Cover Page
Cover Page - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Apr. 24, 2020 | Jun. 28, 2019 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2019 | ||
Document Transition Report | false | ||
Entity File Number | 1-38668 | ||
Entity Registrant Name | Legacy Reserves Inc. | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 82-4919553 | ||
Entity Address, Address Line One | 303 W. Wall Street, Suite 1800 | ||
Entity Address, City or Town | Midland | ||
Entity Address, State or Province | TX | ||
Entity Address, Postal Zip Code | 79701 | ||
City Area Code | 432 | ||
Local Phone Number | 689-5200 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | Yes | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 2.1 | ||
Entity Common Stock, Shares Outstanding | 61,062,850 | ||
Entity Central Index Key | 0001735828 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Fiscal Year Focus | 2019 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 11, 2019 | Dec. 10, 2019 | Dec. 31, 2018 |
Current assets: | ||||
Cash | $ 4,306 | $ 16,563 | $ 7,187 | $ 1,098 |
Restricted cash | 24,039 | 27,386 | 3,450 | 0 |
Accounts receivable, net: | ||||
Oil and natural gas | 62,543 | 63,672 | 63,672 | 56,615 |
Joint interest owners | 15,842 | 13,213 | 13,213 | 15,370 |
Other | 2 | 2 | 2 | 0 |
Fair value of derivatives (Notes 11 and 12) | 569 | 0 | 0 | 66,662 |
Prepaid expenses and other current assets | 9,708 | 10,465 | 10,465 | 11,347 |
Total current assets | 117,009 | 131,301 | 97,989 | 151,092 |
Oil and natural gas properties, at cost: | ||||
Proved properties | 650,839 | 646,634 | 3,565,631 | 3,471,456 |
Unproved properties | 280,025 | 280,003 | 20,244 | 19,863 |
Accumulated depletion, depreciation, amortization and impairment | (4,921) | 0 | (2,424,454) | (2,177,006) |
Total oil and natural gas properties, net | 925,943 | 926,637 | 1,161,421 | 1,314,313 |
Other property and equipment, net of accumulated depreciation and amortization of $— and $12,323, respectively | 5,993 | 6,184 | 5,949 | 2,456 |
Operating rights, net of amortization of $0 and $6,123, respectively | 0 | 29 | 574 | 894 |
Fair value of derivatives (Notes 11 and 12) | 0 | 91 | 91 | 3,135 |
Other assets | 0 | 0 | 0 | 3,041 |
Total assets | 1,048,945 | 1,064,242 | 1,266,024 | 1,474,931 |
Current liabilities: | ||||
Current debt, net | 0 | 0 | 596,000 | 856,646 |
Accounts payable | 12,021 | 8,225 | 5,350 | 11,227 |
Accrued oil and natural gas liabilities (Note 3) | 61,176 | 63,965 | 63,965 | 98,886 |
Fair value of derivatives (Notes 11 and 12) | 10,223 | 4,749 | 4,749 | 0 |
Asset retirement obligation (Note 14) | 4,739 | 4,739 | 3,938 | 3,938 |
Other | 28,717 | 45,307 | 50,223 | 13,953 |
Total current liabilities | 116,876 | 126,985 | 724,225 | 984,650 |
Long-term debt (Note 5) | 369,549 | 379,426 | 0 | 432,923 |
Asset retirement obligation (Note 14) | 147,754 | 147,447 | 257,984 | 248,796 |
Fair value of derivatives (Notes 11 and 12) | 3,491 | 2,118 | 2,118 | 550 |
Other long-term liabilities | 2,055 | 2,096 | 2,096 | 643 |
Total liabilities | 639,725 | 658,072 | 1,776,225 | 1,667,562 |
Stockholders' equity (deficit): | ||||
Common stock, $0.01 par value; 945,000,000 shares authorized, 109,442,278 shares outstanding at December 31, 2018 (Predecessor) | 611 | 611 | 1,148 | 1,094 |
Additional paid-in capital | 405,559 | 405,559 | 43,197 | 24,752 |
Retained earnings (accumulated deficit) | 3,050 | 0 | (554,546) | (218,477) |
Total stockholders’ deficit | 409,220 | 406,170 | (510,201) | (192,631) |
Total liabilities and stockholders' equity (deficit) | $ 1,048,945 | $ 1,064,242 | $ 1,266,024 | $ 1,474,931 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Statement of Financial Position [Abstract] | ||
Other property and equipment, net of accumulated depreciation and amortization | $ 0 | $ 12,323 |
Operating rights, net of amortization | $ 0 | $ 6,123 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 600,000,000 | 945,000,000 |
Common stock, shares outstanding (in shares) | 61,062,850 | 109,442,278 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 1 Months Ended | 11 Months Ended | 12 Months Ended | |
Dec. 31, 2019 | Dec. 10, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Revenues: | ||||
Revenues | $ 30,164 | $ 416,475 | $ 554,861 | $ 436,301 |
Expenses: | ||||
Oil and natural gas production | 9,779 | 173,232 | 200,285 | 183,219 |
Exploration Expense | 750 | 0 | 0 | 0 |
Production and other taxes | 1,564 | 22,371 | 29,532 | 19,825 |
General and administrative | 1,470 | 77,364 | 73,039 | 49,372 |
Depletion, depreciation, amortization and accretion | 6,259 | 156,935 | 159,998 | 126,938 |
Impairment of long-lived assets | 0 | 105,532 | 67,978 | 37,283 |
Loss (gain) on disposal of assets | (565) | 2,130 | (23,803) | 1,606 |
Total expenses | 19,257 | 537,564 | 507,029 | 418,243 |
Operating income (loss) | 10,907 | (121,089) | 47,832 | 18,058 |
Other income (expense): | ||||
Interest income | 5 | 46 | 36 | 64 |
Interest expense (Notes 5, 11 and 12) | (1,607) | (115,660) | (117,008) | (89,206) |
Gain on extinguishment of debt | 0 | 13,105 | 66,066 | 0 |
Equity in income of equity method investees | (2) | (35) | (19) | 17 |
Net gains (losses) on commodity derivatives (Notes 11 and 12) | (6,292) | (50,294) | 49,172 | 17,776 |
Reorganization items, net (Note 2) | 0 | 447,901 | 0 | 0 |
Other | 42 | 7 | 722 | 792 |
Income (loss) before income taxes | 3,053 | 173,981 | 46,801 | (52,499) |
Income tax expense | (3) | (105) | (2,968) | (1,398) |
Net Income (loss) | $ 3,050 | $ 173,876 | $ 43,833 | $ (53,897) |
Income (loss) per share - basic and diluted (in dollars per share) | $ 0.05 | $ 1.51 | $ 0.42 | $ (0.54) |
Weighted average number of units used in computing net loss per share — | ||||
Basic and diluted (in shares) | 61,063 | 114,811 | 105,087 | 100,049 |
Oil Sales | ||||
Revenues: | ||||
Revenues | $ 23,232 | $ 300,905 | $ 375,444 | $ 239,448 |
Natural Gas Liquids Sales | ||||
Revenues: | ||||
Revenues | 916 | 14,082 | 27,750 | 24,796 |
Natural Gas Sales | ||||
Revenues: | ||||
Revenues | $ 6,016 | $ 101,488 | $ 151,667 | $ 172,057 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders'/Unitholders' Equity (Deficit) - USD ($) $ in Thousands | Total | Non-employee directors | Common Stock | Common StockNon-employee directors | Additional Paid-in Capital | Additional Paid-in CapitalNon-employee directors | Acc. Deficit | Preferred EquitySeries A Preferred Equity | Preferred EquitySeries B Preferred Equity | Incentive Distribution Equity | Partners' DeficitLimited Partner | Partners' DeficitLimited PartnerNon-employee directors | Partners' DeficitGeneral Partner |
Shareholders' equity, beginning balance (in shares) at Dec. 31, 2016 | 0 | ||||||||||||
Shareholders' equity, beginning balance at Dec. 31, 2016 | $ 0 | $ 0 | $ 0 | $ 0 | |||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||
Vesting of restricted and phantom units (in shares) | 252,000 | ||||||||||||
Net income (loss) | (53,897) | $ (53,883) | $ (14) | ||||||||||
Shareholders' equity, ending balance (in shares) at Dec. 31, 2017 | 0 | ||||||||||||
Shareholders' equity, ending balance at Dec. 31, 2017 | 0 | $ 0 | 0 | 0 | |||||||||
Partners' equity, beginning balance (in units) at Dec. 31, 2016 | 2,300,000 | 7,200,000 | 100,000 | 72,056,000 | |||||||||
Partners' equity, beginning balance at Dec. 31, 2016 | $ 55,192 | $ 174,261 | $ 30,814 | $ (482,200) | (146) | ||||||||
Increase (Decrease) in Partners' Capital [Roll Forward] | |||||||||||||
Unit-based compensation (in units) | 287,000 | ||||||||||||
Unit-based compensation | $ 3,703 | $ 586 | |||||||||||
Vesting of restricted and phantom units (in units) | 252,000 | ||||||||||||
Net income (loss) | (53,897) | $ (53,883) | (14) | ||||||||||
Partners' equity, ending balance (in units) at Dec. 31, 2017 | 2,300,000 | 7,200,000 | 100,000 | 72,595,000 | |||||||||
Partners' equity, ending balance at Dec. 31, 2017 | $ 55,192 | $ 174,261 | $ 30,814 | $ (531,794) | (160) | ||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||
Units issued to Legacy Board of Directors for services (in shares) | 33,000 | ||||||||||||
Units issued to Legacy Board of Directors for services | $ 162 | $ 162 | |||||||||||
Stock/Unit-based compensation | 4,108 | 4,108 | |||||||||||
Vesting of restricted and phantom units (in shares) | 1,550,000 | 339,000 | |||||||||||
Debt exchange (in shares) | 3,422,000 | ||||||||||||
Debt exchange | 23,849 | $ 34 | 23,815 | ||||||||||
Corporate Reorganization (in units) | 104,437,000 | 2,300,000 | 7,200,000 | 100,000 | 76,794,000 | ||||||||
Corporate Reorganization | (264,583) | $ 1,060 | (3,333) | (262,310) | $ (55,192) | $ (174,261) | $ (30,814) | $ 521,591 | 160 | ||||
Net income (loss) | 43,833 | 43,833 | 0 | 0 | |||||||||
Shareholders' equity, ending balance (in shares) at Dec. 31, 2018 | 109,442,000 | ||||||||||||
Shareholders' equity, ending balance at Dec. 31, 2018 | (192,631) | $ 1,094 | 24,752 | (218,477) | |||||||||
Increase (Decrease) in Partners' Capital [Roll Forward] | |||||||||||||
Unit-based compensation (in units) | 60,000 | ||||||||||||
Unit-based compensation | $ 3,753 | $ 522 | |||||||||||
Vesting of restricted and phantom units (in units) | 1,550,000 | 339,000 | |||||||||||
Units issued in exchange for Standstill Fee (in shares) | 3,800,000 | ||||||||||||
Units issued in exchange for Standstill Fee | $ 5,928 | ||||||||||||
Corporate Reorganization (in units) | (104,437,000) | (2,300,000) | (7,200,000) | (100,000) | (76,794,000) | ||||||||
Corporate Reorganization | (264,583) | $ 1,060 | (3,333) | (262,310) | $ (55,192) | $ (174,261) | $ (30,814) | $ 521,591 | 160 | ||||
Net income (loss) | 43,833 | 43,833 | $ 0 | 0 | |||||||||
Partners' equity, ending balance (in units) at Dec. 31, 2018 | 0 | 0 | 0 | 0 | |||||||||
Partners' equity, ending balance at Dec. 31, 2018 | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | ||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||
Stock/Unit-based compensation | 14,782 | 14,782 | |||||||||||
Debt exchange (in shares) | 5,368,000 | ||||||||||||
Debt exchange | 3,717 | $ 54 | 3,663 | ||||||||||
Net loss | 173,876 | 173,876 | |||||||||||
Net income (loss) | 173,876 | ||||||||||||
Shareholders' equity, ending balance (in shares) at Dec. 10, 2019 | 114,810,000 | ||||||||||||
Shareholders' equity, ending balance at Dec. 10, 2019 | 0 | $ 1,148 | 43,197 | (44,345) | |||||||||
Increase (Decrease) in Partners' Capital [Roll Forward] | |||||||||||||
Net income (loss) | 173,876 | ||||||||||||
Net income (loss) | 3,050 | 3,050 | |||||||||||
Shareholders' equity, ending balance (in shares) at Dec. 31, 2019 | 61,063,000 | ||||||||||||
Shareholders' equity, ending balance at Dec. 31, 2019 | 409,220 | $ 611 | $ 405,559 | 3,050 | |||||||||
Increase (Decrease) in Partners' Capital [Roll Forward] | |||||||||||||
Net income (loss) | $ 3,050 | $ 3,050 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 1 Months Ended | 11 Months Ended | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 10, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | ||
Cash flows from operating activities: | |||||
Net income (loss) | $ 3,050 | $ 173,876 | $ 43,833 | $ (53,897) | |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | |||||
Depletion, depreciation, amortization and accretion | 6,259 | 156,935 | 159,998 | 126,938 | |
Amortization of debt discount and issuance costs | 123 | 28,775 | 20,604 | 7,657 | |
Gain on extinguishment of debt | 0 | (13,105) | (66,066) | 0 | |
Impairment of long-lived assets | 0 | 105,532 | 67,978 | 37,283 | |
(Gain) loss on derivatives | 6,292 | 52,337 | (49,099) | (19,711) | |
Equity in income (loss) of equity method investees | 2 | 35 | 19 | (17) | |
Stock/Unit-based compensation | 0 | 14,782 | 6,619 | 6,011 | |
Loss (gain) on disposal of assets | (565) | 2,130 | (23,803) | 1,606 | |
Changes in assets and liabilities: | |||||
(Increase) decrease in accounts receivable, oil and natural gas | 1,129 | (7,057) | 6,140 | (19,563) | |
(Increase) decrease in accounts receivable, joint interest owners | (2,630) | 2,167 | 12,039 | (4,006) | |
(Increase) decrease in accounts receivable, other | 0 | (12) | 12 | 0 | |
(Increase) decrease in other assets | (335) | 1,133 | 2,157 | 3 | |
Increase (decrease) in accounts payable | 3,794 | (6,150) | (1,865) | 4,001 | |
Increase (decrease) in accrued oil and natural gas liabilities | (508) | (4,856) | 9,540 | 1,891 | |
Reorganization items, net increase | 0 | (479,071) | 0 | 0 | |
Increase (decrease) in other liabilities | (16,722) | 27,788 | (12,165) | 11,599 | |
Total adjustments | (3,161) | (118,637) | 132,108 | 153,692 | |
Net cash provided by operating activities | (111) | 55,239 | 175,941 | 99,795 | |
Cash flows from investing activities: | |||||
Investment in oil and natural gas properties | (7,162) | (128,086) | (227,855) | (313,898) | |
Decrease in deposit on pending acquisition | 0 | (75) | 0 | 0 | |
Proceeds from sale of fixed assets | 350 | 1,608 | 54,968 | 11,099 | |
Investment in other equipment | 150 | (4,003) | (406) | (593) | |
Corporate Reorganization | 0 | 0 | (3,120) | 0 | |
Distribution from equity method investee | 0 | 660 | 0 | 0 | |
Net cash settlements on commodity derivatives | 76 | 23,686 | (11,715) | 24,156 | |
Net cash used in investing activities | (6,586) | (106,210) | (188,128) | (279,236) | |
Cash flows from financing activities: | |||||
Proceeds from long-term debt | 17,000 | 626,758 | 659,626 | 538,000 | |
Payments of long-term debt | (27,000) | (779,758) | (619,384) | (357,000) | |
Payments of debt issuance costs | 0 | (11,648) | (28,132) | (3,282) | |
Proceeds from equity offering | 0 | 256,300 | 0 | 0 | |
Net cash provided by (used in) financing activities | (10,000) | 91,652 | 12,110 | 177,718 | |
Net (decrease) increase in cash | (16,697) | 40,681 | (77) | (1,723) | |
Cash and restricted cash, beginning of period | [1] | 45,042 | 4,361 | 4,438 | 6,161 |
Cash and restricted cash, end of period | [1] | 28,345 | 45,042 | 4,361 | 4,438 |
Supplemental cash flow information: | |||||
Cash paid for interest | 1,383 | 69,294 | 101,315 | 83,160 | |
Cash paid for reorganization items | 14,307 | 27,969 | 0 | 0 | |
Non-Cash Investing and Financing Activities: | |||||
Asset retirement obligation costs and liabilities | 91 | 5,273 | 65 | 39 | |
Asset retirement obligations associated with property acquisitions | 0 | 30 | 226 | 62 | |
Asset retirement obligations associated with properties sold | (244) | (243) | (27,673) | (8,464) | |
Debt exchange | 0 | 0 | 23,849 | 0 | |
Change in accrued capital expenditures | (2,281) | (30,066) | 8,029 | 0 | |
Units issued in exchange for Standstill Agreement | 0 | 0 | 5,928 | ||
Restricted cash | $ 24,000 | $ 28,500 | $ 3,300 | $ 3,200 | |
[1] | (1) Inclusive of $24.0 million, $28.5 million, $3.3 million, and $3.2 million of restricted cash for the period December 11, 2019 through December 31, 2019 (Successor) and the period of January 1, 2019 through December 10, 2019 (Predecessor), and December 31, 2018 (Predecessor) and 2017 (Predecessor) respectively. |
Emergence from Voluntary Reorga
Emergence from Voluntary Reorganization under Chapter 11 of the Bankruptcy Code | 12 Months Ended |
Dec. 31, 2019 | |
Reorganizations [Abstract] | |
Emergence from Voluntary Reorganization under Chapter 11 of the Bankruptcy Code | Emergence from Voluntary Reorganization under Chapter 11 of the Bankruptcy Code On June 18, 2019, Legacy and certain of its subsidiaries (collectively with Legacy, the “Debtors”) commenced voluntary cases (the “Chapter 11 Cases”) under chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the Southern District of Texas (the “Bankruptcy Court”). On June 19, 2019, the Bankruptcy Court granted a motion seeking joint administration of the Chapter 11 Cases under the caption In re Legacy Reserves Inc., et al . On August 2, 2019, the Debtors filed the Joint Chapter 11 Plan of Reorganization for Legacy Reserves Inc. and its Debtor Affiliates (as amended, modified or supplemented from time to time, the “Plan”) with the Bankruptcy Court. On November 15, 2019, the Bankruptcy Court entered an order (the “Confirmation Order”) confirming the Plan and on December 11, 2019 (the “Effective Date”), the Plan became effective in accordance with its terms and the Debtors emerged from the Chapter 11 Cases. Plan of Reorganization Treatment of Claims and Interests under the Plan The Plan provided the following treatment of claims against and interests in the Debtors: • all holders of claims arising under the Senior Secured Superpriority Debtor-In-Possession Credit Agreement (the “DIP Credit Agreement”) dated as of June 21, 2019 among Legacy Reserves LP, as debtor, debtor-in-possession and borrower, the other loan parties party thereto, as debtors, debtors-in-possession and guarantors, Wells Fargo Bank, National Association, as administrative agent, and the lenders party thereto (the “RBL Lenders”), received, in full satisfaction of their respective claims (i) on account of claims under the new money revolving loan facility in an aggregate amount of up to $100.0 million, payment in full in cash, (ii) on account of claims under the refinancing term loan in the amount of $250.0 million, distribution of cash and commitments under the Successor Revolving Credit Facility and/or (iii) if the Successor Revolving Credit Facility had not been consummated, payment in full in cash. See Note 5, "Debt" for additional information about the Successor Revolving Credit Facility; • all holders of claims arising under the Third Amended and Restated Credit Agreement dated as of April 1, 2014 (as amended, the “Prepetition RBL Credit Agreement”) among Legacy Reserves LP, as borrower, the guarantors party thereto, Wells Fargo Bank, National Association, as administrative agent, and the lenders party thereto (the “Term Lenders”), received, in full satisfaction of their respective claims, (i) distribution of their pro rata share of commitments under the Successor Revolving Credit Facility in exchange for the claims arising under the Prepetition RBL Credit Agreement or (ii) if the Successor Revolving Credit Facility had not been consummated, payment in full in cash; • all holders of claims arising under the Term Loan Credit Agreement dated as of October 25, 2016 among Legacy Reserves LP, as borrower, the guarantors party thereto, Cortland Capital Market Services LLC, as administrative agent and the lenders party thereto (the “Term Loan Credit Agreement”), received their pro rata share of approximately 52.25% of the new common stock (the “New Common Stock”) issued by Legacy, as reorganized pursuant to and under the Plan (“Reorganized Legacy”), subject to dilution; • holders of claims arising under the indenture governing the 8% Senior Notes due 2020, the indenture governing the 6.25% Senior Notes due 2021 and the indenture governing the 8% Convertible Senior Notes due 2023 (the “Noteholders”) received their respective pro rata share of (i) approximately 2.46% of the New Common Stock, subject to dilution, and (ii) subscription rights to purchase approximately 10.82% of the New Common Stock pursuant to the Rights Offering (as defined below) to the extent that such Noteholders are “accredited investors” as defined under Regulation D promulgated under the Securities Act of 1933, as amended (“Securities Act”); • all existing equity interests in Legacy did not receive any recovery under the Plan and were extinguished. Capital Structure As of the Effective Date, under the Plan, Reorganized Legacy issued New Common Stock to certain holders of claims against and interests in the Debtors, and Legacy’s shares of existing common stock outstanding immediately prior to the Effective Date were cancelled. As of the Effective Date, there were approximately 114,810,671 shares of Legacy’s existing common stock outstanding. Exit Financing The Plan was funded by the following exit financings: • up to $500.0 million in aggregate principal amount under a new senior secured first lien reserved-based revolving credit facility funded by certain of the RBL Lenders; • $189.8 million in proceeds from the purchase of approximately 30.88% of the New Common Stock, subject to dilution, backstopped pursuant to the Sponsor Backstop Commitment Agreement dated June 13, 2019, among Legacy and GSO Capital Partners LP and certain of its affiliates (the “Plan Sponsor”); and • $66.5 million in proceeds from a rights offering (the “Rights Offering”), backstopped pursuant the Noteholder Backstop Commitment Agreement dated June 13, 2019, among Legacy and certain Noteholders (the “Noteholder Backstop Agreement”). U pon the Company’s emergence from the Chapter 11 Cases, the Company qualified for and adopted fresh-start accounting in accordance with the provisions set forth in ASC 852 as (i) the Reorganization Value (as defined below) of the Company's assets immediately before the date of confirmation was less than the post-petition liabilities and allowed claims, and (ii) the holders of existing voting shares immediately before confirmation received less than 50% of the voting shares of the emerging entity. As a result of the application of fresh-start accounting, as well as the effects of the implementation of the Plan, the consolidated financial statements on or after the Effective Date are not comparable with the consolidated financial statements prior to the Effective Date. See Note 1, “Emergence from Voluntary Reorganization under Chapter 11 of the Bankruptcy Code” for additional information. References to the “Successor” or “Successor Company” refer to the financial position and results of operations of the new reorganized Company subsequent to the Effective Date. References to “Predecessor” or “Predecessor Company” refer to the financial position and results of operations of the Company prior to the Effective Date. Adopting fresh-start accounting results in a new financial reporting entity with no beginning retained earnings or deficit as of the fresh-start reporting date. Upon the application of fresh-start accounting, the Company allocated the fair value of the Successor Company’s total assets (the “Reorganization Value”) to its individual assets based on their estimated fair values. Reorganization Value represents the fair value of the Successor Company's total assets and is intended to approximate the amount a willing buyer would pay for the assets immediately before restructuring. Under fresh start accounting, we allocated the reorganization value to our individual assets based on their estimated fair values. Our reorganization value was derived from an estimate of "Enterprise Value," or the fair value of the Company’s long-term debt and stockholders’ equity. The estimated Enterprise Value at the Effective Date was a range of $725 - $925 million as established in the Plan and approved by the bankruptcy court. Based on the estimates and assumptions used in determining the Enterprise Value, as further discussed below, the Company estimated the Enterprise Value to be approximately $769.0 million. This estimate was derived from an independent valuation using an asset based methodology of proved reserves, undeveloped acreage, and other financial information, considerations and projections, applying a combination of the income, cost and market approaches. The Company’s principal assets are its oil and natural gas properties. Significant inputs used to determine the fair values of properties include estimates of: (i) reserves; (ii) future operating and development costs; (iii) future commodity prices; and (iv) a market-based weighted average cost of capital rate. These inputs require significant judgments and estimates by the Company’s management at the time of the valuation and are the most sensitive and subject to change. Reserves were categorized based on the probability of being able to extract the reserves from the ground. The two major categories being proved reserves and unproved reserves. Proved reserves are those with a 90% certainty of commercial extraction and consist of producing reserves ("PDP"), non-producing reserves ("PDNP"), and proved, undeveloped reserves ("PUD") . Unproved reserves were further broken into two categories: probable reserves and possible reserves. Probable reserves have a 50% certainty of commercial extraction and Possible reserves have a 10% certainty of commercial extraction. For purposes of estimating the fair value of the Company’s proved, probable, and possible reserves, the Discounted Cash Flow ("DCF") method under the income approach was used which estimated fair value based on the anticipated cash flows associated with the Company's reserves, risked by reserve category and discounted using a weighted average cost of capital rate of 10.4%. Future commodity prices were estimated using market-based transactions for future delivery adjusted for transportation and differentials. For oil, futures prices published at close as of December 11, 2019 (the "Valuation Date") from the New York Mercantile Exchange for delivery of a barrel of West Texas Intermediate ("WTI") crude oil to Cushing, Oklahoma was used. For natural gas, the futures price published at close of the Valuation date from the New York Mercantile Exchange for delivery of one thousand cubic feet ("mcf") of natural gas to the Henry Hub in Erath, LA was used. The price for natural gas liquids ("NGLs") was based on 26% of WTI. Future operating and development costs were estimated based on the Company's recent costs trends adjusted for inflation. Risk factors were determined separately depending on geographic location of the reserves. In estimating the fair value of the Company's unproved acreage, that was not included in the valuation of probable and possible reserves, a market approach was used in which a review of recent transactions involving properties in the same geographical location indicated the fair value of the Company's unproved acreage from a market participant perspective. A lthough 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 equity as of December 11, 2019 (in thousands): December 11, 2019 Enterprise Value $ 769,033 Plus: Cash and cash equivalents 16,563 Indicated invested capital value 785,596 Less: Post-Reorganization Debt (379,426) Concluded Equity Value $ 406,170 Upon issuance of the Successor Revolving Credit Facility on December 11, 2019, the Company received net proceeds of approximately $379.4 million and incurred debt issuance costs of approximately $8.6 million. The following table reconciles the Company's Debt as of December 11, 2019 (in thousands): 12/11/2019 Successor Revolving Credit Facility $ 388,000 Less: Successor Revolving Credit Facility fees and debt issuance costs (8,574) Total Debt $ 379,426 The following table reconciles the Company’s Enterprise Value to its Reorganization Value as of December 11, 2019 (in thousands): 12/11/2019 Enterprise Value $ 769,033 Plus: Cash and cash equivalents 16,563 Plus: Current and Other Liabilities (Excluding Post-Reorg. Debt and ARO) 126,460 Plus: Asset Retirement Obligation $ 152,186 Reorganization Value of Successor Assets $ 1,064,242 Reorganization Value and Enterprise Value were estimated using numerous projections and assumptions that are inherently subject to significant uncertainties and resolution of contingencies that are beyond our control. Accordingly, the estimates set forth herein are not necessarily indicative of actual outcomes, and there can be no assurance that the estimates, projections or assumptions will be realized. Condensed Consolidated Balance Sheet The following illustrates the effects on the Company’s consolidated balance sheet due to the reorganization and fresh-start accounting adjustments. The explanatory notes following the table below provide further details on the adjustments, including the Company’s assumptions and methods used to determine fair value for its assets and liabilities. As of December 11, 2019 Reorganization Adjustments Fresh-Start Adjustments (in thousands) Predecessor Successor ASSETS Current assets: Cash $ 7,187 $ 9,376 (1) $ — $ 16,563 Restricted cash 3,450 23,936 (1) — 27,386 Accounts receivable, net: Oil and natural gas 63,672 — — 63,672 Joint interest owners 13,213 — — 13,213 Other 2 — — 2 Fair value of derivatives — — — — Prepaid expenses and other current assets 10,465 — — 10,465 Total current assets $ 97,989 $ 33,312 $ — $ 131,301 Oil and natural gas properties, at cost: Proved oil and natural gas properties using the successful efforts method of accounting 3,565,631 — (2,918,997) (10) 646,634 Unproved properties 20,244 — 259,759 (10) 280,003 Accumulated depletion, depreciation, amortization and impairment (2,424,454) — 2,424,454 (10) — Total oil and natural gas properties, net $ 1,161,421 $ — $ (234,784) $ 926,637 Other property and equipment, net of accumulated depreciation and amortization 5,949 — 235 (10) 6,184 Operating rights, net of amortization 574 — (545) (11) 29 Fair value of derivatives 91 — — 91 Other assets — — — — Investments in equity method investees — — — — Total assets $ 1,266,024 $ 33,312 $ (235,094) $ 1,064,242 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Current debt, net $ 596,000 $ (596,000) (2) $ — $ — Accounts payable 5,350 2,875 (5) — 8,225 Accrued oil and natural gas liabilities 63,965 — — 63,965 Fair value of derivatives 4,749 — — 4,749 Asset retirement obligation 3,938 — 801 (12) 4,739 Other 50,223 (4,916) (3) — 45,307 Total current liabilities $ 724,225 $ (598,041) $ 801 $ 126,985 Long-term debt — 379,426 (6) — 379,426 Asset retirement obligation 257,984 — (110,537) (12) 147,447 Fair value of derivatives 2,118 — — 2,118 Other long-term liabilities 2,096 — — 2,096 Total liabilities not subject to compromise 986,423 (218,615) (109,736) 658,072 Liabilities subject to compromise 789,802 (789,802) (4) — — Total liabilities $ 1,776,225 $ (1,008,417) $ (109,736) $ 658,072 Stockholders' equity (deficit): Common stock (Predecessor) 1,148 (1,148) (7) — — Common stock (Successor) — 611 (8) — 611 Additional paid-in capital (Predecessor) 43,197 (43,197) (7) — — Additional paid-in capital (Successor) — 405,559 (8) — 405,559 Accumulated deficit (554,546) 679,904 (9) (125,358) (13) — Total stockholders’ deficit (510,201) 1,041,729 (125,358) 406,170 Total liabilities and stockholders' equity $ 1,266,024 $ 33,312 $ (235,094) $ 1,064,242 Reorganization Adjustments 1. Reflects the net cash payments recorded as of the Effective Date from implementation of the Plan (in thousands): Proceeds from Backstop Commitments and Rights Offering $ 256,300 Borrowings under Successor Revolving Credit Facility 388,000 Payment of Predecessor Credit Facility (313,000) Payment of Interest under Predecessor Credit Facility (5,623) Payment of Predecessor DIP Claims (283,000) Payment of Interest and Fees under Predecessor DIP Claims (791) Payment of Successor Revolving Credit Facility fees and debt issuance costs (8,574) Funding of Professional Fees Escrow Account (23,936) Changes in Cash $ 9,376 2. Reflects the repayment of outstanding borrowings under the Predecessor Credit Facility of approximately $313.0 million and the repayment of the DIP Credit Agreement balance of $283.0 million. See Note 5, "Debt" for more information about the DIP Credit Agreement. 3. Reflects payment of accrued interest under Predecessor Credit Facility of $4.9 million. 4. Liabilities subject to compromise were settled as follows in accordance with the Plan (in thousands): Debt $ 757,449 Accrued Interest Payable 29,478 Accounts Payable 2,875 Total Liabilities Subject to Compromise 789,802 Reinstatement of Liability for the General Unsecured Claims (2,875) Fair Value of Equity Issued to Former Holders of the Senior Notes, Bonds, and Second Lien (149,870) Gain on Settlement of Liabilities Subject to Compromise $ 637,057 5. Reflects reinstatement of payables for the general unsecured claims. 6. Reflects the $379.4 million in net new borrowings under the Successor Revolving Credit Facility. 7. Reflects the cancellation of the Predecessor company equity to accumulated deficit. 8. Represents backstop commitments and rights offering totaling $256.3 million and fair value of equity issue to former holders of the Senior Notes, Bonds, and Second Lien Term Loan totaling $149.9 million. 9. Reflects the cumulative impact of the reorganization adjustments discussed above (in thousands): Gain on Settlement of Liabilities Subject to Compromise $ 637,057 Other Adjustments (1,498) Cancellation of Predecessor company equity 44,345 Net impact to accumulated deficit $ 679,904 Fresh Start Adjustments 10. The following table summarizes the fair value adjustment on our oil and gas properties and accumulated depletion, depreciation and amortization (in thousands): Fresh-Start Adjustments Predecessor Successor Oil and Gas Properties Proved properties $ 3,565,631 $ (2,918,997) $ 646,634 Unproved properties 20,244 259,759 280,003 Total Oil and Gas Properties 3,585,875 (2,659,238) 926,637 Less - Accumulated depletion, depreciation and impairment (2,424,454) 2,424,454 — Net Oil and Gas Properties 1,161,421 (234,784) 926,637 Furniture, Fixtures, and other equipment 18,782 (12,598) 6,184 Less - Accumulated depreciation (12,833) 12,833 — Net Furniture, Fixtures and other equipment 5,949 235 6,184 Net Oil and Gas Properties, Furniture and fixtures and accumulated depreciation $ 1,167,370 $ (234,549) $ 932,821 11. Reflects the adjustment of operating rights to fair value. 12. Primarily reflects the fair value adjustment of asset retirement obligations ("ARO") to fair value of approximately $152.2 million, of which $147.4 million is reflected as long-term ARO and $4.7 million of current ARO. The fair value of asset retirement obligations was estimated using valuation techniques that convert future cash flows to a single discounted amount. Significant inputs to the valuation include estimates of: (i) plus and abandon costs per well based on existing regulatory requirements; (ii) remaining life per well; (iii) future inflation factors; and (iv) a credit-adjusted risk-free interest rate. Refer to Note 14, "Asset Retirement Obligations" for further detail of the Company's asset retirement obligations. 13. Reflects the cumulative impact of fresh start adjustments as discussed above. Reorganization Items Reorganization items represent (i) expenses or income incurred subsequent to June 18, 2019 (the "Petition Date") as a direct result of the confirmed Plan, (ii) gain or losses from liabilities settled and (iii) fresh-start accounting adjustments and are recorded in "Reorganization items" in the Company's unaudited Consolidated Statement of Operations. The following table summarizes reorganization items (in thousands): Successor Predecessor Period from December 11, 2019 to December 31, 2019 Period from January 1, 2019 to December 10, 2019 Gain on settlement of liabilities subject to compromise $ — $ (637,057) Fresh start accounting adjustments — 125,358 Reorganization legal and professional fees and expenses — 63,798 Reorganization items $ — $ (447,901) |
Fresh-Start Accounting
Fresh-Start Accounting | 12 Months Ended |
Dec. 31, 2019 | |
Reorganizations [Abstract] | |
Fresh-Start Accounting | Emergence from Voluntary Reorganization under Chapter 11 of the Bankruptcy Code On June 18, 2019, Legacy and certain of its subsidiaries (collectively with Legacy, the “Debtors”) commenced voluntary cases (the “Chapter 11 Cases”) under chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the Southern District of Texas (the “Bankruptcy Court”). On June 19, 2019, the Bankruptcy Court granted a motion seeking joint administration of the Chapter 11 Cases under the caption In re Legacy Reserves Inc., et al . On August 2, 2019, the Debtors filed the Joint Chapter 11 Plan of Reorganization for Legacy Reserves Inc. and its Debtor Affiliates (as amended, modified or supplemented from time to time, the “Plan”) with the Bankruptcy Court. On November 15, 2019, the Bankruptcy Court entered an order (the “Confirmation Order”) confirming the Plan and on December 11, 2019 (the “Effective Date”), the Plan became effective in accordance with its terms and the Debtors emerged from the Chapter 11 Cases. Plan of Reorganization Treatment of Claims and Interests under the Plan The Plan provided the following treatment of claims against and interests in the Debtors: • all holders of claims arising under the Senior Secured Superpriority Debtor-In-Possession Credit Agreement (the “DIP Credit Agreement”) dated as of June 21, 2019 among Legacy Reserves LP, as debtor, debtor-in-possession and borrower, the other loan parties party thereto, as debtors, debtors-in-possession and guarantors, Wells Fargo Bank, National Association, as administrative agent, and the lenders party thereto (the “RBL Lenders”), received, in full satisfaction of their respective claims (i) on account of claims under the new money revolving loan facility in an aggregate amount of up to $100.0 million, payment in full in cash, (ii) on account of claims under the refinancing term loan in the amount of $250.0 million, distribution of cash and commitments under the Successor Revolving Credit Facility and/or (iii) if the Successor Revolving Credit Facility had not been consummated, payment in full in cash. See Note 5, "Debt" for additional information about the Successor Revolving Credit Facility; • all holders of claims arising under the Third Amended and Restated Credit Agreement dated as of April 1, 2014 (as amended, the “Prepetition RBL Credit Agreement”) among Legacy Reserves LP, as borrower, the guarantors party thereto, Wells Fargo Bank, National Association, as administrative agent, and the lenders party thereto (the “Term Lenders”), received, in full satisfaction of their respective claims, (i) distribution of their pro rata share of commitments under the Successor Revolving Credit Facility in exchange for the claims arising under the Prepetition RBL Credit Agreement or (ii) if the Successor Revolving Credit Facility had not been consummated, payment in full in cash; • all holders of claims arising under the Term Loan Credit Agreement dated as of October 25, 2016 among Legacy Reserves LP, as borrower, the guarantors party thereto, Cortland Capital Market Services LLC, as administrative agent and the lenders party thereto (the “Term Loan Credit Agreement”), received their pro rata share of approximately 52.25% of the new common stock (the “New Common Stock”) issued by Legacy, as reorganized pursuant to and under the Plan (“Reorganized Legacy”), subject to dilution; • holders of claims arising under the indenture governing the 8% Senior Notes due 2020, the indenture governing the 6.25% Senior Notes due 2021 and the indenture governing the 8% Convertible Senior Notes due 2023 (the “Noteholders”) received their respective pro rata share of (i) approximately 2.46% of the New Common Stock, subject to dilution, and (ii) subscription rights to purchase approximately 10.82% of the New Common Stock pursuant to the Rights Offering (as defined below) to the extent that such Noteholders are “accredited investors” as defined under Regulation D promulgated under the Securities Act of 1933, as amended (“Securities Act”); • all existing equity interests in Legacy did not receive any recovery under the Plan and were extinguished. Capital Structure As of the Effective Date, under the Plan, Reorganized Legacy issued New Common Stock to certain holders of claims against and interests in the Debtors, and Legacy’s shares of existing common stock outstanding immediately prior to the Effective Date were cancelled. As of the Effective Date, there were approximately 114,810,671 shares of Legacy’s existing common stock outstanding. Exit Financing The Plan was funded by the following exit financings: • up to $500.0 million in aggregate principal amount under a new senior secured first lien reserved-based revolving credit facility funded by certain of the RBL Lenders; • $189.8 million in proceeds from the purchase of approximately 30.88% of the New Common Stock, subject to dilution, backstopped pursuant to the Sponsor Backstop Commitment Agreement dated June 13, 2019, among Legacy and GSO Capital Partners LP and certain of its affiliates (the “Plan Sponsor”); and • $66.5 million in proceeds from a rights offering (the “Rights Offering”), backstopped pursuant the Noteholder Backstop Commitment Agreement dated June 13, 2019, among Legacy and certain Noteholders (the “Noteholder Backstop Agreement”). U pon the Company’s emergence from the Chapter 11 Cases, the Company qualified for and adopted fresh-start accounting in accordance with the provisions set forth in ASC 852 as (i) the Reorganization Value (as defined below) of the Company's assets immediately before the date of confirmation was less than the post-petition liabilities and allowed claims, and (ii) the holders of existing voting shares immediately before confirmation received less than 50% of the voting shares of the emerging entity. As a result of the application of fresh-start accounting, as well as the effects of the implementation of the Plan, the consolidated financial statements on or after the Effective Date are not comparable with the consolidated financial statements prior to the Effective Date. See Note 1, “Emergence from Voluntary Reorganization under Chapter 11 of the Bankruptcy Code” for additional information. References to the “Successor” or “Successor Company” refer to the financial position and results of operations of the new reorganized Company subsequent to the Effective Date. References to “Predecessor” or “Predecessor Company” refer to the financial position and results of operations of the Company prior to the Effective Date. Adopting fresh-start accounting results in a new financial reporting entity with no beginning retained earnings or deficit as of the fresh-start reporting date. Upon the application of fresh-start accounting, the Company allocated the fair value of the Successor Company’s total assets (the “Reorganization Value”) to its individual assets based on their estimated fair values. Reorganization Value represents the fair value of the Successor Company's total assets and is intended to approximate the amount a willing buyer would pay for the assets immediately before restructuring. Under fresh start accounting, we allocated the reorganization value to our individual assets based on their estimated fair values. Our reorganization value was derived from an estimate of "Enterprise Value," or the fair value of the Company’s long-term debt and stockholders’ equity. The estimated Enterprise Value at the Effective Date was a range of $725 - $925 million as established in the Plan and approved by the bankruptcy court. Based on the estimates and assumptions used in determining the Enterprise Value, as further discussed below, the Company estimated the Enterprise Value to be approximately $769.0 million. This estimate was derived from an independent valuation using an asset based methodology of proved reserves, undeveloped acreage, and other financial information, considerations and projections, applying a combination of the income, cost and market approaches. The Company’s principal assets are its oil and natural gas properties. Significant inputs used to determine the fair values of properties include estimates of: (i) reserves; (ii) future operating and development costs; (iii) future commodity prices; and (iv) a market-based weighted average cost of capital rate. These inputs require significant judgments and estimates by the Company’s management at the time of the valuation and are the most sensitive and subject to change. Reserves were categorized based on the probability of being able to extract the reserves from the ground. The two major categories being proved reserves and unproved reserves. Proved reserves are those with a 90% certainty of commercial extraction and consist of producing reserves ("PDP"), non-producing reserves ("PDNP"), and proved, undeveloped reserves ("PUD") . Unproved reserves were further broken into two categories: probable reserves and possible reserves. Probable reserves have a 50% certainty of commercial extraction and Possible reserves have a 10% certainty of commercial extraction. For purposes of estimating the fair value of the Company’s proved, probable, and possible reserves, the Discounted Cash Flow ("DCF") method under the income approach was used which estimated fair value based on the anticipated cash flows associated with the Company's reserves, risked by reserve category and discounted using a weighted average cost of capital rate of 10.4%. Future commodity prices were estimated using market-based transactions for future delivery adjusted for transportation and differentials. For oil, futures prices published at close as of December 11, 2019 (the "Valuation Date") from the New York Mercantile Exchange for delivery of a barrel of West Texas Intermediate ("WTI") crude oil to Cushing, Oklahoma was used. For natural gas, the futures price published at close of the Valuation date from the New York Mercantile Exchange for delivery of one thousand cubic feet ("mcf") of natural gas to the Henry Hub in Erath, LA was used. The price for natural gas liquids ("NGLs") was based on 26% of WTI. Future operating and development costs were estimated based on the Company's recent costs trends adjusted for inflation. Risk factors were determined separately depending on geographic location of the reserves. In estimating the fair value of the Company's unproved acreage, that was not included in the valuation of probable and possible reserves, a market approach was used in which a review of recent transactions involving properties in the same geographical location indicated the fair value of the Company's unproved acreage from a market participant perspective. A lthough 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 equity as of December 11, 2019 (in thousands): December 11, 2019 Enterprise Value $ 769,033 Plus: Cash and cash equivalents 16,563 Indicated invested capital value 785,596 Less: Post-Reorganization Debt (379,426) Concluded Equity Value $ 406,170 Upon issuance of the Successor Revolving Credit Facility on December 11, 2019, the Company received net proceeds of approximately $379.4 million and incurred debt issuance costs of approximately $8.6 million. The following table reconciles the Company's Debt as of December 11, 2019 (in thousands): 12/11/2019 Successor Revolving Credit Facility $ 388,000 Less: Successor Revolving Credit Facility fees and debt issuance costs (8,574) Total Debt $ 379,426 The following table reconciles the Company’s Enterprise Value to its Reorganization Value as of December 11, 2019 (in thousands): 12/11/2019 Enterprise Value $ 769,033 Plus: Cash and cash equivalents 16,563 Plus: Current and Other Liabilities (Excluding Post-Reorg. Debt and ARO) 126,460 Plus: Asset Retirement Obligation $ 152,186 Reorganization Value of Successor Assets $ 1,064,242 Reorganization Value and Enterprise Value were estimated using numerous projections and assumptions that are inherently subject to significant uncertainties and resolution of contingencies that are beyond our control. Accordingly, the estimates set forth herein are not necessarily indicative of actual outcomes, and there can be no assurance that the estimates, projections or assumptions will be realized. Condensed Consolidated Balance Sheet The following illustrates the effects on the Company’s consolidated balance sheet due to the reorganization and fresh-start accounting adjustments. The explanatory notes following the table below provide further details on the adjustments, including the Company’s assumptions and methods used to determine fair value for its assets and liabilities. As of December 11, 2019 Reorganization Adjustments Fresh-Start Adjustments (in thousands) Predecessor Successor ASSETS Current assets: Cash $ 7,187 $ 9,376 (1) $ — $ 16,563 Restricted cash 3,450 23,936 (1) — 27,386 Accounts receivable, net: Oil and natural gas 63,672 — — 63,672 Joint interest owners 13,213 — — 13,213 Other 2 — — 2 Fair value of derivatives — — — — Prepaid expenses and other current assets 10,465 — — 10,465 Total current assets $ 97,989 $ 33,312 $ — $ 131,301 Oil and natural gas properties, at cost: Proved oil and natural gas properties using the successful efforts method of accounting 3,565,631 — (2,918,997) (10) 646,634 Unproved properties 20,244 — 259,759 (10) 280,003 Accumulated depletion, depreciation, amortization and impairment (2,424,454) — 2,424,454 (10) — Total oil and natural gas properties, net $ 1,161,421 $ — $ (234,784) $ 926,637 Other property and equipment, net of accumulated depreciation and amortization 5,949 — 235 (10) 6,184 Operating rights, net of amortization 574 — (545) (11) 29 Fair value of derivatives 91 — — 91 Other assets — — — — Investments in equity method investees — — — — Total assets $ 1,266,024 $ 33,312 $ (235,094) $ 1,064,242 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Current debt, net $ 596,000 $ (596,000) (2) $ — $ — Accounts payable 5,350 2,875 (5) — 8,225 Accrued oil and natural gas liabilities 63,965 — — 63,965 Fair value of derivatives 4,749 — — 4,749 Asset retirement obligation 3,938 — 801 (12) 4,739 Other 50,223 (4,916) (3) — 45,307 Total current liabilities $ 724,225 $ (598,041) $ 801 $ 126,985 Long-term debt — 379,426 (6) — 379,426 Asset retirement obligation 257,984 — (110,537) (12) 147,447 Fair value of derivatives 2,118 — — 2,118 Other long-term liabilities 2,096 — — 2,096 Total liabilities not subject to compromise 986,423 (218,615) (109,736) 658,072 Liabilities subject to compromise 789,802 (789,802) (4) — — Total liabilities $ 1,776,225 $ (1,008,417) $ (109,736) $ 658,072 Stockholders' equity (deficit): Common stock (Predecessor) 1,148 (1,148) (7) — — Common stock (Successor) — 611 (8) — 611 Additional paid-in capital (Predecessor) 43,197 (43,197) (7) — — Additional paid-in capital (Successor) — 405,559 (8) — 405,559 Accumulated deficit (554,546) 679,904 (9) (125,358) (13) — Total stockholders’ deficit (510,201) 1,041,729 (125,358) 406,170 Total liabilities and stockholders' equity $ 1,266,024 $ 33,312 $ (235,094) $ 1,064,242 Reorganization Adjustments 1. Reflects the net cash payments recorded as of the Effective Date from implementation of the Plan (in thousands): Proceeds from Backstop Commitments and Rights Offering $ 256,300 Borrowings under Successor Revolving Credit Facility 388,000 Payment of Predecessor Credit Facility (313,000) Payment of Interest under Predecessor Credit Facility (5,623) Payment of Predecessor DIP Claims (283,000) Payment of Interest and Fees under Predecessor DIP Claims (791) Payment of Successor Revolving Credit Facility fees and debt issuance costs (8,574) Funding of Professional Fees Escrow Account (23,936) Changes in Cash $ 9,376 2. Reflects the repayment of outstanding borrowings under the Predecessor Credit Facility of approximately $313.0 million and the repayment of the DIP Credit Agreement balance of $283.0 million. See Note 5, "Debt" for more information about the DIP Credit Agreement. 3. Reflects payment of accrued interest under Predecessor Credit Facility of $4.9 million. 4. Liabilities subject to compromise were settled as follows in accordance with the Plan (in thousands): Debt $ 757,449 Accrued Interest Payable 29,478 Accounts Payable 2,875 Total Liabilities Subject to Compromise 789,802 Reinstatement of Liability for the General Unsecured Claims (2,875) Fair Value of Equity Issued to Former Holders of the Senior Notes, Bonds, and Second Lien (149,870) Gain on Settlement of Liabilities Subject to Compromise $ 637,057 5. Reflects reinstatement of payables for the general unsecured claims. 6. Reflects the $379.4 million in net new borrowings under the Successor Revolving Credit Facility. 7. Reflects the cancellation of the Predecessor company equity to accumulated deficit. 8. Represents backstop commitments and rights offering totaling $256.3 million and fair value of equity issue to former holders of the Senior Notes, Bonds, and Second Lien Term Loan totaling $149.9 million. 9. Reflects the cumulative impact of the reorganization adjustments discussed above (in thousands): Gain on Settlement of Liabilities Subject to Compromise $ 637,057 Other Adjustments (1,498) Cancellation of Predecessor company equity 44,345 Net impact to accumulated deficit $ 679,904 Fresh Start Adjustments 10. The following table summarizes the fair value adjustment on our oil and gas properties and accumulated depletion, depreciation and amortization (in thousands): Fresh-Start Adjustments Predecessor Successor Oil and Gas Properties Proved properties $ 3,565,631 $ (2,918,997) $ 646,634 Unproved properties 20,244 259,759 280,003 Total Oil and Gas Properties 3,585,875 (2,659,238) 926,637 Less - Accumulated depletion, depreciation and impairment (2,424,454) 2,424,454 — Net Oil and Gas Properties 1,161,421 (234,784) 926,637 Furniture, Fixtures, and other equipment 18,782 (12,598) 6,184 Less - Accumulated depreciation (12,833) 12,833 — Net Furniture, Fixtures and other equipment 5,949 235 6,184 Net Oil and Gas Properties, Furniture and fixtures and accumulated depreciation $ 1,167,370 $ (234,549) $ 932,821 11. Reflects the adjustment of operating rights to fair value. 12. Primarily reflects the fair value adjustment of asset retirement obligations ("ARO") to fair value of approximately $152.2 million, of which $147.4 million is reflected as long-term ARO and $4.7 million of current ARO. The fair value of asset retirement obligations was estimated using valuation techniques that convert future cash flows to a single discounted amount. Significant inputs to the valuation include estimates of: (i) plus and abandon costs per well based on existing regulatory requirements; (ii) remaining life per well; (iii) future inflation factors; and (iv) a credit-adjusted risk-free interest rate. Refer to Note 14, "Asset Retirement Obligations" for further detail of the Company's asset retirement obligations. 13. Reflects the cumulative impact of fresh start adjustments as discussed above. Reorganization Items Reorganization items represent (i) expenses or income incurred subsequent to June 18, 2019 (the "Petition Date") as a direct result of the confirmed Plan, (ii) gain or losses from liabilities settled and (iii) fresh-start accounting adjustments and are recorded in "Reorganization items" in the Company's unaudited Consolidated Statement of Operations. The following table summarizes reorganization items (in thousands): Successor Predecessor Period from December 11, 2019 to December 31, 2019 Period from January 1, 2019 to December 10, 2019 Gain on settlement of liabilities subject to compromise $ — $ (637,057) Fresh start accounting adjustments — 125,358 Reorganization legal and professional fees and expenses — 63,798 Reorganization items $ — $ (447,901) |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies (a) Organization, Basis of Presentation and Description of Business Unless the context requires otherwise or unless otherwise noted, all references to “Legacy Reserves,” “Legacy Inc.,” “Legacy,” the “Company,” “we,” “us,” “our” or like terms are to Legacy Reserves Inc. and its subsidiaries for the periods after September 20, 2018, the date the Corporate Reorganization was consummated (as defined below). For the periods prior to September 20, 2018, unless the context requires otherwise or unless otherwise noted, all references to “Legacy Reserves,” “Legacy LP,” “Legacy,” the “Company,” “we,” “us,” “our” or like terms are to Legacy Reserves LP and its subsidiaries. Legacy is an independent energy company engaged in the development, production and acquisition of oil and natural gas properties in the United States. Its current operations are focused on the horizontal development of unconventional plays in the Permian Basin and the cost-efficient management of shallow-decline oil and natural gas wells in the Permian Basin, East Texas, Rocky Mountain and Mid-Continent regions. The accompanying financial statements have been prepared on the accrual basis of accounting whereby revenues are recognized when earned, and expenses are recognized when incurred. (b) Corporate Reorganization On September 20, 2018, we completed the transactions contemplated by the Amended and Restated Agreement and Plan of Merger (the “Merger Agreement”), dated July 9, 2018, by and among Legacy Inc., Legacy LP, Legacy Reserves GP, LLC (the “General Partner”) and Legacy Reserves Merger Sub LLC, a wholly owned subsidiary of Legacy Inc. (“Merger Sub”), and the GP Purchase Agreement, dated March 23, 2018, by and among Legacy Inc., the General Partner, Legacy LP, Lion GP Interests, LLC, Moriah Properties Limited, and Brothers Production Properties, Ltd., Brothers Production Company, Inc., Brothers Operating Company, Inc., J&W McGraw Properties, Ltd., DAB Resources, Ltd. and H2K Holdings, Ltd. (such transactions referred to herein collectively as the “Corporate Reorganization”). Upon the consummation of the Corporate Reorganization: • Legacy Inc., which prior to the Corporate Reorganization, was a wholly owned subsidiary of the General Partner, acquired all of the issued and outstanding limited liability company interests in the General Partner and became the sole member of the General Partner with the General Partner becoming a subsidiary of Legacy Inc.; and • Legacy LP merged with Merger Sub, with Legacy LP continuing as the surviving entity and as a subsidiary of Legacy Inc. (the “Merger”), the limited partner interests of Legacy LP, other than the incentive distribution units in Legacy LP, were exchanged for shares of Legacy Inc.’s common stock, par value $0.01 (“common stock”) and the general partner interest remained outstanding. The Corporate Reorganization was accounted for under ASC 805 as a combination of entities under common control. As such, the assets and liabilities of the Partnership were recognized at their carrying values in Legacy Inc. (c) Accounts Receivable Accounts receivable are recorded at the invoiced amount and do not bear interest. Legacy routinely assesses the financial strength of its customers. Bad debts are recorded based on an account-by-account review. Accounts are written off after all means of collection have been exhausted and potential recovery is considered remote. Legacy does not have any off-balance-sheet credit exposure related to its customers (see Note 13, "Sales to Major Customers"). (d) Oil and Natural Gas Properties Legacy accounts for oil and natural gas properties using the successful efforts method. Under this method of accounting, costs relating to the acquisition and development of proved areas are capitalized when incurred. The costs of development wells are capitalized whether productive or non-productive. Leasehold acquisition costs are capitalized when incurred. If proved reserves are found on an unproved property, leasehold cost is transferred to proved properties. Exploration dry holes are charged to expense when it is determined that no commercial reserves exist. Other exploration costs, including personnel costs, geological and geophysical expenses and delay rentals for oil and natural gas leases, are charged to expense when incurred. The costs of acquiring or constructing support equipment and facilities used in oil and gas producing activities are capitalized. Production costs are charged to expense as incurred and are those costs incurred to operate and maintain our wells and related equipment and facilities. Depreciation and depletion of producing oil and natural gas properties is recorded based on units of production. Acquisition costs of proved properties are amortized on the basis of all proved reserves, developed and undeveloped, and capitalized development costs (wells and related equipment and facilities) are amortized on the basis of proved developed reserves. As more fully described below, proved reserves are estimated annually by Legacy’s independent petroleum engineer, LaRoche Petroleum Consultants, Ltd. ("LaRoche"), and are subject to future revisions based on availability of additional information. Legacy’s in-house reservoir engineers prepare an updated estimate of reserves each quarter. Depletion is calculated each quarter based upon the latest estimated reserves data available. As discussed in Note 14, asset retirement costs are recognized when the asset is placed in service, and are amortized over proved developed reserves using the units of production method. Asset retirement costs are estimated by Legacy’s engineers using existing regulatory requirements and anticipated future inflation rates. Upon sale or retirement of complete fields of depreciable or depletable property, the book value thereof, less proceeds from sale or salvage value, is charged to income. On sale or retirement of an individual well the proceeds are credited to accumulated depletion and depreciation. Oil and natural gas properties are reviewed for impairment when facts and circumstances indicate that their carrying value may not be recoverable. Legacy compares net capitalized costs of proved oil and natural gas properties to estimated undiscounted future net cash flows using management’s expectations of future oil and natural gas prices. These future price scenarios reflect Legacy’s estimation of future price volatility. If net capitalized costs exceed estimated undiscounted future net cash flows, the measurement of impairment is based on estimated fair value, using estimated discounted future net cash flows. Significant inputs used to determine the fair values of proved properties include estimates of: (i) reserves; (ii) future operating and development costs; (iii) future commodity prices and (iv) a market-based weighted average cost of capital rate. The underlying commodity prices embedded in Legacy's estimated cash flows are the product of a process that begins with NYMEX forward curve pricing, adjusted for estimated location and quality differentials, as well as other factors that Legacy's management believes will impact realizable prices. For the period of January 1, 2019 through December 10, 2019 (Predecessor), Legacy recognized $105.5 million of impairment expense in 20 separate producing fields, due primarily to the further decline in oil and natural gas futures prices, increased expenses and well performance during the period ended December 10, 2019 (Predecessor), which decreased the expected future cash flows below the carrying value of the assets. For the year ended December 31, 2018 (Predecessor), Legacy recognized $58.7 million of impairment expense, in 50 separate producing fields, due primarily to the further decline in oil and natural gas futures prices, increased expenses and well performance during the year ended December 31, 2018 (Predecessor), which decreased the expected future cash flows below the carrying value of the assets. For the year ended December 31, 2017(Predecessor), Legacy recognized $37.3 million of impairment expense, in 47 separate producing fields, due primarily to further decline in oil and natural gas futures prices, increased expenses and well performance during the year ended December 31, 2017 (Predecessor), which decreased the expected future cash flows below the carrying value of the assets. Unproven properties that are individually significant are assessed for impairment and if considered impaired are charged to expense when such impairment is deemed to have occurred. No unproved impairment was recognized for the period December 11, 2019 through December 31, 2019 (Successor) or for the period of January 1, 2019 through December 10, 2019 (Predecessor). Legacy recognized $9.3 million of impairment of unproven properties during the year ended December 31, 2018 (Predecessor). Legacy did not recognize impairment expense on unproved properties during the years ended December 31, 2017 (Predecessor). We expect to recognize impairments to our oil and natural gas properties in 2020 as a result of the COVID-19 pandemic and the disruption to the oil market. (e) Oil, NGLs and Natural Gas Reserve Quantities Legacy’s estimates of proved reserves are based on the quantities of oil, NGLs and natural gas that engineering and geological analyses demonstrate, with reasonable certainty, to be recoverable from established reservoirs in the future under current operating and economic parameters. LaRoche prepares a reserve and economic evaluation of all Legacy’s properties on a case-by-case basis utilizing information provided to it by Legacy and information available from state agencies that collect information reported to it by the operators of Legacy’s properties. The estimates of Legacy’s proved reserves have been prepared and presented in accordance with the Securities and Exchange Commission ("SEC") rules and accounting standards. Reserves and their relation to estimated future net cash flows impact Legacy’s depletion and impairment calculations. As a result, adjustments to depletion and impairment are made concurrently with changes to reserve estimates. Legacy prepares its reserve estimates, and the projected cash flows derived from these reserve estimates, in accordance with SEC guidelines. The independent engineering firm described above adheres to the same guidelines when preparing the reserve report. The accuracy of Legacy’s reserve estimates is a function of many factors including the quality and quantity of available data, the interpretation of that data, the accuracy of various mandated economic assumptions, and the judgments of the individuals preparing the estimates. Legacy’s proved reserve estimates are a function of many assumptions, all of which could deviate significantly from actual results. As such, reserve estimates may materially vary from the ultimate quantities of oil, NGLs and natural gas eventually recovered. (f) Income Taxes Prior to consummation of the Corporate Reorganization on September 20, 2018, Legacy LP was treated as a partnership for federal and state income tax purposes, in which the taxable income or loss was passed through to its unitholders. Legacy LP was subject to Texas margin tax and certain of Legacy LP’s subsidiaries were c-corporations subject to federal and state income taxes. Therefore, with the exception of the state of Texas and certain subsidiaries, Legacy LP did not directly pay federal and state income taxes and recognition was not given to federal and state income taxes for its operations. Effective upon consummation of the Corporate Reorganization, Legacy Inc. became subject to federal and state income taxes as a c-corporation. As such, we account for income taxes, as required, under the liability method. 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 and net operating loss and tax credit carry-forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those 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 net income or loss in the period that includes the enactment date. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Our policy is to record interest and penalties relating to uncertain tax positions in income tax expense. At December 31, 2019, we did not have any accrued liability for uncertain tax positions and do not anticipate recognition of any significant liabilities for uncertain tax positions during the next 12 months. Please see Note 17, "Income Taxes" for more information on Legacy's accounting for income taxes. (g) Derivative Instruments and Hedging Activities Legacy uses derivative financial instruments to achieve more predictable cash flows by reducing its exposure to oil and natural gas price fluctuations and interest rate changes. Legacy does not specifically designate derivative instruments as cash flow hedges, even though they reduce its exposure to changes in oil and natural gas prices and interest rates. Therefore, Legacy records the change in the fair market values of oil and natural gas derivatives in current earnings. Changes in the fair values of interest rate derivatives are recorded in interest expense (see Note 11, "Fair Value Measurements" and Note 12, "Derivative Financial Instruments"). (h) Use of Estimates Management of Legacy has made a number of estimates and assumptions relating to the reporting of assets, liabilities, revenues and expenses and the disclosure of contingent assets and liabilities to prepare these consolidated financial statements in conformity with accounting principles generally accepted in the United States of America. Actual results could differ materially from those estimates. Estimates which are particularly significant to the consolidated financial statements include estimates of oil and natural gas reserves, valuation of derivatives, impairment of oil and natural gas properties, depreciation, depletion and amortization, asset retirement obligations and accrued revenues. (i) Revenue Recognition On January 1, 2018, Legacy adopted ASU No. 2014-09, “Revenue from Contracts with Customers” (“ASU 2014-09”) using the modified retrospective method of transition applied to all contracts. ASU 2014-09 created ASC 606, Revenue from Contracts with Customers (ASC 606). Legacy enters into contracts with customers to sell its produced oil, natural gas and NGLs. Revenue attributable to these contracts is recognized in accordance with the five-step revenue recognition model prescribed in ASC 606. Specifically, revenue is recognized when Legacy’s performance obligations under these contracts are satisfied, which generally occurs when control of the oil, natural gas and NGLs transfers to the purchaser and collectability is reasonably assured. Given the nature of Legacy’s products sold, Legacy has concluded that control transfers to its customers at a point in time. In accordance with ASC 606, Legacy considers the following indicators of the transfer of control to determine the point in time at which control transfers to its customers: (i) Legacy has a present right to payment for the asset; (ii) the customer has legal title to the asset; (iii) Legacy has transferred physical possession of the asset; and (iv) the customer has the significant risks and rewards of ownership. Oil Sales Legacy's oil sales contracts are generally structured such that Legacy sells its oil production to the purchaser at a contractually specified delivery point at or near the wellhead. The crude oil production is priced on the delivery date based upon prevailing index prices less certain deductions related to oil quality and physical location. Legacy recognizes revenue when control transfers to the purchaser upon delivery at or near the wellhead based on the net price received from purchaser. Natural Gas and NGL Sales Under Legacy's gas processing contracts, Legacy delivers wet gas to a midstream processing entity at the wellhead or the inlet of the midstream processing entity’s system. The midstream processing entity processes the natural gas and remits proceeds to Legacy for the resulting sales of NGLs and residue gas. Under this contract structure, Legacy has determined that the midstream processing entity represents Legacy’s customer, and, consequently, Legacy recognizes revenue when control transfers to the midstream processing entity upon delivery. The amount of revenue recognized is based on the net amount of the proceeds received from the midstream processing entity, which is generally tied to the prevailing index prices for residue gas and NGLs less deductions for gathering, processing, transportation and other expenses. Under Legacy's dry gas sales that do not require processing, Legacy sells its natural gas production to third party purchasers at a contractually specified delivery point at or near the wellhead. Pricing provisions are tied to a market index, with certain deductions based on, among other factors, whether a well delivers to a gathering or transmission line, quality of natural gas, and prevailing supply and demand conditions. Legacy recognizes revenue when control transfers to its third party purchasers upon delivery of the natural gas based on the relevant index price net of deductions. Estimation To the extent actual product volumes and related prices are unavailable for a given reporting period because of timing or information not received from third parties, the expected sales volumes and prices for those properties are estimated and recorded as “Accounts receivable - oil and natural gas” in the accompanying consolidated balance sheets. See Note 6, "Revenue from Contracts with Customer" for additional information. Imbalances Natural gas imbalances occur when Legacy sells more or less than its entitled ownership percentage of total natural gas production. Any amount received in excess of its share is treated as a liability. If Legacy receives less than its entitled share, the underproduction is recorded as a receivable. Legacy did not have any significant natural gas imbalance positions as of the period December 11, 2019 through December 31, 2019 (Successor), the period of January 1, 2019 through December 10, 2019 (Predecessor), the year ended December 31, 2018 (Predecessor), and the year ended December 31, 2017 (Predecessor). (j) Investments Undivided interests in oil and natural gas properties owned through joint ventures are consolidated on a proportionate basis. Investments in entities where Legacy exercises significant influence, but not a controlling interest, are accounted for by the equity method. Under the equity method, Legacy’s investments are stated at cost plus the equity in undistributed earnings and losses after acquisition. (k) Environmental Legacy is subject to extensive federal, state and local environmental laws and regulations. These laws, which are frequently changing, regulate the discharge of materials into the environment and may require Legacy to remove or mitigate the environmental effects of the disposal or release of petroleum or chemical substances at various sites. Environmental expenditures are expensed or capitalized depending on their future economic benefit. Expenditures that relate to an existing condition caused by past operations and that have no future economic benefits are expensed. Liabilities for expenditures of a non-capital nature are recorded when environmental assessment and/or remediation are probable, and the costs can be reasonably estimated. Such liabilities are generally undiscounted unless the timing of cash payments is fixed and readily determinable. (l) Earnings (Loss) Per Share Basic income (loss) per share amounts are calculated using the weighted average number of shares outstanding during each period. Diluted income (loss) per share also gives effect to dilutive unvested restricted shares (calculated based upon the treasury stock method) (see Note 15, "Stockholders' Deficit/Unitholders' Deficit"). In accordance with ASC 805, income (loss) per share amounts for historical periods have been recomputed to reflect shares issued in the Corporate Reorganization. (m) Segment Reporting Legacy’s management initially treats each new acquisition of oil and natural gas properties as a separate operating segment. Legacy aggregates these operating segments into a single segment for reporting purposes. (n) Share-Based Compensation Concurrent with its formation on March 15, 2006, a Long-Term Incentive Plan (“Legacy LP LTIP”) for Legacy was created. Due to Legacy’s history of cash settlements for option exercises unit appreciation rights ("UARs") and certain phantom unit awards, Legacy accounted for these awards under the liability method, which requires Legacy to recognize the fair value of each unit award at the end of each period. Expense or benefit is recognized as the fair value of the liability changes from period to period. Legacy accounted for executive phantom unit and restricted unit awards under the equity method. Pursuant to the terms of the Corporate Reorganization, the Legacy LP LTIP was terminated. On September 19, 2018, the Legacy Inc. 2018 Omnibus Incentive Plan (the "Legacy Inc, LTIP") was approved by the former unitholders of Legacy LP in connection with the Corporate Reorganization. (o) Accrued Oil and Natural Gas Liabilities Below are the components of accrued oil and natural gas liabilities as of the period December 11, 2019 through December 31, 2019 (Successor), the period of January 1, 2019 through December 10, 2019 (Predecessor) and the year ended December 31, 2018 (Predecessor). Successor Predecessor Period from December 11, 2019 to December 31, Year ended December 31, (In thousands) 2019 2018 Revenue payable to joint interest 21,103 22,750 Accrued lease operating expense 20,713 41,227 Accrued capital expenditures 8,880 24,690 Accrued ad valorem tax 5,723 5,255 Other 4,757 4,964 $ 61,176 $ 98,886 (p) Restricted Cash Restricted cash of $24.0 million, $28.5 million and $3.3 million as of the period December 11, 2019 through December 31, 2019 (Successor), the period of January 1, 2019 through December 10, 2019 (Predecessor) and December 31, 2018 (Predecessor), respectively, is recorded in the "Prepaid expenses and other current assets" line. The restricted cash amounts represent funding of an escrow account for the payment of future professional fees incurred in our Chapter 11 bankruptcy reorganization process at December 10, 2019 (Predecessor) as well as various deposits to secure the performance of contracts, surety bonds and other obligations incurred in the ordinary course of business. (q) Prior Year Financial Statement Presentation Certain prior year balances have been reclassified to conform to the current year presentation of balances as stated in these consolidated financial statements. (r) Recent Accounting Pronouncements In February 2016, the FASB issued ASU No. 2016-02, "Leases" ("ASU 2016-02"). ASU 2016-02 establishes a right-of-use (ROU) model that requires a lessee to record a ROU asset and a lease liability on the balance sheet for all leases with terms at commencement longer than twelve months. The new standard was effective for us in the first quarter of 2019, and we adopted the new standard using a modified retrospective approach, with the date of initial application on January 1, 2019. Consequently, upon transition, we recognized an ROU asset and a lease liability, with the cumulative-effect of adoption in retained earnings in the amount of $255,916, as of January 1, 2019. We further utilized the package of practical expedients at transition to not reassess the following: • Whether any expired or existing contracts were or contained leases; • The lease classification for any expired or existing leases; and • Initial direct costs for any existing leases. In addition, we elected the practical expedient to not assess whether existing or expired land easements that were not previously accounted for as leases under superseded guidance are or contain a lease under the new leases guidance. We determine if an arrangement is a lease at inception of the arrangement. To the extent that we determine an arrangement represents a lease, we classify that lease as an operating lease or a finance lease. We capitalize operating and finance leases on our consolidated balance sheets through a right-of-use (“ROU”) asset and a corresponding lease liability. ROU assets represent our right to use an underlying asset for the lease term, and lease liabilities represent our obligation to make lease payments arising from the lease. Operating leases are included in other property and equipment, other current liabilities, and other long-term liabilities in our consolidated balance sheets. Operating lease ROU assets and liabilities are recognized at the commencement date of an arrangement based on the present value of lease payments over the lease term. The operating lease ROU asset also includes any lease payments made to the lessor prior to lease commencement, less any lease incentives, and initial direct costs incurred. Lease expense for operating lease payments is recognized on a straight-line basis over the lease term. Finance leases are included in other property and equipment, other current liabilities, and other long-term liabilities in our consolidated balance sheets. Finance lease ROU assets (that is, amounts capitalized in other property and equipment) and liabilities are recognized at the commencement date of an arrangement based on the present value of lease payments over the lease term. The finance lease ROU asset also includes any lease payments made to the lessor prior to lease commencement, less any lease incentives, and initial direct costs incurred. We generally amortize that ROU asset on a straight-line basis, while interest on the lease liability is calculated using the effective interest method. Lease expense recognized under our finance leases is, therefore, comprised of amortization on the finance lease ROU asset and interest on the finance lease liability. Nature of Leases In support of our operations, we lease certain corporate office space, field offices, compressors, drilling rigs, other production equipment, fleet vehicles and storage space under cancelable and non-cancelable contracts. A more detailed description of our material lease types is included below. Corporate and Field Offices We enter into long-term contracts to lease corporate and field office space in support of company operations. These contracts are generally structured with an initial non-cancelable term of two Compressors We rent compressors from third parties in order to facilitate the downstream movement of our production to market. Our compressor arrangements are typically structured with a non-cancelable primary term of one To the extent that our compressor rental arrangements have a primary term of twelve months or less, we have elected to apply the practical expedient for short-term leases. For those short-term compressor contracts, we do not apply the lease recognition requirements, and we recognize lease payments related to these arrangements in profit or loss on a straight-line basis over the lease term. Drilling Rigs We enter into daywork contracts for drilling rigs with third party service contractors to support the development and exploitation of undeveloped reserves and acreage. Our 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, we typically have 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. We have concluded that our drilling rig arrangements represent short-term operating leases with a lease term that equals the period of time required to complete drilling operations on the contractually specified well or well pad (that is, generally one to a few months from commencement of drilling). We do not include the option to extend the drilling rig contract in the lease term due to the continuously evolving nature of our drilling schedules, which requires significant flexibility in the structure of the term of these arrangements, and the potential volatility in commodity prices in an annual period. We have further elected to apply the practical expedient for short-term leases to our drilling rig leases. Accordingly, we do not apply the lease recognition requirements to our drilling rig contracts, and we recognize lease payments related to these arrangements in capital expenditures on a straight-line basis over the lease term. Other Production Equipment We rent other production equipment, primarily electric submersible pumps, from third party vendors to be used in our production operations. These arrangements are typically structured with a non-cancelable term of 1 to 3 months and often continue thereafter on a month-to-month basis subject to termination by either party with thirty days’ notice. We have concluded that we are not reasonably certain of executing the month-to-month renewal options beyond a twelve month period based on the historical term for which we have used other production equipment, and, therefore, our other equipment agreements represent operating leases with a lease term up to twelve months. We have further elected to apply the practical expedient for short-term leases to our other production equipment contracts. Accordingly, we do not apply the lease recognition requirements to these contracts, and we recognize lease payments related to these arrangements in profit or loss on a straight-line basis over the lease term. Fleet Vehicles |
Fair Values of Financial Instru
Fair Values of Financial Instruments | 12 Months Ended |
Dec. 31, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair Values of Financial Instruments | Fair Values of Financial Instruments The estimated fair values of Legacy’s financial instruments approximate the carrying amounts except as discussed below: Debt. The carrying amount of the revolving long-term debt approximates fair value because Legacy’s current borrowing rate does not materially differ from market rates for similar bank borrowings. Derivatives. See Note 12, "Derivative Financial Instrument" for discussion of process used in estimating the fair value of commodity price and interest rate derivatives. Fair value is defined as the price that would be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value measurements are classified and disclosed in one of the following categories: Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. Legacy considers active markets as those in which transactions for the assets or liabilities occur in sufficient frequency and volume to provide pricing information on an ongoing basis. Level 2: Quoted prices in markets that are not active, or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability. This category includes those derivative instruments that Legacy values using observable market data. Substantially all of these inputs are observable in the marketplace throughout the term of the derivative instrument, can be derived from observable data, or are supported by observable levels at which transactions are executed in the marketplace. Instruments in this category include non-exchange traded derivatives such as over-the-counter commodity price swaps and collars and interest rate swaps as well as long-term incentive plan liabilities calculated using the Black-Scholes model to estimate the fair value as of the measurement date. Level 3: Measured based on prices or valuation models that require inputs that are both significant to the fair value measurement and less observable from objective sources (i.e. supported by little or no market activity). Legacy’s valuation models are primarily industry standard models that consider various inputs including: (a) quoted forward prices for commodities, (b) time value, and (c) current market and contractual prices for the underlying instruments, as well as other relevant economic measures. Level 3 instruments currently are limited to Midland-Cushing crude oil differential swaps. Although Legacy utilizes third party broker quotes to assess the reasonableness of its prices and valuation techniques, Legacy does not have sufficient corroborating evidence to support classifying these assets and liabilities as Level 2. Financial assets and liabilities are classified based on the lowest level of input that is significant to the fair value measurement. Legacy’s assessment of the significance of a particular input to the fair value measurement requires judgment, and may affect the valuation of the fair value of assets and liabilities and their placement within the fair value hierarchy levels. Fair Value on a Recurring Basis The following table sets forth by level within the fair value hierarchy Legacy’s financial assets and liabilities that were accounted for at fair value on a recurring basis as of December 31, 2019 (Successor) and 2018 (Predecessor): December 31, 2019 (Successor) Fair Value Measurements Using Quoted Prices in Significant Other Significant Total Fair Value Gross Amounts Offset in the Consolidated Balance Sheets Net Amounts Presented in the Consolidated Balance Sheets Description (Level 1) (Level 2) (Level 3) (In thousands) Assets: Current Commodity derivatives $ — $ 3,006 $ — $ 3,006 $ (2,438) $ 569 Noncurrent Commodity derivatives — 1,851 — 1,851 (1,851) — Liabilities: Current Commodity derivatives — (12,660) — (12,660) 2,438 (10,223) Noncurrent Commodity derivatives — (5,342) — (5,342) 1,851 (3,491) $ — $ (13,145) $ — $ (13,145) $ — $ (13,145) December 31, 2018 (Predecessor) Fair Value Measurements Using Quoted Prices in Significant Other Significant Total Fair Value Gross Amounts Offset in the Consolidated Balance Sheets Net Amounts Presented in the Consolidated Balance Sheets Description (Level 1) (Level 2) (Level 3) (In thousands) Assets: Current Commodity derivatives $ — $ 69,288 $ — $ 69,288 $ (4,670) $ 64,618 Interest rate derivatives — 2,044 — 2,044 — 2,044 Noncurrent Commodity derivatives — 3,473 — 3,473 (338) 3,135 Interest rate derivatives — — — — — Liabilities: Current Commodity derivatives — (4,670) — (4,670) 4,670 — Interest rate derivatives — — — — — LTIP liability — — — — — Noncurrent Commodity derivatives — (888) — (888) 338 (550) Interest rate derivatives — — — $ — $ 69,247 $ — $ 69,247 $ — $ 69,247 Legacy estimates the fair values of its commodity swaps based on published forward commodity price curves for the underlying commodities as of the date of the estimate for those commodities for which published forward pricing is readily available. For those commodity derivatives for which forward commodity price curves are not readily available, Legacy estimates, with the assistance of third-party pricing experts, the forward curves as of the date of the estimate. Legacy validates the data provided by third parties by understanding the pricing models used, obtaining market values from other pricing sources, analyzing pricing data in certain situations and confirming, where applicable, that those securities trade in active markets. Legacy estimates the option value of puts and calls combined into hedges, including costless collars, three-way collars and enhanced swaps using an option pricing model which takes into account market volatility, market prices, contract parameters and discount rates based on published LIBOR rates and interest swap rates. Due to the lack of an active market for periods beyond one-month from the balance sheet date for Legacy's oil price differential swaps, Legacy has reviewed historical differential prices and known economic influences to estimate a reasonable forward curve of future pricing scenarios based upon these factors. In order to estimate the fair value of its interest rate swaps, Legacy uses a yield curve based on money market rates and interest rate swaps, extrapolates a forecast of future interest rates, estimates each future cash flow, derives discount factors to value the fixed and floating rate cash flows of each swap, and then discounts to present value all known (fixed) and forecasted (floating) swap cash flows. Curve building and discounting techniques used to establish the theoretical market value of interest bearing securities are based on readily available money market rates and interest swap market data. The determination of the fair values above incorporates various factors including the impact of Legacy's non-performance risk and the credit standing of the counterparties involved in Legacy’s derivative contracts. The risk of nonperformance by Legacy’s counterparties is mitigated by the fact that enters into derivative transactions with entities which Legacy's management believes are creditworthy. In addition, Legacy routinely monitors the creditworthiness of its counterparties. As the factors described above are based on significant assumptions made by management, these assumptions are the most sensitive to change. The following table sets forth a reconciliation of changes in the fair value of financial assets and liabilities classified as Level 3 in the fair value hierarchy: Significant Successor Predecessor Period from December 11, 2019 to December 31, Period from January 1, 2019 to December 10, December 31, (In thousands) 2019 2019 2018 2017 Beginning balance $ — $ — $ (5,088) $ 8 Total gains (losses) — — 30,571 (5073) Settlements — — (22,379) (23) Transfers — — (3,104) (a) — Ending balance $ — $ — $ — $ (5,088) Gains (losses) included in earnings relating to derivatives $ — $ — $ — $ (5,088) ____________________ (a) Due to the lack of a historical market, we have historically accounted for our Midland-to-Cushing crude oil differential swaps as Level 3. However, with recent widening differentials, an active market has been created in which quoted prices are readily observable. As such, we determined that the inputs used to value these derivatives classify as Level 2 and transferred the value of the derivatives into Level 2 during 2018. During periods of market disruption, including periods of volatile oil and natural gas prices, rapid credit contraction or illiquidity, it may be difficult to value certain of the Legacy's derivative instruments if trading becomes less frequent and/or market data becomes less observable. There may be certain asset classes that were in active markets with observable data that become illiquid due to changes in the financial environment. In such cases, more derivative instruments may fall to Level 3 and thus require more subjectivity and management judgment. As such, valuations may include inputs and assumptions that are less observable or require greater estimation as well as valuation methods which are more sophisticated or require greater estimation thereby resulting in valuations with less certainty. Further, rapidly changing commodity and unprecedented credit and equity market conditions could materially impact the valuation of derivative instruments as reported within Legacy's consolidated financial statements and the period-to-period changes in value could vary significantly. Decreases in value may have a material adverse effect on Legacy's results of operations or financial condition. Fair Value on a Non-Recurring Basis On the Effective Date, the Company emerged from the Chapter 11 Cases and adopted fresh-start accounting, which resulted in the Company becoming a new entity for financial reporting purposes. Upon the adoption of fresh-start accounting, the Company’s assets and liabilities were recorded at their fair values as of the fresh-start reporting date, December 11, 2019. See Note 2, “Fresh-start Accounting,” for a detailed discussion of the fair value approaches used by the Company. Nonfinancial assets and liabilities measured at fair value on a non-recurring basis include certain nonfinancial assets and liabilities as may be acquired in a business combination, measurements of oil and natural gas property impairments, and the initial recognition of asset retirement obligations, for which fair value is used. These ARO 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, Legacy has designated these measurements as Level 3. A reconciliation of the beginning and ending balances of Legacy’s ARO is presented in Note 14, "Asset Retirement Obligation." |
Debt
Debt | 12 Months Ended |
Dec. 31, 2019 | |
Debt Disclosure [Abstract] | |
Debt | Debt Debt consists of the following at December 31, 2019 (Successor) and the year ended December 31, 2018 (Predecessor): Successor Predecessor Year ended December 31, Year ended December 31, (In thousands) 2019 2018 Current debt Credit Facility due 2019 $ — $ 541,000 Second Lien Term Loans due 2020 — 338,626 Unamortized debt issuance costs — (17,332) Unamortized discount on Second Lien Term Loans — (5,648) Total current debt, net $ — $ 856,646 Long-term debt Successor Revolving Credit Facility $ 378,000 $ — 8% Senior Notes due 2020 — 208,885 6.625% Senior Notes due 2021 — 131,279 8% Convertible Senior Notes due 2023 — 128,103 $ 378,000 $ 468,267 Unamortized discount on Second Lien Term Loans and Senior Notes — (31,517) Unamortized debt issuance costs (8,451) (3,827) Total long-term debt, net $ 369,549 $ 432,923 Total debt, net $ 369,549 $ 1,289,569 Successor Credit Facility On the Effective Date, Legacy entered into a credit agreement (the “Credit Agreement”) among Legacy, as borrower, the lenders from time to time party thereto, and Wells Fargo Bank, National Association, as the administrative agent, the collateral agent and the issuing bank. Pursuant to the Credit Agreement, the lenders party thereto agreed to provide a new reserves-based revolving credit facility (the “Successor Revolving Credit Facility”) with initial aggregate commitments in the amount of $1.5 billion, subject to a borrowing base. The initial borrowing base under the Credit Agreement is $460 million. The stated maturity date under the Credit Agreement is December 11, 2023. The loans under the Successor Revolving Credit Facility shall bear interest based on borrowing base utilization percentage at a rate per annum equal to the alternate base rate plus a margin ranging from 1.25% to 2.25% for alternate base rate loans or the adjusted LIBOR rate plus a margin ranging from 2.25% to 3.25% for LIBOR loans. Unused commitments under the Credit Agreement will accrue a commitment fee at a rate per annum of 0.50%. All interest and commitment fees are payable quarterly in arrears. Legacy may elect, at its option, to prepay any loan under the Successor Revolving Credit Facility without premium or penalty (except with respect to any break funding payments which may be payable pursuant to the Credit Agreement). Legacy may be required to make mandatory prepayments of the loans under the Successor Revolving Credit Facility in connection with certain borrowing base deficiencies. Additionally, if Legacy has outstanding borrowings, undrawn letters of credit and reimbursement obligations in respect of letters of credit issued under the Successor Revolving Credit Facility in excess of the aggregate revolving commitments, Legacy may be required to make mandatory prepayments. Legacy’s obligations under the Successor Revolving Credit Facility are guaranteed by all of Legacy’s material domestic subsidiaries (the “Guarantors”) and secured by substantially all of the assets of Legacy and the Guarantors, including at least 95% of the net present value of Legacy’s and the Guarantors’ proved oil and gas properties, in each case subject to certain exceptions. The Credit Agreement contains customary representations and warranties and also customary affirmative and negative covenants, in each case for credit facilities of this nature, including restrictions on the incurrence of indebtedness, liens, fundamental changes, asset sales, investments, dividends, redemptions, repayments of other debt and hedge agreements. Additionally, Legacy is required as of the last day of any fiscal quarter, commencing with the fiscal quarter ending March 31, 2020, to maintain (a) a maximum total net leverage ratio of 3.50 to 1.00 and (b) a minimum current ratio of 1.00 of 1.00. Additionally, the Credit Agreement contains customary events of default and remedies for credit facilities of this nature, including non-payment, breaches of representations and warranties, non-compliance with covenants or other agreements, bankruptcy, ERISA, failure of the loan documents to be in full force and effect, judgments and change of control. As of December 31, 2019 (Successor), Legacy was in compliance with all financial and other covenants of the Credit Agreement. Predecessor DIP Credit Agreement On June 21, 2019, in connection with the Chapter 11 Cases, Legacy LP entered into the DIP Credit Agreement. The DIP Credit Agreement provided for a senior secured priming superpriority debtor-in-possession revolving loan credit facility in an aggregate principal amount of up to $350 million, consisting of (i) a new money revolving loan facility in an aggregate amount of up to $100 million (the “New Money Facility”), and (ii) a refinancing term loan in the amount of $250 million (the “Refinancing Facility”). Borrowings under the (i) New Money Facility beared interest, at the option of the Company, at a rate per annum equal to the alternate base rate (the “ABR”) plus 4.25% or LIBOR plus 5.25% and (ii) the Refinancing Facility beared interest at a rate per annum equal to the ABR plus 3.50%. The Company was required to pay an unused commitment fee equal to 1.00% per annum to the lenders under the New Money Facility in respect of the unused commitments thereunder. Upon the occurrence of the Effective Date, the DIP Credit Agreement was terminated in accordance with the Plan. See Note 1 for more information regarding the termination of the DIP Credit Agreement. Predecessor Credit Facility On April 1, 2014, Legacy LP entered into a five years $1.5 billion Prepetition RBL Credit Agreement, which provided a reserves-based credit facility (the "Predecessor Credit Facility"). On March 21, 2019, the maturity of the Prepetition RBL Credit Agreement was extended from April 1, 2019 to May 31, 2019. Legacy's obligations under the Prepetition RBL Credit Agreement were secured by mortgages on over 95% of the total value of its oil and natural gas properties as well as a pledge of all of its ownership interests in its operating subsidiaries and Legacy's ownership interests in the General Partner. Concurrently with the Corporate Reorganization, the General Partner and Legacy Inc. provided guarantees of Legacy LP's obligations under the Prepetition RBL Credit Agreement. The borrowing base was subject to semi-annual redeterminations on or about April 1 and October 1 of each year, and the Prepetition RBL Credit Agreement matured on May 31, 2019. Upon the occurrence of the Effective Date, the Prepetition RBL Credit Agreement was terminated in accordance with the Plan. See Note 1 for more information regarding the termination of the Prepetition RBL Credit Agreement. Predecessor Second Lien Term Loans On October 25, 2016, Legacy entered into the Term Loan Credit Agreement, initially providing for term loans up to an aggregate principal amount of $300 million (the “Second Lien Term Loans”). The Term Loan Credit Agreement was scheduled to mature on August 31, 2021; provided that, if on July 1, 2020, Legacy had greater than or equal to a face amount of $15.0 million of Senior Notes that were outstanding on the date the Term Loan Credit Agreement was entered into or any other senior notes with a maturity date that is earlier than August 31, 2021, the Term Loan Credit Agreement was to mature on August 1, 2020. The Second Lien Term Loans were secured on a second lien priority basis by the same collateral that secured the Predecessor Credit Agreement and were unconditionally guaranteed on a joint and several basis by the same wholly owned subsidiaries of Legacy that were guarantors under the Credit Agreement. In addition, upon consummation of the Corporate Reorganization, the General Partner and Legacy Inc. became guarantors. On December 31, 2017, the Term Loan Credit Agreement was amended, which, among other things, increased the maximum amount available for borrowing under the Second Lien Term Loans to $400 million. Upon the occurrence of the Effective Date, the Term Loan Credit Agreement was terminated in accordance with the Plan. See Note 1 for more information regarding the termination of the Term Loan Credit Agreement. Predecessor 8% Senior Notes Due 2020 On December 4, 2012, Legacy and its 100% owned subsidiary Legacy Reserves Finance Corporation completed a private placement offering to eligible purchasers of an aggregate principal amount of $300 million of Legacy's 8% Senior Notes due 2020 (the "2020 Senior Notes" and, together with the 2021 Senior Notes, the “Senior Notes”), which were subsequently registered through a public exchange offer that closed on January 8, 2014. The 2020 Senior Notes were issued at 97.848% of par. Interest was payable on June 1 and December 1 of each year. Legacy and Legacy Reserves Finance Corporation's obligations under the 2020 Senior Notes were guaranteed by its 100% owned subsidiaries. In connection with the exchange of approximately $21.0 million aggregate principal amount of 2020 Senior Notes for the same aggregate principal of the 2023 Convertible Notes and the issuance of 105,020 shares of Common Stock in September 2018, Legacy recognized a $1.4 million gain on extinguishment of debt, which consisted of the difference between (1) the face amount of the exchanged 2020 Senior Notes repurchased net of the unamortized portion of both the original issuer's discount and issuance costs and (2) the fair value of the new 2023 Convertible Notes. During the year ended December 31, 2018 (Predecessor), Legacy exchanged 1,000,000 shares of Common Stock for $3.1 million of face amount of its outstanding 2020 Senior Notes. Legacy treated the exchange as an extinguishment of debt. Accordingly, Legacy recognized a gain for the difference between (1) the face amount of the 2020 Senior Notes repurchased net of the unamortized portion of both the original issuer's discount and issuance costs and (2) the fair value of the units issued in the exchange based on the closing price on the date of exchange. Upon the occurrence of the Effective Date, the 2020 Senior Notes were terminated in accordance with the Plan. See Note 1 for more information regarding the termination of the 2020 Senior Notes. Predecessor 6.625% Senior Notes Due 2021 On May 28, 2013, Legacy and its 100% owned subsidiary Legacy Reserves Finance Corporation completed a private placement offering to eligible purchasers of an aggregate principal amount of $250.0 million of Legacy's 6.625% Senior Notes due 2021 (the "2021 Senior Notes"), which were subsequently registered through a public exchange offer that closed on March 18, 2014. The 2021 Senior Notes were issued at 98.405% of par. Interest was payable on June 1 and December 1 of each year. On May 13, 2014, Legacy and its 100% owned subsidiary Legacy Reserves Finance Corporation completed a private placement offering to eligible purchasers of an aggregate principal amount of an additional $300.0 million of the 6.625% 2021 Senior Notes. These 2021 Senior Notes were issued at 99% of par. The terms of the 2021 Senior Notes, including details related to Legacy's guarantors, are substantially identical to the terms of the 2020 Senior Notes with the exception of the maturity date, interest rate and redemption provisions Legacy and Legacy Reserves Finance Corporation's obligations under the 2021 Senior Notes were guaranteed by the same parties and on the same terms as Legacy's 2020 Senior Notes discussed above. For the period of January 1, 2019 through December 10, 2019 (Predecessor), $1.75 million of 2021 Senior Notes were exchanged for 593,367 shares of common stock. Legacy treated the exchange as an extinguishment of debt. Accordingly, Legacy recognized a gain for the difference between (1) the face amount of the 2021 Senior Notes repurchased net of the unamortized portion of both the original issuer's discount and issuance costs and (2) the fair value of shares issued in the exchange based on the closing price on the date of exchange. On September 20, 2018, in connection with the exchange of approximately $109.0 million aggregate principal amount of 2021 Senior Notes for the same aggregate principal of the 2023 Convertible Notes, Legacy recognized a $10.7 million gain on extinguishment of debt, which consisted of the difference between (1) the face amount of the exchanged 2021 Senior Notes repurchased net of the unamortized portion of both the original issuer's discount and issuance costs and (2) the fair value of the new 2023 Convertible Notes. During the year ended December 31, 2018 (Predecessor), Legacy exchanged 2,000,000 shares of Common Stock for $5.3 million of face amount of its outstanding 2020 Senior Notes. Legacy treated the exchange as an extinguishment of debt. Accordingly, Legacy recognized a gain for the difference between (1) the face amount of the 2020 Senior Notes repurchased net of the unamortized portion of both the original issuer's discount and issuance costs and (2) the fair value of the units issued in the exchange based on the closing price on the date of exchange. On December 31, 2017 (Predecessor), Legacy entered into an agreement to repurchase a face amount of $187.0 million of its 2021 Senior Notes from certain holders in a single transaction. The transaction was funded on January 5, 2018 and was therefore recognized in 2018. Legacy treated this repurchase as an extinguishment of debt. Accordingly, Legacy recognized a gain for the difference between (1) the face amount of the 2021 Senior Notes repurchased net of the unamortized portion of both the original issuer's discount and issuance costs and (2) the repurchase price. Upon the occurrence of the Effective Date, the 2021 Senior Notes were terminated in accordance with the Plan. See Note 1 for more information regarding the termination of the 2021 Senior Notes. Predecessor 8% Convertible Senior Notes Due 2023 (the "2023 Convertible Notes") On September 20, 2018, Legacy and its 100% owned subsidiary Legacy Reserves Finance Corporation (together, the “Issuers”), completed private exchanges with certain holders of senior notes, pursuant to which the Issuers exchanged (i) $21.0 million aggregate principal amount of 2020 Senior Notes for $21.0 million aggregate principal amount of 2023 Convertible Notes and 105,020 shares of common stock and (ii) $109.0 million aggregate principal amount of 2021 Senior Notes for $109.0 million aggregate principal amount of 2023 Convertible Notes. The 2023 Convertible Notes were issued pursuant to an Indenture, dated as of September 20, 2018 (the “2023 Convertible Note Indenture”). Interest was payable on June 1 and December 1 of each year. Upon issuance, the Company separately accounted for the liability and equity components in accordance with Accounting Standards Codification 470-20. The initial fair value of the 2023 Convertible Notes in its entirety (inclusive of the equity component related to the conversion option) was estimated using observable inputs such as trades that occurred on the day of the transaction. The liability component was recorded at the estimated fair value of a similar debt instrument without the conversion feature. The difference between the aggregate principal amount of the 2023 Convertible Notes and the fair value of the liability component was recorded as a debt discount and is being amortized to interest expense over the term of the notes using the effective interest method. The fair value of the liability component of the 2023 Convertible Notes was estimated at $101.0 million, resulting in a debt discount of $29.0 million The equity component, representing the value of the conversion option, was computed by deducting the fair value of the liability component from the initial fair value of the 2023 Convertible Notes. The equity component was recorded in additional paid-in capital within stockholders’ equity. The 2023 Convertible Notes were to mature September 20, 2023, unless earlier repurchased or redeemed by the Issuers or converted. The 2023 Convertible Notes were subject to redemption for cash, in whole or in part, at the Issuers’ option at a redemption price equal to 100% of the 2023 Convertible Notes to be redeemed, plus any accrued and unpaid interest. In addition, the Issuers would have been required to make an offer to holders of the 2023 Convertible Notes upon a change of control at a price equal to 101%, plus any accrued and unpaid interest, and an offer to holders of the 2023 Convertible Notes upon consummation by the Issuers or any restricted subsidiaries of certain asset sales at a price equal to 100%, plus any accrued and unpaid interest. The 2023 Convertible Notes were convertible into shares of common stock at an initial conversion rate of 166.6667 shares per $1,000 principal amount of 2023 Convertible Notes, which is equal to an initial conversion price of $6.00 per share of common stock (the "Conversion Price") The 2023 Convertible Notes were convertible, at the option of the holders, into shares of common stock at any time from the date of issuance up until the close of business on the earlier of (i) the business day prior to the date of a mandatory conversion notice, (ii) with respect to a 2023 Convertible Note called for redemption, the business day immediately preceding the redemption date or (iii) the business day immediately preceding the maturity date. In addition, if a holder exercised its right to convert on or prior to September 19, 2019, such holder received an early conversion payment, in cash, per $1,000 principal amount as follows: Early Conversion Date Early Conversion Payment December 1, 2018 through May 31, 2019 .............................................................................................................. $64.22 June 1, 2019 through September 19, 2019 .............................................................................................................. $24.22 The 2023 Convertible Notes were guaranteed by Legacy Inc., the General Partner, Legacy Reserves Operating GP LLC, Legacy Reserves Operating LP, Legacy Reserves Services LLC, Legacy Reserves Energy Services LLC, Dew Gathering LLC and Pinnacle Gas Treating LLC. The terms of the 2023 Convertible Notes, including the guarantors, were substantially identical to the terms of the 2020 Senior Notes and 2021 Senior Notes with the exception of the interest rate, conversion and redemption provisions noted above. During the year ended December 31, 2018 (Predecessor), certain holders of the 2023 Convertible Notes exercised their option to convert $1.9 million of face amount of 2023 Convertible Notes in exchange for 316,828 shares of our common stock. For the period of January 1, 2019 through December 10, 2019 (Predecessor), certain holders of the 2023 Convertible Notes exercised their option to convert $6.5 million of 2023 Convertible Notes in exchange for 2.4 million shares of common stock and $14.1 million of face amount of 2023 Convertible Notes in exchange for 2.3 million shares of common stock. Upon the occurrence of the Effective Date, the 2023 Convertible Notes were terminated in accordance with the Plan. See Note 1, "Emergence from Voluntary Reorganization under Chapter 11 of the Bankruptcy Code" for more information regarding the termination of the 2023 Convertible Notes. |
Revenues from Contracts with Cu
Revenues from Contracts with Customers | 12 Months Ended |
Dec. 31, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Revenue from Contracts with Customers | Revenue from Contracts with Customers Oil, NGL and natural gas sales revenues are generally recognized at the point in time that control of the product is transferred to the customer and collectability is reasonably assured. This generally occurs when oil or natural gas has been delivered to a pipeline or a tank lifting has occurred. A more detailed summary of the sale of each product type is included below. Oil Sales Legacy's oil sales contracts are generally structured such that Legacy sells its oil production to the purchaser at a contractually specified delivery point at or near the wellhead. The crude oil production is priced on the delivery date based upon prevailing index prices less certain deductions related to oil quality and physical location. Legacy recognizes revenue when control transfers to the purchaser upon delivery at the net price received from purchaser. NGL and Natural Gas Sales Under Legacy's gas processing contracts, Legacy delivers wet gas to a midstream processing entity at the wellhead or the inlet of the midstream processing entity’s system. The midstream processing entity processes the natural gas and remits proceeds to Legacy for the resulting sales of NGLs and residue gas. In these scenarios, Legacy evaluates whether it is the principal or the agent in the transaction. In virtually all of Legacy's gas processing contracts, Legacy has concluded that it is the agent, and the midstream processing entity is Legacy's customer. Accordingly, Legacy recognizes revenue upon delivery based on the net amount of the proceeds received from the midstream processing entity. Proceeds are generally tied to the prevailing index prices for residue gas and NGLs less deductions for gathering, processing, transportation and other expenses. Under Legacy's dry gas sales that do not require processing, Legacy sells its natural gas production to third party purchasers at a contractually specified delivery point at or near the wellhead. Pricing provisions are tied to a market index, with certain deductions based on, among other factors, whether a well delivers to a gathering or transmission line, quality of natural gas, and prevailing supply and demand conditions, so that the price of the natural gas fluctuates to remain competitive with other available natural gas supplies. Legacy recognizes revenue upon delivery of the natural gas to third party purchasers based on the relevant index price net of deductions. Imbalances Natural gas imbalances occur when Legacy sells more or less than its entitled ownership percentage of total natural gas production. Any amount received in excess of its share is treated as a liability. If Legacy receives less than its entitled share, the underproduction is recorded as a receivable. Legacy did not have any significant natural gas imbalance positions for the period December 11, 2019 through December 31, 2019 (Successor), the period of January 1, 2019 through December 10, 2019 (Predecessor), the year ended December 31, 2018 (Predecessor), and the year ended December 31, 2017 (Predecessor). Disaggregation of Revenue Legacy has identified three material revenue streams in its business: oil sales, NGL sales, and natural gas sales. Revenue attributable to each of Legacy's identified revenue streams is disaggregated in the table below. Successor Predecessor Period from December 11, 2019 to December 31, Period from January 1, 2019 to December 10, (In thousands) 2019 2019 Revenues: Oil sales $ 23,232 $ 300,905 Natural gas liquids (NGL) sales 916 14,082 Natural gas sales 6,016 101,488 Total revenues $ 30,164 $ 416,475 Significant Judgments Principal versus agent Legacy 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 Legacy's behalf, such as Legacy's percentage-of-proceeds and gas purchase contracts. These types of transactions require judgment to determine whether Legacy is the principal or the agent in the contract and, as a result, whether revenues are recorded gross or net. Transaction price allocated to remaining performance obligations A significant number of Legacy's product sales are short-term in nature with a contract term of one year or less. For those contracts, Legacy has utilized the practical expedient in ASC 606 that exempts it from disclosure of the transaction price allocated to remaining performance obligations if the performance obligation is part of a contract that has an original expected duration of one year or less. For Legacy's product sales that have a contract term greater than one year, Legacy has utilized the practical expedient in ASC 606 that states that it is not required to disclose the transaction price allocated to remaining performance obligations if the variable consideration is allocated entirely to a wholly unsatisfied performance obligation. Under these sales contracts, each unit of product represents a separate performance obligation; therefore future volumes are wholly unsatisfied and disclosure of the transaction price allocated to remaining performance obligations is not required. Contract balances Under Legacy's product sales contracts, it is entitled to payment from purchasers once its performance obligations have been satisfied upon delivery of the product, at which point payment is unconditional and invoiced amounts are recorded as “Accounts receivable - oil and natural gas” in its consolidated balance sheet. To the extent actual volumes and prices of oil and natural gas are unavailable for a given reporting period because of timing or information not received from third parties, the expected sales volumes and prices for those properties are estimated and also recorded as “Accounts receivable - oil and natural gas” in the accompanying consolidated balance sheets. In this scenario, payment is also unconditional, as Legacy has satisfied its performance obligations through delivery of the relevant product. As a result, Legacy has concluded that its product sales do not give rise to contract assets or liabilities under ASC 606. Prior-period performance obligations Legacy records revenue in the month production is delivered to the purchaser. However, settlement statements for certain oil, natural gas and NGL sales may not be received for 30 to 60 days after the date production is delivered, and as a result, Legacy is required to estimate the amount of production that was delivered to the midstream purchaser and the price that will be received for the sale of the product. Additionally, to the extent actual volumes and prices of oil are unavailable for a given reporting period because of timing or information not received from third party purchasers, the expected sales volumes and prices for those barrels of oil are also estimated. |
Asset Acquisitions and Disposit
Asset Acquisitions and Dispositions | 12 Months Ended |
Dec. 31, 2019 | |
Business Combinations [Abstract] | |
Asset Acquisitions and Dispositions | Asset Acquisitions and DispositionsOn August 1, 2017, Legacy made a payment in the amount of $141 million (the “Acceleration Payment”) in connection with its First Amended and Restated Development Agreement (the “Restated Agreement”) with Jupiter JV, LP (“Jupiter”). The Acceleration Payment caused the reversion to Legacy of additional working interests in all wells and associated personal property and infrastructure (collectively, the “Wells”) and all undeveloped assets subject to the Restated Agreement. The transaction was accounted for as an asset acquisition. Therefore, the acquired interests were recorded based upon the cash consideration paid, with all value assigned to proved oil and natural gas properties.During the year ended December 31, 2018 (Predecessor), Legacy divested certain individually immaterial oil and natural gas assets for net cash proceeds of $55.0 million. These dispositions were treated as asset sales and resulted in a gain on disposition of assets of $23.8 million during the period. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2019 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party TransactionsBlue Quail Energy Services, LLC (“Blue Quail”), a company specializing in water transfer services, is an affiliate of Moriah Energy Services LLC, an entity which former Legacy director Cary D. Brown is a principal. Legacy has contracted with Blue Quail to provide water transfer services and paid $18,157, $37,008, $169,949 and $9,758 for the period of December 11, 2019 through December 31, 2019 (Successor), the period of January 1, 2019 through December 10, 2019 (Predecessor), the year ended December 31, 2018 (Predecessor) and the year ended December 31, 2017 (Predecessor), respectively, to Blue Quail for such services. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies From time to time Legacy is a party to various legal proceedings arising in the ordinary course of business. While the outcome of lawsuits cannot be predicted with certainty, Legacy is not currently a party to any proceeding that it believes could have a potential material adverse effect on its financial condition, results of operations or cash flows. Legacy is subject to numerous laws and regulations governing the discharge of materials into the environment or otherwise relating to environmental protection. To the extent laws are enacted or other governmental action is taken that restricts drilling or imposes environmental protection requirements that result in increased costs to the oil and natural gas industry in general, the business and prospects of Legacy could be adversely affected. Legacy has employment agreements with its officers. The employment agreements with its officers specify that if the officer is terminated by Legacy for other than cause or following a change in control, the officer shall receive severance pay ranging from 12 to 36 months' salary plus bonus and COBRA benefits, respectively. |
Business and Credit Concentrati
Business and Credit Concentrations | 12 Months Ended |
Dec. 31, 2019 | |
Risks and Uncertainties [Abstract] | |
Business and Credit Concentrations | Business and Credit Concentrations Cash Legacy maintains its cash in bank deposit accounts, which, at times, may exceed federally insured amounts. Legacy has not experienced any losses in such accounts. Legacy believes it is not exposed to any significant credit risk on its cash. Revenue and Accounts Receivable Substantially all of Legacy’s accounts receivable result from oil and natural gas sales or joint interest billings to third parties in the oil and natural gas industry. This concentration of customers and joint interest owners may impact Legacy’s overall credit risk in that these entities may be similarly affected by changes in economic and other conditions. Historically, Legacy has not experienced significant credit losses on such receivables. No bad debt expense was recorded for the period of December 11, 2019 through December 31, 2019 (Successor), the period of January 1, 2019 through December 10, 2019 (Predecessor), the year ended December 31, 2018 (Predecessor) and the year ended December 31, 2017 (Predecessor). Legacy cannot ensure that such losses will not be realized in the future. A listing of oil and natural gas purchasers exceeding 10% of Legacy’s sales is presented in Note 13, "Sales to Major Customers". Commodity Derivatives Due to the volatility of oil and natural gas prices, Legacy periodically enters into price-risk management transactions (e.g., swaps, collars and enhanced swaps) for a portion of its oil and natural gas production to achieve a more predictable cash flow, as well as to reduce exposure from price fluctuations. Legacy values these transactions at fair value on a recurring basis (Note 12, "Derivative Financial Instrument"). As of December 31, 2019 (Successor), Legacy’s commodity derivative transactions have a fair value unfavorable to the Company of $(13.1) million, collectively. Legacy enters into commodity derivative transactions with entities which Legacy's management believes are creditworthy. In addition, Legacy reviews and assesses the creditworthiness of these institutions on a routine basis. For the period of December 11, 2019 through December 31, 2019 (Successor), the period of January 1, 2019 through December 10, 2019 (Predecessor), the years ended December 31, 2018 (Predecessor), and 2017 (Predecessor), Legacy sold oil, NGL and natural gas production representing 10% or more of total revenues to the purchasers as detailed in the table below. Successor Predecessor Period from Period from December 11, 2019 January 1, 2019 to December 31, to December 10, Year Ended December 31, 2019 2019 2018 2017 Plains Marketing, LP 15% 19% 20% 10% Trafigura 21% 19% 9% 1% Rio Energy International Inc (1) —% 2% 13% 9% (1) Less than 1% for the period December 11, 2019 to December 31, 2019 (Successor). |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Values of Financial Instruments The estimated fair values of Legacy’s financial instruments approximate the carrying amounts except as discussed below: Debt. The carrying amount of the revolving long-term debt approximates fair value because Legacy’s current borrowing rate does not materially differ from market rates for similar bank borrowings. Derivatives. See Note 12, "Derivative Financial Instrument" for discussion of process used in estimating the fair value of commodity price and interest rate derivatives. Fair value is defined as the price that would be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value measurements are classified and disclosed in one of the following categories: Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. Legacy considers active markets as those in which transactions for the assets or liabilities occur in sufficient frequency and volume to provide pricing information on an ongoing basis. Level 2: Quoted prices in markets that are not active, or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability. This category includes those derivative instruments that Legacy values using observable market data. Substantially all of these inputs are observable in the marketplace throughout the term of the derivative instrument, can be derived from observable data, or are supported by observable levels at which transactions are executed in the marketplace. Instruments in this category include non-exchange traded derivatives such as over-the-counter commodity price swaps and collars and interest rate swaps as well as long-term incentive plan liabilities calculated using the Black-Scholes model to estimate the fair value as of the measurement date. Level 3: Measured based on prices or valuation models that require inputs that are both significant to the fair value measurement and less observable from objective sources (i.e. supported by little or no market activity). Legacy’s valuation models are primarily industry standard models that consider various inputs including: (a) quoted forward prices for commodities, (b) time value, and (c) current market and contractual prices for the underlying instruments, as well as other relevant economic measures. Level 3 instruments currently are limited to Midland-Cushing crude oil differential swaps. Although Legacy utilizes third party broker quotes to assess the reasonableness of its prices and valuation techniques, Legacy does not have sufficient corroborating evidence to support classifying these assets and liabilities as Level 2. Financial assets and liabilities are classified based on the lowest level of input that is significant to the fair value measurement. Legacy’s assessment of the significance of a particular input to the fair value measurement requires judgment, and may affect the valuation of the fair value of assets and liabilities and their placement within the fair value hierarchy levels. Fair Value on a Recurring Basis The following table sets forth by level within the fair value hierarchy Legacy’s financial assets and liabilities that were accounted for at fair value on a recurring basis as of December 31, 2019 (Successor) and 2018 (Predecessor): December 31, 2019 (Successor) Fair Value Measurements Using Quoted Prices in Significant Other Significant Total Fair Value Gross Amounts Offset in the Consolidated Balance Sheets Net Amounts Presented in the Consolidated Balance Sheets Description (Level 1) (Level 2) (Level 3) (In thousands) Assets: Current Commodity derivatives $ — $ 3,006 $ — $ 3,006 $ (2,438) $ 569 Noncurrent Commodity derivatives — 1,851 — 1,851 (1,851) — Liabilities: Current Commodity derivatives — (12,660) — (12,660) 2,438 (10,223) Noncurrent Commodity derivatives — (5,342) — (5,342) 1,851 (3,491) $ — $ (13,145) $ — $ (13,145) $ — $ (13,145) December 31, 2018 (Predecessor) Fair Value Measurements Using Quoted Prices in Significant Other Significant Total Fair Value Gross Amounts Offset in the Consolidated Balance Sheets Net Amounts Presented in the Consolidated Balance Sheets Description (Level 1) (Level 2) (Level 3) (In thousands) Assets: Current Commodity derivatives $ — $ 69,288 $ — $ 69,288 $ (4,670) $ 64,618 Interest rate derivatives — 2,044 — 2,044 — 2,044 Noncurrent Commodity derivatives — 3,473 — 3,473 (338) 3,135 Interest rate derivatives — — — — — Liabilities: Current Commodity derivatives — (4,670) — (4,670) 4,670 — Interest rate derivatives — — — — — LTIP liability — — — — — Noncurrent Commodity derivatives — (888) — (888) 338 (550) Interest rate derivatives — — — $ — $ 69,247 $ — $ 69,247 $ — $ 69,247 Legacy estimates the fair values of its commodity swaps based on published forward commodity price curves for the underlying commodities as of the date of the estimate for those commodities for which published forward pricing is readily available. For those commodity derivatives for which forward commodity price curves are not readily available, Legacy estimates, with the assistance of third-party pricing experts, the forward curves as of the date of the estimate. Legacy validates the data provided by third parties by understanding the pricing models used, obtaining market values from other pricing sources, analyzing pricing data in certain situations and confirming, where applicable, that those securities trade in active markets. Legacy estimates the option value of puts and calls combined into hedges, including costless collars, three-way collars and enhanced swaps using an option pricing model which takes into account market volatility, market prices, contract parameters and discount rates based on published LIBOR rates and interest swap rates. Due to the lack of an active market for periods beyond one-month from the balance sheet date for Legacy's oil price differential swaps, Legacy has reviewed historical differential prices and known economic influences to estimate a reasonable forward curve of future pricing scenarios based upon these factors. In order to estimate the fair value of its interest rate swaps, Legacy uses a yield curve based on money market rates and interest rate swaps, extrapolates a forecast of future interest rates, estimates each future cash flow, derives discount factors to value the fixed and floating rate cash flows of each swap, and then discounts to present value all known (fixed) and forecasted (floating) swap cash flows. Curve building and discounting techniques used to establish the theoretical market value of interest bearing securities are based on readily available money market rates and interest swap market data. The determination of the fair values above incorporates various factors including the impact of Legacy's non-performance risk and the credit standing of the counterparties involved in Legacy’s derivative contracts. The risk of nonperformance by Legacy’s counterparties is mitigated by the fact that enters into derivative transactions with entities which Legacy's management believes are creditworthy. In addition, Legacy routinely monitors the creditworthiness of its counterparties. As the factors described above are based on significant assumptions made by management, these assumptions are the most sensitive to change. The following table sets forth a reconciliation of changes in the fair value of financial assets and liabilities classified as Level 3 in the fair value hierarchy: Significant Successor Predecessor Period from December 11, 2019 to December 31, Period from January 1, 2019 to December 10, December 31, (In thousands) 2019 2019 2018 2017 Beginning balance $ — $ — $ (5,088) $ 8 Total gains (losses) — — 30,571 (5073) Settlements — — (22,379) (23) Transfers — — (3,104) (a) — Ending balance $ — $ — $ — $ (5,088) Gains (losses) included in earnings relating to derivatives $ — $ — $ — $ (5,088) ____________________ (a) Due to the lack of a historical market, we have historically accounted for our Midland-to-Cushing crude oil differential swaps as Level 3. However, with recent widening differentials, an active market has been created in which quoted prices are readily observable. As such, we determined that the inputs used to value these derivatives classify as Level 2 and transferred the value of the derivatives into Level 2 during 2018. During periods of market disruption, including periods of volatile oil and natural gas prices, rapid credit contraction or illiquidity, it may be difficult to value certain of the Legacy's derivative instruments if trading becomes less frequent and/or market data becomes less observable. There may be certain asset classes that were in active markets with observable data that become illiquid due to changes in the financial environment. In such cases, more derivative instruments may fall to Level 3 and thus require more subjectivity and management judgment. As such, valuations may include inputs and assumptions that are less observable or require greater estimation as well as valuation methods which are more sophisticated or require greater estimation thereby resulting in valuations with less certainty. Further, rapidly changing commodity and unprecedented credit and equity market conditions could materially impact the valuation of derivative instruments as reported within Legacy's consolidated financial statements and the period-to-period changes in value could vary significantly. Decreases in value may have a material adverse effect on Legacy's results of operations or financial condition. Fair Value on a Non-Recurring Basis On the Effective Date, the Company emerged from the Chapter 11 Cases and adopted fresh-start accounting, which resulted in the Company becoming a new entity for financial reporting purposes. Upon the adoption of fresh-start accounting, the Company’s assets and liabilities were recorded at their fair values as of the fresh-start reporting date, December 11, 2019. See Note 2, “Fresh-start Accounting,” for a detailed discussion of the fair value approaches used by the Company. Nonfinancial assets and liabilities measured at fair value on a non-recurring basis include certain nonfinancial assets and liabilities as may be acquired in a business combination, measurements of oil and natural gas property impairments, and the initial recognition of asset retirement obligations, for which fair value is used. These ARO 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, Legacy has designated these measurements as Level 3. A reconciliation of the beginning and ending balances of Legacy’s ARO is presented in Note 14, "Asset Retirement Obligation." |
Derivative Financial Instrument
Derivative Financial Instruments | 12 Months Ended |
Dec. 31, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Financial Instruments | Derivative Financial Instruments Commodity derivative transactions Due to the volatility of oil and natural gas prices, Legacy periodically enters into price-risk management transactions (e.g., swaps and enhanced swaps) for a portion of its oil and natural gas production to achieve a more predictable cash flow, as well as to reduce exposure from price fluctuations. While the use of these arrangements limits Legacy’s ability to benefit from increases in the prices of oil and natural gas, it also reduces Legacy’s potential exposure to adverse price movements. Legacy’s arrangements, to the extent it enters into any, apply to only a portion of its production, provide only partial price protection against declines in oil and natural gas prices and limit Legacy’s potential gains from future increases in prices. None of these instruments are used for trading or speculative purposes. These derivative instruments are intended to mitigate a portion of Legacy’s price-risk and may be considered hedges for economic purposes, but Legacy has chosen not to designate them as cash flow hedges for accounting purposes. Therefore, all derivative instruments are recorded on the balance sheet at fair value with changes in fair value being recorded in current period earnings. By using derivative instruments to mitigate exposures to changes in commodity prices, Legacy exposes itself to credit risk and market risk. Credit risk is the failure of the counterparty to perform under the terms of the derivative contract. When the fair value of a derivative contract is positive, the counterparty owes Legacy, which creates credit risk. Legacy minimizes the credit or repayment risk in derivative instruments by entering into transactions with high-quality counterparties. The following table sets forth a reconciliation of the changes in fair value of Legacy's commodity derivatives for the period of December 11, 2019 through December 31, 2019 (Successor), the period of January 1, 2019 through December 10, 2019 (Predecessor), for the years ended December 31, 2018 (Predecessor), and 2017 (Predecessor). Successor Predecessor Period from December 11, 2019 to December 31, Period from January 1, 2019 to December 10, December 31, 2019 2019 2018 2017 (In thousands) Beginning fair value of commodity derivatives $ (6,776) $ 67,205 $ 6,318 $ 12,698 Total gain (loss) crude oil derivatives (7,477) (48,146) 54,380 (15,325) Total gain (loss) natural gas derivatives 1,185 (2,148) (5,208) 33,101 Crude oil derivative cash settlements paid (received) (67) (8,773) 16,845 (11,840) Natural gas derivative cash settlements received (9) (14,914) (5,130) (12,316) Ending fair value of commodity derivatives $ (13,144) $ (6,776) $ 67,205 $ 6,318 As of December 31, 2019, Legacy had the following NYMEX WTI crude oil swaps paying floating prices and receiving fixed prices for a portion of its future oil production as indicated below: Calendar Year Volumes (Bbls) Average Price per Bbl Price Range per Bbl 2020 3,660,000 $55.62 $54.10 - $56.00 2021 2,555,000 $52.80 $52.40 - $53.22 As of December 31, 2019, Legacy had the following Midland-to-Cushing crude oil differential swaps paying a floating differential and receiving a fixed differential for a portion of its future oil production as indicated below: Calendar Year Volumes (Bbls) Average Price per Bbl Price Range per Bbl 2020 732,000 $0.90 $0.90 2021 730,000 $1.05 $1.05 As of December 31, 2019, Legacy had the following NYMEX Henry Hub natural gas swaps paying floating natural gas prices and receiving fixed prices for a portion of its future natural gas production as indicated below: Average Price Range Calendar Year Volumes (MMBtu) Price per MMBtu per MMBtu 2020 32,940,000 $2.35 $2.32 - $2.40 2021 29,200,000 $2.41 $2.37 - $2.44 Interest rate derivative transactions Due to the volatility of interest rates, Legacy periodically enters into interest rate risk management transactions in the form of interest rate swaps for a portion of its outstanding debt balance. These transactions allow Legacy to reduce exposure to interest rate fluctuations. While the use of these arrangements limits Legacy’s ability to benefit from decreases in interest rates, it also reduces Legacy’s potential exposure to increases in interest rates. Legacy’s arrangements, to the extent it enters into any, apply to only a portion of its outstanding debt balance, provide only partial protection against interest rate increases and limit Legacy’s potential savings from future interest rate declines. It is never management’s intention to hold or issue derivative instruments for speculative trading purposes. Conditions sometimes arise where actual borrowings are less than notional amounts hedged which has and could result in overhedged amounts. Legacy does not designate these derivatives as cash flow hedges, even though they reduce its exposure to changes in interest rates. Therefore, the mark-to-market of these instruments is recorded in current earnings and classified as a component of interest expense. The total impact on interest expense from the mark-to-market and settlements was as follows: Successor Predecessor Period from December 11, 2019 to December 31, Period from January 1, 2019 to December 10, Years Ended December 31, 2019 2019 2018 2017 (In thousands) Beginning fair value of interest rate swaps $ — $ 2,044 $ 2,117 $ 183 Total gain (loss) loss on interest rate swaps — (119) 1,213 1,168 Cash settlements paid — (1,925) (1,286) 766 Ending fair value of interest rate swaps $ — $ — $ 2,044 $ 2,117 |
Sales to Major Customers
Sales to Major Customers | 12 Months Ended |
Dec. 31, 2019 | |
Risks and Uncertainties [Abstract] | |
Sales to Major Customers | Business and Credit Concentrations Cash Legacy maintains its cash in bank deposit accounts, which, at times, may exceed federally insured amounts. Legacy has not experienced any losses in such accounts. Legacy believes it is not exposed to any significant credit risk on its cash. Revenue and Accounts Receivable Substantially all of Legacy’s accounts receivable result from oil and natural gas sales or joint interest billings to third parties in the oil and natural gas industry. This concentration of customers and joint interest owners may impact Legacy’s overall credit risk in that these entities may be similarly affected by changes in economic and other conditions. Historically, Legacy has not experienced significant credit losses on such receivables. No bad debt expense was recorded for the period of December 11, 2019 through December 31, 2019 (Successor), the period of January 1, 2019 through December 10, 2019 (Predecessor), the year ended December 31, 2018 (Predecessor) and the year ended December 31, 2017 (Predecessor). Legacy cannot ensure that such losses will not be realized in the future. A listing of oil and natural gas purchasers exceeding 10% of Legacy’s sales is presented in Note 13, "Sales to Major Customers". Commodity Derivatives Due to the volatility of oil and natural gas prices, Legacy periodically enters into price-risk management transactions (e.g., swaps, collars and enhanced swaps) for a portion of its oil and natural gas production to achieve a more predictable cash flow, as well as to reduce exposure from price fluctuations. Legacy values these transactions at fair value on a recurring basis (Note 12, "Derivative Financial Instrument"). As of December 31, 2019 (Successor), Legacy’s commodity derivative transactions have a fair value unfavorable to the Company of $(13.1) million, collectively. Legacy enters into commodity derivative transactions with entities which Legacy's management believes are creditworthy. In addition, Legacy reviews and assesses the creditworthiness of these institutions on a routine basis. For the period of December 11, 2019 through December 31, 2019 (Successor), the period of January 1, 2019 through December 10, 2019 (Predecessor), the years ended December 31, 2018 (Predecessor), and 2017 (Predecessor), Legacy sold oil, NGL and natural gas production representing 10% or more of total revenues to the purchasers as detailed in the table below. Successor Predecessor Period from Period from December 11, 2019 January 1, 2019 to December 31, to December 10, Year Ended December 31, 2019 2019 2018 2017 Plains Marketing, LP 15% 19% 20% 10% Trafigura 21% 19% 9% 1% Rio Energy International Inc (1) —% 2% 13% 9% (1) Less than 1% for the period December 11, 2019 to December 31, 2019 (Successor). |
Asset Retirement Obligation
Asset Retirement Obligation | 12 Months Ended |
Dec. 31, 2019 | |
Asset Retirement Obligation [Abstract] | |
Asset Retirement Obligation | Asset Retirement Obligation An asset retirement obligation (“ARO”) associated with the retirement of a tangible long-lived asset is recognized as a liability in the period in which it is incurred and becomes determinable. When liabilities for dismantlement and abandonment costs, excluding salvage values, are initially recorded, the carrying amount of the related oil and natural gas properties is increased. The fair value of the additions to the ARO asset and liability is estimated using valuation techniques that convert future cash flows to a single discounted amount. Significant inputs to the valuation include estimates of: (i) plug and abandon costs per well based on existing regulatory requirements; (ii) remaining life per well; (iii) future inflation factors; and (iv) a credit-adjusted risk-free interest rate. These inputs require significant judgments and estimates by Legacy's management at the time of the valuation and are the most sensitive and subject to change. Accretion of the liability is recognized each period using the interest method of allocation, and the capitalized cost is depleted using the units of production method. Should either the estimated life or the estimated abandonment costs of a property change materially upon Legacy’s periodic review, a new calculation is performed using the same methodology of taking the abandonment cost and inflating it forward to its abandonment date and then discounting it back to the present using Legacy’s credit-adjusted-risk-free rate. The carrying value of the ARO is adjusted to the newly calculated value, with a corresponding offsetting adjustment to the asset retirement cost. When obligations are relieved by sale of the property or plugging and abandoning the well, the related liability and asset costs are removed from Legacy's balance sheet. Any difference in the cost to plug and the related liability is recorded as a gain or loss on Legacy's statement of operations in the disposal of assets line item. Upon the Company's emergence from bankruptcy on December 11, 2019, as discussed in Note 1, "Emergence from Voluntary Reorganization under Chapter 11 of the Bankruptcy Code," the Company applied fresh-start accounting. This included adjusting the Asset Retirement Obligations based on the estimated fair values at the Effective Date. The following table reflects the changes in the ARO during the period of December 11, 2019 through December 31, 2019 (Successor), the period of January 1, 2019 through December 10, 2019 (Predecessor), and the years ended December 31, 2018 (Predecessor) and 2017 (Predecessor). Successor Predecessor Period from Period from December 11, 2019 January 1, 2019 to December 31, to December 10, Year Ended December 31, 2019 2019 2018 2017 (In thousands) Asset retirement obligation — beginning of period $ 152,186 $ 252,734 $ 274,686 $ 272,148 Liabilities incurred with properties acquired — — 226 62 Liabilities incurred with properties drilled — 30 65 39 Liabilities settled during the period (79) (2,891) (2,258) (1,891) Liabilities associated with properties sold (244) (243) (27,673) (8,464) Current period accretion 630 12,292 12,568 12,792 Current period revisions to previous estimates — — (4,880) — Fresh-start adjustment $ — (109,736) — — Asset retirement obligation — end of period $ 152,493 $ 152,186 $ 252,734 $ 274,686 Each year Legacy reviews and, to the extent necessary, revises its ARO estimates. For the year ended December 31, 2019 (Successor), no revision of previous estimates were necessary due to adjusting the Asset Retirement Obligation based on the estimated fair values. For the year ended December 31, 2018 (Predecessor), Legacy decreased its estimate of future asset retirement obligations by $4.9 million. For the year ended December 31, 2017 (Predecessor), no revision of previous estimates were deemed necessary. |
Stockholders' Deficit_Unitholde
Stockholders' Deficit/Unitholders' Deficit | 12 Months Ended |
Dec. 31, 2019 | |
Equity [Abstract] | |
Stockholders' Deficit/Partners' Deficit | Stockholders' Deficit / Unitholders' Deficit Preferred Units On September 20, 2018, in connection with the Corporate Reorganization, all of Legacy LP's 8% Series A Fixed-to-Floating Cumulative Redeemable Perpetual Preferred Units and 8.000% Series B Fixed-to-Floating Rate Cumulative Redeemable Perpetual Preferred Units outstanding were converted into shares of common stock. Incentive Distribution Units On September 20, 2018, all of Legacy LP's Incentive Distribution Units outstanding were cancelled in connection with the Corporate Reorganization. Earnings/(loss) per share / unit The following table sets forth the computation of basic and diluted loss per share / unit: Successor Predecessor Period from Period from December 11, 2019 January 1, 2019 to December 31, to December 10, Year Ended December 31, 2019 2019 2018 2017 (In thousands) Net Income/(loss) $ 3,050 $ 173,876 $ 43,833 $ (53,897) Income/(loss) attributable to shareholders $ 3,050 $ 173,876 $ 43,833 $ (53,897) Weighted average number of shares outstanding 61,063 114,811 105,087 100,049 Effect of dilutive securities: Restricted and phantom units — — — — Weighted average units and potential units outstanding 61,063 114,811 105,087 100,049 Basic and diluted income/(loss) per share $ 0.05 $ 1.51 $ 0.42 $ (0.54) |
Stock-Based Compensation
Stock-Based Compensation | 12 Months Ended |
Dec. 31, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Stock-Based Compensation | Stock-Based Compensation Legacy LP Long Term Incentive Plan On March 15, 2006, a Long-Term Incentive Plan (as amended, “LTIP”) for Legacy was created and Legacy adopted the LTIP for its employees, consultants and directors, its affiliates and its general partner. The awards under the long-term incentive plan may include unit grants, restricted units, phantom units, unit options and unit appreciation rights (“UARs”). The LTIP permits the grant of awards that may be made or settled in units up to an aggregate of 5,000,000 units. As of September, 2018 grants of awards net of forfeitures and, in the case of phantom units, historical exercises covering 3,459,197 units had been made, comprised of 266,014 unit option awards, 988,207 restricted unit awards, 1,424,114 phantom unit awards and 780,862 unit awards. Pursuant to the terms of the Corporate Reorganization, the Legacy LP long-term incentive plan ("Legacy LP LTIP") was terminated. Unit Appreciation Rights A UAR is a notional unit that entitles the holder, upon vesting, to receive cash valued at the difference between the closing price of units on the exercise date and the exercise price, as determined on the date of grant. Because these awards are settled in cash, Legacy accounts for the UARs under the liability method. Legacy did not issue UARs to employees during the period of December 11, 2019 through December 31, 2019 (Successor), the period of January 1, 2019 through December 10, 2019 (Predecessor) or the year ended December 31, 2018 (Predecessor). All outstanding UARs vested on September 20, 2018 in connection with the Corporate Reorganization and were subsequently exercised or forfeited. As a result of all UARs vesting on September 20, 2018 and no new UARs being issued for the period of December 11, 2019 through December 31, 2019 (Successor) and the period of January 1, 2019 through December 10, 2019 (Predecessor), Legacy did not record any compensation (benefit) expense. For the year ended December 31, 2018 (Predecessor), Legacy recorded compensation (benefit) expense of $(169,024), due to the changes in the compensation liability related to the above awards based on its use of the Black-Scholes model to estimate the December 31, 2018 (Predecessor) fair value of these UARs. The cost of employee services in exchange for an award of equity instruments was measured based on a grant-date fair value of the award (with limited exceptions), and that cost was generally recognized over the vesting period of the award. However, if an entity that nominally has the choice of settling awards by issuing stock predominately settles in cash, or if an entity usually settles in cash whenever an employee asks for cash settlement, the entity is settling a substantive liability rather than repurchasing an equity instrument. Because the UARs were settled in cash, Legacy accounted for them by utilizing the liability method. The liability method requires companies to measure the cost of the employee services in exchange for a cash award based on the fair value of the underlying security at the end of each reporting period. Compensation cost was recognized based on the change in the liability between periods. A summary of UAR activity for the year ended December 31, 2019 (Successor), 2018 (Predecessor) and 2017 (Predecessor) is as follows: Units Weighted-Average Weighted-Average Remaining Aggregate Intrinsic Value Outstanding at January 1, 2017 (Predecessor) 884,546 $ 20.75 Expired (147,024) $ 24.50 Forfeited (15,501) $ 13.91 Outstanding at December 31, 2017 (Predecessor) 722,021 $ 20.13 3.29 $ — UARs exercisable at December 31, 2017 (Predecessor) 592,522 $ 23.23 2.99 $ — Outstanding at January 1, 2018 (Predecessor) 722,021 $ 20.13 Expired (90,844) $ 4.69 Forfeited (631,177) $ 22.35 Outstanding at December 31, 2018 (Predecessor) — $ — $ — Phantom Units Legacy previously issued phantom units under the Legacy LP LTIP to executive officers. A phantom unit is a notional unit that entitles the holder, upon vesting, to receive either one Partnership unit for each phantom unit or the cash equivalent of a Partnership unit, as stipulated by the form of the grant. Legacy accounted for the phantom units settled in Partnership units by utilizing the equity method. Legacy accounted for the phantom units settled in cash by utilizing the liability method. 391,674 Phantom units that settle in cash and 1,032,440 phantom units that settle in units vested on September 20, 2018 in connection with the Corporate Reorganization. Upon the occurrence of the Effective Date, all then existing equity was extinguished in accordance with the Plan. See Note 1 for more information. Compensation expense related to the phantom units was $22.9 million and $4.6 million for the years ended December 31, 2018 (Predecessor) and 2017 (Predecessor), respectively. Restricted Units Legacy LP previously issued restricted units to certain employees and members of management. All restricted units vested on September 20, 2018 in connection with the Corporate Reorganization. Upon the occurrence of the Effective Date, all then existing equity was extinguished in accordance with the Plan. See Note 1 for more information. As a result of all restricted units vesting on September 20, 2018, there was no compensation expense related to restricted units for the period of December 11, 2019 through December 31, 2019 (Successor) and the period of January 1, 2019 through December 10, 2019 (Predecessor). For the years ended December 31, 2018 (Predecessor) and 2017 (Predecessor), compensation expense related to restricted units was $0.8 million and $1.5 million, respectively. Board Units On May 16, 2017, Legacy granted and issued 47,847 units to each of its six non-employee directors as part of their annual compensation for serving on the board of directors of Legacy’s general partner. The value of each unit was $2.04 at the time of issuance. On May 15, 2018, Legacy granted and issued 12,019 units to four non-employee directors who serve on the Board of Directors of Legacy and 6,010 units to two non-employee directors of Legacy LP who do not serve on the Board of Directors of Legacy Inc. The value of each unit was $8.69 at the time of issuance. No units were issued in 2019. None of these units were subject to vesting. Legacy recognized the expense associated with the unit grants on the date of grant. Upon the occurrence of the Effective Date, all then existing equity was extinguished in accordance with the Plan. See Note 1 for more information. Legacy Reserves Inc. 2018 Omnibus Incentive Plan On September 19, 2018, the Legacy Inc. 2018 Omnibus Incentive Plan (the "Legacy Inc. LTIP") was approved by the former unitholders of Legacy LP in connection with the Corporate Reorganization for it and its affiliates' employees, consultants and directors. The Legacy Inc. LTIP provides for up to 10,500,000 shares (the "Share Reserve") to be used for awards, and that the Share Reserve will increase proportionately by 10% of all shares of common stock issued by Legacy Inc. after the effective date of the Legacy Inc. LTIP and before the first anniversary of the effective date. The awards under the Legacy Inc. LTIP may include stock grants, restricted stock, restricted stock units and stock options. For the period of January 1, 2019 through December 10, 2019 (Predecessor), grants of awards net of forfeitures covering 549,164 shares had been made, compromised of 516,594 restricted stock units and 32,570 stock awards. Upon the occurrence of the Effective Date, the Legacy Inc. LTIP was terminated and all then existing equity was extinguished in accordance with the Plan. See Note 1 for more information. Restricted Stock Units For the period of December 11, 2019 through December 31, 2019 (Successor), no restricted stock units ("RSUs") were issued to either executive or non-executive employees. For the period of January 1, 2019 through December 10, 2019 (Predecessor), Legacy issued an aggregate 516,594 RSUs to both executive and non-executive employees. The RSUs vest generally over a three four A summary of RSU activity for the period of December 11, 2019 through December 31, 2019 (Successor) and the period of January 1, 2019 through December 10, 2019 (Predecessor) is as follows: Number of Restricted Stock Units Weighted Average Grant Date Fair Value Outstanding at January 1, 2019 (Predecessor) 7,302,809 $ 4.88 Granted 516,594 $ 1.32 Expired — $ — Canceled at December 10, 2019 (Predecessor) (7,819,403) $ 4.65 Outstanding at December 31, 2019 (Successor) — $ — Board Shares On September 25, 2018, Legacy granted and issued 5,030 shares to four non-employee directors who serve on the Board of Directors of Legacy in accordance with Legacy's director compensation policy. The value of each share was $4.97 at the time of issuance. Upon the occurrence of the Effective Date, all then existing equity was extinguished in accordance with the Plan. See Note 1 for more information. On October 16, 2018, Legacy granted and issued 12,450 shares to one non-employee director who serves on the Board of Directors of Legacy in accordance with Legacy's director compensation policy. The value of each share was $5.02 at the time of issuance. Upon the occurrence of the Effective Date, all then existing equity was extinguished in accordance with the Plan. See Note 1 for more information. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income TaxesEffective September 20, 2018, pursuant to the Merger Agreement, Legacy Inc. became subject to federal and state income taxes. Prior to consummation of the Corporate Reorganization, Legacy LP was treated as a partnership for federal and state income tax purposes, in which the taxable income or loss was passed through to its unitholders. With the exception of the state of Texas and certain subsidiaries, Legacy LP did not directly pay federal and state income taxes and recognition was not given to federal and state income taxes for its operations. On December 22, 2017, Public Law No. 115-97, commonly referred to as the Tax Cuts and Jobs Act (the “Tax Act”) was enacted into law. The provisions of the Tax Act that impact Legacy include, but are not limited to, (1) reducing the U.S. federal corporate income tax rate from 35.0% to 21.0%, (2) full expensing of certain qualified property acquired after September 27, 2017, (3) limitations on the maximum deduction for net operating loss (NOL) as well as indefinite life carryforwards for tax years beginning after December 31, 2017 and (4) limitations on the maximum deduction for net business interest expense in tax years beginning after December 31, 2017. Legacy has previously recorded all amounts for the income effects of the Tax Act as of December 31, 2017. On June 18, 2019, Legacy and certain of its subsidiaries commenced voluntary cases under chapter 11 of the United States Bankruptcy Code in the Bankruptcy Court. On November 15, 2019, the Bankruptcy Court entered an order confirming the Plan, and on December 11, 2019 the Plan became effective in accordance with its terms and the Debtors emerged from the Chapter 11 Cases. P ursuant to the Plan, certain obligations of the Debtors were extinguished. Absent an exception, a debtor recognizes CODI upon discharge of its outstanding indebtedness for an amount of consideration that is less than its adjusted issue price. The Tax Code provides that a debtor in a bankruptcy case (such as the Chapter 11 Cases) may exclude CODI from taxable income but must reduce certain of its tax attributes by the amount of any CODI realized as a result of the Plan. The amount of CODI realized by a taxpayer is the adjusted issue price of any indebtedness discharged less the sum of (i) the amount of cash paid, (ii) the issue price of any new indebtedness issued and (iii) the fair market value of any other consideration, including equity, issued. As a result of the market value of equity upon emergence from the Chapter 11 Cases, the amount of CODI realized was approximately $640 million, which reduced the Company’s U.S. NOL carryovers of $195 million to zero, and further reduced the Company’s tax basis in producing properties (subject to future recovery through tax DD&A deductions) by $445 million. For the period of December 11, 2019 through December 31, 2019 (Successor), the period of January 1, 2019 through December 10, 2019 (Predecessor), the years ended December 31, 2018, and 2017 (Predecessor) the effective income tax rates were 0.21%, 0.06%, 6.3% and (2.7)%, respectively. For the year ended December 31, 2019 (Successor), our effective tax rate differed from the statutory rate primarily due to non-deductible executive compensation and the valuation allowance. For the period of January 1, 2019 through December 10, 2019 (Predecessor), our effective rate differed from the statutory rate primarily due to non-deductible debt restructuring expenses and the valuation allowance. For the twelve months ended December 31, 2018 (Predecessor), our effective tax rate differed from the statutory rate primarily due to Legacy LP’s income not being subject to U.S. federal income tax, the 2023 Convertible Notes issuance, Texas margins tax, and the valuation allowance. For the year ended December 31, 2017 (Predecessor), our effective tax rate differed from the statutory rate primarily due to Legacy LP’s income not being subject to U.S. federal income tax and Texas margins tax. For the period of December 11, 2019 through December 31, 2019 (Successor), the period of January 1, 2019 through December 10, 2019 (Predecessor), the years ended December 31, 2018, and 2017 (Predecessor), we recorded income/(loss) before income taxes of $3.1 million, $174.0 million, $46.8 million and $(52.5) million, respectively. All of Legacy's income is sourced within the United States. The income tax expense (benefit) consists of: Successor Predecessor Period from December 11, 2019 to December 31, Period from January 1, 2019 to December 10, Years Ended December 31, (In thousands) 2019 2019 2018 2017 Current: Federal $ — $ 1 $ 140 $ 1,911 State 3 104 (147) (52) Total current income tax expense (benefit) 3 105 (7) 1,859 Deferred: Federal $ — $ — $ 1,270 $ (464) State — — 1,705 3 Total deferred income tax expense (benefit) — — 2,975 (461) Total income tax expense $ 3 $ 105 $ 2,968 $ 1,398 A reconciliation of the federal statutory tax rate to the effective tax rate is as follows: Successor Predecessor Period from December 11, 2019 to December 31, Period from January 1, 2019 to December 10, Years Ended December 31, 2019 2019 2018 2017 Tax at federal statutory rate 21.00 % 21.00 % 21.0 % 35.0 % Partnership loss not subject to federal tax — % — % 16.6 % (36.1) % Federal rate change — % — % — % (1.6) % Non-Deductible Debt Restructuring Expenses — % 8.51 % — % — % 2023 Convertible Notes issuance — % — % 7.4 % — % 162(m) - Executive Compensation 2.32 % 0.72 % — % — % Valuation allowance adjustment (23.38) % (30.98) % (44.1) % — % Texas margins tax 0.21 % 0.06 % 6.1 % (1.6) % Other 0.06 % 0.75 % (0.7) % 1.6 % Effective tax rate 0.21 % 0.06 % 6.3 % (2.7) % Deferred income tax balances representing the tax effect of temporary differences between the financial statement carrying amounts and the tax basis of assets and liabilities are as follows: Successor Predecessor Year Ended December 31, Year Ended December 31, 2019 2018 (In thousands) Deferred tax assets: Oil and natural gas properties $ 19,660 $ 91,948 Net operating losses — 12,961 Interest expense 19,074 6,668 Hedging 3,000 — Other 1,537 — Total deferred tax assets 43,271 111,577 Deferred tax liabilities Hedging activities — (15,934) Other — (1,585) Total deferred tax liabilities — (17,519) Valuation allowance (43,271) (94,058) Net deferred tax assets $ — $ — At December 31, 2019, Legacy had a net interest expense carryover of $85 million under Section 163(j) of the Code subject to indefinite carryover. Legacy has recorded a full valuation allowance against the net interest expense carryover and other deferred tax assets because it is probable that these attributes will not be realized. In assessing the realizability of net deferred tax assets, Legacy's management assesses the available positive and negative evidence to estimate whether sufficient future taxable income will be generated to permit use of the existing deferred tax assets. On the basis of this evaluation, as of December 31, 2019, a full valuation allowance has been recorded as management has determined that it is more likely than not that the net deferred tax asset will not be realized. The full valuation allowance could be adjusted in future periods if objective negative evidence is no longer present and additional weight is given to subjective evidence. In accordance with the applicable accounting standards, Legacy recognizes only the impact of income tax positions that, based on their merits, are more likely than not to be sustained upon audit by a taxing authority. To evaluate its current tax positions to identify any material uncertain tax positions, Legacy developed a policy of identifying and evaluating uncertain tax positions that considers support for each tax position, industry standards, tax return disclosures and schedules and the significance of each position. It is Legacy’s policy to recognize interest and penalties, if any, related to unrecognized tax benefits in income tax expense. The Company had no material uncertain tax positions at December 31, 2019. The tax years 2015 through 2019 remain subject to examination by the major tax jurisdictions. |
Guarantors
Guarantors | 12 Months Ended |
Dec. 31, 2019 | |
Guarantees [Abstract] | |
Guarantors | Guarantors Legacy LP's 2020 Senior Notes were issued in a private offering on December 4, 2012 and were subsequently registered through a public exchange offer that closed on January 8, 2014. Legacy LP's 2021 Senior Notes were issued in two separate private offerings on May 28, 2013 and May 8, 2014. $250 million aggregate principal amount of our 2021 Senior Notes were subsequently registered through a public exchange offer that closed on March 18, 2014. The remaining $300 million of aggregate principal amount of Legacy's 2021 Senior Notes were subsequently registered through a public exchange offer that closed on February 10, 2015. Legacy LP's 2023 Convertible Notes were issued in exchange for portions of the 2020 Senior Notes and 2021 Senior Notes on September 20, 2018. The 2020 Senior Notes, the 2021 Senior Notes and the 2023 Convertible Notes were guaranteed by Legacy LP's 100% owned subsidiaries Legacy Reserves Operating GP LLC, Legacy Reserves Operating LP, Legacy Reserves Services LLC, Legacy Reserves Energy Services LLC, Legacy Marketing LLC, Dew Gathering LLC and Pinnacle Gas Treating LLC, which constitute all of Legacy's wholly-owned subsidiaries other than Legacy Reserves Finance Corporation, and certain other future subsidiaries (the “Guarantors”, together with any future 100% owned subsidiaries that guarantee the Partnership's 2020 Senior Notes, 2021 Senior Notes and the 2023 Convertible Notes, the “Subsidiaries”) as well as Legacy Inc. and the General Partner, as parent guarantors (the "Parent Guarantors"). The Subsidiaries are 100% owned, directly or indirectly, by the Partnership and the guarantees by the Subsidiaries are full and unconditional, except for customary release provisions. Legacy LP is 100% owned, directly or indirectly, by the Parent Guarantors and the guarantees by the Parent Guarantors were full and unconditional, except for customary release provisions. Legacy LP has no assets or operations independent of the Subsidiaries, and there are no significant restrictions upon the ability of the Subsidiaries to distribute funds to the Partnership. The guarantees constituted joint and several obligations of the Guarantors and Parent Guarantors. Upon the occurrence of the Effective Date, the 2020 Senior Notes, 2021 Senior Notes and 2023 Convertible Notes were terminated in accordance with the Plan. See Note 1, “Emergence from Voluntary Reorganization under Chapter 11 of the Bankruptcy Code” for more information regarding the termination of the 2020 Senior Notes, 2021 Senior Notes and 2023 Convertible Notes. |
ASC 842 Adoption
ASC 842 Adoption | 12 Months Ended |
Dec. 31, 2019 | |
Leases [Abstract] | |
ASC 842 Adoption | ASC 842 Adoption As previously described in Note 3 – Summary of Significant Accounting Policies, we lease certain office space, office equipment, production field offices, compressors, drilling rigs, vehicles and other production equipment under cancellable and non-cancelable leases to support our operations. The components of our total lease cost were as follows: Successor Predecessor Period from December 11, 2019 to December 31, Period from January 1, 2019 to December 10, 2019 2019 (In thousands) Operating lease cost $ 243 $ 4,607 Finance lease cost: Amortization of right-of-use assets 35 420 Interest on lease liabilities 24 332 Total finance lease costs $ 59 $ 752 Short-term lease cost $ 1,504 $ 13,302 Total $ 1,806 $ 18,661 Supplemental cash flow information related to our leases is included in the table below: Successor Predecessor Period from December 11, 2019 to December 31, Period from January 1, 2019 to December 10, 2019 2019 (In thousands) Cash paid for amounts included in lease liabilities: Operating cash flows from operating leases $ 1,504 $ 15,711 Operating cash flows from finance leases 59 752 Right-of-use assets obtained in exchange for lease obligations: Operating leases $ — $ 4,573 Finance leases 75 1,332 Supplemental balance sheet information related to our leases is included in the table below: Successor Predecessor Period from December 11, 2019 to December 31, Period from January 1, 2019 to December 10, 2019 2019 (In thousands) Operating Leases Operating lease right-of-use assets $ 2,283 $ 2,466 Other current liabilities (1,773) (1,910) Other long-term liabilities (731) (782) Total operating lease liabilities $ (2,504) $ (2,692) Finance Leases Other property and equipment 1,407 1,332 Accumulated depreciation and amortization (315) (272) Other property and equipment, net $ 1,092 $ 1,060 Other current liabilities (481) (451) Other long-term liabilities (681) (671) Total finance lease liabilities $ (1,162) $ (1,122) Our weighted average remaining lease term and weighted average discount rate by lease classification were as follows: Successor Predecessor Period from December 11, 2019 to December 31, Period from January 1, 2019 to December 10, 2019 2019 Weighted Average Remaining Lease Term (Years) Operating leases 1.60 1.60 Finance leases 2.33 2.35 Weighted Average Discount Rate Operating leases 8.00 % 24.44 % Finance leases 8.00 % 24.46 % As of December 31, 2019 (Successor), our lease liabilities with enforceable contract terms that are greater than one year mature as follows: Operating Leases Finance Leases (in thousands) Year 1 $ 2,148 $ 714 Year 2 517 572 Year 3 235 227 Year 4 180 17 Year 5 12 — Thereafter — — Total lease payments $ 3,092 $ 1,530 Less imputed interest (588) (368) Total $ 2,504 $ 1,162 |
ASC 842 Adoption | ASC 842 Adoption As previously described in Note 3 – Summary of Significant Accounting Policies, we lease certain office space, office equipment, production field offices, compressors, drilling rigs, vehicles and other production equipment under cancellable and non-cancelable leases to support our operations. The components of our total lease cost were as follows: Successor Predecessor Period from December 11, 2019 to December 31, Period from January 1, 2019 to December 10, 2019 2019 (In thousands) Operating lease cost $ 243 $ 4,607 Finance lease cost: Amortization of right-of-use assets 35 420 Interest on lease liabilities 24 332 Total finance lease costs $ 59 $ 752 Short-term lease cost $ 1,504 $ 13,302 Total $ 1,806 $ 18,661 Supplemental cash flow information related to our leases is included in the table below: Successor Predecessor Period from December 11, 2019 to December 31, Period from January 1, 2019 to December 10, 2019 2019 (In thousands) Cash paid for amounts included in lease liabilities: Operating cash flows from operating leases $ 1,504 $ 15,711 Operating cash flows from finance leases 59 752 Right-of-use assets obtained in exchange for lease obligations: Operating leases $ — $ 4,573 Finance leases 75 1,332 Supplemental balance sheet information related to our leases is included in the table below: Successor Predecessor Period from December 11, 2019 to December 31, Period from January 1, 2019 to December 10, 2019 2019 (In thousands) Operating Leases Operating lease right-of-use assets $ 2,283 $ 2,466 Other current liabilities (1,773) (1,910) Other long-term liabilities (731) (782) Total operating lease liabilities $ (2,504) $ (2,692) Finance Leases Other property and equipment 1,407 1,332 Accumulated depreciation and amortization (315) (272) Other property and equipment, net $ 1,092 $ 1,060 Other current liabilities (481) (451) Other long-term liabilities (681) (671) Total finance lease liabilities $ (1,162) $ (1,122) Our weighted average remaining lease term and weighted average discount rate by lease classification were as follows: Successor Predecessor Period from December 11, 2019 to December 31, Period from January 1, 2019 to December 10, 2019 2019 Weighted Average Remaining Lease Term (Years) Operating leases 1.60 1.60 Finance leases 2.33 2.35 Weighted Average Discount Rate Operating leases 8.00 % 24.44 % Finance leases 8.00 % 24.46 % As of December 31, 2019 (Successor), our lease liabilities with enforceable contract terms that are greater than one year mature as follows: Operating Leases Finance Leases (in thousands) Year 1 $ 2,148 $ 714 Year 2 517 572 Year 3 235 227 Year 4 180 17 Year 5 12 — Thereafter — — Total lease payments $ 3,092 $ 1,530 Less imputed interest (588) (368) Total $ 2,504 $ 1,162 |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events On January 30, 2020, the World Health Organization (“WHO”) announced a global health emergency because of a new strain of coronavirus originating in Wuhan, China (“COVID-19”) and the risks to the international community as the virus spread globally beyond its point of origin. In March 2020, the WHO classified the COVID-19 outbreak as a pandemic, based on the rapid increase in exposure globally. In addition, crude oil prices have recently experienced a severe decrease due to increased supply by Organization of the Petroleum Exporting Countries (“OPEC”) nations and general economic downturn, although, as of April 2020, Russia and OPEC have reached a tentative agreement on production cuts. Other countries, including the U.S. and Canada, are expected to reduce production as well. As of April 2020, some states, including Texas and Oklahoma, are considering proration of oil production in response to market conditions, which could limit the amount of oil and natural gas we can produce from our wells or limit the number of wells or the locations at which we can drill. Many uncertainties remain regarding the COVID-19 pandemic and the disruption in the oil market, and it is impossible at this time to predict the full economic impact and the impact on our business. The COVID-19 pandemic and the disruption in the oil market is expected to lead to a significant reduction in the borrowing base under our Successor Revolving Credit Facility, a reduction in our reserves and may result in the recognition of impairment of our oil and natural gas properties. The COVID-19 pandemic may also impact the ability of our customers to continue to purchase our produced oil and natural gas at current levels due to increased supply and storage capacity shortages, which would reduce our future expected revenues and may have a material adverse effect on our financial position, results of operations and liquidity. As the majority of our capital budget is comprised of operated properties in which we control the timing of capital expenditure activity, if the borrowing base reduction under our Successor Revolving Credit Facility is larger than expected we can and will defer a portion or all of our planned capital expenditures to a future date. Further, we have enacted cost reduction efforts and initiatives in both our operational activities as well as our general and administrative expenses in an attempt to improve our financial position, results of operations and liquidity. We continue to monitor and evaluate these and other developments with respect to market conditions for oil and natural gas and the COVID-19 pandemic, though we cannot guarantee that any measures we take in response thereto will be entirely effective or effective at all. On March 27, 2020, President Trump signed into law the "Coronavirus Aid, Relief, and Economic Security Act" ("CARES ACT"). The Company is evaluating the impact, if any, that the CARES Act may have on the Company's future operations, financial position, and liquidity in fiscal year 2020. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization, Basis of Presentation and Description of Business | Organization, Basis of Presentation and Description of Business Unless the context requires otherwise or unless otherwise noted, all references to “Legacy Reserves,” “Legacy Inc.,” “Legacy,” the “Company,” “we,” “us,” “our” or like terms are to Legacy Reserves Inc. and its subsidiaries for the periods after September 20, 2018, the date the Corporate Reorganization was consummated (as defined below). For the periods prior to September 20, 2018, unless the context requires otherwise or unless otherwise noted, all references to “Legacy Reserves,” “Legacy LP,” “Legacy,” the “Company,” “we,” “us,” “our” or like terms are to Legacy Reserves LP and its subsidiaries. Legacy is an independent energy company engaged in the development, production and acquisition of oil and natural gas properties in the United States. Its current operations are focused on the horizontal development of unconventional plays in the Permian Basin and the cost-efficient management of shallow-decline oil and natural gas wells in the Permian Basin, East Texas, Rocky Mountain and Mid-Continent regions. The accompanying financial statements have been prepared on the accrual basis of accounting whereby revenues are recognized when earned, and expenses are recognized when incurred. |
Corporate Reorganization | Corporate Reorganization On September 20, 2018, we completed the transactions contemplated by the Amended and Restated Agreement and Plan of Merger (the “Merger Agreement”), dated July 9, 2018, by and among Legacy Inc., Legacy LP, Legacy Reserves GP, LLC (the “General Partner”) and Legacy Reserves Merger Sub LLC, a wholly owned subsidiary of Legacy Inc. (“Merger Sub”), and the GP Purchase Agreement, dated March 23, 2018, by and among Legacy Inc., the General Partner, Legacy LP, Lion GP Interests, LLC, Moriah Properties Limited, and Brothers Production Properties, Ltd., Brothers Production Company, Inc., Brothers Operating Company, Inc., J&W McGraw Properties, Ltd., DAB Resources, Ltd. and H2K Holdings, Ltd. (such transactions referred to herein collectively as the “Corporate Reorganization”). Upon the consummation of the Corporate Reorganization: • Legacy Inc., which prior to the Corporate Reorganization, was a wholly owned subsidiary of the General Partner, acquired all of the issued and outstanding limited liability company interests in the General Partner and became the sole member of the General Partner with the General Partner becoming a subsidiary of Legacy Inc.; and • Legacy LP merged with Merger Sub, with Legacy LP continuing as the surviving entity and as a subsidiary of Legacy Inc. (the “Merger”), the limited partner interests of Legacy LP, other than the incentive distribution units in Legacy LP, were exchanged for shares of Legacy Inc.’s common stock, par value $0.01 (“common stock”) and the general partner interest remained outstanding. The Corporate Reorganization was accounted for under ASC 805 as a combination of entities under common control. As such, the assets and liabilities of the Partnership were recognized at their carrying values in Legacy Inc. |
Accounts Receivable | Accounts Receivable Accounts receivable are recorded at the invoiced amount and do not bear interest. Legacy routinely assesses the financial strength of its customers. Bad debts are recorded based on an account-by-account review. Accounts are written off after all means of collection have been exhausted and potential recovery is considered remote. |
Oil and Natural Gas Properties, Oil, NGLs and Natural Gas Reserve Quantities | Oil and Natural Gas Properties Legacy accounts for oil and natural gas properties using the successful efforts method. Under this method of accounting, costs relating to the acquisition and development of proved areas are capitalized when incurred. The costs of development wells are capitalized whether productive or non-productive. Leasehold acquisition costs are capitalized when incurred. If proved reserves are found on an unproved property, leasehold cost is transferred to proved properties. Exploration dry holes are charged to expense when it is determined that no commercial reserves exist. Other exploration costs, including personnel costs, geological and geophysical expenses and delay rentals for oil and natural gas leases, are charged to expense when incurred. The costs of acquiring or constructing support equipment and facilities used in oil and gas producing activities are capitalized. Production costs are charged to expense as incurred and are those costs incurred to operate and maintain our wells and related equipment and facilities. Depreciation and depletion of producing oil and natural gas properties is recorded based on units of production. Acquisition costs of proved properties are amortized on the basis of all proved reserves, developed and undeveloped, and capitalized development costs (wells and related equipment and facilities) are amortized on the basis of proved developed reserves. As more fully described below, proved reserves are estimated annually by Legacy’s independent petroleum engineer, LaRoche Petroleum Consultants, Ltd. ("LaRoche"), and are subject to future revisions based on availability of additional information. Legacy’s in-house reservoir engineers prepare an updated estimate of reserves each quarter. Depletion is calculated each quarter based upon the latest estimated reserves data available. As discussed in Note 14, asset retirement costs are recognized when the asset is placed in service, and are amortized over proved developed reserves using the units of production method. Asset retirement costs are estimated by Legacy’s engineers using existing regulatory requirements and anticipated future inflation rates. Upon sale or retirement of complete fields of depreciable or depletable property, the book value thereof, less proceeds from sale or salvage value, is charged to income. On sale or retirement of an individual well the proceeds are credited to accumulated depletion and depreciation. Oil and natural gas properties are reviewed for impairment when facts and circumstances indicate that their carrying value may not be recoverable. Legacy compares net capitalized costs of proved oil and natural gas properties to estimated undiscounted future net cash flows using management’s expectations of future oil and natural gas prices. These future price scenarios reflect Legacy’s estimation of future price volatility. If net capitalized costs exceed estimated undiscounted future net cash flows, the measurement of impairment is based on estimated fair value, using estimated discounted future net cash flows. Significant inputs used to determine the fair values of proved properties include estimates of: (i) reserves; (ii) future operating and development costs; (iii) future commodity prices and (iv) a market-based weighted average cost of capital rate. The underlying commodity prices embedded in Legacy's estimated cash flows are the product of a process that begins with NYMEX forward curve pricing, adjusted for estimated location and quality differentials, as well as other factors that Legacy's management believes will impact realizable prices. For the period of January 1, 2019 through December 10, 2019 (Predecessor), Legacy recognized $105.5 million of impairment expense in 20 separate producing fields, due primarily to the further decline in oil and natural gas futures prices, increased expenses and well performance during the period ended December 10, 2019 (Predecessor), which decreased the expected future cash flows below the carrying value of the assets. For the year ended December 31, 2018 (Predecessor), Legacy recognized $58.7 million of impairment expense, in 50 separate producing fields, due primarily to the further decline in oil and natural gas futures prices, increased expenses and well performance during the year ended December 31, 2018 (Predecessor), which decreased the expected future cash flows below the carrying value of the assets. For the year ended December 31, 2017(Predecessor), Legacy recognized $37.3 million of impairment expense, in 47 separate producing fields, due primarily to further decline in oil and natural gas futures prices, increased expenses and well performance during the year ended December 31, 2017 (Predecessor), which decreased the expected future cash flows below the carrying value of the assets. Unproven properties that are individually significant are assessed for impairment and if considered impaired are charged to expense when such impairment is deemed to have occurred. No unproved impairment was recognized for the period December 11, 2019 through December 31, 2019 (Successor) or for the period of January 1, 2019 through December 10, 2019 (Predecessor). Legacy recognized $9.3 million of impairment of unproven properties during the year ended December 31, 2018 (Predecessor). Legacy did not recognize impairment expense on unproved properties during the years ended December 31, 2017 (Predecessor). We expect to recognize impairments to our oil and natural gas properties in 2020 as a result of the COVID-19 pandemic and the disruption to the oil market. (e) Oil, NGLs and Natural Gas Reserve Quantities Legacy’s estimates of proved reserves are based on the quantities of oil, NGLs and natural gas that engineering and geological analyses demonstrate, with reasonable certainty, to be recoverable from established reservoirs in the future under current operating and economic parameters. LaRoche prepares a reserve and economic evaluation of all Legacy’s properties on a case-by-case basis utilizing information provided to it by Legacy and information available from state agencies that collect information reported to it by the operators of Legacy’s properties. The estimates of Legacy’s proved reserves have been prepared and presented in accordance with the Securities and Exchange Commission ("SEC") rules and accounting standards. Reserves and their relation to estimated future net cash flows impact Legacy’s depletion and impairment calculations. As a result, adjustments to depletion and impairment are made concurrently with changes to reserve estimates. Legacy prepares its reserve estimates, and the projected cash flows derived from these reserve estimates, in accordance with SEC guidelines. The independent engineering firm described above adheres to the same guidelines when preparing the reserve report. The accuracy of Legacy’s reserve estimates is a function of many factors including the quality and quantity of available data, the interpretation of that data, the accuracy of various mandated economic assumptions, and the judgments of the individuals preparing the estimates. |
Income Taxes | Income Taxes Prior to consummation of the Corporate Reorganization on September 20, 2018, Legacy LP was treated as a partnership for federal and state income tax purposes, in which the taxable income or loss was passed through to its unitholders. Legacy LP was subject to Texas margin tax and certain of Legacy LP’s subsidiaries were c-corporations subject to federal and state income taxes. Therefore, with the exception of the state of Texas and certain subsidiaries, Legacy LP did not directly pay federal and state income taxes and recognition was not given to federal and state income taxes for its operations. Effective upon consummation of the Corporate Reorganization, Legacy Inc. became subject to federal and state income taxes as a c-corporation. As such, we account for income taxes, as required, under the liability method. 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 and net operating loss and tax credit carry-forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those 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 net income or loss in the period that includes the enactment date. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. |
Derivative Instruments and Hedging Activities | Derivative Instruments and Hedging Activities Legacy uses derivative financial instruments to achieve more predictable cash flows by reducing its exposure to oil and natural gas price fluctuations and interest rate changes. Legacy does not specifically designate derivative instruments as cash flow hedges, even though they reduce its exposure to changes in oil and natural gas prices and interest rates. Therefore, Legacy records the change in the fair market values of oil and natural gas derivatives in current earnings. |
Use of Estimates | Use of Estimates Management of Legacy has made a number of estimates and assumptions relating to the reporting of assets, liabilities, revenues and expenses and the disclosure of contingent assets and liabilities to prepare these consolidated financial statements in conformity with accounting principles generally accepted in the United States of America. Actual results could differ materially from those estimates. Estimates which are particularly significant to the consolidated financial statements include estimates of oil and natural gas reserves, valuation of derivatives, impairment of oil and natural gas properties, depreciation, depletion and amortization, asset retirement obligations and accrued revenues. |
Revenue Recognition | Revenue Recognition On January 1, 2018, Legacy adopted ASU No. 2014-09, “Revenue from Contracts with Customers” (“ASU 2014-09”) using the modified retrospective method of transition applied to all contracts. ASU 2014-09 created ASC 606, Revenue from Contracts with Customers (ASC 606). Legacy enters into contracts with customers to sell its produced oil, natural gas and NGLs. Revenue attributable to these contracts is recognized in accordance with the five-step revenue recognition model prescribed in ASC 606. Specifically, revenue is recognized when Legacy’s performance obligations under these contracts are satisfied, which generally occurs when control of the oil, natural gas and NGLs transfers to the purchaser and collectability is reasonably assured. Given the nature of Legacy’s products sold, Legacy has concluded that control transfers to its customers at a point in time. In accordance with ASC 606, Legacy considers the following indicators of the transfer of control to determine the point in time at which control transfers to its customers: (i) Legacy has a present right to payment for the asset; (ii) the customer has legal title to the asset; (iii) Legacy has transferred physical possession of the asset; and (iv) the customer has the significant risks and rewards of ownership. Oil Sales Legacy's oil sales contracts are generally structured such that Legacy sells its oil production to the purchaser at a contractually specified delivery point at or near the wellhead. The crude oil production is priced on the delivery date based upon prevailing index prices less certain deductions related to oil quality and physical location. Legacy recognizes revenue when control transfers to the purchaser upon delivery at or near the wellhead based on the net price received from purchaser. Natural Gas and NGL Sales Under Legacy's gas processing contracts, Legacy delivers wet gas to a midstream processing entity at the wellhead or the inlet of the midstream processing entity’s system. The midstream processing entity processes the natural gas and remits proceeds to Legacy for the resulting sales of NGLs and residue gas. Under this contract structure, Legacy has determined that the midstream processing entity represents Legacy’s customer, and, consequently, Legacy recognizes revenue when control transfers to the midstream processing entity upon delivery. The amount of revenue recognized is based on the net amount of the proceeds received from the midstream processing entity, which is generally tied to the prevailing index prices for residue gas and NGLs less deductions for gathering, processing, transportation and other expenses. Under Legacy's dry gas sales that do not require processing, Legacy sells its natural gas production to third party purchasers at a contractually specified delivery point at or near the wellhead. Pricing provisions are tied to a market index, with certain deductions based on, among other factors, whether a well delivers to a gathering or transmission line, quality of natural gas, and prevailing supply and demand conditions. Legacy recognizes revenue when control transfers to its third party purchasers upon delivery of the natural gas based on the relevant index price net of deductions. Estimation To the extent actual product volumes and related prices are unavailable for a given reporting period because of timing or information not received from third parties, the expected sales volumes and prices for those properties are estimated and recorded as “Accounts receivable - oil and natural gas” in the accompanying consolidated balance sheets. See Note 6, "Revenue from Contracts with Customer" for additional information. Imbalances Natural gas imbalances occur when Legacy sells more or less than its entitled ownership percentage of total natural gas production. Any amount received in excess of its share is treated as a liability. If Legacy receives less than its entitled share, the underproduction is recorded as a receivable. Legacy did not have any significant natural gas imbalance positions as of the period December 11, 2019 through December 31, 2019 (Successor), the period of January 1, 2019 through December 10, 2019 (Predecessor), the year ended December 31, 2018 (Predecessor), and the year ended December 31, 2017 (Predecessor). |
Investments | Investments Undivided interests in oil and natural gas properties owned through joint ventures are consolidated on a proportionate basis. Investments in entities where Legacy exercises significant influence, but not a controlling interest, are accounted for by the equity method. Under the equity method, Legacy’s investments are stated at cost plus the equity in undistributed earnings and losses after acquisition. |
Environmental | Environmental Legacy is subject to extensive federal, state and local environmental laws and regulations. These laws, which are frequently changing, regulate the discharge of materials into the environment and may require Legacy to remove or mitigate the environmental effects of the disposal or release of petroleum or chemical substances at various sites. Environmental expenditures are expensed or capitalized depending on their future economic benefit. Expenditures that relate to an existing condition caused by past operations and that have no future economic benefits are expensed. Liabilities for expenditures of a non-capital nature are recorded when environmental assessment and/or remediation are probable, and the costs can be reasonably estimated. Such liabilities are generally undiscounted unless the timing of cash payments is fixed and readily determinable. |
Earnings (Loss) Per Share | (Loss) Per Share Basic income (loss) per share amounts are calculated using the weighted average number of shares outstanding during each period. Diluted income (loss) per share also gives effect to dilutive unvested restricted shares (calculated based upon the treasury stock method) (see Note 15, "Stockholders' Deficit/Unitholders' Deficit"). In accordance with ASC 805, income (loss) per share amounts for historical periods have been recomputed to reflect shares issued in the Corporate Reorganization. |
Segment Reporting | Segment Reporting Legacy’s management initially treats each new acquisition of oil and natural gas properties as a separate operating segment. Legacy aggregates these operating segments into a single segment for reporting purposes. |
Share-Based Compensation | Share-Based Compensation Concurrent with its formation on March 15, 2006, a Long-Term Incentive Plan (“Legacy LP LTIP”) for Legacy was created. Due to Legacy’s history of cash settlements for option exercises unit appreciation rights ("UARs") and certain phantom unit awards, Legacy accounted for these awards under the liability method, which requires Legacy to recognize the fair value of each unit award at the end of each period. Expense or benefit is recognized as the fair value of the liability changes from period to period. Legacy accounted for executive phantom unit and restricted unit awards under the equity method. Pursuant to the terms of the Corporate Reorganization, the Legacy LP LTIP was terminated. On September 19, 2018, the Legacy Inc. 2018 Omnibus Incentive Plan (the "Legacy Inc, LTIP") was approved by the former unitholders of Legacy LP in connection with the Corporate Reorganization. |
Restricted Cash | Restricted CashRestricted cash of $24.0 million, $28.5 million and $3.3 million as of the period December 11, 2019 through December 31, 2019 (Successor), the period of January 1, 2019 through December 10, 2019 (Predecessor) and December 31, 2018 (Predecessor), respectively, is recorded in the "Prepaid expenses and other current assets" line. The restricted cash amounts represent funding of an escrow account for the payment of future professional fees incurred in our Chapter 11 bankruptcy reorganization process at December 10, 2019 (Predecessor) as well as various deposits to secure the performance of contracts, surety bonds and other obligations incurred in the ordinary course of business. |
Prior Year Financial Statement Presentation | Prior Year Financial Statement PresentationCertain prior year balances have been reclassified to conform to the current year presentation of balances as stated in these consolidated financial statements. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In February 2016, the FASB issued ASU No. 2016-02, "Leases" ("ASU 2016-02"). ASU 2016-02 establishes a right-of-use (ROU) model that requires a lessee to record a ROU asset and a lease liability on the balance sheet for all leases with terms at commencement longer than twelve months. The new standard was effective for us in the first quarter of 2019, and we adopted the new standard using a modified retrospective approach, with the date of initial application on January 1, 2019. Consequently, upon transition, we recognized an ROU asset and a lease liability, with the cumulative-effect of adoption in retained earnings in the amount of $255,916, as of January 1, 2019. We further utilized the package of practical expedients at transition to not reassess the following: • Whether any expired or existing contracts were or contained leases; • The lease classification for any expired or existing leases; and • Initial direct costs for any existing leases. In addition, we elected the practical expedient to not assess whether existing or expired land easements that were not previously accounted for as leases under superseded guidance are or contain a lease under the new leases guidance. We determine if an arrangement is a lease at inception of the arrangement. To the extent that we determine an arrangement represents a lease, we classify that lease as an operating lease or a finance lease. We capitalize operating and finance leases on our consolidated balance sheets through a right-of-use (“ROU”) asset and a corresponding lease liability. ROU assets represent our right to use an underlying asset for the lease term, and lease liabilities represent our obligation to make lease payments arising from the lease. Operating leases are included in other property and equipment, other current liabilities, and other long-term liabilities in our consolidated balance sheets. Operating lease ROU assets and liabilities are recognized at the commencement date of an arrangement based on the present value of lease payments over the lease term. The operating lease ROU asset also includes any lease payments made to the lessor prior to lease commencement, less any lease incentives, and initial direct costs incurred. Lease expense for operating lease payments is recognized on a straight-line basis over the lease term. Finance leases are included in other property and equipment, other current liabilities, and other long-term liabilities in our consolidated balance sheets. Finance lease ROU assets (that is, amounts capitalized in other property and equipment) and liabilities are recognized at the commencement date of an arrangement based on the present value of lease payments over the lease term. The finance lease ROU asset also includes any lease payments made to the lessor prior to lease commencement, less any lease incentives, and initial direct costs incurred. We generally amortize that ROU asset on a straight-line basis, while interest on the lease liability is calculated using the effective interest method. Lease expense recognized under our finance leases is, therefore, comprised of amortization on the finance lease ROU asset and interest on the finance lease liability. Nature of Leases In support of our operations, we lease certain corporate office space, field offices, compressors, drilling rigs, other production equipment, fleet vehicles and storage space under cancelable and non-cancelable contracts. A more detailed description of our material lease types is included below. Corporate and Field Offices We enter into long-term contracts to lease corporate and field office space in support of company operations. These contracts are generally structured with an initial non-cancelable term of two Compressors We rent compressors from third parties in order to facilitate the downstream movement of our production to market. Our compressor arrangements are typically structured with a non-cancelable primary term of one To the extent that our compressor rental arrangements have a primary term of twelve months or less, we have elected to apply the practical expedient for short-term leases. For those short-term compressor contracts, we do not apply the lease recognition requirements, and we recognize lease payments related to these arrangements in profit or loss on a straight-line basis over the lease term. Drilling Rigs We enter into daywork contracts for drilling rigs with third party service contractors to support the development and exploitation of undeveloped reserves and acreage. Our 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, we typically have 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. We have concluded that our drilling rig arrangements represent short-term operating leases with a lease term that equals the period of time required to complete drilling operations on the contractually specified well or well pad (that is, generally one to a few months from commencement of drilling). We do not include the option to extend the drilling rig contract in the lease term due to the continuously evolving nature of our drilling schedules, which requires significant flexibility in the structure of the term of these arrangements, and the potential volatility in commodity prices in an annual period. We have further elected to apply the practical expedient for short-term leases to our drilling rig leases. Accordingly, we do not apply the lease recognition requirements to our drilling rig contracts, and we recognize lease payments related to these arrangements in capital expenditures on a straight-line basis over the lease term. Other Production Equipment We rent other production equipment, primarily electric submersible pumps, from third party vendors to be used in our production operations. These arrangements are typically structured with a non-cancelable term of 1 to 3 months and often continue thereafter on a month-to-month basis subject to termination by either party with thirty days’ notice. We have concluded that we are not reasonably certain of executing the month-to-month renewal options beyond a twelve month period based on the historical term for which we have used other production equipment, and, therefore, our other equipment agreements represent operating leases with a lease term up to twelve months. We have further elected to apply the practical expedient for short-term leases to our other production equipment contracts. Accordingly, we do not apply the lease recognition requirements to these contracts, and we recognize lease payments related to these arrangements in profit or loss on a straight-line basis over the lease term. Fleet Vehicles |
Fresh-Start Accounting (Tables)
Fresh-Start Accounting (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Reorganizations [Abstract] | |
Reconciliation of Reorganization Value | The following table reconciles the Company’s Enterprise Value to the estimated fair value of the Successor’s equity as of December 11, 2019 (in thousands): December 11, 2019 Enterprise Value $ 769,033 Plus: Cash and cash equivalents 16,563 Indicated invested capital value 785,596 Less: Post-Reorganization Debt (379,426) Concluded Equity Value $ 406,170 The following table reconciles the Company’s Enterprise Value to its Reorganization Value as of December 11, 2019 (in thousands): 12/11/2019 Enterprise Value $ 769,033 Plus: Cash and cash equivalents 16,563 Plus: Current and Other Liabilities (Excluding Post-Reorg. Debt and ARO) 126,460 Plus: Asset Retirement Obligation $ 152,186 Reorganization Value of Successor Assets $ 1,064,242 |
Reconciliation of Debt | The following table reconciles the Company's Debt as of December 11, 2019 (in thousands): 12/11/2019 Successor Revolving Credit Facility $ 388,000 Less: Successor Revolving Credit Facility fees and debt issuance costs (8,574) Total Debt $ 379,426 |
Successor Condensed Consolidated Balance Sheet | The following illustrates the effects on the Company’s consolidated balance sheet due to the reorganization and fresh-start accounting adjustments. The explanatory notes following the table below provide further details on the adjustments, including the Company’s assumptions and methods used to determine fair value for its assets and liabilities. As of December 11, 2019 Reorganization Adjustments Fresh-Start Adjustments (in thousands) Predecessor Successor ASSETS Current assets: Cash $ 7,187 $ 9,376 (1) $ — $ 16,563 Restricted cash 3,450 23,936 (1) — 27,386 Accounts receivable, net: Oil and natural gas 63,672 — — 63,672 Joint interest owners 13,213 — — 13,213 Other 2 — — 2 Fair value of derivatives — — — — Prepaid expenses and other current assets 10,465 — — 10,465 Total current assets $ 97,989 $ 33,312 $ — $ 131,301 Oil and natural gas properties, at cost: Proved oil and natural gas properties using the successful efforts method of accounting 3,565,631 — (2,918,997) (10) 646,634 Unproved properties 20,244 — 259,759 (10) 280,003 Accumulated depletion, depreciation, amortization and impairment (2,424,454) — 2,424,454 (10) — Total oil and natural gas properties, net $ 1,161,421 $ — $ (234,784) $ 926,637 Other property and equipment, net of accumulated depreciation and amortization 5,949 — 235 (10) 6,184 Operating rights, net of amortization 574 — (545) (11) 29 Fair value of derivatives 91 — — 91 Other assets — — — — Investments in equity method investees — — — — Total assets $ 1,266,024 $ 33,312 $ (235,094) $ 1,064,242 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Current debt, net $ 596,000 $ (596,000) (2) $ — $ — Accounts payable 5,350 2,875 (5) — 8,225 Accrued oil and natural gas liabilities 63,965 — — 63,965 Fair value of derivatives 4,749 — — 4,749 Asset retirement obligation 3,938 — 801 (12) 4,739 Other 50,223 (4,916) (3) — 45,307 Total current liabilities $ 724,225 $ (598,041) $ 801 $ 126,985 Long-term debt — 379,426 (6) — 379,426 Asset retirement obligation 257,984 — (110,537) (12) 147,447 Fair value of derivatives 2,118 — — 2,118 Other long-term liabilities 2,096 — — 2,096 Total liabilities not subject to compromise 986,423 (218,615) (109,736) 658,072 Liabilities subject to compromise 789,802 (789,802) (4) — — Total liabilities $ 1,776,225 $ (1,008,417) $ (109,736) $ 658,072 Stockholders' equity (deficit): Common stock (Predecessor) 1,148 (1,148) (7) — — Common stock (Successor) — 611 (8) — 611 Additional paid-in capital (Predecessor) 43,197 (43,197) (7) — — Additional paid-in capital (Successor) — 405,559 (8) — 405,559 Accumulated deficit (554,546) 679,904 (9) (125,358) (13) — Total stockholders’ deficit (510,201) 1,041,729 (125,358) 406,170 Total liabilities and stockholders' equity $ 1,266,024 $ 33,312 $ (235,094) $ 1,064,242 |
Schedule of Net Cash Payments Made Upon Emergence | Reflects the net cash payments recorded as of the Effective Date from implementation of the Plan (in thousands): Proceeds from Backstop Commitments and Rights Offering $ 256,300 Borrowings under Successor Revolving Credit Facility 388,000 Payment of Predecessor Credit Facility (313,000) Payment of Interest under Predecessor Credit Facility (5,623) Payment of Predecessor DIP Claims (283,000) Payment of Interest and Fees under Predecessor DIP Claims (791) Payment of Successor Revolving Credit Facility fees and debt issuance costs (8,574) Funding of Professional Fees Escrow Account (23,936) Changes in Cash $ 9,376 |
Schedule Of Liabilities Subject To Compromise | Liabilities subject to compromise were settled as follows in accordance with the Plan (in thousands): Debt $ 757,449 Accrued Interest Payable 29,478 Accounts Payable 2,875 Total Liabilities Subject to Compromise 789,802 Reinstatement of Liability for the General Unsecured Claims (2,875) Fair Value of Equity Issued to Former Holders of the Senior Notes, Bonds, and Second Lien (149,870) Gain on Settlement of Liabilities Subject to Compromise $ 637,057 |
Schedule of Reorganization Adjustments | Reflects the cumulative impact of the reorganization adjustments discussed above (in thousands): Gain on Settlement of Liabilities Subject to Compromise $ 637,057 Other Adjustments (1,498) Cancellation of Predecessor company equity 44,345 Net impact to accumulated deficit $ 679,904 |
Schedule of Fresh-Start Adjustments | The following table summarizes the fair value adjustment on our oil and gas properties and accumulated depletion, depreciation and amortization (in thousands): Fresh-Start Adjustments Predecessor Successor Oil and Gas Properties Proved properties $ 3,565,631 $ (2,918,997) $ 646,634 Unproved properties 20,244 259,759 280,003 Total Oil and Gas Properties 3,585,875 (2,659,238) 926,637 Less - Accumulated depletion, depreciation and impairment (2,424,454) 2,424,454 — Net Oil and Gas Properties 1,161,421 (234,784) 926,637 Furniture, Fixtures, and other equipment 18,782 (12,598) 6,184 Less - Accumulated depreciation (12,833) 12,833 — Net Furniture, Fixtures and other equipment 5,949 235 6,184 Net Oil and Gas Properties, Furniture and fixtures and accumulated depreciation $ 1,167,370 $ (234,549) $ 932,821 Successor Predecessor Period from December 11, 2019 to December 31, 2019 Period from January 1, 2019 to December 10, 2019 Gain on settlement of liabilities subject to compromise $ — $ (637,057) Fresh start accounting adjustments — 125,358 Reorganization legal and professional fees and expenses — 63,798 Reorganization items $ — $ (447,901) |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of components of accrued oil and natural gas liabilities | Below are the components of accrued oil and natural gas liabilities as of the period December 11, 2019 through December 31, 2019 (Successor), the period of January 1, 2019 through December 10, 2019 (Predecessor) and the year ended December 31, 2018 (Predecessor). Successor Predecessor Period from December 11, 2019 to December 31, Year ended December 31, (In thousands) 2019 2018 Revenue payable to joint interest 21,103 22,750 Accrued lease operating expense 20,713 41,227 Accrued capital expenditures 8,880 24,690 Accrued ad valorem tax 5,723 5,255 Other 4,757 4,964 $ 61,176 $ 98,886 |
Debt (Tables)
Debt (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Debt Disclosure [Abstract] | |
Schedule of long-term debt | Debt consists of the following at December 31, 2019 (Successor) and the year ended December 31, 2018 (Predecessor): Successor Predecessor Year ended December 31, Year ended December 31, (In thousands) 2019 2018 Current debt Credit Facility due 2019 $ — $ 541,000 Second Lien Term Loans due 2020 — 338,626 Unamortized debt issuance costs — (17,332) Unamortized discount on Second Lien Term Loans — (5,648) Total current debt, net $ — $ 856,646 Long-term debt Successor Revolving Credit Facility $ 378,000 $ — 8% Senior Notes due 2020 — 208,885 6.625% Senior Notes due 2021 — 131,279 8% Convertible Senior Notes due 2023 — 128,103 $ 378,000 $ 468,267 Unamortized discount on Second Lien Term Loans and Senior Notes — (31,517) Unamortized debt issuance costs (8,451) (3,827) Total long-term debt, net $ 369,549 $ 432,923 Total debt, net $ 369,549 $ 1,289,569 |
Convertible debt | In addition, if a holder exercised its right to convert on or prior to September 19, 2019, such holder received an early conversion payment, in cash, per $1,000 principal amount as follows: Early Conversion Date Early Conversion Payment December 1, 2018 through May 31, 2019 .............................................................................................................. $64.22 June 1, 2019 through September 19, 2019 .............................................................................................................. $24.22 |
Revenues from Contracts with _2
Revenues from Contracts with Customers (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of revenue | Revenue attributable to each of Legacy's identified revenue streams is disaggregated in the table below. Successor Predecessor Period from December 11, 2019 to December 31, Period from January 1, 2019 to December 10, (In thousands) 2019 2019 Revenues: Oil sales $ 23,232 $ 300,905 Natural gas liquids (NGL) sales 916 14,082 Natural gas sales 6,016 101,488 Total revenues $ 30,164 $ 416,475 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Fair Value Disclosures [Abstract] | |
Schedule of financial assets and liabilities that were accounted for at fair value on a recurring basis | The following table sets forth by level within the fair value hierarchy Legacy’s financial assets and liabilities that were accounted for at fair value on a recurring basis as of December 31, 2019 (Successor) and 2018 (Predecessor): December 31, 2019 (Successor) Fair Value Measurements Using Quoted Prices in Significant Other Significant Total Fair Value Gross Amounts Offset in the Consolidated Balance Sheets Net Amounts Presented in the Consolidated Balance Sheets Description (Level 1) (Level 2) (Level 3) (In thousands) Assets: Current Commodity derivatives $ — $ 3,006 $ — $ 3,006 $ (2,438) $ 569 Noncurrent Commodity derivatives — 1,851 — 1,851 (1,851) — Liabilities: Current Commodity derivatives — (12,660) — (12,660) 2,438 (10,223) Noncurrent Commodity derivatives — (5,342) — (5,342) 1,851 (3,491) $ — $ (13,145) $ — $ (13,145) $ — $ (13,145) December 31, 2018 (Predecessor) Fair Value Measurements Using Quoted Prices in Significant Other Significant Total Fair Value Gross Amounts Offset in the Consolidated Balance Sheets Net Amounts Presented in the Consolidated Balance Sheets Description (Level 1) (Level 2) (Level 3) (In thousands) Assets: Current Commodity derivatives $ — $ 69,288 $ — $ 69,288 $ (4,670) $ 64,618 Interest rate derivatives — 2,044 — 2,044 — 2,044 Noncurrent Commodity derivatives — 3,473 — 3,473 (338) 3,135 Interest rate derivatives — — — — — Liabilities: Current Commodity derivatives — (4,670) — (4,670) 4,670 — Interest rate derivatives — — — — — LTIP liability — — — — — Noncurrent Commodity derivatives — (888) — (888) 338 (550) Interest rate derivatives — — — $ — $ 69,247 $ — $ 69,247 $ — $ 69,247 |
Reconciliation of changes in the fair value of financial assets and liabilities classified as Level 3 | The following table sets forth a reconciliation of changes in the fair value of financial assets and liabilities classified as Level 3 in the fair value hierarchy: Significant Successor Predecessor Period from December 11, 2019 to December 31, Period from January 1, 2019 to December 10, December 31, (In thousands) 2019 2019 2018 2017 Beginning balance $ — $ — $ (5,088) $ 8 Total gains (losses) — — 30,571 (5073) Settlements — — (22,379) (23) Transfers — — (3,104) (a) — Ending balance $ — $ — $ — $ (5,088) Gains (losses) included in earnings relating to derivatives $ — $ — $ — $ (5,088) ____________________ (a) Due to the lack of a historical market, we have historically accounted for our Midland-to-Cushing crude oil differential swaps as Level 3. However, with recent widening differentials, an active market has been created in which quoted prices are readily observable. As such, we determined that the inputs used to value these derivatives classify as Level 2 and transferred the value of the derivatives into Level 2 during 2018. |
Derivative Financial Instrume_2
Derivative Financial Instruments (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of reconciliation of the changes in fair value of Legacy's commodity derivatives | The following table sets forth a reconciliation of the changes in fair value of Legacy's commodity derivatives for the period of December 11, 2019 through December 31, 2019 (Successor), the period of January 1, 2019 through December 10, 2019 (Predecessor), for the years ended December 31, 2018 (Predecessor), and 2017 (Predecessor). Successor Predecessor Period from December 11, 2019 to December 31, Period from January 1, 2019 to December 10, December 31, 2019 2019 2018 2017 (In thousands) Beginning fair value of commodity derivatives $ (6,776) $ 67,205 $ 6,318 $ 12,698 Total gain (loss) crude oil derivatives (7,477) (48,146) 54,380 (15,325) Total gain (loss) natural gas derivatives 1,185 (2,148) (5,208) 33,101 Crude oil derivative cash settlements paid (received) (67) (8,773) 16,845 (11,840) Natural gas derivative cash settlements received (9) (14,914) (5,130) (12,316) Ending fair value of commodity derivatives $ (13,144) $ (6,776) $ 67,205 $ 6,318 |
Schedule of notional amounts of outstanding derivative positions | As of December 31, 2019, Legacy had the following NYMEX WTI crude oil swaps paying floating prices and receiving fixed prices for a portion of its future oil production as indicated below: Calendar Year Volumes (Bbls) Average Price per Bbl Price Range per Bbl 2020 3,660,000 $55.62 $54.10 - $56.00 2021 2,555,000 $52.80 $52.40 - $53.22 As of December 31, 2019, Legacy had the following Midland-to-Cushing crude oil differential swaps paying a floating differential and receiving a fixed differential for a portion of its future oil production as indicated below: Calendar Year Volumes (Bbls) Average Price per Bbl Price Range per Bbl 2020 732,000 $0.90 $0.90 2021 730,000 $1.05 $1.05 As of December 31, 2019, Legacy had the following NYMEX Henry Hub natural gas swaps paying floating natural gas prices and receiving fixed prices for a portion of its future natural gas production as indicated below: Average Price Range Calendar Year Volumes (MMBtu) Price per MMBtu per MMBtu 2020 32,940,000 $2.35 $2.32 - $2.40 2021 29,200,000 $2.41 $2.37 - $2.44 |
Schedule of total impact on interest expense from the mark-to-market and settlements | The total impact on interest expense from the mark-to-market and settlements was as follows: Successor Predecessor Period from December 11, 2019 to December 31, Period from January 1, 2019 to December 10, Years Ended December 31, 2019 2019 2018 2017 (In thousands) Beginning fair value of interest rate swaps $ — $ 2,044 $ 2,117 $ 183 Total gain (loss) loss on interest rate swaps — (119) 1,213 1,168 Cash settlements paid — (1,925) (1,286) 766 Ending fair value of interest rate swaps $ — $ — $ 2,044 $ 2,117 |
Sales to Major Customers (Table
Sales to Major Customers (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Risks and Uncertainties [Abstract] | |
Schedule of revenue by major customer | For the period of December 11, 2019 through December 31, 2019 (Successor), the period of January 1, 2019 through December 10, 2019 (Predecessor), the years ended December 31, 2018 (Predecessor), and 2017 (Predecessor), Legacy sold oil, NGL and natural gas production representing 10% or more of total revenues to the purchasers as detailed in the table below. Successor Predecessor Period from Period from December 11, 2019 January 1, 2019 to December 31, to December 10, Year Ended December 31, 2019 2019 2018 2017 Plains Marketing, LP 15% 19% 20% 10% Trafigura 21% 19% 9% 1% Rio Energy International Inc (1) —% 2% 13% 9% (1) Less than 1% for the period December 11, 2019 to December 31, 2019 (Successor). |
Asset Retirement Obligation (Ta
Asset Retirement Obligation (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Asset Retirement Obligation [Abstract] | |
Schedule of changes in asset retirement obligations | The following table reflects the changes in the ARO during the period of December 11, 2019 through December 31, 2019 (Successor), the period of January 1, 2019 through December 10, 2019 (Predecessor), and the years ended December 31, 2018 (Predecessor) and 2017 (Predecessor). Successor Predecessor Period from Period from December 11, 2019 January 1, 2019 to December 31, to December 10, Year Ended December 31, 2019 2019 2018 2017 (In thousands) Asset retirement obligation — beginning of period $ 152,186 $ 252,734 $ 274,686 $ 272,148 Liabilities incurred with properties acquired — — 226 62 Liabilities incurred with properties drilled — 30 65 39 Liabilities settled during the period (79) (2,891) (2,258) (1,891) Liabilities associated with properties sold (244) (243) (27,673) (8,464) Current period accretion 630 12,292 12,568 12,792 Current period revisions to previous estimates — — (4,880) — Fresh-start adjustment $ — (109,736) — — Asset retirement obligation — end of period $ 152,493 $ 152,186 $ 252,734 $ 274,686 |
Stockholders' Deficit_Unithol_2
Stockholders' Deficit/Unitholders' Deficit (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Equity [Abstract] | |
Schedule of computation of basic and diluted income (loss) per unit | The following table sets forth the computation of basic and diluted loss per share / unit: Successor Predecessor Period from Period from December 11, 2019 January 1, 2019 to December 31, to December 10, Year Ended December 31, 2019 2019 2018 2017 (In thousands) Net Income/(loss) $ 3,050 $ 173,876 $ 43,833 $ (53,897) Income/(loss) attributable to shareholders $ 3,050 $ 173,876 $ 43,833 $ (53,897) Weighted average number of shares outstanding 61,063 114,811 105,087 100,049 Effect of dilutive securities: Restricted and phantom units — — — — Weighted average units and potential units outstanding 61,063 114,811 105,087 100,049 Basic and diluted income/(loss) per share $ 0.05 $ 1.51 $ 0.42 $ (0.54) |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of option and UAR activity | A summary of UAR activity for the year ended December 31, 2019 (Successor), 2018 (Predecessor) and 2017 (Predecessor) is as follows: Units Weighted-Average Weighted-Average Remaining Aggregate Intrinsic Value Outstanding at January 1, 2017 (Predecessor) 884,546 $ 20.75 Expired (147,024) $ 24.50 Forfeited (15,501) $ 13.91 Outstanding at December 31, 2017 (Predecessor) 722,021 $ 20.13 3.29 $ — UARs exercisable at December 31, 2017 (Predecessor) 592,522 $ 23.23 2.99 $ — Outstanding at January 1, 2018 (Predecessor) 722,021 $ 20.13 Expired (90,844) $ 4.69 Forfeited (631,177) $ 22.35 Outstanding at December 31, 2018 (Predecessor) — $ — $ — |
Schedule of RSU activity | A summary of RSU activity for the period of December 11, 2019 through December 31, 2019 (Successor) and the period of January 1, 2019 through December 10, 2019 (Predecessor) is as follows: Number of Restricted Stock Units Weighted Average Grant Date Fair Value Outstanding at January 1, 2019 (Predecessor) 7,302,809 $ 4.88 Granted 516,594 $ 1.32 Expired — $ — Canceled at December 10, 2019 (Predecessor) (7,819,403) $ 4.65 Outstanding at December 31, 2019 (Successor) — $ — |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Schedule of Components of Income Tax Expense (Benefit) | The income tax expense (benefit) consists of: Successor Predecessor Period from December 11, 2019 to December 31, Period from January 1, 2019 to December 10, Years Ended December 31, (In thousands) 2019 2019 2018 2017 Current: Federal $ — $ 1 $ 140 $ 1,911 State 3 104 (147) (52) Total current income tax expense (benefit) 3 105 (7) 1,859 Deferred: Federal $ — $ — $ 1,270 $ (464) State — — 1,705 3 Total deferred income tax expense (benefit) — — 2,975 (461) Total income tax expense $ 3 $ 105 $ 2,968 $ 1,398 |
Schedule of Effective Income Tax Rate Reconciliation | A reconciliation of the federal statutory tax rate to the effective tax rate is as follows: Successor Predecessor Period from December 11, 2019 to December 31, Period from January 1, 2019 to December 10, Years Ended December 31, 2019 2019 2018 2017 Tax at federal statutory rate 21.00 % 21.00 % 21.0 % 35.0 % Partnership loss not subject to federal tax — % — % 16.6 % (36.1) % Federal rate change — % — % — % (1.6) % Non-Deductible Debt Restructuring Expenses — % 8.51 % — % — % 2023 Convertible Notes issuance — % — % 7.4 % — % 162(m) - Executive Compensation 2.32 % 0.72 % — % — % Valuation allowance adjustment (23.38) % (30.98) % (44.1) % — % Texas margins tax 0.21 % 0.06 % 6.1 % (1.6) % Other 0.06 % 0.75 % (0.7) % 1.6 % Effective tax rate 0.21 % 0.06 % 6.3 % (2.7) % |
Schedule of Deferred Tax Assets and Liabilities | Deferred income tax balances representing the tax effect of temporary differences between the financial statement carrying amounts and the tax basis of assets and liabilities are as follows: Successor Predecessor Year Ended December 31, Year Ended December 31, 2019 2018 (In thousands) Deferred tax assets: Oil and natural gas properties $ 19,660 $ 91,948 Net operating losses — 12,961 Interest expense 19,074 6,668 Hedging 3,000 — Other 1,537 — Total deferred tax assets 43,271 111,577 Deferred tax liabilities Hedging activities — (15,934) Other — (1,585) Total deferred tax liabilities — (17,519) Valuation allowance (43,271) (94,058) Net deferred tax assets $ — $ — |
ASC 842 Adoption (Tables)
ASC 842 Adoption (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Leases [Abstract] | |
Lease, Cost | The components of our total lease cost were as follows: Successor Predecessor Period from December 11, 2019 to December 31, Period from January 1, 2019 to December 10, 2019 2019 (In thousands) Operating lease cost $ 243 $ 4,607 Finance lease cost: Amortization of right-of-use assets 35 420 Interest on lease liabilities 24 332 Total finance lease costs $ 59 $ 752 Short-term lease cost $ 1,504 $ 13,302 Total $ 1,806 $ 18,661 Supplemental cash flow information related to our leases is included in the table below: Successor Predecessor Period from December 11, 2019 to December 31, Period from January 1, 2019 to December 10, 2019 2019 (In thousands) Cash paid for amounts included in lease liabilities: Operating cash flows from operating leases $ 1,504 $ 15,711 Operating cash flows from finance leases 59 752 Right-of-use assets obtained in exchange for lease obligations: Operating leases $ — $ 4,573 Finance leases 75 1,332 |
Assets And Liabilities, Lessee | Supplemental balance sheet information related to our leases is included in the table below: Successor Predecessor Period from December 11, 2019 to December 31, Period from January 1, 2019 to December 10, 2019 2019 (In thousands) Operating Leases Operating lease right-of-use assets $ 2,283 $ 2,466 Other current liabilities (1,773) (1,910) Other long-term liabilities (731) (782) Total operating lease liabilities $ (2,504) $ (2,692) Finance Leases Other property and equipment 1,407 1,332 Accumulated depreciation and amortization (315) (272) Other property and equipment, net $ 1,092 $ 1,060 Other current liabilities (481) (451) Other long-term liabilities (681) (671) Total finance lease liabilities $ (1,162) $ (1,122) Our weighted average remaining lease term and weighted average discount rate by lease classification were as follows: Successor Predecessor Period from December 11, 2019 to December 31, Period from January 1, 2019 to December 10, 2019 2019 Weighted Average Remaining Lease Term (Years) Operating leases 1.60 1.60 Finance leases 2.33 2.35 Weighted Average Discount Rate Operating leases 8.00 % 24.44 % Finance leases 8.00 % 24.46 % |
Finance Lease, Liability, Maturity | As of December 31, 2019 (Successor), our lease liabilities with enforceable contract terms that are greater than one year mature as follows: Operating Leases Finance Leases (in thousands) Year 1 $ 2,148 $ 714 Year 2 517 572 Year 3 235 227 Year 4 180 17 Year 5 12 — Thereafter — — Total lease payments $ 3,092 $ 1,530 Less imputed interest (588) (368) Total $ 2,504 $ 1,162 |
Lessee, Operating Lease, Liability, Maturity | As of December 31, 2019 (Successor), our lease liabilities with enforceable contract terms that are greater than one year mature as follows: Operating Leases Finance Leases (in thousands) Year 1 $ 2,148 $ 714 Year 2 517 572 Year 3 235 227 Year 4 180 17 Year 5 12 — Thereafter — — Total lease payments $ 3,092 $ 1,530 Less imputed interest (588) (368) Total $ 2,504 $ 1,162 |
Emergence from Voluntary Reor_2
Emergence from Voluntary Reorganization under Chapter 11 of the Bankruptcy Code (Details) - USD ($) | Dec. 11, 2019 | Dec. 31, 2019 | Jun. 21, 2019 | Dec. 31, 2018 | Sep. 20, 2018 | Apr. 01, 2014 |
Debt Instrument [Line Items] | ||||||
Common stock, shares outstanding (in shares) | 114,810,671 | 61,062,850 | 109,442,278 | |||
Supporting Creditors Plan | ||||||
Debt Instrument [Line Items] | ||||||
Pro rata share percentage of common stock to be issued | 52.25% | |||||
Pro rata share percentage due to holders of claims | 2.46% | |||||
Equity securities issued or to be issued (percent) | 10.82% | |||||
Committed equity investment by lenders | $ 189,800,000 | |||||
Committed equity investment by lenders (percent) | 30.88% | |||||
Equity securities issued or to be issued | $ 66,500,000 | |||||
Debtor-In-Possession Credit Agreement | Line of Credit | ||||||
Debt Instrument [Line Items] | ||||||
Maximum borrowing capacity | $ 350,000,000 | |||||
8% Senior Notes due 2020 | Senior notes | ||||||
Debt Instrument [Line Items] | ||||||
Stated interest rate | 8.00% | 8.00% | ||||
6.625% Senior Notes due 2021 | Senior notes | ||||||
Debt Instrument [Line Items] | ||||||
Stated interest rate | 6.25% | 6.625% | ||||
8% Convertible Senior Notes due 2023 | ||||||
Debt Instrument [Line Items] | ||||||
Common stock, shares outstanding (in shares) | 105,020 | |||||
8% Convertible Senior Notes due 2023 | Senior notes | ||||||
Debt Instrument [Line Items] | ||||||
Stated interest rate | 8.00% | 8.00% | ||||
Credit Facility due 2019 | ||||||
Debt Instrument [Line Items] | ||||||
Maximum borrowing capacity | $ 1,500,000,000 | |||||
Credit Facility due 2019 | Debtor-In-Possession Credit Agreement | Line of Credit | ||||||
Debt Instrument [Line Items] | ||||||
Maximum borrowing capacity | $ 100,000,000 | 100,000,000 | ||||
Credit Facility due 2019 | Debtor-In-Possession Credit Agreement | Medium-term Notes | ||||||
Debt Instrument [Line Items] | ||||||
Maximum borrowing capacity | 250,000,000 | $ 250,000,000 | ||||
Stated interest rate | 3.50% | |||||
Credit Facility due 2019 | Exit Facility | Secured Debt | ||||||
Debt Instrument [Line Items] | ||||||
Maximum borrowing capacity | $ 500,000,000 |
Fresh-Start Accounting - Narrat
Fresh-Start Accounting - Narrative (Details) $ in Thousands | Dec. 11, 2019USD ($) | Dec. 10, 2019USD ($) | Dec. 31, 2019USD ($) | Dec. 10, 2019USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) |
Debt Instrument [Line Items] | |||||||
Percentage of voting shares of the emerging entity | 0.50 | ||||||
Enterprise Value | $ 769,033 | ||||||
Weighted average cost of capital rate on proved reserves (percent) | 10.40% | ||||||
Index percentage for natural gas liquids pricing (percent) | 26.00% | ||||||
Long-term debt | 379,426 | $ 369,549 | $ 1,289,569 | ||||
Unamortized debt issuance costs | 8,574 | 8,451 | 3,827 | ||||
Repayments of long-term debt | 313,000 | 27,000 | $ 779,758 | 619,384 | $ 357,000 | ||
Payments of predecessor DIP Claims | 283,000 | ||||||
Proceeds from Backstop Commitments and Rights Offering | 256,300 | ||||||
Fair Value of Equity Issued to Former Holders of the Senior Notes, Bonds, and Second Lien | 149,900 | $ 149,870 | |||||
Asset retirement obligation | 152,186 | 152,186 | 152,493 | 152,186 | 252,734 | $ 274,686 | $ 272,148 |
Long-term asset retirement obligation | 147,447 | 257,984 | 147,754 | 257,984 | 248,796 | ||
Current asset retirement obligation | 4,739 | $ 3,938 | $ 4,739 | $ 3,938 | $ 3,938 | ||
Minimum | |||||||
Debt Instrument [Line Items] | |||||||
Enterprise Value | 725,000 | ||||||
Maximum | |||||||
Debt Instrument [Line Items] | |||||||
Enterprise Value | 925,000 | ||||||
Credit Facility due 2019 | |||||||
Debt Instrument [Line Items] | |||||||
Long-term debt | 379,400 | ||||||
Repayments of long-term debt | 313,000 | ||||||
Accrued interest under Predecessor Credit Facility | 4,900 | ||||||
Credit Facility due 2019 | Debtor-In-Possession Credit Agreement | |||||||
Debt Instrument [Line Items] | |||||||
Payments of predecessor DIP Claims | $ 283,000 |
Fresh-Start Accounting - Reconc
Fresh-Start Accounting - Reconciliation of Enterprise Value to Reorganization Value (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 11, 2019 | Dec. 31, 2018 |
Reorganizations [Abstract] | |||
Enterprise Value | $ 769,033 | ||
Plus: Cash and cash equivalents | 16,563 | ||
Indicated invested capital value | 785,596 | ||
Less: Post-Reorganization Debt | $ (369,549) | (379,426) | $ (1,289,569) |
Concluded Equity Value | $ 406,170 |
Fresh-Start Accounting - Reco_2
Fresh-Start Accounting - Reconciliation of Debt (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 11, 2019 | Dec. 31, 2018 |
Reorganizations [Abstract] | |||
Successor Revolving Credit Facility | $ 378,000 | $ 388,000 | $ 468,267 |
Less: Successor Revolving Credit Facility fees and debt issuance costs | (8,451) | (8,574) | (3,827) |
Total debt, net | $ 369,549 | $ 379,426 | $ 1,289,569 |
Fresh-Start Accounting - Reco_3
Fresh-Start Accounting - Reconciliation of Enterprise Value (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 11, 2019 | Dec. 10, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Reorganizations [Abstract] | ||||||
Enterprise Value | $ 769,033 | |||||
Plus: Cash and cash equivalents | 16,563 | |||||
Plus: Current and Other Liabilities (Excluding Post-Reorg. Debt and ARO) | 126,460 | |||||
Plus: Asset Retirement Obligation | $ 152,493 | 152,186 | $ 152,186 | $ 252,734 | $ 274,686 | $ 272,148 |
Reorganization Value of Successor Assets | $ 1,064,242 |
Fresh-Start Accounting - Conden
Fresh-Start Accounting - Condensed Consolidated Balance Sheet (Detail) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 11, 2019 | Dec. 10, 2019 | Dec. 31, 2018 |
Current assets: | ||||
Cash | $ 4,306 | $ 16,563 | $ 7,187 | $ 1,098 |
Restricted cash | 24,039 | 27,386 | 3,450 | 0 |
Accounts receivable, net: | ||||
Oil and natural gas | 62,543 | 63,672 | 63,672 | 56,615 |
Joint interest owners | 15,842 | 13,213 | 13,213 | 15,370 |
Other | 2 | 2 | 2 | 0 |
Fair value of derivatives (Notes 11 and 12) | 569 | 0 | 0 | 66,662 |
Prepaid expenses and other current assets | 9,708 | 10,465 | 10,465 | 11,347 |
Total current assets | 117,009 | 131,301 | 97,989 | 151,092 |
Oil and natural gas properties, at cost: | ||||
Proved properties | 650,839 | 646,634 | 3,565,631 | 3,471,456 |
Unproved properties | 280,025 | 280,003 | 20,244 | 19,863 |
Accumulated depletion, depreciation, amortization and impairment | (4,921) | 0 | (2,424,454) | (2,177,006) |
Total oil and natural gas properties, net | 925,943 | 926,637 | 1,161,421 | 1,314,313 |
Other property and equipment, net of accumulated depreciation and amortization of $— and $12,323, respectively | 5,993 | 6,184 | 5,949 | 2,456 |
Operating rights, net of amortization of $0 and $6,123, respectively | 0 | 29 | 574 | 894 |
Fair value of derivatives (Notes 11 and 12) | 0 | 91 | 91 | 3,135 |
Other assets | 0 | 0 | 0 | 3,041 |
Investments in equity method investees | 0 | 0 | ||
Total assets | 1,048,945 | 1,064,242 | 1,266,024 | 1,474,931 |
Current liabilities: | ||||
Current debt, net | 0 | 0 | 596,000 | 856,646 |
Accounts payable | 12,021 | 8,225 | 5,350 | 11,227 |
Accrued oil and natural gas liabilities (Note 3) | 61,176 | 63,965 | 63,965 | 98,886 |
Fair value of derivatives (Notes 11 and 12) | 10,223 | 4,749 | 4,749 | 0 |
Asset retirement obligation (Note 14) | 4,739 | 4,739 | 3,938 | 3,938 |
Other | 28,717 | 45,307 | 50,223 | 13,953 |
Total current liabilities | 116,876 | 126,985 | 724,225 | 984,650 |
Long-term debt (Note 5) | 369,549 | 379,426 | 0 | 432,923 |
Asset retirement obligation (Note 14) | 147,754 | 147,447 | 257,984 | 248,796 |
Fair value of derivatives (Notes 11 and 12) | 3,491 | 2,118 | 2,118 | 550 |
Other long-term liabilities | 2,055 | 2,096 | 2,096 | 643 |
Total liabilities not subject to compromise | 658,072 | 986,423 | ||
Liabilities subject to compromise | 0 | 789,802 | ||
Total liabilities | 639,725 | 658,072 | 1,776,225 | 1,667,562 |
Stockholders' equity (deficit): | ||||
Common stock, $0.01 par value; 945,000,000 shares authorized, 109,442,278 shares outstanding at December 31, 2018 (Predecessor) | 611 | 611 | 1,148 | 1,094 |
Additional paid-in capital | 405,559 | 405,559 | 43,197 | 24,752 |
Retained earnings (accumulated deficit) | 3,050 | 0 | (554,546) | (218,477) |
Total stockholders’ deficit | 409,220 | 406,170 | (510,201) | (192,631) |
Total liabilities and stockholders' equity | $ 1,048,945 | 1,064,242 | 1,266,024 | $ 1,474,931 |
Restatement Adjustment | ||||
Current assets: | ||||
Cash | 9,376 | |||
Restricted cash | 23,936 | |||
Accounts receivable, net: | ||||
Prepaid expenses and other current assets | 0 | |||
Total current assets | 33,312 | |||
Oil and natural gas properties, at cost: | ||||
Total assets | 33,312 | |||
Current liabilities: | ||||
Current debt, net | (596,000) | |||
Accounts payable | 2,875 | |||
Other | (4,916) | |||
Total current liabilities | (598,041) | |||
Long-term debt (Note 5) | 379,426 | |||
Total liabilities not subject to compromise | (218,615) | |||
Liabilities subject to compromise | (789,802) | |||
Total liabilities | (1,008,417) | |||
Stockholders' equity (deficit): | ||||
Common stock, $0.01 par value; 945,000,000 shares authorized, 109,442,278 shares outstanding at December 31, 2018 (Predecessor) | 611 | (1,148) | ||
Additional paid-in capital | 405,559 | $ (43,197) | ||
Retained earnings (accumulated deficit) | 679,904 | |||
Total stockholders’ deficit | 1,041,729 | |||
Total liabilities and stockholders' equity | 33,312 | |||
Fresh Start Adjustments | ||||
Oil and natural gas properties, at cost: | ||||
Proved properties | (2,918,997) | |||
Unproved properties | 259,759 | |||
Accumulated depletion, depreciation, amortization and impairment | 2,424,454 | |||
Total oil and natural gas properties, net | (234,784) | |||
Other property and equipment, net of accumulated depreciation and amortization of $— and $12,323, respectively | 235 | |||
Operating rights, net of amortization of $0 and $6,123, respectively | (545) | |||
Other assets | 0 | |||
Total assets | (235,094) | |||
Current liabilities: | ||||
Asset retirement obligation (Note 14) | 801 | |||
Total current liabilities | 801 | |||
Asset retirement obligation (Note 14) | (110,537) | |||
Total liabilities not subject to compromise | (109,736) | |||
Total liabilities | (109,736) | |||
Stockholders' equity (deficit): | ||||
Retained earnings (accumulated deficit) | (125,358) | |||
Total stockholders’ deficit | (125,358) | |||
Total liabilities and stockholders' equity | $ (235,094) |
Fresh-Start Accounting - Net Ca
Fresh-Start Accounting - Net Cash Payments (Details) - USD ($) $ in Thousands | Dec. 11, 2019 | Dec. 31, 2019 | Dec. 10, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Debt Instrument [Line Items] | |||||
Proceeds from Backstop Commitments and Rights Offering | $ 256,300 | ||||
Proceeds from long-term debt | 388,000 | $ 17,000 | $ 626,758 | $ 659,626 | $ 538,000 |
Payments of long-term debt | (313,000) | $ (27,000) | $ (779,758) | $ (619,384) | $ (357,000) |
Payment of Interest under Predecessor Credit Facility | (5,623) | ||||
Payment of Predecessor DIP Claims | (283,000) | ||||
Payment of Interest and Fees under Predecessor DIP Claims | (791) | ||||
Payment of Successor Revolving Credit Facility fees and debt issuance costs | (8,574) | ||||
Funding of Professional Fees Escrow Account | (23,936) | ||||
Changes in Cash | 9,376 | ||||
Credit Facility due 2019 | |||||
Debt Instrument [Line Items] | |||||
Payments of long-term debt | (313,000) | ||||
Credit Facility due 2019 | Debtor-In-Possession Credit Agreement | |||||
Debt Instrument [Line Items] | |||||
Payment of Predecessor DIP Claims | $ (283,000) |
Fresh-Start Accounting - Liabil
Fresh-Start Accounting - Liabilities Subject to Compromise (Details) - USD ($) $ in Thousands | Dec. 11, 2019 | Dec. 10, 2019 | Dec. 31, 2019 | Dec. 10, 2019 |
Reorganizations [Abstract] | ||||
Debt | $ 757,449 | $ 757,449 | ||
Accrued Interest Payable | 29,478 | 29,478 | ||
Accounts Payable | 2,875 | 2,875 | ||
Total Liabilities Subject to Compromise | $ 0 | 789,802 | 789,802 | |
Reinstatement of Liability for the General Unsecured Claims | (2,875) | (2,875) | ||
Fair Value of Equity Issued to Former Holders of the Senior Notes, Bonds, and Second Lien | (149,900) | (149,870) | ||
Gain on settlement of liabilities subject to compromise | $ 637,057 | $ 637,057 | $ 0 | $ 637,057 |
Fresh-Start Accounting - Reorga
Fresh-Start Accounting - Reorganization Adjustments (Details) - USD ($) $ in Thousands | Dec. 11, 2019 | Dec. 10, 2019 | Dec. 31, 2019 | Dec. 10, 2019 |
Reorganizations [Abstract] | ||||
Gain on settlement of liabilities subject to compromise | $ 637,057 | $ 637,057 | $ 0 | $ 637,057 |
Other Adjustments | (1,498) | |||
Cancellation of Predecessor company equity | 44,345 | |||
Net impact to accumulated deficit | $ 679,904 |
Fresh-Start Accounting - Fair V
Fresh-Start Accounting - Fair Value Adjustments on Oil and Gas Properties (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 11, 2019 | Dec. 10, 2019 | Dec. 31, 2018 |
Fresh-Start Adjustment [Line Items] | ||||
Proved properties | $ 650,839 | $ 646,634 | $ 3,565,631 | $ 3,471,456 |
Unproved properties | 280,025 | 280,003 | 20,244 | 19,863 |
Total Oil and Gas Properties | 926,637 | 3,585,875 | ||
Accumulated depletion, depreciation, amortization and impairment | (4,921) | 0 | (2,424,454) | (2,177,006) |
Total oil and natural gas properties, net | 925,943 | 926,637 | 1,161,421 | 1,314,313 |
Less - Accumulated depreciation | $ 0 | $ (12,323) | ||
Furniture and Fixtures | ||||
Fresh-Start Adjustment [Line Items] | ||||
Property, plant and equipment, gross | 6,184 | 18,782 | ||
Less - Accumulated depreciation | 0 | (12,833) | ||
Net Furniture, Fixtures and other equipment | 6,184 | 5,949 | ||
Net Oil and Gas Properties, Furniture and fixtures and accumulated depreciation | 932,821 | $ 1,167,370 | ||
Fresh Start Adjustments | ||||
Fresh-Start Adjustment [Line Items] | ||||
Proved properties | (2,918,997) | |||
Unproved properties | 259,759 | |||
Total Oil and Gas Properties | (2,659,238) | |||
Accumulated depletion, depreciation, amortization and impairment | 2,424,454 | |||
Total oil and natural gas properties, net | (234,784) | |||
Fresh Start Adjustments | Furniture and Fixtures | ||||
Fresh-Start Adjustment [Line Items] | ||||
Property, plant and equipment, gross | (12,598) | |||
Less - Accumulated depreciation | 12,833 | |||
Net Furniture, Fixtures and other equipment | 235 | |||
Net Oil and Gas Properties, Furniture and fixtures and accumulated depreciation | $ (234,549) |
Fresh-Start Accounting - Reor_2
Fresh-Start Accounting - Reorganization Items (Details) - USD ($) $ in Thousands | Dec. 11, 2019 | Dec. 10, 2019 | Dec. 31, 2019 | Dec. 10, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Reorganizations [Abstract] | ||||||
Gain on settlement of liabilities subject to compromise | $ (637,057) | $ (637,057) | $ 0 | $ (637,057) | ||
Fresh start accounting adjustments | 0 | 125,358 | ||||
Reorganization legal and professional fees and expenses | 0 | 63,798 | ||||
Other reorganization items | $ 1,498 | |||||
Reorganization items | $ 0 | $ (447,901) | $ 0 | $ 0 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Other Narrative (Details) | 1 Months Ended | 11 Months Ended | 12 Months Ended | |
Dec. 31, 2019USD ($)$ / shares | Dec. 10, 2019USD ($)field | Dec. 31, 2018USD ($)field$ / shares | Dec. 31, 2017USD ($)field | |
Property, Plant and Equipment [Line Items] | ||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.01 | $ 0.01 | ||
Number of impaired fields | field | 20 | 50 | 47 | |
Oil And Gas Properties, Unproved | ||||
Property, Plant and Equipment [Line Items] | ||||
Impairment of oil and gas properties | $ 0 | $ 0 | $ 9,300,000 | $ 0 |
Nonrecurring | Significant Unobservable Inputs (Level 3) | ||||
Property, Plant and Equipment [Line Items] | ||||
Impairment of oil and gas properties | $ 0 | $ 105,500,000 | $ 58,700,000 | $ 37,300,000 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Accrued Oil and Natural Gas Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 11, 2019 | Dec. 10, 2019 | Dec. 31, 2018 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||
Revenue payable to joint interest | $ 21,103 | $ 22,750 | ||
Accrued lease operating expense | 20,713 | 41,227 | ||
Accrued capital expenditures | 8,880 | 24,690 | ||
Accrued ad valorem tax | 5,723 | 5,255 | ||
Other | 4,757 | 4,964 | ||
Accrued oil and natural gas liabilities | $ 61,176 | $ 63,965 | $ 63,965 | $ 98,886 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Restricted Cash (Details) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 10, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||
Restricted cash | $ 24 | $ 28.5 | $ 3.3 | $ 3.2 |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies - Recent Accounting Pronouncements (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Jan. 01, 2019 | |
Lessee, Lease, Description [Line Items] | ||
ASC 842 Adoption | $ 256,000 | |
Contract termination notice period | 30 days | |
Contract extension notice period | 30 days | |
Acc. Deficit | ||
Lessee, Lease, Description [Line Items] | ||
ASC 842 Adoption | 256,000 | |
Accounting Standards Update 2016-02 | Acc. Deficit | ||
Lessee, Lease, Description [Line Items] | ||
ASC 842 Adoption | $ 255,916 | |
Minimum | Office Building | ||
Lessee, Lease, Description [Line Items] | ||
Lessee, operating lease, term of contract | 2 years | |
Minimum | Equipment | ||
Lessee, Lease, Description [Line Items] | ||
Lessee, operating lease, term of contract | 1 month | |
Minimum | Other Production Equipment | ||
Lessee, Lease, Description [Line Items] | ||
Lessee, operating lease, term of contract | 1 month | |
Minimum | Vehicles | ||
Lessee, Lease, Description [Line Items] | ||
Lessee, operating lease, term of contract | 18 months | |
Maximum | Office Building | ||
Lessee, Lease, Description [Line Items] | ||
Lessee, operating lease, term of contract | 10 years | |
Maximum | Equipment | ||
Lessee, Lease, Description [Line Items] | ||
Lessee, operating lease, term of contract | 24 months | |
Maximum | Other Production Equipment | ||
Lessee, Lease, Description [Line Items] | ||
Lessee, operating lease, term of contract | 3 months | |
Maximum | Vehicles | ||
Lessee, Lease, Description [Line Items] | ||
Lessee, operating lease, term of contract | 48 months |
Debt - Schedule of Long-term De
Debt - Schedule of Long-term Debt (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 11, 2019 | Dec. 10, 2019 | Dec. 31, 2018 |
Debt Instrument [Line Items] | ||||
Unamortized debt issuance costs | $ 0 | $ (17,332) | ||
Unamortized discount on Second Lien Term Loans and Senior Notes | 0 | (31,517) | ||
Total current debt, net | 0 | $ 0 | $ 596,000 | 856,646 |
Successor Revolving Credit Facility | 378,000 | 388,000 | 468,267 | |
Unamortized debt issuance costs | (8,451) | (8,574) | (3,827) | |
Total long-term debt, net | 369,549 | 379,426 | $ 0 | 432,923 |
Total debt, net | 369,549 | $ 379,426 | 1,289,569 | |
Second Lien Term Loans due 2020 | ||||
Debt Instrument [Line Items] | ||||
Long-term debt, gross, current | 0 | 338,626 | ||
Unamortized discount on Second Lien Term Loans and Senior Notes | 0 | (5,648) | ||
Senior notes | 8% Senior Notes due 2020 | ||||
Debt Instrument [Line Items] | ||||
Successor Revolving Credit Facility | $ 0 | 208,885 | ||
Stated interest rate | 8.00% | 8.00% | ||
Senior notes | 6.625% Senior Notes due 2021 | ||||
Debt Instrument [Line Items] | ||||
Successor Revolving Credit Facility | $ 0 | 131,279 | ||
Stated interest rate | 6.625% | 6.25% | ||
Senior notes | 8% Convertible Senior Notes due 2023 | ||||
Debt Instrument [Line Items] | ||||
Successor Revolving Credit Facility | $ 0 | 128,103 | ||
Stated interest rate | 8.00% | 8.00% | ||
Credit Facility due 2019 | ||||
Debt Instrument [Line Items] | ||||
Long-term debt, gross, current | $ 0 | 541,000 | ||
Successor Revolving Credit Facility | $ 378,000 | $ 0 | ||
Total debt, net | $ 379,400 |
Debt - Credit Facility and Cred
Debt - Credit Facility and Credit Agreement (Details) | Jun. 21, 2019USD ($) | Apr. 01, 2014USD ($) | Dec. 31, 2019 | Dec. 11, 2019USD ($) |
Line of Credit | Debtor-In-Possession Credit Agreement | ||||
Line of Credit Facility [Line Items] | ||||
Maximum borrowing capacity | $ 350,000,000 | |||
Credit Facility due 2019 | ||||
Line of Credit Facility [Line Items] | ||||
Maximum borrowing capacity | $ 1,500,000,000 | |||
Current borrowing capacity | $ 460,000,000 | |||
Unused capacity, commitment fee percentage | 0.50% | |||
Maximum total net leverage ratio | 3.50 | |||
Minimum current ratio | 1 | |||
Expiration period | 5 years | |||
Minimum percent of total property value securing credit agreement | 95.00% | |||
Credit Facility due 2019 | Line of Credit | Debtor-In-Possession Credit Agreement | ||||
Line of Credit Facility [Line Items] | ||||
Maximum borrowing capacity | $ 100,000,000 | $ 100,000,000 | ||
Unused capacity, commitment fee percentage | 1.00% | |||
Credit Facility due 2019 | Medium-term Notes | Debtor-In-Possession Credit Agreement | ||||
Line of Credit Facility [Line Items] | ||||
Maximum borrowing capacity | $ 250,000,000 | $ 250,000,000 | ||
Stated interest rate | 3.50% | |||
Credit Facility due 2019 | Alternate Base Rate | Line of Credit | Debtor-In-Possession Credit Agreement | ||||
Line of Credit Facility [Line Items] | ||||
Stated interest rate | 4.25% | |||
Credit Facility due 2019 | London Interbank Offered Rate (LIBOR) | Line of Credit | Debtor-In-Possession Credit Agreement | ||||
Line of Credit Facility [Line Items] | ||||
Stated interest rate | 5.25% | |||
Credit Facility due 2019 | Maximum | Alternate Base Rate | ||||
Line of Credit Facility [Line Items] | ||||
Basis spread on variable rate | 2.25% | |||
Credit Facility due 2019 | Maximum | London Interbank Offered Rate (LIBOR) | ||||
Line of Credit Facility [Line Items] | ||||
Basis spread on variable rate | 3.25% | |||
Credit Facility due 2019 | Minimum | Alternate Base Rate | ||||
Line of Credit Facility [Line Items] | ||||
Basis spread on variable rate | 1.25% | |||
Credit Facility due 2019 | Minimum | London Interbank Offered Rate (LIBOR) | ||||
Line of Credit Facility [Line Items] | ||||
Basis spread on variable rate | 2.25% |
Debt - Second Lien Term Loans (
Debt - Second Lien Term Loans (Details) - USD ($) | Jul. 01, 2020 | Dec. 31, 2019 | Dec. 11, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Oct. 25, 2016 |
Debt Instrument [Line Items] | ||||||
Successor Revolving Credit Facility | $ 378,000,000 | $ 388,000,000 | $ 468,267,000 | |||
Second Lien Term Loan | $300 Million Term Loan at 12% | ||||||
Debt Instrument [Line Items] | ||||||
Aggregate principal amount | $ 400,000,000 | $ 300,000,000 | ||||
Senior notes | Scenario, Forecast | ||||||
Debt Instrument [Line Items] | ||||||
Successor Revolving Credit Facility | $ 15,000,000 |
Debt - Senior Notes (Details)
Debt - Senior Notes (Details) - USD ($) | Sep. 20, 2018 | May 13, 2014 | May 28, 2013 | Dec. 04, 2012 | Dec. 31, 2019 | Sep. 30, 2018 | Dec. 10, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 11, 2019 | Feb. 10, 2015 | Mar. 18, 2014 |
Debt Instrument [Line Items] | |||||||||||||
Gain on extinguishment of debt | $ 0 | $ 13,105,000 | $ 66,066,000 | $ 0 | |||||||||
Cash paid for interest | $ 1,383,000 | 69,294,000 | $ 101,315,000 | 83,160,000 | |||||||||
Common stock, shares outstanding (in shares) | 61,062,850 | 61,062,850 | 109,442,278 | 114,810,671 | |||||||||
Debt exchange | $ 0 | $ 0 | $ 23,849,000 | $ 0 | |||||||||
December 1, 2018 through May 31, 2019 | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Conversion price per share of common stock | $ 64.22 | $ 64.22 | |||||||||||
June 1, 2019 through September 19, 2019 | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Conversion price per share of common stock | $ 24.22 | $ 24.22 | |||||||||||
8% Convertible Senior Notes due 2023 | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Common stock, shares issued | 105,020 | ||||||||||||
Common stock, shares outstanding (in shares) | 105,020 | ||||||||||||
6.625% Senior Notes due 2021 | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Gain on extinguishment of debt | $ 10,700,000 | ||||||||||||
8% Senior Notes due 2020 | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Debt conversion, converted instrument, shares issued (in shares) | 1,000,000 | ||||||||||||
Shares issued for extinguishment of debt (in shares) | 2,000,000 | ||||||||||||
Senior notes | 8% Convertible Senior Notes due 2023 | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Stated interest rate | 8.00% | 8.00% | 8.00% | ||||||||||
Debt conversion, converted instrument, shares issued (in shares) | 316,828 | ||||||||||||
Fair value of liability | $ 101,000,000 | $ 101,000,000 | |||||||||||
Unamortized debt discount | $ 29,000,000 | $ 29,000,000 | |||||||||||
Redemption price percentage | 100.00% | ||||||||||||
Conversion ratio | 166.6667 | ||||||||||||
Conversion price per share of common stock | $ 6 | $ 6 | |||||||||||
Debt exchange | $ 1,900,000 | ||||||||||||
Senior notes | 8% Convertible Senior Notes due 2023 | Change in Control | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Redemption price percentage | 101.00% | ||||||||||||
Senior notes | 8% Convertible Senior Notes due 2023 | 2023 Convertible Notes Debt Redemption Period One | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Debt conversion, converted instrument, shares issued (in shares) | 2,400,000 | ||||||||||||
Debt exchange | $ 6,500,000 | ||||||||||||
Senior notes | 8% Convertible Senior Notes due 2023 | 2023 Convertible Notes Debt Redemption Period Two | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Debt conversion, converted instrument, shares issued (in shares) | 2,300,000 | ||||||||||||
Debt exchange | $ 14,100,000 | ||||||||||||
Senior notes | 6.625% Senior Notes due 2021 | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Stated interest rate | 6.625% | 6.625% | 6.25% | ||||||||||
Aggregate principal amount | $ 300,000,000 | $ 250,000,000 | $ 300,000,000 | $ 250,000,000 | |||||||||
Debt instrument, issued, percent of par | 99.00% | 98.405% | |||||||||||
Debt conversion, converted instrument, shares issued (in shares) | 593,367 | ||||||||||||
Face amount of repurchased debt | $ 187,000,000 | ||||||||||||
Debt exchange | $ 1,750,000 | ||||||||||||
Senior notes | 8% Senior Notes due 2020 | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Stated interest rate | 8.00% | 8.00% | 8.00% | ||||||||||
Aggregate principal amount | $ 300,000,000 | $ 3,100,000 | $ 21,000,000 | $ 3,100,000 | |||||||||
Debt instrument, issued, percent of par | 97.848% | ||||||||||||
Gain on extinguishment of debt | $ 1,400,000 | ||||||||||||
Extinguishment of debt | $ 5,300,000 | ||||||||||||
Senior notes | 8% Notes Due 2023, Tranche 1 | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Aggregate principal amount | 21,000,000 | ||||||||||||
Senior notes | 8% Notes Due 2023, Tranche 2 | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Aggregate principal amount | $ 109,000,000 | ||||||||||||
Legacy Reserves Finance Corporation | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Ownership interest | 100.00% | 100.00% | 100.00% | 100.00% | 100.00% | ||||||||
Senior notes | 8% Notes Due 2020, Tranche 1 | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Extinguishment of debt | $ 21,000,000 | ||||||||||||
Senior notes | 6.625% Percent Notes Due 2021, Tranche 2 | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Extinguishment of debt | $ 109,000,000 |
Revenues from Contracts with _3
Revenues from Contracts with Customers (Details) - USD ($) | 1 Months Ended | 11 Months Ended | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 10, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Disaggregation of Revenue [Line Items] | |||||
Revenues | $ 30,164,000 | $ 416,475,000 | $ 554,861,000 | $ 436,301,000 | |
Contract with customer, performance obligation satisfied in previous period | $ 0 | ||||
Minimum | |||||
Disaggregation of Revenue [Line Items] | |||||
Contract with customer, settlement statements period not to be received | 30 days | ||||
Maximum | |||||
Disaggregation of Revenue [Line Items] | |||||
Contract with customer, settlement statements period not to be received | 60 days | ||||
Oil Sales | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenues | 23,232,000 | 300,905,000 | 375,444,000 | 239,448,000 | |
Natural Gas Liquids Sales | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenues | 916,000 | 14,082,000 | 27,750,000 | 24,796,000 | |
Natural Gas Sales | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenues | $ 6,016,000 | $ 101,488,000 | $ 151,667,000 | $ 172,057,000 |
Asset Acquisitions and Dispos_2
Asset Acquisitions and Dispositions (Details) - USD ($) $ in Thousands | Aug. 01, 2017 | Dec. 31, 2019 | Dec. 10, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Business Acquisition [Line Items] | |||||
Proceeds from sale of fixed assets | $ 55,000 | ||||
Loss (gain) on disposal of assets | $ (565) | $ 2,130 | $ (23,803) | $ 1,606 | |
Jupiter JV, LP | |||||
Business Acquisition [Line Items] | |||||
Payments to acquire business | $ 141,000 |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) | 1 Months Ended | 11 Months Ended | 12 Months Ended | |
Dec. 31, 2019 | Dec. 10, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Water Transfer Services | Blue Quail Energy Services, LLC | Board of Directors Chairman and Director | ||||
Related Party Transaction [Line Items] | ||||
Related party transaction amount | $ 18,157 | $ 37,008 | $ 169,949 | $ 9,758 |
Commitments and Contingencies (
Commitments and Contingencies (Details) - Officer | 12 Months Ended |
Dec. 31, 2019 | |
Loss Contingencies [Line Items] | |
Employment agreements with officers, severance pay consideration period, minimum | 12 months |
Employment agreements with officers, severance pay consideration period, maximum | 36 months |
Business and Credit Concentra_2
Business and Credit Concentrations (Details) - USD ($) | 1 Months Ended | 11 Months Ended | 12 Months Ended | |
Dec. 31, 2019 | Dec. 10, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Risks and Uncertainties [Abstract] | ||||
Bad debt expense | $ 0 | $ 0 | $ 0 | $ 0 |
Fair value of derivative transactions | $ (13,100,000) |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - Recurring - USD ($) $ in Thousands | 1 Months Ended | 11 Months Ended | 12 Months Ended | |
Dec. 31, 2019 | Dec. 10, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Schedule of financial assets and liabilities that were accounted for at fair value on a recurring basis | ||||
Derivative assets (liabilities), net | $ (13,145) | $ 69,247 | ||
Quoted Prices in Active Markets for Identical Assets (Level 1) | ||||
Schedule of financial assets and liabilities that were accounted for at fair value on a recurring basis | ||||
Derivative assets (liabilities), net | 0 | 0 | ||
Significant Other Observable Inputs (Level 2) | ||||
Schedule of financial assets and liabilities that were accounted for at fair value on a recurring basis | ||||
Derivative assets (liabilities), net | (13,145) | 69,247 | ||
Significant Unobservable Inputs (Level 3) | ||||
Schedule of financial assets and liabilities that were accounted for at fair value on a recurring basis | ||||
Derivative assets (liabilities), net | 0 | 0 | ||
Reconciliation of changes in the fair value of financial assets and liabilities classified as Level 3 | ||||
Beginning balance | 0 | $ 0 | (5,088) | $ 8 |
Total gains (losses) | 0 | 0 | 30,571 | (5,073) |
Settlements | 0 | 0 | (22,379) | (23) |
Transfers | 0 | 0 | (3,104) | 0 |
Ending balance | 0 | 0 | 0 | (5,088) |
Gains included in earnings relating to derivatives | 0 | 0 | 30,571 | (5,073) |
Significant Unobservable Inputs (Level 3) | Derivative assets | ||||
Reconciliation of changes in the fair value of financial assets and liabilities classified as Level 3 | ||||
Total gains (losses) | 0 | 0 | 0 | (5,088) |
Gains included in earnings relating to derivatives | 0 | $ 0 | 0 | $ (5,088) |
Derivatives Asset Current | Commodity derivatives | ||||
Schedule of financial assets and liabilities that were accounted for at fair value on a recurring basis | ||||
Gross Amounts of Recognized Assets | 3,006 | 69,288 | ||
Gross Amounts Offset in the Consolidated Balance Sheets | (2,438) | (4,670) | ||
Derivative assets | 569 | 64,618 | ||
Derivatives Asset Current | Interest rate derivatives | ||||
Schedule of financial assets and liabilities that were accounted for at fair value on a recurring basis | ||||
Gross Amounts of Recognized Assets | 2,044 | |||
Gross Amounts Offset in the Consolidated Balance Sheets | 0 | |||
Derivative assets | 2,044 | |||
Derivatives Asset Current | Quoted Prices in Active Markets for Identical Assets (Level 1) | Commodity derivatives | ||||
Schedule of financial assets and liabilities that were accounted for at fair value on a recurring basis | ||||
Gross Amounts of Recognized Assets | 0 | 0 | ||
Derivatives Asset Current | Quoted Prices in Active Markets for Identical Assets (Level 1) | Interest rate derivatives | ||||
Schedule of financial assets and liabilities that were accounted for at fair value on a recurring basis | ||||
Gross Amounts of Recognized Assets | 0 | |||
Derivatives Asset Current | Significant Other Observable Inputs (Level 2) | Commodity derivatives | ||||
Schedule of financial assets and liabilities that were accounted for at fair value on a recurring basis | ||||
Gross Amounts of Recognized Assets | 3,006 | 69,288 | ||
Derivatives Asset Current | Significant Other Observable Inputs (Level 2) | Interest rate derivatives | ||||
Schedule of financial assets and liabilities that were accounted for at fair value on a recurring basis | ||||
Gross Amounts of Recognized Assets | 2,044 | |||
Derivatives Asset Current | Significant Unobservable Inputs (Level 3) | Commodity derivatives | ||||
Schedule of financial assets and liabilities that were accounted for at fair value on a recurring basis | ||||
Gross Amounts of Recognized Assets | 0 | 0 | ||
Derivatives Asset Current | Significant Unobservable Inputs (Level 3) | Interest rate derivatives | ||||
Schedule of financial assets and liabilities that were accounted for at fair value on a recurring basis | ||||
Gross Amounts of Recognized Assets | 0 | |||
Derivatives Asset Noncurrent | Commodity derivatives | ||||
Schedule of financial assets and liabilities that were accounted for at fair value on a recurring basis | ||||
Gross Amounts of Recognized Assets | 1,851 | 3,473 | ||
Gross Amounts Offset in the Consolidated Balance Sheets | (1,851) | (338) | ||
Derivative assets | 0 | 3,135 | ||
Derivatives Asset Noncurrent | Interest rate derivatives | ||||
Schedule of financial assets and liabilities that were accounted for at fair value on a recurring basis | ||||
Gross Amounts of Recognized Assets | 0 | |||
Derivative assets | 0 | |||
Derivatives Asset Noncurrent | Quoted Prices in Active Markets for Identical Assets (Level 1) | Commodity derivatives | ||||
Schedule of financial assets and liabilities that were accounted for at fair value on a recurring basis | ||||
Gross Amounts of Recognized Assets | 0 | 0 | ||
Derivatives Asset Noncurrent | Quoted Prices in Active Markets for Identical Assets (Level 1) | Interest rate derivatives | ||||
Schedule of financial assets and liabilities that were accounted for at fair value on a recurring basis | ||||
Gross Amounts of Recognized Assets | 0 | |||
Derivatives Asset Noncurrent | Significant Other Observable Inputs (Level 2) | Commodity derivatives | ||||
Schedule of financial assets and liabilities that were accounted for at fair value on a recurring basis | ||||
Gross Amounts of Recognized Assets | 1,851 | 3,473 | ||
Derivatives Asset Noncurrent | Significant Other Observable Inputs (Level 2) | Interest rate derivatives | ||||
Schedule of financial assets and liabilities that were accounted for at fair value on a recurring basis | ||||
Gross Amounts of Recognized Assets | 0 | |||
Derivatives Asset Noncurrent | Significant Unobservable Inputs (Level 3) | Commodity derivatives | ||||
Schedule of financial assets and liabilities that were accounted for at fair value on a recurring basis | ||||
Gross Amounts of Recognized Assets | 0 | 0 | ||
Derivatives Asset Noncurrent | Significant Unobservable Inputs (Level 3) | Interest rate derivatives | ||||
Schedule of financial assets and liabilities that were accounted for at fair value on a recurring basis | ||||
Gross Amounts of Recognized Assets | 0 | |||
Derivatives Liability Current | Commodity derivatives | ||||
Schedule of financial assets and liabilities that were accounted for at fair value on a recurring basis | ||||
Gross Amounts of Recognized Liabilities | (12,660) | (4,670) | ||
Gross Amounts Offset in the Consolidated Balance Sheets | 2,438 | 4,670 | ||
Derivative liability | (10,223) | 0 | ||
Derivatives Liability Current | Interest rate derivatives | ||||
Schedule of financial assets and liabilities that were accounted for at fair value on a recurring basis | ||||
Gross Amounts of Recognized Liabilities | 0 | |||
Gross Amounts Offset in the Consolidated Balance Sheets | 0 | |||
Derivative liability | 0 | |||
Derivatives Liability Current | LTIP liability | ||||
Schedule of financial assets and liabilities that were accounted for at fair value on a recurring basis | ||||
Gross Amounts of Recognized Liabilities | 0 | |||
Derivative liability | 0 | |||
Derivatives Liability Current | Quoted Prices in Active Markets for Identical Assets (Level 1) | Commodity derivatives | ||||
Schedule of financial assets and liabilities that were accounted for at fair value on a recurring basis | ||||
Gross Amounts of Recognized Liabilities | 0 | 0 | ||
Derivatives Liability Current | Quoted Prices in Active Markets for Identical Assets (Level 1) | Interest rate derivatives | ||||
Schedule of financial assets and liabilities that were accounted for at fair value on a recurring basis | ||||
Gross Amounts of Recognized Liabilities | 0 | |||
Derivatives Liability Current | Quoted Prices in Active Markets for Identical Assets (Level 1) | LTIP liability | ||||
Schedule of financial assets and liabilities that were accounted for at fair value on a recurring basis | ||||
Gross Amounts of Recognized Liabilities | 0 | |||
Derivatives Liability Current | Significant Other Observable Inputs (Level 2) | Commodity derivatives | ||||
Schedule of financial assets and liabilities that were accounted for at fair value on a recurring basis | ||||
Gross Amounts of Recognized Liabilities | (12,660) | (4,670) | ||
Derivatives Liability Current | Significant Other Observable Inputs (Level 2) | Interest rate derivatives | ||||
Schedule of financial assets and liabilities that were accounted for at fair value on a recurring basis | ||||
Gross Amounts of Recognized Liabilities | 0 | |||
Derivatives Liability Current | Significant Other Observable Inputs (Level 2) | LTIP liability | ||||
Schedule of financial assets and liabilities that were accounted for at fair value on a recurring basis | ||||
Gross Amounts of Recognized Liabilities | 0 | |||
Derivatives Liability Current | Significant Unobservable Inputs (Level 3) | Commodity derivatives | ||||
Schedule of financial assets and liabilities that were accounted for at fair value on a recurring basis | ||||
Gross Amounts of Recognized Liabilities | 0 | 0 | ||
Derivatives Liability Current | Significant Unobservable Inputs (Level 3) | Interest rate derivatives | ||||
Schedule of financial assets and liabilities that were accounted for at fair value on a recurring basis | ||||
Gross Amounts of Recognized Liabilities | ||||
Derivatives Liability Current | Significant Unobservable Inputs (Level 3) | LTIP liability | ||||
Schedule of financial assets and liabilities that were accounted for at fair value on a recurring basis | ||||
Gross Amounts of Recognized Liabilities | 0 | |||
Derivatives Liability Noncurrent | Commodity derivatives | ||||
Schedule of financial assets and liabilities that were accounted for at fair value on a recurring basis | ||||
Gross Amounts of Recognized Liabilities | (5,342) | (888) | ||
Gross Amounts Offset in the Consolidated Balance Sheets | 1,851 | 338 | ||
Derivative liability | (3,491) | (550) | ||
Derivatives Liability Noncurrent | Interest rate derivatives | ||||
Schedule of financial assets and liabilities that were accounted for at fair value on a recurring basis | ||||
Gross Amounts of Recognized Liabilities | 0 | |||
Derivative liability | 0 | |||
Derivatives Liability Noncurrent | Quoted Prices in Active Markets for Identical Assets (Level 1) | Commodity derivatives | ||||
Schedule of financial assets and liabilities that were accounted for at fair value on a recurring basis | ||||
Gross Amounts of Recognized Liabilities | 0 | 0 | ||
Derivatives Liability Noncurrent | Quoted Prices in Active Markets for Identical Assets (Level 1) | Interest rate derivatives | ||||
Schedule of financial assets and liabilities that were accounted for at fair value on a recurring basis | ||||
Gross Amounts of Recognized Liabilities | 0 | |||
Derivatives Liability Noncurrent | Significant Other Observable Inputs (Level 2) | Commodity derivatives | ||||
Schedule of financial assets and liabilities that were accounted for at fair value on a recurring basis | ||||
Gross Amounts of Recognized Liabilities | (5,342) | (888) | ||
Derivatives Liability Noncurrent | Significant Unobservable Inputs (Level 3) | Commodity derivatives | ||||
Schedule of financial assets and liabilities that were accounted for at fair value on a recurring basis | ||||
Gross Amounts of Recognized Liabilities | $ 0 | $ 0 |
Fair Value Measurements Narrati
Fair Value Measurements Narrative (Details) - USD ($) | 1 Months Ended | 11 Months Ended | 12 Months Ended | |
Dec. 31, 2019 | Dec. 10, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Significant Unobservable Inputs (Level 3) | Oil and Gas Properties | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Property, plant and equipment, gross | $ 254,000,000 | $ 102,600,000 | ||
Nonrecurring | Oil and Gas Properties | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Property, plant, and equipment, fair value disclosure | 148,500,000 | 43,900,000 | ||
Nonrecurring | Significant Unobservable Inputs (Level 3) | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Impairment of oil and gas properties | $ 0 | $ 105,500,000 | $ 58,700,000 | $ 37,300,000 |
Derivative Financial Instrume_3
Derivative Financial Instruments - Commodity Derivatives (Details) - USD ($) $ in Thousands | 1 Months Ended | 11 Months Ended | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 10, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Realized and Unrealized Gains (Losses) Related to Derivatives [Roll Forward] | |||||
Total gain (loss) on derivatives | $ (6,292) | $ (52,337) | $ 49,099 | $ 19,711 | |
Ending fair value of derivatives | (13,100) | $ (13,100) | |||
Not designated as hedging instrument | Commodity derivatives | |||||
Realized and Unrealized Gains (Losses) Related to Derivatives [Roll Forward] | |||||
Beginning fair value of derivatives | (6,776) | 67,205 | 67,205 | 6,318 | 12,698 |
Ending fair value of derivatives | (13,144) | (6,776) | $ (13,144) | 67,205 | 6,318 |
Not designated as hedging instrument | Commodity derivatives | Crude oil | |||||
Realized and Unrealized Gains (Losses) Related to Derivatives [Roll Forward] | |||||
Total gain (loss) on derivatives | (7,477) | (48,146) | 54,380 | (15,325) | |
Derivative cash settlements received | (67) | (8,773) | (11,840) | ||
Derivative cash settlements paid | 16,845 | ||||
Not designated as hedging instrument | Commodity derivatives | Natural gas | |||||
Realized and Unrealized Gains (Losses) Related to Derivatives [Roll Forward] | |||||
Total gain (loss) on derivatives | 1,185 | (2,148) | (5,208) | 33,101 | |
Derivative cash settlements received | $ (9) | $ (14,914) | $ (5,130) | $ (12,316) |
Derivative Financial Instrume_4
Derivative Financial Instruments - Schedule of Derivatives, Notional Amounts Outstanding (Details) bbl in Thousands, MMBTU in Thousands | Dec. 31, 2019bblMMBTU$ / bbl$ / MMBTU |
NYMEX WTI Swaps 2020 | Crude oil | |
Derivative [Line Items] | |
Volumes | bbl | 3,660 |
Average price per bbl ($ per bbl) | 55.62 |
NYMEX WTI Swaps 2020 | Crude oil | Minimum | |
Derivative [Line Items] | |
Price range per bbl ($ per bbl) | 54.10 |
NYMEX WTI Swaps 2020 | Crude oil | Maximum | |
Derivative [Line Items] | |
Price range per bbl ($ per bbl) | 56 |
NYMEX WTI Swaps 2021 | Crude oil | |
Derivative [Line Items] | |
Volumes | bbl | 2,555 |
Average price per bbl ($ per bbl) | 52.80 |
NYMEX WTI Swaps 2021 | Crude oil | Minimum | |
Derivative [Line Items] | |
Price range per bbl ($ per bbl) | 52.40 |
NYMEX WTI Swaps 2021 | Crude oil | Maximum | |
Derivative [Line Items] | |
Price range per bbl ($ per bbl) | 53.22 |
Midland to Cushing Differential Swaps 2020 | Crude oil | |
Derivative [Line Items] | |
Volumes | bbl | 732 |
Average price per bbl ($ per bbl) | 0.90 |
Price range per bbl ($ per bbl) | 0.90 |
Midland to Cushing Differential Swaps 2021 | Crude oil | |
Derivative [Line Items] | |
Volumes | bbl | 730 |
Average price per bbl ($ per bbl) | 1.05 |
Price range per bbl ($ per bbl) | 1.05 |
NYMEX Henry Hub Natural Gas Swaps 2020 | Natural gas | |
Derivative [Line Items] | |
Volumes | MMBTU | 32,940 |
Average price per bbl ($ per bbl) | $ / MMBTU | 2.35 |
NYMEX Henry Hub Natural Gas Swaps 2020 | Natural gas | Minimum | |
Derivative [Line Items] | |
Price range per bbl ($ per bbl) | $ / MMBTU | 2.32 |
NYMEX Henry Hub Natural Gas Swaps 2020 | Natural gas | Maximum | |
Derivative [Line Items] | |
Price range per bbl ($ per bbl) | $ / MMBTU | 2.40 |
NYMEX Henry Hub Natural Gas Swaps 2021 | Natural gas | |
Derivative [Line Items] | |
Volumes | MMBTU | 29,200 |
Average price per bbl ($ per bbl) | $ / MMBTU | 2.41 |
NYMEX Henry Hub Natural Gas Swaps 2021 | Natural gas | Minimum | |
Derivative [Line Items] | |
Price range per bbl ($ per bbl) | $ / MMBTU | 2.37 |
NYMEX Henry Hub Natural Gas Swaps 2021 | Natural gas | Maximum | |
Derivative [Line Items] | |
Price range per bbl ($ per bbl) | $ / MMBTU | 2.44 |
Derivative Financial Instrume_5
Derivative Financial Instruments - Schedule of Derivatives, Gain (Loss) on Derivative Activity (Details) - USD ($) $ in Thousands | 1 Months Ended | 11 Months Ended | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 10, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Realized and Unrealized Gains (Losses) Related to Derivatives [Roll Forward] | |||||
Ending fair value of derivatives | $ (13,100) | $ (13,100) | |||
Interest rate derivatives | Not designated as hedging instrument | |||||
Realized and Unrealized Gains (Losses) Related to Derivatives [Roll Forward] | |||||
Beginning fair value of derivatives | 0 | $ 2,044 | 2,044 | $ 2,117 | $ 183 |
Derivative cash settlements received | 0 | (1,925) | (1,286) | ||
Derivative cash settlements paid | 766 | ||||
Ending fair value of derivatives | 0 | $ 0 | 0 | 2,044 | 2,117 |
Interest rate derivatives | Not designated as hedging instrument | Interest Expense | |||||
Realized and Unrealized Gains (Losses) Related to Derivatives [Roll Forward] | |||||
Total gain (loss) loss on interest rate swaps | $ 0 | $ (119) | $ 1,213 | $ 1,168 |
Sales to Major Customers (Detai
Sales to Major Customers (Details) - Revenue from Contract with Customer Benchmark - Customer Concentration Risk | 1 Months Ended | 11 Months Ended | 12 Months Ended | |
Dec. 31, 2019 | Dec. 10, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Plains Marketing, LP | ||||
Concentration Risk [Line Items] | ||||
Percentage of consolidated oil and natural gas revenue | 15.00% | 19.00% | 20.00% | 10.00% |
Trafigura | ||||
Concentration Risk [Line Items] | ||||
Percentage of consolidated oil and natural gas revenue | 21.00% | 19.00% | 9.00% | 1.00% |
Rio Energy International Inc | ||||
Concentration Risk [Line Items] | ||||
Percentage of consolidated oil and natural gas revenue | 0.00% | 2.00% | 13.00% | 9.00% |
Asset Retirement Obligation (De
Asset Retirement Obligation (Details) - USD ($) | 1 Months Ended | 11 Months Ended | 12 Months Ended | |
Dec. 31, 2019 | Dec. 10, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Changes in the ARO | ||||
Asset retirement obligation — beginning of period | $ 152,186,000 | $ 252,734,000 | $ 274,686,000 | $ 272,148,000 |
Liabilities incurred with properties acquired | 0 | 0 | 226,000 | 62,000 |
Liabilities incurred with properties drilled | 0 | 30,000 | 65,000 | 39,000 |
Liabilities settled during the period | (79,000) | (2,891,000) | (2,258,000) | (1,891,000) |
Liabilities associated with properties sold | (244,000) | (243,000) | (27,673,000) | (8,464,000) |
Current period accretion | 630,000 | 12,292,000 | 12,568,000 | 12,792,000 |
Current period revisions to previous estimates | 0 | 0 | (4,880,000) | 0 |
Fresh-start adjustment | 0 | (109,736,000) | 0 | 0 |
Asset retirement obligation — end of period | $ 152,493,000 | $ 152,186,000 | $ 252,734,000 | $ 274,686,000 |
Asset Retirement Obligation Nar
Asset Retirement Obligation Narrative (Details) - USD ($) | 1 Months Ended | 11 Months Ended | 12 Months Ended | |
Dec. 31, 2019 | Dec. 10, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Asset Retirement Obligation [Abstract] | ||||
Current period revisions to previous estimates | $ 0 | $ 0 | $ (4,880,000) | $ 0 |
Stockholders' Deficit_Unithol_3
Stockholders' Deficit/Unitholders' Deficit - Income (loss) per unit (Details) - USD ($) $ / shares in Units, $ in Thousands | Sep. 20, 2018 | Dec. 31, 2019 | Dec. 10, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||
Net income (loss) | $ 3,050 | $ 173,876 | $ 43,833 | $ (53,897) | |
Income/(loss) attributable to shareholders | $ 3,050 | $ 173,876 | $ 43,833 | $ (53,897) | |
Weighted average number of units outstanding (in shares) | 61,063,000 | 114,811,000 | 105,087,000 | 100,049,000 | |
Effect of dilutive securities: | |||||
Restricted and phantom units (in shares) | 0 | 0 | 0 | 0 | |
Weighted average unit and potential units outstanding (in shares) | 61,063,000 | 114,811,000 | 105,087,000 | 100,049,000 | |
Income (loss) per share - basic and diluted (in dollars per share) | $ 0.05 | $ 1.51 | $ 0.42 | $ (0.54) | |
Series A Preferred Equity | |||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||
Dividend rate | 8.00% | ||||
Series B Preferred Equity | |||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||
Dividend rate | 8.00% | ||||
Restricted stock units (RSUs) | |||||
Effect of dilutive securities: | |||||
Antidilutive restricted units excluded from computation of EPS (in shares) | 7,647,191 | 7,302,809 | 241,373 | ||
Phantom share units (PSUs) | |||||
Effect of dilutive securities: | |||||
Antidilutive restricted units excluded from computation of EPS (in shares) | 1,389,773 |
Stock-Based Compensation - LTIP
Stock-Based Compensation - LTIP and Unit Appreciation Rights (Details) - USD ($) | 11 Months Ended | 12 Months Ended | |||
Dec. 10, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2018 | Mar. 15, 2006 | |
Restricted stock units (RSUs) | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Share-based compensation expense | $ 14,800,000 | ||||
Phantom share units (PSUs) | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Share-based compensation expense | $ 22,900,000 | $ 4,600,000 | |||
Unit appreciation rights (UARs) | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Share-based compensation expense | $ (169,024) | ||||
LTIP liability | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Units authorized for issuance (in shares) | 5,000,000 | ||||
Units issued as compensation (in shares) | 3,459,197 | ||||
LTIP liability | Unit option awards | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Units issued as compensation (in shares) | 266,014 | ||||
LTIP liability | Restricted stock units (RSUs) | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Units issued as compensation (in shares) | 988,207 | ||||
LTIP liability | Phantom share units (PSUs) | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Units issued as compensation (in shares) | 1,424,114 | ||||
LTIP liability | Unrestricted units | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Units issued as compensation (in shares) | 780,862 |
Stock-Based Compensation - UAR
Stock-Based Compensation - UAR Activity (Details) - Unit appreciation rights (UARs) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Number of Restricted Stock Units | ||
Outstanding (in shares) | 722,021 | 884,546 |
Expired (in shares) | (90,844) | (147,024) |
Forfeited (in shares) | (631,177) | (15,501) |
Outstanding (in shares) | 0 | 722,021 |
Options and UARs exercisable (in shares) | 592,522 | |
Weighted-Average Exercise Price | ||
Outstanding (in dollars per share) | $ 20.13 | $ 20.75 |
Expired (in dollars per share) | 4.69 | 24.50 |
Forfeited (in dollars per share) | 22.35 | 13.91 |
Outstanding (in dollars per share) | $ 0 | 20.13 |
Options and UARs exercisable (in dollars per share) | $ 23.23 | |
Weighted-Average Remaining Contractual Term | ||
Outstanding at end of period | 3 years 3 months 14 days | |
Options and UARs exercisable | 2 years 11 months 26 days | |
Aggregate Intrinsic Value | ||
Outstanding at end of period | $ 0 | $ 0 |
Options and UARs exercisable | $ 0 |
Stock-Based Compensation - Phan
Stock-Based Compensation - Phantom, Board and Restricted Units (Details) $ / shares in Units, $ in Millions | May 15, 2018director$ / sharesshares | May 16, 2017director$ / sharesshares | Dec. 31, 2019shares | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Oct. 26, 2018director$ / shares | Sep. 25, 2018director$ / shares |
Non-employee directors | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Individuals eligible for plan | director | 1 | 4 | |||||
Phantom share units (PSUs) | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Share-based compensation expense | $ | $ 22.9 | $ 4.6 | |||||
Phantom share units (PSUs) | LTIP liability | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Partnership unit conversion ratio | 1 | ||||||
Phantom units settled in cash (in shares) | 391,674 | ||||||
Phantom units that settle in units vested (in shares) | 1,032,440 | ||||||
Restricted Stock | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Share-based compensation expense | $ | $ 0.8 | $ 1.5 | |||||
Unrestricted units | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Value of each unit at issuance (in dollars per share) | $ / shares | $ 2.04 | ||||||
Unrestricted units | Non-employee directors | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Granted (in shares) | 47,847 | ||||||
Value of each unit at issuance (in dollars per share) | $ / shares | $ 5.02 | $ 4.97 | |||||
Unrestricted units | Non-employee directors | LTIP liability | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Granted (in shares) | 6,010 | ||||||
Individuals eligible for plan | director | 2 | 6 | |||||
Value of each unit at issuance (in dollars per share) | $ / shares | $ 8.69 | ||||||
Unrestricted units | Director 2 | LTIP liability | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Granted (in shares) | 12,019 | ||||||
Individuals eligible for plan | director | 4 |
Stock-Based Compensation - Ince
Stock-Based Compensation - Incentive Plan, Restricted Stock Units, and Board Shares (Details) $ / shares in Units, $ in Millions | Oct. 26, 2018director$ / sharesshares | Sep. 25, 2018director$ / sharesshares | Dec. 10, 2019USD ($)shares | Sep. 19, 2018shares | May 16, 2017$ / shares |
Restricted stock units (RSUs) | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Granted (in shares) | 516,594 | ||||
Share-based compensation expense | $ | $ 14.8 | ||||
Restricted stock units (RSUs) | Minimum | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Award vesting period | 3 years | ||||
Restricted stock units (RSUs) | Maximum | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Award vesting period | 4 years | ||||
Unrestricted units | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Value of each unit at issuance (in dollars per share) | $ / shares | $ 2.04 | ||||
Omnibus Incentive Plan 2018 | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Units authorized for issuance (in shares) | 10,500,000 | ||||
Percentage increase in plan for shares issued | 0.10 | ||||
Grants of awards, net of forfeitures (in shares) | 549,164 | ||||
Grants of options, net of forfeitures (in shares) | 32,570 | ||||
Omnibus Incentive Plan 2018 | Restricted stock units (RSUs) | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Granted (in shares) | 516,594 | ||||
Non-employee directors | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Grants of options, net of forfeitures (in shares) | 12,450 | 5,030 | |||
Individuals eligible for plan | director | 1 | 4 | |||
Non-employee directors | Unrestricted units | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Value of each unit at issuance (in dollars per share) | $ / shares | $ 5.02 | $ 4.97 |
Stock-Based Compensation - RSU
Stock-Based Compensation - RSU Activity (Details) - Restricted stock units (RSUs) - $ / shares | 11 Months Ended | |
Dec. 10, 2019 | Dec. 31, 2019 | |
Number of Restricted Stock Units | ||
Outstanding (in shares) | 7,302,809 | |
Granted (in shares) | 516,594 | |
Expired (in shares) | 0 | |
Forfeited (in shares) | (7,819,403) | |
Outstanding (in shares) | 0 | |
Outstanding (in shares) | 0 | 0 |
Weighted-Average Exercise Price | ||
Outstanding (in dollars per share) | $ 4.88 | |
Grants (in dollars per share) | 1.32 | |
Forfeited (in dollars per share) | 4.65 | |
Outstanding (in dollars per share) | 0 | |
Outstanding (in dollars per share) | $ 0 | $ 0 |
Income Taxes Narrative (Details
Income Taxes Narrative (Details) - USD ($) | 1 Months Ended | 11 Months Ended | 12 Months Ended | |||
Dec. 31, 2019 | Dec. 10, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 11, 2019 | |
Income Tax Disclosure [Abstract] | ||||||
Tax at federal statutory rate | 21.00% | 21.00% | 21.00% | 21.00% | 35.00% | |
Cancellation of indebtedness income | $ 640,000,000 | |||||
Net operating loss carryforward | $ 195,000,000 | 0 | ||||
Tax basis in producing properties | $ 445,000,000 | |||||
US federal income tax rate | 0.21% | 0.06% | 6.30% | (2.70%) | ||
Income (loss) before income taxes | $ 3,053,000 | $ 173,981,000 | $ 46,801,000 | $ (52,499,000) | ||
Net interest expense carryover | $ 85,000,000 | $ 85,000,000 |
Income Taxes Schedule of Income
Income Taxes Schedule of Income Tax Expense (Benefit) (Details) - USD ($) $ in Thousands | 1 Months Ended | 11 Months Ended | 12 Months Ended | |
Dec. 31, 2019 | Dec. 10, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Current: | ||||
Federal | $ 0 | $ 1 | $ 140 | $ 1,911 |
State | 3 | 104 | (147) | (52) |
Total current income tax expense (benefit) | 3 | 105 | (7) | 1,859 |
Deferred: | ||||
Federal | 0 | 0 | 1,270 | (464) |
State | 0 | 0 | 1,705 | 3 |
Total deferred income tax expense (benefit) | 0 | 0 | 2,975 | (461) |
Total income tax expense | $ 3 | $ 105 | $ 2,968 | $ 1,398 |
Income Taxes Schedule of Inco_2
Income Taxes Schedule of Income Tax Rate Reconciliation (Details) | 1 Months Ended | 11 Months Ended | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 10, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Effective Income Tax Rate Reconciliation, Percent [Abstract] | |||||
Tax at federal statutory rate | 21.00% | 21.00% | 21.00% | 21.00% | 35.00% |
Partnership loss not subject to federal tax | 0.00% | 0.00% | 16.60% | (36.10%) | |
Federal rate change | 0.00% | 0.00% | 0.00% | (1.60%) | |
Non-Deductible Debt Restructuring Expenses | 0.00% | 8.51% | 0.00% | 0.00% | |
2023 Convertible Notes issuance | 0.00% | 0.00% | 7.40% | 0.00% | |
162(m) - Executive Compensation | 2.32% | 0.72% | 0.00% | 0.00% | |
Valuation allowance adjustment | (23.38%) | (30.98%) | (44.10%) | 0.00% | |
Texas margins tax | 0.21% | 0.06% | 6.10% | (1.60%) | |
Other | 0.06% | 0.75% | (0.70%) | 1.60% | |
Effective tax rate | 0.21% | 0.06% | 6.30% | (2.70%) |
Income Taxes Schedule of Deferr
Income Taxes Schedule of Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Income Tax Disclosure [Abstract] | ||
Oil and natural gas properties | $ 19,660 | $ 91,948 |
Net operating losses | 0 | 12,961 |
Interest expense | 19,074 | 6,668 |
Other | 1,537 | 0 |
Total deferred tax assets | 43,271 | 111,577 |
Hedging activities | 0 | (15,934) |
Other | 0 | (1,585) |
Total deferred tax liabilities | 0 | (17,519) |
Valuation allowance | (43,271) | (94,058) |
Net deferred tax assets | 0 | 0 |
Deferred Tax Assets, Hedging Transactions | $ 3,000 | $ 0 |
Guarantors (Details)
Guarantors (Details) - Senior notes - 6.625% Senior Notes due 2021 | 11 Months Ended | ||||
May 08, 2014offering | Feb. 10, 2015USD ($) | May 13, 2014USD ($) | Mar. 18, 2014USD ($) | May 28, 2013USD ($) | |
Debt Instrument [Line Items] | |||||
Number of private offerings | offering | 2 | ||||
Aggregate principal amount | $ | $ 300,000,000 | $ 300,000,000 | $ 250,000,000 | $ 250,000,000 |
ASC 842 Adoption - Components o
ASC 842 Adoption - Components of Lease Cost (Details) - USD ($) $ in Thousands | 1 Months Ended | 11 Months Ended |
Dec. 31, 2019 | Dec. 10, 2019 | |
Leases [Abstract] | ||
Operating lease cost | $ 243 | $ 4,607 |
Finance lease cost: | ||
Amortization of right-of-use assets | 35 | 420 |
Interest on lease liabilities | 24 | 332 |
Total finance lease costs | 59 | 752 |
Short-term lease cost | 1,504 | 13,302 |
Total | $ 1,806 | $ 18,661 |
ASC 842 Adoption - Supplemental
ASC 842 Adoption - Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands | 1 Months Ended | 11 Months Ended |
Dec. 31, 2019 | Dec. 10, 2019 | |
Cash paid for amounts included in lease liabilities: | ||
Operating cash flows from operating leases | $ 1,504 | $ 15,711 |
Operating cash flows from finance leases | 59 | 752 |
Right-of-use assets obtained in exchange for lease obligations: | ||
Operating leases | 0 | 4,573 |
Finance leases | $ 75 | $ 1,332 |
ASC 842 Adoption - Supplement_2
ASC 842 Adoption - Supplemental Balance Sheet Information (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 10, 2019 |
Operating Leases | ||
Operating lease right-of-use assets | $ 2,283 | $ 2,466 |
Other current liabilities | us-gaap:OtherLiabilitiesCurrent | us-gaap:OtherLiabilitiesCurrent |
Other long-term liabilities | us-gaap:OperatingLeaseLiabilityNoncurrent | us-gaap:OperatingLeaseLiabilityNoncurrent |
Total operating lease liabilities | $ (2,504) | $ (2,692) |
Finance Leases | ||
Other property and equipment | 1,407 | 1,332 |
Accumulated depreciation and amortization | (315) | (272) |
Other property and equipment, net | 1,092 | 1,060 |
Other current liabilities | (481) | (451) |
Other long-term liabilities | (681) | (671) |
Total finance lease liabilities | $ (1,162) | $ (1,122) |
ASC 842 Adoption - Weighted Ave
ASC 842 Adoption - Weighted Average Remaining Lease Term and Weighted Average Discount Rate (Details) | Dec. 31, 2019 | Dec. 10, 2019 |
Weighted Average Remaining Lease Term (Years) | ||
Operating leases | 1 year 7 months 6 days | 1 year 7 months 6 days |
Finance leases | 2 years 3 months 29 days | 2 years 4 months 6 days |
Weighted Average Discount Rate | ||
Operating leases | 8.00% | 24.44% |
Finance leases | 8.00% | 24.46% |
ASC 842 Adoption - Maturity of
ASC 842 Adoption - Maturity of Lease Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 10, 2019 |
Operating Leases | ||
Year 1 | $ 2,148 | |
Year 2 | 517 | |
Year 3 | 235 | |
Year 4 | 180 | |
Year 5 | 12 | |
Thereafter | 0 | |
Total lease payments | 3,092 | |
Less imputed interest | $ (588) | |
Total | us-gaap:LiabilitiesAbstract | |
Finance Leases | ||
Year 1 | $ 714 | |
Year 2 | 572 | |
Year 3 | 227 | |
Year 4 | 17 | |
Year 5 | 0 | |
Thereafter | 0 | |
Total lease payments | 1,530 | |
Less imputed interest | (368) | |
Total | $ 1,162 | $ 1,122 |
Uncategorized Items - lgcy-2019
Label | Element | Value |
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest | us-gaap_StockholdersEquityIncludingPortionAttributableToNoncontrollingInterest | $ 406,170,000 |
Cancellation of Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest | lgcy_CancellationOfStockholdersEquityIncludingPortionAttributableToNoncontrollingInterest | 0 |
Stock Issued During Period, Value, New Issues | us-gaap_StockIssuedDuringPeriodValueNewIssues | 256,577,000 |
Stock Issued During Period, Value, Conversion of Convertible Securities | us-gaap_StockIssuedDuringPeriodValueConversionOfConvertibleSecurities | 149,593,000 |
Additional Paid-in Capital [Member] | ||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest | us-gaap_StockholdersEquityIncludingPortionAttributableToNoncontrollingInterest | 405,559,000 |
Cancellation of Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest | lgcy_CancellationOfStockholdersEquityIncludingPortionAttributableToNoncontrollingInterest | 43,197,000 |
Stock Issued During Period, Value, New Issues | us-gaap_StockIssuedDuringPeriodValueNewIssues | 256,300,000 |
Stock Issued During Period, Value, Conversion of Convertible Securities | us-gaap_StockIssuedDuringPeriodValueConversionOfConvertibleSecurities | 149,259,000 |
Common Stock [Member] | ||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest | us-gaap_StockholdersEquityIncludingPortionAttributableToNoncontrollingInterest | $ 611,000 |
Cancellation of Shares, Outstanding | lgcy_CancellationOfSharesOutstanding | 114,810,000 |
Cancellation of Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest | lgcy_CancellationOfStockholdersEquityIncludingPortionAttributableToNoncontrollingInterest | $ 1,148,000 |
Stock Issued During Period, Value, New Issues | us-gaap_StockIssuedDuringPeriodValueNewIssues | $ 277,000 |
Stock Issued During Period, Shares, New Issues | us-gaap_StockIssuedDuringPeriodSharesNewIssues | 27,705,000 |
Shares, Outstanding | us-gaap_SharesOutstanding | 61,063,000 |
Stock Issued During Period, Shares, Conversion of Convertible Securities | us-gaap_StockIssuedDuringPeriodSharesConversionOfConvertibleSecurities | 33,358,000 |
Stock Issued During Period, Value, Conversion of Convertible Securities | us-gaap_StockIssuedDuringPeriodValueConversionOfConvertibleSecurities | $ 334,000 |
Retained Earnings [Member] | ||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest | us-gaap_StockholdersEquityIncludingPortionAttributableToNoncontrollingInterest | 0 |
Cancellation of Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest | lgcy_CancellationOfStockholdersEquityIncludingPortionAttributableToNoncontrollingInterest | $ (44,345,000) |