual term (in years) | 2 years 6 months | |
Options vested and exercisable, Weighted Average Remaining Contractual Term (in years) | 2 years 4 months 24 days | |
Options cancelled, weighted average remaining contractual term (in years) | 1 year 4 months 24 days |
Related Party Activities - Addi
Related Party Activities - Additional Information (Details) - USD ($) $ in Millions | 1 Months Ended | 11 Months Ended | 12 Months Ended |
Feb. 28, 2019 | Nov. 30, 2020 | Dec. 31, 2019 | |
New Tech Global Ventures LLC | |||
Related Party Transaction [Line Items] | |||
Cost of consultancy services | $ 1.4 | $ 1.7 | |
Affiliated Entity | |||
Related Party Transaction [Line Items] | |||
Payments to acquire land | $ 2 |
Contingencies and Commitments -
Contingencies and Commitments - Additional Information (Details) a in Thousands | Feb. 01, 2021USD ($)rig | Feb. 29, 2020awell |
One Of Largest Producers In The Eagle Ford | ||
Loss Contingencies [Line Items] | ||
Oil and gas agreement, area of mutual interest | a | 15 | |
Oil and gas agreement, hold-by-production area | a | 6 | |
Oil and gas agreement, working interest | 50.00% | |
One Of Largest Producers In The Eagle Ford | Minimum | ||
Loss Contingencies [Line Items] | ||
Number of wells to be operated | well | 3 | |
Oil and gas agreement, carried working interest | 9.00% | |
One Of Largest Producers In The Eagle Ford | Maximum | ||
Loss Contingencies [Line Items] | ||
Number of wells to be operated | well | 4 | |
Oil and gas agreement, carried working interest | 17.00% | |
Significant Contract | Subsequent Event | ||
Loss Contingencies [Line Items] | ||
Number of drilling rights under contract | rig | 1 | |
Aggregate drilling rate | $ | $ 16,000 | |
Early termination fee amount | $ | $ 12,000 | |
Contract expiration period | 90 days |