Cover Page
Cover Page - shares | 6 Months Ended | |
Jun. 30, 2021 | Aug. 05, 2021 | |
Entity Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 2021 | |
Document Transition Report | false | |
Entity File Number | 1-13726 | |
Entity Registrant Name | CHESAPEAKE ENERGY CORPORATION | |
Entity Incorporation, State or Country Code | OK | |
Entity Tax Identification Number | 73-1395733 | |
Entity Address, Address Line One | 6100 North Western Avenue, | |
Entity Address, City or Town | Oklahoma City, | |
Entity Address, State or Province | OK | |
Entity Address, Postal Zip Code | 73118 | |
City Area Code | (405) | |
Local Phone Number | 848-8000 | |
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 Common Stock, Shares Outstanding | 98,280,695 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q2 | |
Entity Central Index Key | 0000895126 | |
Current Fiscal Year End Date | --12-31 | |
Common Stock, $0.01 par value per share | ||
Entity Information [Line Items] | ||
Title of 12(b) Security | Common Stock, $0.01 par value per share | |
Trading Symbol | CHK | |
Security Exchange Name | NASDAQ | |
Class A Warrants to purchase Common Stock | ||
Entity Information [Line Items] | ||
Title of 12(b) Security | Class A Warrants to purchase Common Stock | |
Trading Symbol | CHKEW | |
Security Exchange Name | NASDAQ | |
Class B Warrants to purchase Common Stock | ||
Entity Information [Line Items] | ||
Title of 12(b) Security | Class B Warrants to purchase Common Stock | |
Trading Symbol | CHKEZ | |
Security Exchange Name | NASDAQ | |
Class C Warrants to purchase Common Stock | ||
Entity Information [Line Items] | ||
Title of 12(b) Security | Class C Warrants to purchase Common Stock | |
Trading Symbol | CHKEL | |
Security Exchange Name | NASDAQ |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions | Jun. 30, 2021 | Dec. 31, 2020 |
Current assets: | ||
Cash and cash equivalents | $ 612 | $ 279 |
Restricted cash | 10 | 0 |
Accounts receivable, net | 674 | 746 |
Short-term derivative assets | 0 | 19 |
Other current assets | 58 | 64 |
Total current assets | 1,354 | 1,108 |
Oil and natural gas properties, successful efforts method | ||
Proved oil and natural gas properties | 4,960 | 25,734 |
Unproved properties | 442 | 1,550 |
Other property and equipment | 491 | 1,754 |
Total property and equipment | 5,893 | 29,038 |
Less: accumulated depreciation, depletion and amortization | (346) | (23,806) |
Property and equipment held for sale, net | 3 | 10 |
Total property and equipment, net | 5,550 | 5,242 |
Other long-term assets | 95 | 234 |
Total assets | 6,999 | 6,584 |
Current liabilities: | ||
Accounts payable | 281 | 346 |
Current maturities of long-term debt | 0 | 1,929 |
Accrued interest | 24 | 3 |
Short-term derivative liabilities | 780 | 93 |
Other current liabilities | 781 | 723 |
Total current liabilities | 1,866 | 3,094 |
Long-term debt, net | 1,261 | 0 |
Long-term derivative liabilities | 211 | 44 |
Asset retirement obligations, net of current portion | 241 | 139 |
Other long-term liabilities | 7 | 5 |
Liabilities subject to compromise | 0 | 8,643 |
Total liabilities | 3,586 | 11,925 |
Contingencies and commitments (Note 6) | ||
Stockholders’ equity (deficit): | ||
Predecessor preferred stock, $0.01 par value, 20,000,000 shares authorized: 0 and 5,563,458 shares outstanding | 1,631 | |
Common stock | 1 | 0 |
Additional paid-in capital | 3,590 | 16,937 |
Predecessor accumulated other comprehensive income | 45 | |
Accumulated deficit | (178) | (23,954) |
Total stockholders’ equity (deficit) | 3,413 | (5,341) |
Total liabilities and stockholders’ equity (deficit) | $ 6,999 | $ 6,584 |
Common stock, shares issued (shares) | 97,954,037 | 9,780,547 |
Preferred stock, shares outstanding (shares) | 0 | 5,563,458 |
Preferred stock, par value (usd per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (shares) | 20,000,000 | 20,000,000 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Jun. 30, 2021 | Dec. 31, 2020 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (usd per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (shares) | 20,000,000 | 20,000,000 |
Preferred stock, shares outstanding (shares) | 0 | 5,563,458 |
Common stock, par value (usd per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (shares) | 450,000,000 | 22,500,000 |
Common stock, shares issued (shares) | 97,954,037 | 9,780,547 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 1 Months Ended | 3 Months Ended | 5 Months Ended | 6 Months Ended | |
Feb. 09, 2021 | Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Revenues and other: | |||||
Oil and natural gas derivatives | $ (382,000) | $ (740,000) | $ (173,000) | $ (694,000) | $ 734,000 |
Gains on sales of assets | 5,000 | 2,000 | 0 | 6,000 | 0 |
Total revenues and other | 260,000 | 693,000 | 507,000 | 1,573,000 | 3,032,000 |
Operating expenses: | |||||
Severance and ad valorem taxes | 18,000 | 41,000 | 25,000 | 65,000 | 79,000 |
General and administrative | 21,000 | 24,000 | 112,000 | 39,000 | 177,000 |
Separation and other termination costs | 22,000 | 11,000 | 22,000 | 11,000 | 27,000 |
Depreciation, depletion and amortization | 72,000 | 229,000 | 158,000 | 351,000 | 761,000 |
Impairments | 0 | 1,000 | 0 | 1,000 | 8,522,000 |
Other operating expense (income), net | (12,000) | (4,000) | (2,000) | (2,000) | 66,000 |
Total operating expenses | 494,000 | 1,123,000 | 1,048,000 | 1,718,000 | 11,800,000 |
Loss from operations | (234,000) | (430,000) | (541,000) | (145,000) | (8,768,000) |
Other income (expense): | |||||
Interest expense | (11,000) | (18,000) | (137,000) | (30,000) | (282,000) |
Gains on purchases or exchanges of debt | 0 | 0 | 2,000 | 0 | 65,000 |
Other income (expense) | 2,000 | 9,000 | 6,000 | 31,000 | (11,000) |
Reorganization items, net | 5,569,000 | 0 | 394,000 | 0 | 394,000 |
Total other income | 5,560,000 | (9,000) | 265,000 | 1,000 | 166,000 |
Income (loss) before income taxes | 5,326,000 | (439,000) | (276,000) | (144,000) | (8,602,000) |
Income tax benefit | (57,000) | 0 | 0 | 0 | (13,000) |
Net income (loss) | 5,383,000 | (439,000) | (276,000) | (144,000) | (8,589,000) |
Net loss attributable to noncontrolling interests | 0 | 0 | 0 | 0 | 16,000 |
Net income (loss) attributable to Chesapeake | 5,383,000 | (439,000) | (276,000) | (144,000) | (8,573,000) |
Preferred stock dividends | 0 | 0 | 0 | 0 | (22,000) |
Net income (loss) available to common stockholders | 5,383,000 | (439,000) | (276,000) | (8,595,000) | |
Net income (loss), basic and diluted | $ 5,383 | $ (439,000) | $ (276,000) | $ (144,000) | $ (8,595) |
Earnings (loss) per common share: | |||||
Basic (in dollars per share) | $ 550.35 | $ (4.48) | $ (28.22) | $ (1.47) | $ (880.18) |
Diluted (in dollars per share) | $ 534.51 | $ (4.48) | $ (28.22) | $ (1.47) | $ (880.18) |
Weighted average common shares outstanding (in thousands): | |||||
Basic (in shares) | 9,781 | 97,931 | 9,779 | 97,922 | 9,765 |
Diluted (in shares) | 10,071 | 97,931 | 9,779 | 97,922 | 9,765 |
Oil, natural gas and NGL | |||||
Revenues and other: | |||||
Revenue | $ 892,000 | $ 440,000 | |||
Total revenues and other | $ 398,000 | 892,000 | 440,000 | $ 1,445,000 | $ 1,334,000 |
Marketing | |||||
Revenues and other: | |||||
Revenue | 539,000 | 240,000 | |||
Total revenues and other | 239,000 | 539,000 | 240,000 | 816,000 | 964,000 |
Operating expenses: | |||||
Expense | 237,000 | 535,000 | 242,000 | 815,000 | 988,000 |
Production | |||||
Operating expenses: | |||||
Expense | 32,000 | 74,000 | 91,000 | 114,000 | 213,000 |
Gathering, processing and transportation | |||||
Operating expenses: | |||||
Expense | 102,000 | 211,000 | 270,000 | 322,000 | 555,000 |
Exploration | |||||
Operating expenses: | |||||
Expense | $ 2,000 | $ 1,000 | $ 130,000 | $ 2,000 | $ 412,000 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Millions | 1 Months Ended | 3 Months Ended | 5 Months Ended | 6 Months Ended | |
Feb. 09, 2021 | Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Statement of Comprehensive Income [Abstract] | |||||
Net income (loss) | $ 5,383 | $ (439) | $ (276) | $ (144) | $ (8,589) |
Other comprehensive income, net of income tax: | |||||
Reclassification of losses on settled derivative instruments | 3 | 0 | 8 | 0 | 17 |
Other comprehensive income | 3 | 0 | 8 | 0 | 17 |
Comprehensive income (loss) | 5,386 | (439) | (268) | (144) | (8,572) |
Comprehensive loss attributable to noncontrolling interests | 0 | 0 | 0 | 0 | 16 |
Comprehensive income (loss) attributable to Chesapeake | $ 5,386 | $ (439) | $ (268) | $ (144) | $ (8,556) |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions | 1 Months Ended | 5 Months Ended | 6 Months Ended |
Feb. 09, 2021 | Jun. 30, 2021 | Jun. 30, 2020 | |
Cash flows from operating activities: | |||
Net income (loss) | $ 5,383 | $ (144) | $ (8,589) |
Adjustments to reconcile net income (loss) to cash provided by operating activities: | |||
Depreciation, depletion and amortization | 72 | 351 | 761 |
Deferred income tax benefit | (57) | 0 | (10) |
Derivative (gains) losses, net | 382 | 694 | (734) |
Cash receipts (payments) on derivative settlements, net | (17) | (145) | 880 |
Stock-based compensation | 3 | 3 | 9 |
Gains on sales of assets | (5) | (6) | 0 |
Impairments | 0 | 1 | 8,522 |
Non-cash reorganization items, net | (6,680) | 0 | (449) |
Exploration | 2 | 1 | 406 |
Gains on purchases or exchanges of debt | 0 | 0 | (65) |
Other | 45 | (3) | 1 |
Changes in assets and liabilities | 851 | 51 | 41 |
Net cash provided by (used in) operating activities | (21) | 803 | 773 |
Cash flows from investing activities: | |||
Capital expenditures | (66) | (226) | (867) |
Proceeds from divestitures of property and equipment | 0 | 6 | 11 |
Net cash used in investing activities | (66) | (220) | (856) |
Cash flows from financing activities: | |||
Proceeds from Exit Credit Facility - Tranche A Loans | 0 | 30 | 0 |
Payments on Exit Credit Facility - Tranche A Loans | (479) | (80) | 0 |
Proceeds from pre-petition revolving credit facility borrowings | 0 | 0 | 3,806 |
Payments on pre-petition revolving credit facility borrowings | 0 | 0 | (3,467) |
Payments on DIP Facility borrowings | (1,179) | 0 | 0 |
Proceeds from issuance of senior notes, net | 1,000 | 0 | 0 |
Proceeds from issuance of common stock | 600 | 0 | 0 |
Proceeds from warrant exercise | 0 | 2 | 0 |
Debt issuance and other financing costs | (8) | (3) | (55) |
Cash paid to purchase debt | 0 | 0 | (95) |
Cash paid for common stock dividends | 0 | (34) | 0 |
Cash paid for preferred stock dividends | 0 | 0 | (22) |
Other | 0 | (2) | (8) |
Net cash provided by (used in) financing activities | (66) | (87) | 159 |
Net increase (decrease) in cash, cash equivalents and restricted cash | (153) | 496 | 76 |
Cash, cash equivalents and restricted cash, beginning of period | 279 | 126 | 6 |
Cash, cash equivalents and restricted cash, end of period | 126 | 622 | 82 |
Cash and cash equivalents | 40 | 612 | 82 |
Restricted cash | 86 | 10 | 0 |
Total cash, cash equivalents and restricted cash | 126 | 622 | 82 |
Supplemental cash flow information: | |||
Cash paid for reorganization items, net | 66 | 65 | 55 |
Interest paid, net of capitalized interest | 13 | 3 | 177 |
Income taxes paid, net of refunds received | 0 | (3) | (2) |
Supplemental disclosure of significant non-cash investing and financing activities: | |||
Put option premium on equity backstop agreement | 60 | 0 | 0 |
Change in accrued drilling and completion costs | |||
Supplemental disclosure of significant non-cash investing and financing activities: | |||
Change in accrued drilling and completion costs | $ (5) | $ 14 | $ (223) |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) $ in Millions | Total | Class A Warrants | Class B Warrants | Class C Warrants | Preferred Stock | Common Stock | Additional Paid-in Capital | Additional Paid-in CapitalClass A Warrants | Additional Paid-in CapitalClass B Warrants | Additional Paid-in CapitalClass C Warrants | Retained Earnings (Accumulated Deficit) | Accumulated Other Comprehensive Income | Treasury Stock | Non-controlling Interest |
Beginning balance (in shares) at Dec. 31, 2019 | 5,563,458 | 9,772,793 | ||||||||||||
Beginning balance at Dec. 31, 2019 | $ 4,401 | $ 1,631 | $ 0 | $ 16,973 | $ (14,220) | $ 12 | $ (32) | $ 37 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||
Stock-based compensation (in shares) | 7,409 | |||||||||||||
Stock-based compensation | (27) | (27) | ||||||||||||
Dividends, Preferred Stock | (22) | (22) | ||||||||||||
Net income (loss) attributable to Chesapeake | (8,573) | (8,573) | ||||||||||||
Hedging activity | 17 | 17 | ||||||||||||
Purchase of shares for company benefit plans | (2) | (2) | ||||||||||||
Release of shares for company benefit plans | 34 | 34 | ||||||||||||
Net loss attributable to noncontrolling interests | (16) | (16) | ||||||||||||
Ending balance (in shares) at Jun. 30, 2020 | 5,563,458 | 9,780,202 | ||||||||||||
Ending balance at Jun. 30, 2020 | (4,188) | $ 1,631 | $ 0 | 16,924 | (22,793) | 29 | 0 | 21 | ||||||
Beginning balance (in shares) at Mar. 31, 2020 | 5,563,458 | 9,783,773 | ||||||||||||
Beginning balance at Mar. 31, 2020 | (3,924) | $ 1,631 | $ 0 | 16,920 | (22,517) | 21 | 0 | 21 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||
Stock-based compensation (in shares) | 3,571 | |||||||||||||
Stock-based compensation | 4 | 4 | ||||||||||||
Net income (loss) attributable to Chesapeake | (276) | (276) | ||||||||||||
Hedging activity | 8 | 8 | ||||||||||||
Net loss attributable to noncontrolling interests | 0 | |||||||||||||
Ending balance (in shares) at Jun. 30, 2020 | 5,563,458 | 9,780,202 | ||||||||||||
Ending balance at Jun. 30, 2020 | (4,188) | $ 1,631 | $ 0 | 16,924 | (22,793) | 29 | 0 | 21 | ||||||
Beginning balance (in shares) at Dec. 31, 2020 | 5,563,358 | 9,780,547 | ||||||||||||
Beginning balance at Dec. 31, 2020 | (5,341) | $ 1,631 | $ 0 | 16,937 | (23,954) | 45 | 0 | 0 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||
Stock-based compensation (in shares) | 67 | |||||||||||||
Stock-based compensation | 3 | 3 | ||||||||||||
Net income (loss) attributable to Chesapeake | 5,383 | 5,383 | ||||||||||||
Hedging activity | 3 | 3 | ||||||||||||
Cancellation of Predecessor Equity (in shares) | (5,563,358) | (9,780,614) | ||||||||||||
Cancellation of Predecessor Equity | (48) | $ (1,631) | (16,940) | 18,571 | (48) | |||||||||
Issuance of Successor common stock (in shares) | 97,907,081 | |||||||||||||
Issuance of Successor common stock | 3,331 | $ 1 | 3,330 | |||||||||||
Issuance of Successor warrants | $ 93 | $ 94 | $ 68 | $ 93 | $ 94 | $ 68 | ||||||||
Net loss attributable to noncontrolling interests | 0 | |||||||||||||
Ending balance (in shares) at Feb. 09, 2021 | 0 | 97,907,081 | ||||||||||||
Ending balance at Feb. 09, 2021 | 3,586 | $ 0 | $ 1 | 3,585 | 0 | 0 | 0 | 0 | ||||||
Ending balance (in shares) at Mar. 31, 2021 | 0 | 97,907,081 | ||||||||||||
Ending balance at Mar. 31, 2021 | 3,881 | $ 0 | $ 1 | 3,585 | 295 | 0 | 0 | 0 | ||||||
Beginning balance (in shares) at Feb. 09, 2021 | 0 | 97,907,081 | ||||||||||||
Beginning balance at Feb. 09, 2021 | 3,586 | $ 0 | $ 1 | 3,585 | 0 | 0 | 0 | 0 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||
Stock-based compensation (in shares) | 921 | |||||||||||||
Stock-based compensation | 3 | 3 | ||||||||||||
Net income (loss) attributable to Chesapeake | (144) | (144) | ||||||||||||
Hedging activity | 0 | |||||||||||||
Dividends on common stock | (34) | (34) | ||||||||||||
Issuance of common stock for warrant exercise (in shares) | 46,035 | |||||||||||||
Issuance of Successor warrants | 2 | 2 | ||||||||||||
Net loss attributable to noncontrolling interests | 0 | |||||||||||||
Ending balance (in shares) at Jun. 30, 2021 | 0 | 97,954,037 | ||||||||||||
Ending balance at Jun. 30, 2021 | 3,413 | $ 0 | $ 1 | 3,590 | (178) | 0 | 0 | 0 | ||||||
Beginning balance (in shares) at Mar. 31, 2021 | 0 | 97,907,081 | ||||||||||||
Beginning balance at Mar. 31, 2021 | 3,881 | $ 0 | $ 1 | 3,585 | 295 | 0 | 0 | 0 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||
Stock-based compensation (in shares) | 921 | |||||||||||||
Stock-based compensation | 3 | 3 | ||||||||||||
Net income (loss) attributable to Chesapeake | (439) | (439) | 0 | |||||||||||
Hedging activity | 0 | |||||||||||||
Dividends on common stock | (34) | (34) | ||||||||||||
Issuance of common stock for warrant exercise (in shares) | 46,035 | |||||||||||||
Issuance of Successor warrants | 2 | 2 | ||||||||||||
Net loss attributable to noncontrolling interests | 0 | |||||||||||||
Ending balance (in shares) at Jun. 30, 2021 | 0 | 97,954,037 | ||||||||||||
Ending balance at Jun. 30, 2021 | $ 3,413 | $ 0 | $ 1 | $ 3,590 | $ (178) | $ 0 | $ 0 | $ 0 |
Basis of Presentation and Summa
Basis of Presentation and Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2021 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Summary of Significant Accounting Policies | 1. Basis of Presentation and Summary of Significant Accounting Policies Description of Company Chesapeake Energy Corporation (“Chesapeake”, “we,” “our”, “us” or the “Company”) is an oil and natural gas exploration and production company engaged in the acquisition, exploration and development of properties for the production of oil, natural gas and NGL from underground reservoirs. Our operations are located onshore in the United States. As discussed in Note 2 below, we filed the Chapter 11 Cases on the Petition Date and subsequently operated as a debtor-in-possession, in accordance with applicable provisions of the Bankruptcy Code, until emergence on February 9, 2021. To facilitate our financial statement presentations, we refer to the post-emergence reorganized Company in these condensed consolidated financial statements and footnotes as the “Successor” for periods subsequent to February 9, 2021, and to the pre-emergence company as “Predecessor” for periods on or prior to February 9, 2021. Basis of Presentation The accompanying unaudited condensed consolidated financial statements of Chesapeake were prepared in accordance with GAAP and the rules and regulations of the SEC. Pursuant to such rules and regulations, certain disclosures have been condensed or omitted. This Quarterly Report on Form 10-Q (this “Form 10-Q”) relates to the financial position and periods of February 10, 2021 through June 30, 2021 (“2021 Successor Period”), and January 1, 2021 through February 9, 2021 (“2021 Predecessor Period”), the three months ended June 30, 2021 (“2021 Successor Quarter”), and the three and six months ended June 30, 2020 (“2020 Predecessor Quarter” and “2020 Predecessor Period”, respectively). Our annual report on Form 10-K for the year ended December 31, 2020 (“2020 Form 10-K”) should be read in conjunction with this Form 10-Q. Except as disclosed herein, and with the exception of information in this report related to our emergence from Chapter 11 and fresh start accounting, there has been no material change in the information disclosed in the notes to the consolidated financial statements included in the 2020 Form 10-K. The accompanying unaudited condensed consolidated financial statements reflect all normal recurring adjustments which, in the opinion of management, are necessary for a fair statement of our condensed consolidated financial statements and accompanying notes and include the accounts of our direct and indirect wholly-owned subsidiaries and entities in which we have a controlling financial interest. Intercompany accounts and balances have been eliminated. The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern. Segments Operating segments are defined as components of an enterprise that engage in activities from which it may earn revenues and incur expenses for which separate operational financial information is available and is regularly evaluated by the chief operating decision maker for the purpose of allocating an enterprise’s resources and assessing its operating performance. We have concluded that we have only one reportable operating segment due to the similar nature of the exploration and production business across Chesapeake and its consolidated subsidiaries and the fact that our marketing activities are ancillary to our operations. Restricted Cash As of June 30, 2021, we had restricted cash of $10 million. The restricted funds are maintained primarily to pay certain convenience class unsecured claims following our emergence from bankruptcy. Voluntary Filing under Chapter 11 Bankruptcy On the Petition Date the Debtors filed the Chapter 11 Cases under the Bankruptcy Code in the Bankruptcy Court. On June 29, 2020, the Bankruptcy Court entered an order authorizing the joint administration of the Chapter 11 Cases under the caption In re Chesapeake Energy Corporation , Case No. 20-33233. Subsidiaries with noncontrolling interests, consolidated variable interest entities and certain de minimis subsidiaries (collectively, the “Non-Filing Entities”) were not part of the Bankruptcy Filing. The Non-Filing Entities have continued to operate in the ordinary course of business. The Bankruptcy Court confirmed the Plan and entered the Confirmation Order on January 16, 2021. The Debtors emerged from the Chapter 11 Cases on the Effective Date. The Company’s bankruptcy proceedings and related matters have been summarized below. During the pendency of the Chapter 11 Cases, we continued to operate our business in the ordinary course as debtors-in-possession in accordance with the applicable provisions of the Bankruptcy Code. The Bankruptcy Court granted the first day relief we requested that was designed primarily to mitigate the impact of the Chapter 11 Cases on our operations, vendors, suppliers, customers and employees. As a result, we were able to conduct normal business activities and satisfy all associated obligations for the period following the Petition Date and were also authorized to pay mineral interest owner royalties, employee wages and benefits, and certain vendors and suppliers in the ordinary course for goods and services provided prior to the Petition Date. During the pendency of the Chapter 11 Cases, all transactions outside the ordinary course of business required the prior approval of the Bankruptcy Court. Subject to certain specific exceptions under the Bankruptcy Code, the filing of the Chapter 11 Cases automatically stayed all judicial or administrative actions against us and efforts by creditors to collect on or otherwise exercise rights or remedies with respect to pre-petition claims. Absent an order from the Bankruptcy Court, substantially all of the Debtors’ pre-petition liabilities were subject to compromise and discharge under the Bankruptcy Code. The automatic stay was lifted on the Effective Date. We have applied ASC 852, Reorganizations, in preparing the unaudited condensed consolidated financial statements for the period ended February 9, 2021. ASC 852 requires that the financial statements, for periods subsequent to the Chapter 11 Cases, distinguish transactions and events that are directly associated with the reorganization from the ongoing operations of the business. Accordingly, certain revenues, expenses, realized gains and losses and provisions for losses that were realized or incurred during the bankruptcy proceedings, including gain on settlement of liabilities subject to compromise, losses related to executory contracts that have been approved for rejection by the Bankruptcy Court, and unamortized debt issuance costs, premiums and discounts associated with debt classified as liabilities subject to compromise, were recorded as reorganization items, net. In addition, pre-petition obligations that may be impacted by the Chapter 11 process have been classified on the condensed consolidated balance sheet as of December 31, 2020 as liabilities subject to compromise. See Note 3 for more information regarding reorganization items. |
Chapter 11 Emergence
Chapter 11 Emergence | 6 Months Ended |
Jun. 30, 2021 | |
Reorganizations [Abstract] | |
Chapter 11 Emergence | 2. Chapter 11 Emergence As described in Note 1 , on June 28, 2020, the Debtors filed the Chapter 11 Cases and on September 11, 2020, the Debtors filed the Plan, which was subsequently amended, and entered the Confirmation Order on January 16, 2021. The Debtors then emerged from bankruptcy upon effectiveness of the Plan on February 9, 2021. Capitalized terms used but not defined herein shall have the meanings ascribed to them in the Plan. Plan of Reorganization In accordance with the Plan confirmed by the Bankruptcy Court, the following significant transactions occurred upon the Company’s emergence from bankruptcy on February 9, 2021: • On the Effective Date, we issued approximately 97,907,081 shares of New Common Stock, reserved 2,092,918 shares of New Common Stock for future issuance to eligible holders of Allowed Unsecured Notes Claims and Allowed General Unsecured Claims and reserved 37,174,210 shares of New Common Stock for issuance upon exercise of the Warrants, which were the result of the transactions described below. We also entered into a registration rights agreement, warrant agreements and amended our articles of incorporation and bylaws for the authorization of the New Common Stock among other corporate governance actions. See Note 10 for further discussion of our post-emergence equity. • Each holder of an equity interest in the Predecessor, including Predecessor’s common and preferred stock, had such interest canceled, released, and extinguished without any distribution. • Each holder of obligations under the pre-petition revolving credit facility received, at such holder's prior determined allocation, its pro rata share of either Tranche A Loans or Tranche B Loans, on a dollar for dollar basis. • Each holder of obligations under the FLLO Term Loan Facility received its pro rata share of 23,022,420 shares of New Common Stock. • Each holder of an Allowed Second Lien Notes Claim received its pro rata share of 3,635,118 shares of New Common Stock, 11,111,111 Class A Warrants to purchase 11,111,111 shares of New Common Stock, 12,345,679 Class B Warrants to purchase 12,345,679 shares of New Common Stock, and 6,858,710 Class C Warrants to purchase 6,858,710 shares of New Common Stock. • Each holder of an Allowed Unsecured Notes Claim received its pro rata share of 1,311,089 shares of New Common Stock and 2,473,757 Class C Warrants to purchase 2,473,757 shares of New Common Stock. • Each holder of an Allowed General Unsecured Claim received its pro rata share of 231,112 shares of New Common Stock and 436,060 Class C Warrants to purchase 436,060 shares of New Common Stock; provided that to the extent such Allowed General Unsecured Claim is a Convenience Claim, such holder instead received its pro rata share of $10 million, which pro rata share shall not exceed five percent of such Convenience Claim. • Participants in the Rights Offering extending to the applicable classes under the Plan received 62,927,320 shares of New Common Stock. • In connection with the Rights Offering described above, the Backstop Parties under the Backstop Commitment Agreement received 6,337,031 shares of New Common Stock in respect to the Put Option Premium, and 442,991 shares of New Common Stock were issued in connection with the backstop obligation thereunder to purchase unsubscribed shares of the New Common Stock. • 2,092,918 shares of New Common Stock and 3,948,893 Class C Warrants were reserved for future issuance to eligible holders of Allowed Unsecured Notes Claims and Allowed General Unsecured Claims. The reserved New Common Stock and Class C Warrants will be issued on a pro rata basis upon the determination of the allowed portion of all disputed General Unsecured Claims and Unsecured Notes Claims. • The 2021 Long Term Incentive Plan (the “LTIP”) was approved with a share reserve equal to 6,800,000 shares of New Company Stock. • Each holder of an Allowed Other Secured Claim will receive, at the Company's option and in consultation with the Required Consenting Stakeholders (as defined in the Plan): (a) payment in full in cash; (b) the collateral securing its secured claim; (c) reinstatement of its secured claim; or (d) such other treatment that renders its secured claim unimpaired in accordance with Section 1124 of the Bankruptcy Code. • Each holder of an Allowed Other Priority Claim will receive cash up to the allowed amount of its claim. Additionally, pursuant to the Plan confirmed by the Bankruptcy Court, the Company’s post-emergence Board of Directors is comprised of six directors, including the Company’s Interim Chief Executive Officer, Michael Wichterich, and five non-employee directors, Timothy S. Duncan, Benjamin C. Duster, IV, Sarah Emerson, Matthew M. Gallagher and Brian Steck. 3. Fresh Start Accounting Fresh Start Accounting In connection with our emergence from bankruptcy and in accordance with ASC 852, we qualified for and applied fresh start accounting on the Effective Date. We were required to apply fresh start accounting because (i) the holders of existing voting shares of the Company prior to its emergence received less than 50% of the voting shares of the Company outstanding following its emergence from bankruptcy and (ii) the reorganization value of our assets immediately prior to confirmation of the Plan of approximately $6.8 billion was less than the post-petition liabilities and allowed claims of $13.2 billion. In accordance with ASC 852, with the application of fresh start accounting, the Company allocated its reorganization value to its individual assets based on their estimated fair value in conformity with FASB ASC Topic 820 - Fair Value Measurements and FASB ASC Topic 805 - Business Combinations . Accordingly, the consolidated financial statements after February 9, 2021 are not comparable with the consolidated financial statements as of or prior to that date. The Effective Date fair values of the Successor’s assets and liabilities differ materially from their recorded values as reflected on the historical balance sheet of the Predecessor. Reorganization Value Reorganization value is derived from an estimate of enterprise value, or fair value of the Company’s interest-bearing debt and stockholders’ equity. Under ASC 852, reorganization value generally approximates fair value of the entity before considering liabilities and is intended to approximate the amount a willing buyer would pay for the assets immediately after the effects of a restructuring. As set forth in the disclosure statement, amended for updated pricing, and approved by the Bankruptcy Court, the enterprise value of the Successor was estimated to be between $3.5 billion and $4.9 billion. With the assistance of third-party valuation advisors, we determined the enterprise value and corresponding implied equity value of the Successor using various valuation approaches and methods, including: (i) income approach using a calculation of present value of future cash flows based on our financial projections, (ii) the market approach using selling prices of similar assets and (iii) the cost approach. For GAAP purposes, the Company valued the Successor’s individual assets, liabilities and equity instruments and determined an estimate of the enterprise value within the estimated range. Management concluded that the best estimate of enterprise value was $4.85 billion. Specific valuation approaches and key assumptions used to arrive at reorganization value, and the value of discrete assets and liabilities resulting from the application of fresh start accounting, are described below in greater detail within the valuation process. The enterprise value and corresponding implied equity value are dependent upon achieving the future financial results set forth in our valuation using an asset-based methodology of estimated proved reserves, undeveloped properties, and other financial information, considerations and projections, applying a combination of the income, cost and market approaches as of the fresh start reporting date of February 9, 2021. All estimates, assumptions, valuations and financial projections, including the fair value adjustments, the financial projections, the enterprise value and equity value projections, are inherently subject to significant uncertainties and the resolution of contingencies beyond our control. Accordingly, there is no assurance that the estimates, assumptions, valuations or financial projections will be realized, and actual results could vary materially. The following table reconciles the enterprise value to the implied fair value of the Successor’s equity as of the Effective Date: February 9, 2021 Enterprise Value $ 4,851 Plus: Cash and cash equivalents (a) 48 Less: Fair value of debt (1,313) Successor equity value $ 3,586 ____________________________________________ (a) Cash and cash equivalents includes $8 million that was initially classified as restricted cash as of the Effective Date but subsequently released from escrow and returned to the Successor. Restricted cash exclusive of the $8 million is not included in the table above. The following table reconciles the enterprise value to the reorganization value as of the Effective Date: February 9, 2021 Enterprise Value $ 4,851 Plus: Cash and cash equivalents (a) 48 Plus: Current liabilities 1,582 Plus: Asset retirement obligations (non-current portion) 236 Plus: Other non-current liabilities 97 Reorganization value of Successor assets $ 6,814 ____________________________________________ (a) Cash and cash equivalents includes $8 million that was initially classified as restricted cash as of the Effective Date but subsequently released from escrow and returned to the Successor. Restricted cash exclusive of the $8 million is not included in the table above. Valuation Process The fair values of our oil and natural gas properties, other property and equipment, other long-term assets, long-term debt, asset retirement obligations and warrants were estimated as of the Effective Date. Oil and natural gas properties. The Company’s principal assets are its oil and natural gas properties, which are accounted for under the successful efforts accounting method. The Company determined the fair value of its oil and natural gas properties based on the discounted future net cash flows expected to be generated from these assets. Discounted cash flow models by operating area were prepared using the estimated future revenues and operating costs for all developed wells and undeveloped properties comprising the proved and unproved reserves. Significant inputs associated with the calculation of discounted future net cash flows include estimates of (i) recoverable reserves, (ii) production rates, (iii) future operating and development costs, (iv) future commodity prices escalated by an inflationary rate after five years, adjusted for differentials, and (v) a market-based weighted average cost of capital by operating area. The Company utilized NYMEX strip pricing, adjusted for differentials, to value the reserves. The NYMEX strip pricing inputs used are classified as Level 1 fair value assumptions and all other inputs are classified as Level 3 fair value assumptions. The discount rates utilized were derived using a weighted average cost of capital computation, which included an estimated cost of debt and equity for market participants with similar geographies and asset development type by operating area. Other property and equipment. The fair value of other property and equipment such as buildings, land, computer equipment, and other equipment was determined using replacement cost method under the cost approach which considers historical acquisition costs for the assets adjusted for inflation, as well as factors in any potential obsolescence based on the current condition of the assets and the ability of those assets to generate cash flow. Long-term debt. A market approach, based upon quotes from major financial institutions, was used to measure the fair value of the $500 million aggregate principal amount of 5.5% Senior Notes due 2026 (the “2026 Notes”) and $500 million aggregate principal amount of 5.875% Senior Notes due 2029 (the “2029 Notes” and, together with the 2026 Notes, the “Notes”). The carrying value of borrowings under our Exit Credit Facility approximated fair value as the terms and interest rates are based on prevailing market rates. Asset retirement obligations. The fair value of the Company’s asset retirement obligations was revalued based upon estimated current reclamation costs for our assets with reclamation obligations, an appropriate long-term inflation adjustment, and our revised credit adjusted risk-free rate. The credit adjusted risk-free rate was based on an evaluation of an interest rate that equates to a risk-free interest rate adjusted for the effect of our credit standing. Warrants. The fair values of the Warrants issued upon the Effective Date were estimated using a Black-Scholes model, a commonly used option-pricing model. The Black-Scholes model was used to estimate the fair value of the warrants with an implied stock price of $20.52; initial exercise price per share of $27.63, $32.13 and $36.18 for Class A, Class B and Class C Warrants, respectively; expected volatility of 58% estimated using volatilities of similar entities; risk-free rate using a 5-year Treasury bond rate; and an expected annual dividend yield which was estimated to be zero. Condensed Consolidated Balance Sheet The following consolidated balance sheet is as of February 9, 2021. This consolidated balance sheet includes adjustments that reflect the consummation of the transactions contemplated by the Plan (reflected in the column “Reorganization Adjustments”) as well as fair value adjustments as a result of the adoption of fresh start accounting (reflected in the column “Fresh Start Adjustments”) as of the Effective Date. The explanatory notes following the table below provide further details on the adjustments, including the assumptions and methods used to determine fair value for its assets, liabilities and warrants. Predecessor Reorganization Adjustments Fresh Start Adjustments Successor Assets Current assets: Cash and cash equivalents $ 243 $ (203) (a) $ — $ 40 Restricted cash — 86 (b) — 86 Accounts receivable, net 861 (18) (c) — 843 Short-term derivative assets — — — — Other current assets 66 (5) (d) — 61 Total current assets 1,170 (140) — 1,030 Property and equipment: Oil and natural gas properties, successful efforts method Proved oil and natural gas properties 25,794 — (21,108) (o) 4,686 Unproved properties 1,546 — (1,063) (o) 483 Other property and equipment 1,755 — (1,256) (o) 499 Total property and equipment 29,095 — (23,427) (o) 5,668 Less: accumulated depreciation, depletion and amortization (23,877) — 23,877 (o) — Property and equipment held for sale, net 9 — (7) (o) 2 Total property and equipment, net 5,227 — 443 (o) 5,670 Other long-term assets 198 — (84) (p) 114 Total assets $ 6,595 $ (140) $ 359 $ 6,814 Predecessor Reorganization Adjustments Fresh Start Adjustments Successor Liabilities and stockholders’ equity (deficit) Current liabilities: Accounts payable $ 391 $ 24 (e) $ — $ 415 Current maturities of long-term debt, net 1,929 (1,929) (f) — — Accrued interest 4 (4) (g) — — Short-term derivative liabilities 398 — — 398 Other current liabilities 645 124 (h) — 769 Total current liabilities 3,367 (1,785) — 1,582 Long-term debt, net — 1,261 (i) 52 (q) 1,313 Long-term derivative liabilities 90 — — 90 Asset retirement obligations, net of current portion 139 — 97 (r) 236 Other long-term liabilities 5 2 (j) — 7 Liabilities subject to compromise 9,574 (9,574) (k) — — Total liabilities 13,175 (10,096) 149 3,228 Contingencies and commitments ( Note 6 ) Stockholders’ equity (deficit): Predecessor preferred stock 1,631 (1,631) (l) — — Predecessor common stock — — — — Predecessor additional paid-in capital 16,940 (16,940) (l) — — Successor common stock — 1 (m) — 1 Successor additional paid-in-capital — 3,585 (m) — 3,585 Accumulated other comprehensive income 48 — (48) (s) — Accumulated deficit (25,199) 24,941 (n) 258 (t) — Total stockholders’ equity (deficit) (6,580) 9,956 210 3,586 Total liabilities and stockholders’ equity (deficit) $ 6,595 $ (140) $ 359 $ 6,814 Reorganization Adjustments (a) The table below reflects the sources and uses of cash on the Effective Date from implementation of the Plan: Sources: Proceeds from issuance of the Notes $ 1,000 Proceeds from Rights Offering 600 Proceeds from refunds of interest deposit for the Notes 5 Total sources of cash $ 1,605 Uses: Payment of roll-up of DIP Facility balance $ (1,179) Payment of Exit Credit Facility - Tranche A Loan (479) Transfers to restricted cash for professional fee reserve (76) Transfers to restricted cash for convenience claim distribution reserve (10) Payment of professional fees (31) Payment of DIP Facility interest and fees (12) Payment of FLLO alternative transaction fee (12) Payment of the Notes fees funded out of escrow (8) Payment of RBL interest and fees (1) Total uses of cash $ (1,808) Net cash used $ (203) (b) Represents the transfer of funds to a restricted cash account for purposes of funding the professional fee reserve and the convenience claim distribution reserve. (c) Reflects the removal of an insurance receivable associated with a discharged legal liability. (d) Reflects the collection of an interest deposit for the senior unsecured notes. (e) Changes in accounts payable include the following: Accrual of professional service provider success fees $ 38 Accrual of convenience claim distribution reserve 10 Accrual of professional service provider fees 5 Reinstatement of accounts payable from liabilities subject to compromise 2 Payment of professional fees (31) Net impact to accounts payable $ 24 (f) Reflects payment of the pre-petition credit facility for $1.179 billion and transfer of the Tranche A and Tranche B Loans to long-term debt for $750 million. (g) Reflect payments of accrued interest and fees on the DIP Facility. (h) Changes in other current liabilities include the following: Reinstatement of other current liabilities from liabilities subject to compromise $ 191 Accrual of the Notes fees 2 Settlement of Put Option Premium through issuance of Successor Common Stock (60) Payment of DIP Facility fees (9) Net impact to other current liabilities $ 124 (i) Change in long-term debt include the following: Issuance of the Notes $ 1,000 Issuance of Tranche A and Tranche B Loans 750 Payments on Tranche A Loans (479) Debt issuance costs for the Notes (10) Net impact to long-term debt, net $ 1,261 (j) Reflects reinstatement of a long-term lease liability. (k) On the Effective Date, liabilities subject to compromise were settled in accordance with the Plan as follows: Liabilities subject to compromise pre-emergence $ 9,574 To be reinstated on the Effective Date: Accounts payable $ (2) Other current liabilities (191) Other long-term liabilities (2) Total liabilities reinstated $ (195) Consideration provided to settle amounts per the Plan or Reorganization: Issuance of Successor common stock associated with the Rights Offering and Backstop Commitment and settlement of the Put Option Premium $ (2,311) Proceeds from issuance of Successor common stock associated with the Rights Offering and Backstop Commitment 600 Issuance of Successor common stock to FLLO Term Loan holders, incremental to the Rights Offering and Backstop Commitment (783) Issuance of Successor common stock to second lien note holders, incremental to the Rights Offering and Backstop Commitment (124) Issuance of Successor common stock to unsecured note holders (45) Issuance of Successor common stock to general unsecured claims (8) Fair value of Class A Warrants (93) Fair value of Class B Warrants (94) Fair value of Class C Warrants (68) Proceeds to holders of general unsecured claims (10) Total consideration provided to settle amounts per the Plan $ (2,936) Gain on settlement of liabilities subject to compromise $ 6,443 (l) Pursuant to the Plan, as of the Effective Date, all equity interests in Predecessor, including Predecessor’s common and preferred stock, were cancelled without any distribution. (m) Reflects the Successor equity including the issuance of 97,907,081 shares of New Common Stock, 11,111,111 shares of Class A Warrants, 12,345,679 shares of Class B Warrants and 9,768,527 shares of Class C Warrants pursuant to the Plan. Issuance of Successor equity associated with the Rights Offering and Backstop Commitment $ 2,371 Issuance of Successor equity to holders of the FLLO Term Loan, incremental to the Rights Offering and Backstop Commitment 783 Issuance of Successor equity to holders of the Second Lien Notes, incremental to the Rights Offering and Backstop Commitment 124 Issuance of Successor equity to holders of the unsecured senior notes 45 Issuance of Successor equity to holders of allowed general unsecured claims 8 Fair value of Class A warrants 93 Fair value of Class B warrants 94 Fair value of Class C warrants 68 Total change in Successor common stock and additional paid-in capital 3,586 Less: par value of Successor common stock (1) Change in Successor additional paid-in capital $ 3,585 (n) Reflects the cumulative net impact of the effects on accumulated deficit as follows: Gain on settlement of liabilities subject to compromise $ 6,443 Accrual of professional service provider success fees (38) Accrual of professional service provider fees (5) Surrender of other receivable (18) Payment of FLLO alternative transaction fee (12) Total reorganization items, net 6,370 Cancellation of predecessor equity 18,571 Net impact on accumulated deficit $ 24,941 Fresh Start Adjustments (o) Reflects fair value adjustments to our (i) proved oil and natural gas properties, (ii) unproved properties, (iii) other property and equipment (iv) property and equipment held for sale, and the elimination of accumulated depletion, depreciation and amortization. (p) Reflects the fair value adjustment to record historical contracts at their fair values. (q) Reflects the fair value adjustments to the 2026 Notes and 2029 Notes for $22 million and $30 million, respectively. (r) Reflects the adjustment to our asset retirement obligations using assumptions as of the Effective Date, including an inflation factor of 2% and an average credit-adjusted risk-free rate of 5.18%. (s) Reflects the fair value adjustment to eliminate the accumulated other comprehensive income of $9 million related to hedging settlements offset by the elimination of $57 million of income tax effects which has resulted in the recording of an income tax benefit of $57 million. See Note 9 for a discussion of income taxes. (t) Reflects the net cumulative impact of the fresh start adjustments on accumulated deficit as follows: Fresh start adjustments to property and equipment $ 443 Fresh start adjustments to other long-term assets (84) Fresh start adjustments to long-term debt (52) Fresh start adjustments to long-term asset retirement obligations (97) Fresh start adjustments to accumulated other comprehensive income (9) Total fresh start adjustments impacting reorganizations items, net 201 Income tax effects on accumulated other comprehensive income 57 Net impact to accumulated deficit $ 258 Reorganization Items, Net We have incurred significant expenses, gains and losses associated with the reorganization, primarily the gain on settlement of liabilities subject to compromise, write-off of unamortized debt issuance costs and related unamortized premiums and discounts, debt and equity financing fees, provision for allowed claims and legal and professional fees incurred subsequent to the Chapter 11 filings for the restructuring process. The accrual for allowed claims primarily represents damages from contract rejections and settlements attributable to the midstream savings requirement as stipulated in the Plan. While the claims reconciliation process is ongoing, we do not believe any existing unresolved claims will result in a material adjustment to the financial statements. The amount of these items, which were incurred in reorganization items, net within our accompanying unaudited condensed consolidated statements of operations, have significantly affected our statements of operations. The following table summarizes the components in reorganization items, net included in our unaudited condensed consolidated statements of operations: Successor Predecessor Three Months Ended Three Months Ended Write off of unamortized debt premiums (discounts) on Predecessor debt $ — $ 518 Write off of unamortized debt issuance costs on Predecessor debt — (61) DIP Facility financing costs — (63) Total reorganization items, net $ — $ 394 Successor Predecessor Period from February 10, 2021 through June 30, 2021 Period from January 1, 2021 through February 9, 2021 Six Months Ended Gains on the settlement of liabilities subject to compromise $ — $ 6,443 $ — Accrual for allowed claims — (1,002) — Write off of unamortized debt premiums (discounts) on Predecessor debt — — 518 Write off of unamortized debt issuance costs on Predecessor debt — — (61) Gain on fresh start adjustments — 201 — Gain from release of commitment liabilities — 55 — DIP Facility financing costs — — (63) Professional service provider fees and other — (60) — Success fees for professional service providers — (38) — Surrender of other receivable — (18) — FLLO alternative transaction fee — (12) — Total reorganization items, net $ — $ 5,569 $ 394 |
Fresh Start Accounting
Fresh Start Accounting | 6 Months Ended |
Jun. 30, 2021 | |
Reorganizations [Abstract] | |
Fresh Start Accounting | 2. Chapter 11 Emergence As described in Note 1 , on June 28, 2020, the Debtors filed the Chapter 11 Cases and on September 11, 2020, the Debtors filed the Plan, which was subsequently amended, and entered the Confirmation Order on January 16, 2021. The Debtors then emerged from bankruptcy upon effectiveness of the Plan on February 9, 2021. Capitalized terms used but not defined herein shall have the meanings ascribed to them in the Plan. Plan of Reorganization In accordance with the Plan confirmed by the Bankruptcy Court, the following significant transactions occurred upon the Company’s emergence from bankruptcy on February 9, 2021: • On the Effective Date, we issued approximately 97,907,081 shares of New Common Stock, reserved 2,092,918 shares of New Common Stock for future issuance to eligible holders of Allowed Unsecured Notes Claims and Allowed General Unsecured Claims and reserved 37,174,210 shares of New Common Stock for issuance upon exercise of the Warrants, which were the result of the transactions described below. We also entered into a registration rights agreement, warrant agreements and amended our articles of incorporation and bylaws for the authorization of the New Common Stock among other corporate governance actions. See Note 10 for further discussion of our post-emergence equity. • Each holder of an equity interest in the Predecessor, including Predecessor’s common and preferred stock, had such interest canceled, released, and extinguished without any distribution. • Each holder of obligations under the pre-petition revolving credit facility received, at such holder's prior determined allocation, its pro rata share of either Tranche A Loans or Tranche B Loans, on a dollar for dollar basis. • Each holder of obligations under the FLLO Term Loan Facility received its pro rata share of 23,022,420 shares of New Common Stock. • Each holder of an Allowed Second Lien Notes Claim received its pro rata share of 3,635,118 shares of New Common Stock, 11,111,111 Class A Warrants to purchase 11,111,111 shares of New Common Stock, 12,345,679 Class B Warrants to purchase 12,345,679 shares of New Common Stock, and 6,858,710 Class C Warrants to purchase 6,858,710 shares of New Common Stock. • Each holder of an Allowed Unsecured Notes Claim received its pro rata share of 1,311,089 shares of New Common Stock and 2,473,757 Class C Warrants to purchase 2,473,757 shares of New Common Stock. • Each holder of an Allowed General Unsecured Claim received its pro rata share of 231,112 shares of New Common Stock and 436,060 Class C Warrants to purchase 436,060 shares of New Common Stock; provided that to the extent such Allowed General Unsecured Claim is a Convenience Claim, such holder instead received its pro rata share of $10 million, which pro rata share shall not exceed five percent of such Convenience Claim. • Participants in the Rights Offering extending to the applicable classes under the Plan received 62,927,320 shares of New Common Stock. • In connection with the Rights Offering described above, the Backstop Parties under the Backstop Commitment Agreement received 6,337,031 shares of New Common Stock in respect to the Put Option Premium, and 442,991 shares of New Common Stock were issued in connection with the backstop obligation thereunder to purchase unsubscribed shares of the New Common Stock. • 2,092,918 shares of New Common Stock and 3,948,893 Class C Warrants were reserved for future issuance to eligible holders of Allowed Unsecured Notes Claims and Allowed General Unsecured Claims. The reserved New Common Stock and Class C Warrants will be issued on a pro rata basis upon the determination of the allowed portion of all disputed General Unsecured Claims and Unsecured Notes Claims. • The 2021 Long Term Incentive Plan (the “LTIP”) was approved with a share reserve equal to 6,800,000 shares of New Company Stock. • Each holder of an Allowed Other Secured Claim will receive, at the Company's option and in consultation with the Required Consenting Stakeholders (as defined in the Plan): (a) payment in full in cash; (b) the collateral securing its secured claim; (c) reinstatement of its secured claim; or (d) such other treatment that renders its secured claim unimpaired in accordance with Section 1124 of the Bankruptcy Code. • Each holder of an Allowed Other Priority Claim will receive cash up to the allowed amount of its claim. Additionally, pursuant to the Plan confirmed by the Bankruptcy Court, the Company’s post-emergence Board of Directors is comprised of six directors, including the Company’s Interim Chief Executive Officer, Michael Wichterich, and five non-employee directors, Timothy S. Duncan, Benjamin C. Duster, IV, Sarah Emerson, Matthew M. Gallagher and Brian Steck. 3. Fresh Start Accounting Fresh Start Accounting In connection with our emergence from bankruptcy and in accordance with ASC 852, we qualified for and applied fresh start accounting on the Effective Date. We were required to apply fresh start accounting because (i) the holders of existing voting shares of the Company prior to its emergence received less than 50% of the voting shares of the Company outstanding following its emergence from bankruptcy and (ii) the reorganization value of our assets immediately prior to confirmation of the Plan of approximately $6.8 billion was less than the post-petition liabilities and allowed claims of $13.2 billion. In accordance with ASC 852, with the application of fresh start accounting, the Company allocated its reorganization value to its individual assets based on their estimated fair value in conformity with FASB ASC Topic 820 - Fair Value Measurements and FASB ASC Topic 805 - Business Combinations . Accordingly, the consolidated financial statements after February 9, 2021 are not comparable with the consolidated financial statements as of or prior to that date. The Effective Date fair values of the Successor’s assets and liabilities differ materially from their recorded values as reflected on the historical balance sheet of the Predecessor. Reorganization Value Reorganization value is derived from an estimate of enterprise value, or fair value of the Company’s interest-bearing debt and stockholders’ equity. Under ASC 852, reorganization value generally approximates fair value of the entity before considering liabilities and is intended to approximate the amount a willing buyer would pay for the assets immediately after the effects of a restructuring. As set forth in the disclosure statement, amended for updated pricing, and approved by the Bankruptcy Court, the enterprise value of the Successor was estimated to be between $3.5 billion and $4.9 billion. With the assistance of third-party valuation advisors, we determined the enterprise value and corresponding implied equity value of the Successor using various valuation approaches and methods, including: (i) income approach using a calculation of present value of future cash flows based on our financial projections, (ii) the market approach using selling prices of similar assets and (iii) the cost approach. For GAAP purposes, the Company valued the Successor’s individual assets, liabilities and equity instruments and determined an estimate of the enterprise value within the estimated range. Management concluded that the best estimate of enterprise value was $4.85 billion. Specific valuation approaches and key assumptions used to arrive at reorganization value, and the value of discrete assets and liabilities resulting from the application of fresh start accounting, are described below in greater detail within the valuation process. The enterprise value and corresponding implied equity value are dependent upon achieving the future financial results set forth in our valuation using an asset-based methodology of estimated proved reserves, undeveloped properties, and other financial information, considerations and projections, applying a combination of the income, cost and market approaches as of the fresh start reporting date of February 9, 2021. All estimates, assumptions, valuations and financial projections, including the fair value adjustments, the financial projections, the enterprise value and equity value projections, are inherently subject to significant uncertainties and the resolution of contingencies beyond our control. Accordingly, there is no assurance that the estimates, assumptions, valuations or financial projections will be realized, and actual results could vary materially. The following table reconciles the enterprise value to the implied fair value of the Successor’s equity as of the Effective Date: February 9, 2021 Enterprise Value $ 4,851 Plus: Cash and cash equivalents (a) 48 Less: Fair value of debt (1,313) Successor equity value $ 3,586 ____________________________________________ (a) Cash and cash equivalents includes $8 million that was initially classified as restricted cash as of the Effective Date but subsequently released from escrow and returned to the Successor. Restricted cash exclusive of the $8 million is not included in the table above. The following table reconciles the enterprise value to the reorganization value as of the Effective Date: February 9, 2021 Enterprise Value $ 4,851 Plus: Cash and cash equivalents (a) 48 Plus: Current liabilities 1,582 Plus: Asset retirement obligations (non-current portion) 236 Plus: Other non-current liabilities 97 Reorganization value of Successor assets $ 6,814 ____________________________________________ (a) Cash and cash equivalents includes $8 million that was initially classified as restricted cash as of the Effective Date but subsequently released from escrow and returned to the Successor. Restricted cash exclusive of the $8 million is not included in the table above. Valuation Process The fair values of our oil and natural gas properties, other property and equipment, other long-term assets, long-term debt, asset retirement obligations and warrants were estimated as of the Effective Date. Oil and natural gas properties. The Company’s principal assets are its oil and natural gas properties, which are accounted for under the successful efforts accounting method. The Company determined the fair value of its oil and natural gas properties based on the discounted future net cash flows expected to be generated from these assets. Discounted cash flow models by operating area were prepared using the estimated future revenues and operating costs for all developed wells and undeveloped properties comprising the proved and unproved reserves. Significant inputs associated with the calculation of discounted future net cash flows include estimates of (i) recoverable reserves, (ii) production rates, (iii) future operating and development costs, (iv) future commodity prices escalated by an inflationary rate after five years, adjusted for differentials, and (v) a market-based weighted average cost of capital by operating area. The Company utilized NYMEX strip pricing, adjusted for differentials, to value the reserves. The NYMEX strip pricing inputs used are classified as Level 1 fair value assumptions and all other inputs are classified as Level 3 fair value assumptions. The discount rates utilized were derived using a weighted average cost of capital computation, which included an estimated cost of debt and equity for market participants with similar geographies and asset development type by operating area. Other property and equipment. The fair value of other property and equipment such as buildings, land, computer equipment, and other equipment was determined using replacement cost method under the cost approach which considers historical acquisition costs for the assets adjusted for inflation, as well as factors in any potential obsolescence based on the current condition of the assets and the ability of those assets to generate cash flow. Long-term debt. A market approach, based upon quotes from major financial institutions, was used to measure the fair value of the $500 million aggregate principal amount of 5.5% Senior Notes due 2026 (the “2026 Notes”) and $500 million aggregate principal amount of 5.875% Senior Notes due 2029 (the “2029 Notes” and, together with the 2026 Notes, the “Notes”). The carrying value of borrowings under our Exit Credit Facility approximated fair value as the terms and interest rates are based on prevailing market rates. Asset retirement obligations. The fair value of the Company’s asset retirement obligations was revalued based upon estimated current reclamation costs for our assets with reclamation obligations, an appropriate long-term inflation adjustment, and our revised credit adjusted risk-free rate. The credit adjusted risk-free rate was based on an evaluation of an interest rate that equates to a risk-free interest rate adjusted for the effect of our credit standing. Warrants. The fair values of the Warrants issued upon the Effective Date were estimated using a Black-Scholes model, a commonly used option-pricing model. The Black-Scholes model was used to estimate the fair value of the warrants with an implied stock price of $20.52; initial exercise price per share of $27.63, $32.13 and $36.18 for Class A, Class B and Class C Warrants, respectively; expected volatility of 58% estimated using volatilities of similar entities; risk-free rate using a 5-year Treasury bond rate; and an expected annual dividend yield which was estimated to be zero. Condensed Consolidated Balance Sheet The following consolidated balance sheet is as of February 9, 2021. This consolidated balance sheet includes adjustments that reflect the consummation of the transactions contemplated by the Plan (reflected in the column “Reorganization Adjustments”) as well as fair value adjustments as a result of the adoption of fresh start accounting (reflected in the column “Fresh Start Adjustments”) as of the Effective Date. The explanatory notes following the table below provide further details on the adjustments, including the assumptions and methods used to determine fair value for its assets, liabilities and warrants. Predecessor Reorganization Adjustments Fresh Start Adjustments Successor Assets Current assets: Cash and cash equivalents $ 243 $ (203) (a) $ — $ 40 Restricted cash — 86 (b) — 86 Accounts receivable, net 861 (18) (c) — 843 Short-term derivative assets — — — — Other current assets 66 (5) (d) — 61 Total current assets 1,170 (140) — 1,030 Property and equipment: Oil and natural gas properties, successful efforts method Proved oil and natural gas properties 25,794 — (21,108) (o) 4,686 Unproved properties 1,546 — (1,063) (o) 483 Other property and equipment 1,755 — (1,256) (o) 499 Total property and equipment 29,095 — (23,427) (o) 5,668 Less: accumulated depreciation, depletion and amortization (23,877) — 23,877 (o) — Property and equipment held for sale, net 9 — (7) (o) 2 Total property and equipment, net 5,227 — 443 (o) 5,670 Other long-term assets 198 — (84) (p) 114 Total assets $ 6,595 $ (140) $ 359 $ 6,814 Predecessor Reorganization Adjustments Fresh Start Adjustments Successor Liabilities and stockholders’ equity (deficit) Current liabilities: Accounts payable $ 391 $ 24 (e) $ — $ 415 Current maturities of long-term debt, net 1,929 (1,929) (f) — — Accrued interest 4 (4) (g) — — Short-term derivative liabilities 398 — — 398 Other current liabilities 645 124 (h) — 769 Total current liabilities 3,367 (1,785) — 1,582 Long-term debt, net — 1,261 (i) 52 (q) 1,313 Long-term derivative liabilities 90 — — 90 Asset retirement obligations, net of current portion 139 — 97 (r) 236 Other long-term liabilities 5 2 (j) — 7 Liabilities subject to compromise 9,574 (9,574) (k) — — Total liabilities 13,175 (10,096) 149 3,228 Contingencies and commitments ( Note 6 ) Stockholders’ equity (deficit): Predecessor preferred stock 1,631 (1,631) (l) — — Predecessor common stock — — — — Predecessor additional paid-in capital 16,940 (16,940) (l) — — Successor common stock — 1 (m) — 1 Successor additional paid-in-capital — 3,585 (m) — 3,585 Accumulated other comprehensive income 48 — (48) (s) — Accumulated deficit (25,199) 24,941 (n) 258 (t) — Total stockholders’ equity (deficit) (6,580) 9,956 210 3,586 Total liabilities and stockholders’ equity (deficit) $ 6,595 $ (140) $ 359 $ 6,814 Reorganization Adjustments (a) The table below reflects the sources and uses of cash on the Effective Date from implementation of the Plan: Sources: Proceeds from issuance of the Notes $ 1,000 Proceeds from Rights Offering 600 Proceeds from refunds of interest deposit for the Notes 5 Total sources of cash $ 1,605 Uses: Payment of roll-up of DIP Facility balance $ (1,179) Payment of Exit Credit Facility - Tranche A Loan (479) Transfers to restricted cash for professional fee reserve (76) Transfers to restricted cash for convenience claim distribution reserve (10) Payment of professional fees (31) Payment of DIP Facility interest and fees (12) Payment of FLLO alternative transaction fee (12) Payment of the Notes fees funded out of escrow (8) Payment of RBL interest and fees (1) Total uses of cash $ (1,808) Net cash used $ (203) (b) Represents the transfer of funds to a restricted cash account for purposes of funding the professional fee reserve and the convenience claim distribution reserve. (c) Reflects the removal of an insurance receivable associated with a discharged legal liability. (d) Reflects the collection of an interest deposit for the senior unsecured notes. (e) Changes in accounts payable include the following: Accrual of professional service provider success fees $ 38 Accrual of convenience claim distribution reserve 10 Accrual of professional service provider fees 5 Reinstatement of accounts payable from liabilities subject to compromise 2 Payment of professional fees (31) Net impact to accounts payable $ 24 (f) Reflects payment of the pre-petition credit facility for $1.179 billion and transfer of the Tranche A and Tranche B Loans to long-term debt for $750 million. (g) Reflect payments of accrued interest and fees on the DIP Facility. (h) Changes in other current liabilities include the following: Reinstatement of other current liabilities from liabilities subject to compromise $ 191 Accrual of the Notes fees 2 Settlement of Put Option Premium through issuance of Successor Common Stock (60) Payment of DIP Facility fees (9) Net impact to other current liabilities $ 124 (i) Change in long-term debt include the following: Issuance of the Notes $ 1,000 Issuance of Tranche A and Tranche B Loans 750 Payments on Tranche A Loans (479) Debt issuance costs for the Notes (10) Net impact to long-term debt, net $ 1,261 (j) Reflects reinstatement of a long-term lease liability. (k) On the Effective Date, liabilities subject to compromise were settled in accordance with the Plan as follows: Liabilities subject to compromise pre-emergence $ 9,574 To be reinstated on the Effective Date: Accounts payable $ (2) Other current liabilities (191) Other long-term liabilities (2) Total liabilities reinstated $ (195) Consideration provided to settle amounts per the Plan or Reorganization: Issuance of Successor common stock associated with the Rights Offering and Backstop Commitment and settlement of the Put Option Premium $ (2,311) Proceeds from issuance of Successor common stock associated with the Rights Offering and Backstop Commitment 600 Issuance of Successor common stock to FLLO Term Loan holders, incremental to the Rights Offering and Backstop Commitment (783) Issuance of Successor common stock to second lien note holders, incremental to the Rights Offering and Backstop Commitment (124) Issuance of Successor common stock to unsecured note holders (45) Issuance of Successor common stock to general unsecured claims (8) Fair value of Class A Warrants (93) Fair value of Class B Warrants (94) Fair value of Class C Warrants (68) Proceeds to holders of general unsecured claims (10) Total consideration provided to settle amounts per the Plan $ (2,936) Gain on settlement of liabilities subject to compromise $ 6,443 (l) Pursuant to the Plan, as of the Effective Date, all equity interests in Predecessor, including Predecessor’s common and preferred stock, were cancelled without any distribution. (m) Reflects the Successor equity including the issuance of 97,907,081 shares of New Common Stock, 11,111,111 shares of Class A Warrants, 12,345,679 shares of Class B Warrants and 9,768,527 shares of Class C Warrants pursuant to the Plan. Issuance of Successor equity associated with the Rights Offering and Backstop Commitment $ 2,371 Issuance of Successor equity to holders of the FLLO Term Loan, incremental to the Rights Offering and Backstop Commitment 783 Issuance of Successor equity to holders of the Second Lien Notes, incremental to the Rights Offering and Backstop Commitment 124 Issuance of Successor equity to holders of the unsecured senior notes 45 Issuance of Successor equity to holders of allowed general unsecured claims 8 Fair value of Class A warrants 93 Fair value of Class B warrants 94 Fair value of Class C warrants 68 Total change in Successor common stock and additional paid-in capital 3,586 Less: par value of Successor common stock (1) Change in Successor additional paid-in capital $ 3,585 (n) Reflects the cumulative net impact of the effects on accumulated deficit as follows: Gain on settlement of liabilities subject to compromise $ 6,443 Accrual of professional service provider success fees (38) Accrual of professional service provider fees (5) Surrender of other receivable (18) Payment of FLLO alternative transaction fee (12) Total reorganization items, net 6,370 Cancellation of predecessor equity 18,571 Net impact on accumulated deficit $ 24,941 Fresh Start Adjustments (o) Reflects fair value adjustments to our (i) proved oil and natural gas properties, (ii) unproved properties, (iii) other property and equipment (iv) property and equipment held for sale, and the elimination of accumulated depletion, depreciation and amortization. (p) Reflects the fair value adjustment to record historical contracts at their fair values. (q) Reflects the fair value adjustments to the 2026 Notes and 2029 Notes for $22 million and $30 million, respectively. (r) Reflects the adjustment to our asset retirement obligations using assumptions as of the Effective Date, including an inflation factor of 2% and an average credit-adjusted risk-free rate of 5.18%. (s) Reflects the fair value adjustment to eliminate the accumulated other comprehensive income of $9 million related to hedging settlements offset by the elimination of $57 million of income tax effects which has resulted in the recording of an income tax benefit of $57 million. See Note 9 for a discussion of income taxes. (t) Reflects the net cumulative impact of the fresh start adjustments on accumulated deficit as follows: Fresh start adjustments to property and equipment $ 443 Fresh start adjustments to other long-term assets (84) Fresh start adjustments to long-term debt (52) Fresh start adjustments to long-term asset retirement obligations (97) Fresh start adjustments to accumulated other comprehensive income (9) Total fresh start adjustments impacting reorganizations items, net 201 Income tax effects on accumulated other comprehensive income 57 Net impact to accumulated deficit $ 258 Reorganization Items, Net We have incurred significant expenses, gains and losses associated with the reorganization, primarily the gain on settlement of liabilities subject to compromise, write-off of unamortized debt issuance costs and related unamortized premiums and discounts, debt and equity financing fees, provision for allowed claims and legal and professional fees incurred subsequent to the Chapter 11 filings for the restructuring process. The accrual for allowed claims primarily represents damages from contract rejections and settlements attributable to the midstream savings requirement as stipulated in the Plan. While the claims reconciliation process is ongoing, we do not believe any existing unresolved claims will result in a material adjustment to the financial statements. The amount of these items, which were incurred in reorganization items, net within our accompanying unaudited condensed consolidated statements of operations, have significantly affected our statements of operations. The following table summarizes the components in reorganization items, net included in our unaudited condensed consolidated statements of operations: Successor Predecessor Three Months Ended Three Months Ended Write off of unamortized debt premiums (discounts) on Predecessor debt $ — $ 518 Write off of unamortized debt issuance costs on Predecessor debt — (61) DIP Facility financing costs — (63) Total reorganization items, net $ — $ 394 Successor Predecessor Period from February 10, 2021 through June 30, 2021 Period from January 1, 2021 through February 9, 2021 Six Months Ended Gains on the settlement of liabilities subject to compromise $ — $ 6,443 $ — Accrual for allowed claims — (1,002) — Write off of unamortized debt premiums (discounts) on Predecessor debt — — 518 Write off of unamortized debt issuance costs on Predecessor debt — — (61) Gain on fresh start adjustments — 201 — Gain from release of commitment liabilities — 55 — DIP Facility financing costs — — (63) Professional service provider fees and other — (60) — Success fees for professional service providers — (38) — Surrender of other receivable — (18) — FLLO alternative transaction fee — (12) — Total reorganization items, net $ — $ 5,569 $ 394 |
Earnings Per Share
Earnings Per Share | 6 Months Ended |
Jun. 30, 2021 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | 4. Earnings Per Share Basic net income (loss) per common share is computed by dividing the net income (loss) attributable to common stockholders by the weighted average number of shares of common stock outstanding during the period. Diluted net income (loss) per common share is calculated in the same manner, but includes the impact of potentially dilutive securities. Potentially dilutive securities during the Successor Period consist of issuable shares related to warrants and unvested restricted stock and during the Predecessor Period have historically consisted of unvested restricted stock, contingently issuable shares related to preferred stock and convertible senior notes unless their effect was antidilutive. The reconciliations between basic and diluted earnings (loss) per share are as follows: Successor Predecessor Three Months Ended June 30, 2021 Three Months Ended Numerator Net loss, basic and diluted $ (439) $ (276) Denominator (in thousands) Weighted average common shares outstanding, basic 97,931 9,779 Effect of potentially dilutive securities Preferred stock — — Warrants — — Restricted stock — — Weighted average common shares outstanding, diluted 97,931 9,779 Loss per common share Loss per common share, basic $ (4.48) $ (28.22) Loss per common share, diluted $ (4.48) $ (28.22) Successor During the 2021 Successor Quarter, the diluted earnings (loss) per share calculation excludes the effect of 2,092,918 reserved shares of common stock and 3,948,893 reserved Class C warrants related to the settlement of general unsecured claims associated with the Chapter 11 Cases as all necessary conditions had not been met to be considered dilutive shares as of the 2021 Successor Quarter. Additionally, the 2021 Successor Quarter had a net loss and therefore the diluted earnings (loss) per share calculation excludes the antidilutive effect of 12,186,128 issuable shares related to warrants and 121,348 shares of restricted stock. Predecessor The diluted earnings (loss) per share calculation for the 2020 Predecessor Quarter excludes the antidilutive effect of 290,716 shares of common stock equivalent of our preferred stock. We had the option to settle conversions of the 5.5% convertible senior notes due 2026 with cash, shares or common stock or any combination thereof. As the price of our common stock was below the conversion threshold level for any time during the conversion period, there was no impact to diluted earnings (loss) per share. Successor Predecessor Period from February 10, 2021 through June 30, 2021 Period from January 1, 2021 through Six Months Ended Numerator Net income (loss), basic and diluted $ (144) $ 5,383 $ (8,595) Denominator (in thousands) Weighted average common shares outstanding, basic 97,922 9,781 9,765 Effect of potentially dilutive securities Preferred stock — 290 — Warrants — — — Restricted stock — — — Weighted average common shares outstanding, diluted 97,922 10,071 9,765 Earnings (loss) per common share Earnings (loss) per common share, basic $ (1.47) $ 550.35 $ (880.18) Earnings (loss) per common share, diluted $ (1.47) $ 534.51 $ (880.18) Successor During the 2021 Successor Period, the diluted earnings (loss) per share calculation excludes the effect of 2,092,918 reserved shares of common stock and 3,948,893 reserved Class C warrants related to the settlement of general unsecured claims associated with the Chapter 11 Cases as all necessary conditions had not been met to be considered dilutive shares as of the 2021 Successor Period. Additionally, the 2021 Successor Period had a net loss and therefore the diluted earnings (loss) per share calculation excludes the antidilutive effect of 11,275,229 issuable shares related to warrants and 66,817 shares of restricted stock. Predecessor The diluted earnings (loss) per share calculation for the 2020 Predecessor Period excludes the antidilutive effect of 290,716 shares of common stock equivalent of our preferred stock. |
Debt
Debt | 6 Months Ended |
Jun. 30, 2021 | |
Debt Disclosure [Abstract] | |
Debt | 5. Debt Our long-term debt consisted of the following as of June 30, 2021 and December 31, 2020: Successor Predecessor June 30, 2021 December 31, 2020 Carrying Amount Fair Value (a) Carrying Amount Fair Value (a) Exit Credit Facility - Tranche A Loans $ — $ — $ — $ — Exit Credit Facility - Tranche B Loans 221 221 — — 5.5% senior notes due 2026 500 527 — — 5.875% senior notes due 2029 500 541 — — DIP Facility — — — — Pre-petition revolving credit facility — — 1,929 1,929 Term loan due 2024 — — 1,500 1,220 11.5% senior secured second lien notes due 2025 — — 2,330 373 6.625% senior notes due 2020 — — 176 8 6.875% senior notes due 2020 — — 73 3 6.125% senior notes due 2021 — — 167 7 5.375% senior notes due 2021 — — 127 5 4.875% senior notes due 2022 — — 272 12 5.75% senior notes due 2023 — — 167 8 7.00% senior notes due 2024 — — 624 29 6.875% senior notes due 2025 — — 2 2 8.00% senior notes due 2025 — — 246 10 5.5% convertible senior notes due 2026 — — 1,064 42 7.5% senior notes due 2026 — — 119 5 8.00% senior notes due 2026 — — 46 2 8.00% senior notes due 2027 — — 253 11 Premiums on senior notes 50 — — — Debt issuance costs (10) — — — Total debt, net 1,261 1,289 9,095 3,666 Less current maturities of long-term debt — — (1,929) (1,929) Less amounts reclassified to liabilities subject to compromise — — (7,166) (1,737) Total long-term debt, net $ 1,261 $ 1,289 $ — $ — ____________________________________________ (a) The carrying value of borrowings under our Exit Credit Facility approximate fair value as the interest rates are based on prevailing market rates; therefore, they are a Level 1 fair value measurement. For all other debt, a market approach, based upon quotes from major financial institutions, which are Level 2 inputs, is used to measure the fair value. Successor Debt Our post-emergence exit financing consists of the Exit Credit Facility, which includes a reserve-based revolving credit facility and a non-revolving loan facility, and the Notes. Exit Credit Facility. On the Effective Date, pursuant to the terms of the Plan, the Company, as borrower, entered into a reserve-based credit agreement (the “Credit Agreement”) providing for a reserve-based credit facility with an initial borrowing base of $2.5 billion. The borrowing base will be redetermined semiannually on or around May 1 and November 1 of each year and the next scheduled redetermination will be on or about October 1, 2021. The aggregate initial elected commitments of the lenders under the Exit Credit Facility will be $1.75 billion of Tranche A Loans and $221 million of fully funded Tranche B Loans. The Exit Credit Facility provides for a $200 million sublimit of the aggregate commitments that are available for the issuance of letters of credit. The Exit Credit Facility bears interest at the ABR (alternate base rate) or LIBOR, at our election, plus an applicable margin (ranging from 2.25–3.25% per annum for ABR loans and 3.25–4.25% per annum for LIBOR loans, subject to a 1.00% LIBOR floor), depending on the percentage of the borrowing base then being utilized. The Tranche A Loans mature three years after the Effective Date and the Tranche B Loans mature four years after the Effective Date. The Tranche B Loans can be repaid if no Tranche A Loans are outstanding. The Credit Agreement contains financial covenants that require the Company and its Guarantors, on a consolidated basis, to maintain (i) a first lien leverage ratio of not more than 2.75 to 1:00, (ii) a total leverage ratio of not more than 3.50 to 1:00, (iii) a current ratio of not less than 1.00 to 1:00 and (iv) at any time additional secured debt is outstanding, an asset coverage ratio of not less than 1.50 to 1:00, defined as PV10 of PDP reserves to total secured debt. The Company had no additional secured debt outstanding at emergence. The Credit Agreement also contains customary affirmative and negative covenants, including, among other things, as to compliance with laws (including environmental laws and anti-corruption laws), delivery of quarterly and annual financial statements, conduct of business, maintenance of property, maintenance of insurance, restrictions on the incurrence of liens, indebtedness, asset dispositions, fundamental changes, restricted payments, and other customary covenants. The Company is required to pay a commitment fee of 0.50% per annum on the average daily unused portion of the current aggregate commitments under the Tranche A Loans. The Company is also required to pay customary letter of credit and fronting fees. Outstanding Senior Notes. On February 2, 2021, Chesapeake Escrow Issuer LLC (the “Escrow Issuer”) then an indirect wholly-owned subsidiary of the Company, issued $500 million aggregate principal amount of its 2026 Notes and $500 million aggregate principal amount of its 2029 Notes. The Notes included a $52 million premium to reflect fair value adjustments at the date of emergence. The Notes are guaranteed on a senior unsecured basis by each of the Company’s subsidiaries that guarantee the Exit Credit Facility. The Notes were issued pursuant to an indenture, dated as of February 5, 2021 (the “Indenture”), among the Issuer, the Guarantors and Deutsche Bank Trust Company Americas, as trustee. Interest on the Notes is payable semi-annually, on February 1 and August 1 of each year, commencing on August 1, 2021, to holders of record on the immediately preceding January 15 and July 15. The Notes are the Company’s senior unsecured obligations. Accordingly, they rank (i) equal in right of payment to all existing and future senior indebtedness, including borrowings under the Exit Credit Facility, (ii) effectively subordinate in right of payment to all of existing and future secured indebtedness, including indebtedness under the Exit Credit Facility, to the extent of the value of the collateral securing such indebtedness, (iii) structurally subordinate in right of payment to all existing and future indebtedness and other liabilities of any future subsidiaries that do not guarantee the Notes and any entity that is not a subsidiary that does not guarantee the Notes and (iv) senior in right of payment to all future subordinated indebtedness. Each guarantee of the Notes by a guarantor is a general, unsecured, senior obligation of such guarantor. Accordingly, the guarantees (i) rank equally in right of payment with all existing and future senior indebtedness of such guarantor (including such guarantor’s guarantee of indebtedness under the Exit Credit Facility), (ii) are subordinated to all existing and future secured indebtedness of such guarantor, including such guarantor’s guarantee of indebtedness under our Exit Credit Facility, to the extent of the value of the collateral of such guarantor securing such secured indebtedness, (iii) are structurally subordinated to all indebtedness and other liabilities of any future subsidiaries of such guarantor that do not guarantee the notes and (iv) rank senior in right of payment to all future subordinated indebtedness of such guarantor. Phase-Out of LIBOR In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848) . The purpose of ASU 2020-04 is to provide optional guidance to ease the potential effects on financial reporting of the market-wide migration away from Interbank Offered Rates such as LIBOR, which is expected to be phased out at the end of calendar year 2021, to alternative reference rates. ASU 2020-04 applies only to contracts, hedging relationships, debt arrangements and other transactions that reference a benchmark reference rate expected to be discontinued because of reference rate reform. The amendments in ASU 2020-04 are effective for all entities as of March 12, 2020 through December 31, 2022. The Company does not expect that the adoption of this guidance will have a material impact on its consolidated financial statements and related disclosures. Chapter 11 Proceedings - Predecessor Debt Filing of the Chapter 11 Cases constituted an event of default with respect to certain of our previous secured and unsecured debt obligations. As a result of the Chapter 11 Cases, the principal and interest due under these debt instruments became immediately due and payable. However, Section 362 of the Bankruptcy Code stayed the creditors from taking any action as a result of the default. The principal amounts outstanding under the FLLO Term Loan, Second Lien Notes and all of our other unsecured senior and convertible senior notes were reclassified as liabilities subject to compromise on the accompanying condensed consolidated balance sheet as of December 31, 2020. The agreements for our FLLO Term Loan, Second Lien Notes, and unsecured senior and convertible senior notes contain provisions regarding the calculation of interest upon default. Upon default, the interest rate on the FLLO Term Loan increased from LIBOR plus 8.00% to alternative base rate (ABR) (3.25% during the 2021 Predecessor Period) plus Applicable Margin (7.00% during the 2021 Predecessor Period) plus 2.00%. For the Second Lien Notes and all of our other unsecured senior and convertible senior notes, the interest rate remained the same upon default. However, interest accrued on the amount of unpaid interest in addition to the principal balance. We did not pay or recognize interest on the FLLO Term Loan, Second Lien Notes, or unsecured senior and convertible senior notes during the Chapter 11 process. Debtor-in-Possession Credit Agreement On June 28, 2020, prior to the commencement of Chapter 11 Cases, the Company entered into a commitment letter with certain of the lenders (“New Money Lenders”) under the pre-petition revolving credit facility and/or their affiliates to provide the Debtors with a debtor-in-possession credit agreement in an aggregate principal amount of up to approximately $2.104 billion in commitments and loans from the New Money Lenders. The DIP Facility consisted of a revolving loan facility of new money in an aggregate principal amount of up to $925 million, which included a sub-facility of up to $200 million for the issuance of letters of credit, and a $1.179 billion term loan that reflected the roll-up of a portion of outstanding borrowings under the pre-petition revolving credit facility: (i) a $925 million term loan reflected the roll-up of a portion of outstanding existing borrowings made by the New Money Lenders under the existing revolving credit agreement and (ii) an up to approximately $254 million term loan reflected the roll-up or a portion of outstanding existing borrowings made by certain other lenders under the pre-petition revolving credit facility agreement. The $750 million of outstanding borrowings under the pre-petition revolving credit facility that were not rolled up remained outstanding throughout the Chapter 11 Cases but accrued interest at a lower rate than the rolled-up loans. The proceeds of the DIP Facility were used for, among other things, post-petition working capital, permitted capital investments, general corporate purposes, letters of credit, administrative costs, premiums, expenses and fees for the transactions contemplated by the Chapter 11 Cases, payment of court approved adequate protection obligations and other such purposes consistent with the DIP Facility. On the Effective Date, the DIP Facility was terminated and the holders of obligations under the DIP Facility received payment in full in cash; provided that to the extent such lender under the DIP Facility was also a lender under the Exit Credit Facility, such lender’s allowed DIP claims were first reduced dollar-for-dollar and satisfied by the amount of its Exit RBL Loans provided as of the Effective Date. Predecessor Senior Notes In the 2020 Predecessor Period, we repurchased approximately $160 million aggregate principal amount of certain senior notes for $95 million and recorded an aggregate gain of approximately $65 million. |
Contingencies and Commitments
Contingencies and Commitments | 6 Months Ended |
Jun. 30, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contingencies and Commitments | 6. Contingencies and Commitments There have been no material developments in previously reported legal or environmental contingencies or commitments other than the items discussed below. Contingencies Chapter 11 Proceedings Commencement of the Chapter 11 Cases automatically stayed the proceedings and actions against us that are described below, in addition to actions seeking to collect pre-petition indebtedness or to exercise control over the property of the Company’s bankruptcy estates. The Plan in the Chapter 11 Cases, which became effective on February 9, 2021, provided for the treatment of claims against the Company’s bankruptcy estates, including pre-petition liabilities that had not been satisfied or addressed during the Chapter 11 Cases. See Note 2 for additional information. Litigation and Regulatory Proceedings We were involved in a number of litigation and regulatory proceedings as of the Petition Date. Many of these proceedings were in early stages, and many of them sought damages and penalties, the amount of which is indeterminate. Our total accrued liability in respect of litigation and regulatory proceedings is determined on a case-by-case basis and represents an estimate of probable losses after considering, among other factors, the progress of each case or proceeding, our experience and the experience of others in similar cases or proceedings, and the opinions and views of legal counsel. Significant judgment is required in making these estimates and our final liabilities may ultimately be materially different. We are involved in, and expect to continue to be involved in, various lawsuits and disputes incidental to our business operations, including commercial disputes, personal injury claims, royalty claims, property damage claims and contract actions. The majority of the prepetition legal proceedings have been settled during the Chapter 11 Cases or will be resolved in connection with the claims reconciliation process before the Bankruptcy Court. Any allowed claim related to such prepetition litigation will be treated in accordance with the Plan. Environmental Contingencies The nature of the oil and gas business carries with it certain environmental risks for us and our subsidiaries. We have implemented various policies, programs, procedures, training and audits to reduce and mitigate such environmental risks. We conduct periodic reviews, on a company-wide basis, to assess changes in our environmental risk profile. Environmental reserves are established for environmental liabilities for which economic losses are probable and reasonably estimable. We manage our exposure to environmental liabilities in acquisitions by using an evaluation process that seeks to identify pre-existing contamination or compliance concerns and addressing the potential liability. Depending on the extent of an identified environmental concern, we may, among other things, exclude a property from the transaction, require the seller to remediate the property to our satisfaction in an acquisition or agree to assume liability for the remediation of the property. We were recently dismissed as a defendant from numerous lawsuits in Oklahoma alleging that we and other companies engaged in activities that have caused earthquakes. The lawsuits sought compensation for injury to real and personal property, diminution of property value, economic losses due to business interruption, interference with the use and enjoyment of property, annoyance and inconvenience, personal injury and emotional distress. In addition, they sought the reimbursement of insurance premiums and the award of punitive damages, attorneys’ fees, costs, expenses and interest. Any allowed claim related to such prepetition litigation will be treated in accordance with the Plan. We settled outstanding violations with the Pennsylvania Department of Environmental Protection (“PADEP”) regarding gas migration in the vicinity of certain of our wells in Wyoming County, Pennsylvania. The resolution of the matter resulted in monetary sanctions of more than $300,000, which were assessed pursuant to a Proof of Claim filed by PADEP in the Chapter 11 proceedings. Chesapeake will allow the Proof of Claim as a General Unsecured Claim in accordance with the Consent Order and Agreement executed by the parties and Chesapeake’s approved Plan of Reorganization. Other Matters Based on management’s current assessment, we are of the opinion that no pending or threatened lawsuit or dispute relating to our business operations is likely to have a material adverse effect on our future consolidated financial position, results of operations or cash flows. The final resolution of such matters could exceed amounts accrued, however, and actual results could differ materially from management’s estimates. Commitments Gathering, Processing and Transportation Agreements We have contractual commitments with midstream service companies and pipeline carriers for future gathering, processing and transportation of oil, natural gas and NGL to move certain of our production to market. Working interest owners and royalty interest owners, where appropriate, will be responsible for their proportionate share of these costs. Commitments related to gathering, processing and transportation agreements are not recorded as obligations in the accompanying condensed consolidated balance sheets; however, they are reflected in our estimates of proved reserves. The aggregate undiscounted commitments under our gathering, processing and transportation agreements, excluding any reimbursement from working interest and royalty interest owners, credits for third-party volumes or future costs under cost-of-service agreements, are presented below: Successor June 30, Remainder of 2021 $ 330 2022 569 2023 458 2024 390 2025 310 2026 – 2033 1,539 Total $ 3,596 In addition, we have entered into long-term agreements for certain natural gas gathering and related services within specified acreage dedication areas in exchange for cost-of-service based fees redetermined annually, or tiered fees based on volumes delivered relative to scheduled volumes. Future gathering fees may vary with the applicable agreement. |
Other Current Liabilities
Other Current Liabilities | 6 Months Ended |
Jun. 30, 2021 | |
Other Liabilities Disclosure [Abstract] | |
Other Current Liabilities | 7. Other Current Liabilities Other current liabilities as of June 30, 2021 and December 31, 2020 are detailed below: Successor Predecessor June 30, December 31, Revenues and royalties due others $ 404 $ 236 Accrued drilling and production costs 91 104 Other accrued taxes 62 82 Accrued compensation and benefits 48 59 Hedging 45 7 Operating leases 18 24 Debt and equity financing fees — 69 Joint interest prepayments received 13 8 Other 100 134 Total other current liabilities $ 781 $ 723 |
Revenue
Revenue | 6 Months Ended |
Jun. 30, 2021 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | 8. Revenue The following table shows revenue disaggregated by operating area and product type: Successor Three months ended June 30, 2021 Oil Natural Gas NGL Total Appalachia $ — $ 226 $ — $ 226 Gulf Coast — 124 — 124 South Texas 224 25 36 285 Brazos Valley 162 6 5 173 Powder River Basin 58 16 10 84 Oil, natural gas and NGL revenue $ 444 $ 397 $ 51 $ 892 Marketing revenue $ 340 $ 146 $ 53 $ 539 Predecessor Three months ended June 30, 2020 Oil Natural Gas NGL Total Appalachia $ — $ 131 $ — $ 131 Gulf Coast — 67 — 67 South Texas 73 21 14 108 Brazos Valley 76 3 1 80 Powder River Basin 29 7 3 39 Mid-Continent 8 5 2 15 Oil, natural gas and NGL revenue $ 186 $ 234 $ 20 $ 440 Marketing revenue from contracts with customers $ 121 $ 96 $ 15 $ 232 Other marketing revenue 6 2 — 8 Marketing revenue $ 127 $ 98 $ 15 $ 240 Successor Period from Oil Natural Gas NGL Total Appalachia $ — $ 389 $ — $ 389 Gulf Coast — 194 — 194 South Texas 341 53 55 449 Brazos Valley 251 21 9 281 Powder River Basin 86 30 16 132 Oil, natural gas and NGL revenue $ 678 $ 687 $ 80 $ 1,445 Marketing revenue $ 502 $ 243 $ 71 $ 816 Predecessor Period from Oil Natural Gas NGL Total Appalachia $ — $ 119 $ — $ 119 Gulf Coast — 53 — 53 South Texas 92 15 15 122 Brazos Valley 67 2 2 71 Powder River Basin 20 7 6 33 Oil, natural gas and NGL revenue $ 179 $ 196 $ 23 $ 398 Marketing revenue $ 141 $ 78 $ 20 $ 239 Predecessor Six Months Ended June 30, 2020 Oil Natural Gas NGL Total Appalachia $ — $ 306 $ — $ 306 Gulf Coast — 151 — 151 South Texas 350 52 34 436 Brazos Valley 248 7 5 260 Powder River Basin 97 23 10 130 Mid-Continent 30 15 6 51 Oil, natural gas and NGL revenue $ 725 $ 554 $ 55 $ 1,334 Marketing revenue from contracts with customers $ 629 $ 220 $ 45 $ 894 Other marketing revenue 67 3 — 70 Marketing revenue $ 696 $ 223 $ 45 $ 964 Accounts Receivable Our accounts receivable are primarily from purchasers of oil, natural gas and NGL and from exploration and production companies that own interests in properties we operate. This industry concentration could affect our overall exposure to credit risk, either positively or negatively, because our purchasers and joint working interest owners may be similarly affected by changes in economic, industry or other conditions. We monitor the creditworthiness of all our counterparties and we generally require letters of credit or parent guarantees for receivables from parties deemed to have sub-standard credit, unless the credit risk can otherwise be mitigated. We estimate expected credit losses using forecasts based on historical information and current information, in addition to specifically identifying receivables that may be uncollectible. Accounts receivable as of June 30, 2021 and December 31, 2020 are detailed below: Successor Predecessor June 30, December 31, Oil, natural gas and NGL sales $ 531 $ 589 Joint interest 117 119 Other 27 68 Allowance for doubtful accounts (1) (30) Total accounts receivable, net $ 674 $ 746 |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2021 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 9. Income Taxes We estimate our annual effective tax rate (“AETR”) for continuing operations in recording our interim quarterly income tax provision for the various jurisdictions in which we operate. The tax effects of statutory rate changes, significant unusual or infrequently occurring items, and certain changes in the assessment of the realizability of deferred tax assets are excluded from the determination of our estimated AETR as such items are recognized as discrete items in the quarter in which they occur. Our estimated AETR for the 2021 Successor Period is 0.0% as a result of projecting a full valuation allowance against our anticipated net deferred asset position at December 31, 2021. The income tax provision for the 2021 Predecessor Period was determined based on actual results for the period ended February 9, 2021, including those resulting from fresh start accounting. The effective tax rate for the 2021 Predecessor Period was (1.1%) which results from the elimination of the income tax effects associated with hedging settlements from accumulated other comprehensive income as part of fresh start accounting. We recorded an income tax benefit of $57 million in the 2021 Predecessor Period for the elimination of such income tax effects. Any changes to our deferred tax assets and liabilities for the 2021 Predecessor Period (whether resulting from Reorganization Adjustments, Fresh Start Adjustments or otherwise) were completely offset with a corresponding adjustment to our valuation allowance which results in the low effective tax rate. Accordingly, there are no balances shown for deferred tax assets or liabilities in the condensed consolidated balance sheet table shown in Note 3 . For the 2020 Predecessor Period, we recorded an income tax benefit of $13 million, which included the reversal of substantially all of the deferred tax liability associated with Texas through the application of the estimated AETR as well as recording a receivable for amounts previously sequestered from refunds of corporate alternative minimum tax credits. This resulted in a 0.2% effective tax rate for the 2020 Predecessor Period. As of the Effective Date, we were in a net deferred tax asset position and anticipate being in a net deferred tax asset position as of December 31, 2021. Based on all available positive and negative evidence, including projections of future taxable income, we believe it is more likely than not that some or all of our deferred tax assets will not be realized. Our deferred tax assets relate primarily to the excess tax basis over post emergence book value of oil and natural gas properties along with federal and state net operating loss (“NOL”) carryforwards. A significant piece of objectively verifiable negative evidence evaluated is the cumulative loss incurred over the rolling thirty-six-month period ended June 30, 2021. Such evidence limits our ability to consider various forms of subjective positive evidence, such as any projections of future growth and earnings. However, should we begin to achieve a level of sustained profitability as a restructured entity, increased consideration will need to be given to projections of future taxable income to determine whether such projections provide an adequate source of taxable income for the realization of our deferred tax assets. A full valuation allowance was recorded against our net deferred tax asset position for federal and state purposes as of June 30, 2021 and December 31, 2020. We have evaluated the income tax impact of the Plan, including the ownership change under Section 382 of the Internal Revenue Code of 1986, as amended (the “Code”), as a result of emergence from bankruptcy. Section 382(b) of the Code provides an annual limitation with respect to the ability of a corporation to utilize its tax attributes existing at the time of an ownership change against future taxable income. We did not qualify for the exception under Section 382(l)(5) of the Code, and therefore an annual limitation was determined under Section 382(l)(6) of the Code, which is based on the post-emergence value of the taxpayer’s equity multiplied by the adjusted federal long-term rate in effect for the month in which the ownership change occurred. The amount of the annual limitation has been computed to be $54 million and will be prorated for the current year based on the number of days attributable to the post-Effective Date portion of the year. The limitation applies to our NOL carryforwards, disallowed business interest carryforwards and general business credits until such attributes expire or are fully utilized. As we believe we were in an overall net unrealized built-in loss position at the Effective Date, the limitation also applies to any recognized built-in losses incurred for a period of five years but only to the extent of the overall net unrealized built-in loss. We estimate that this will occur during the current year such that no further limitation for recognized built-in losses will occur in subsequent years. Some states impose similar limitations on tax attribute utilization upon experiencing an ownership change. In Chapter 11 bankruptcy cases, the cancellation of debt income (“CODI”) realized upon emergence from bankruptcy is excludible from taxable income but results in a reduction of tax attributes in accordance with the attribute reduction and ordering rules of Section 108 of the Code. The amount of our CODI is estimated to be $5 billion and will be taken completely against, and therefore will reduce, our NOL carryforwards. After taking into account the CODI and the impact of Section 382 of the Code, the remaining federal NOL carryforwards are estimated to be in the range of $2.5 billion to $3.0 billion. Approximately $900 million are NOL carryforwards which expire in 2037 and $1.6 billion to $2.1 billion are NOL carryforwards which do not expire. The reductions in NOL carryforwards for the CODI and expiring NOL carryforwards are expected to be fully offset by a corresponding decrease to our valuation allowance at December 31, 2021. Some states have similar rules for attribute reduction which will result in the reduction of certain of our state NOL carryforwards. |
Equity
Equity | 6 Months Ended |
Jun. 30, 2021 | |
Equity [Abstract] | |
Equity | 10. Equity New Common Stock. As discussed in Note 2 , on the Effective Date, we issued an aggregate of approximately 97,907,081 shares of New Common Stock, par value $0.01 per share, to the holders of allowed claims, and approximately 2,092,918 shares of New Common Stock were reserved for future distributions under the Plan. On August 10, 2021 we declared a quarterly dividend payable of $0.34375 per share, which will be paid on September 9, 2021 to stockholders of record at the close of business on August 24, 2021. Warrants. As discussed in Note 2 , on the Effective Date, we issued 11,111,111 Class A Warrants, 12,345,679 Class B Warrants and 9,768,527 Class C Warrants, that are initially exercisable for one share of New Common Stock per Warrant at initial exercise prices of $27.63, $32.13 and $36.18 per share, respectively, subject to adjustments pursuant to the terms of the Warrants. Additionally, 3,948,893 Class C Warrants were reserved for future issuance. The Warrants are exercisable from the Effective Date until February 9, 2026. The Warrants contain customary anti-dilution adjustments in the event of any stock split, reverse stock split, reclassification, stock dividend or other distributions. The initial exercise prices of the Warrants were adjusted to prevent the dilution of rights for the effects of the quarterly dividend distribution on June 10, 2021, and the adjusted exercise prices are $27.44, $31.91, and $35.93 per share for the Class A, Class B and Class C Warrants, respectively. During the Successor Period, 9,068 Class A, 32,221 Class B, and 5,702 Class C Warrants were converted into 46,035 common shares. Chapter 11 Proceedings Upon emergence from Chapter 11 on February 9, 2021, as discussed in Note 2 , Predecessor common stock and preferred stock were canceled and released under the Plan without receiving any recovery on account thereof. |
Share-Based Compensation
Share-Based Compensation | 6 Months Ended |
Jun. 30, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Share-Based Compensation | 11. Share-Based Compensation As discussed in Note 2 , on the Effective Date, our Predecessor common stock was canceled and New Common Stock was issued. Accordingly, our then existing share-based compensation awards were also canceled, which resulted in the recognition of any previously unamortized expense related to the canceled awards on the date of cancellation. Share-based compensation for the Predecessor and Successor Periods is not comparable. Successor Share-Based Compensation As of the Effective Date, the Board of Directors adopted the LTIP with a share reserve equal to 6,800,000 shares of New Common Stock. The LTIP provides for the grant of restricted stock units, restricted stock awards, stock options, stock appreciation rights, performance awards and other stock awards to the Company’s employees and non-employee directors. Successor Restricted Stock In the 2021 Successor Period, we granted restricted stock awards to employees and non-employee directors under the LTIP, which will vest over a three one Shares of Weighted Average (in thousands) Unvested as of February 10, 2021 — $ — Granted 727 $ 44.28 Vested (1) $ 44.30 Forfeited/canceled (18) $ 44.30 Unvested as of June 30, 2021 708 $ 44.28 The aggregate intrinsic value of restricted stock that vested during the 2021 Successor Period was approximately $0.1 million based on the stock price at the time of vesting. As of June 30, 2021, there was approximately $28 million of total unrecognized compensation expense related to unvested restricted stock. The expense is expected to be recognized over a weighted average period of approximatel y 2.67 years . Successor Performance Share Units In the 2021 Successor Period, we granted performance share units (“PSUs”) to senior management under the LTIP, which will generally vest over a three The following table presents the assumptions used in the valuation of the PSUs granted in 2021. Assumption Share Price Hurdle TSR, rTSR Risk-free interest rate 0.30 % 0.23 % Volatility 68.4 % 71.4 % A summary of the changes in unvested PSUs is presented below: Unvested Performance Share Units Weighted Average (in thousands) Unvested as of February 10, 2021 — $ — Granted 142 $ 54.23 Vested — $ — Forfeited/canceled — $ — Unvested as of June 30, 2021 142 $ 54.23 As of June 30, 2021, there was approximatel y $7 million of total unrecognized compensation expense related to unvested PSU awards. The expense is expected to be recognized over a weighted average period of approximat ely 2.87 years . Predecessor Share-Based Compensation Our Predecessor share-based compensation program consisted of restricted stock, stock options, PSUs and cash restricted stock units (“CRSUs”) granted to employees and restricted stock granted to non-employee directors under our long-term incentive plans. The restricted stock and stock options were equity-classified awards and the PSUs and CRSUs were liability-classified awards. Restricted Stock. We granted restricted stock units to employees and non-employee directors. A summary of the changes in unvested restricted stock is presented below: Shares of Weighted Average (in thousands) Unvested as of January 1, 2021 1 $ 616.57 Granted — $ — Vested — $ — Forfeited/canceled (1) $ 611.47 Unvested as of February 9, 2021 — $ — Stock Options. In the 2020 Predecessor Period, we granted members of management stock options that vested ratably over a three We utilized the Black-Scholes option-pricing model to measure the fair value of stock options. The expected life of an option was determined using the simplified method. Volatility assumptions were estimated based on the average historical volatility of Chesapeake stock over the expected life of an option. The risk-free interest rate was based on the U.S. Treasury rate in effect at the time of the grant over the expected life of the option. The dividend yield was based on an annual dividend yield, taking into account our dividend policy, over the expected life of the option. The following table provides information related to stock option activity: Number of Weighted Weighted Average Contract Life in Years Aggregate Intrinsic Value (a) (in thousands) Outstanding as of January 1, 2021 20 $ 1,429 4.27 $ — Granted — $ — Exercised — $ — $ — Expired (1) $ 742 Forfeited/canceled (19) $ 1,452 Outstanding as of February 9, 2021 — $ — — $ — Exercisable as of February 9, 2021 — $ — — $ — ___________________________________________ (a) The intrinsic value of a stock option is the amount by which the current market value or the market value upon exercise of the underlying stock exceeds the exercise price of the option. |
Derivative and Hedging Activiti
Derivative and Hedging Activities | 6 Months Ended |
Jun. 30, 2021 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative and Hedging Activities | 12. Derivative and Hedging Activities We use derivative instruments to reduce our exposure to fluctuations in future commodity prices and to protect our expected operating cash flow against significant market movements or volatility. These commodity derivative financial instruments include financial price swaps, basis protection swaps, and collars. All of our oil and natural gas derivative instruments are net settled based on the difference between the fixed-price payment and the floating-price payment, resulting in a net amount due to or from the counterparty. The estimated fair values of our oil, natural gas and NGL derivative instrument assets (liabilities) as of June 30, 2021 and December 31, 2020 are provided below: Successor Predecessor June 30, 2021 December 31, 2020 Notional Volume Fair Value Notional Volume Fair Value Oil (MMBbl): Fixed-price swaps 22 $ (524) 27 $ (136) Basis protection swaps 13 (5) 7 (1) Total oil 35 (529) 34 (137) Natural gas (Bcf): Fixed-price swaps 536 (410) 728 10 Collars 113 (46) 53 8 Basis protection swaps 179 (6) 66 1 Total natural gas 828 (462) 847 19 Total estimated fair value $ (991) $ (118) We have terminated certain commodity derivative contracts that were previously designated as cash flow hedges for which the original contract months are yet to occur. See further discussion below under Effect of Derivative Instruments – Accumulated Other Comprehensive Income (Loss) . Effect of Derivative Instruments – Condensed Consolidated Balance Sheets The following table presents the fair value and location of each classification of derivative instrument included in the condensed consolidated balance sheets as of June 30, 2021 and December 31, 2020 on a gross basis and after same-counterparty netting: Gross Fair Value Amounts Netted in the Consolidated Balance Sheets Net Fair Value Presented in the Consolidated Balance Sheets Successor As of June 30, 2021 Commodity Contracts: Short-term derivative asset $ 23 $ (23) $ — Long-term derivative asset 6 (6) — Short-term derivative liability (803) 23 (780) Long-term derivative liability (217) 6 (211) Total derivatives $ (991) $ — $ (991) Predecessor As of December 31, 2020 Commodity Contracts: Short-term derivative asset $ 84 $ (65) $ 19 Long-term derivative asset 5 (5) — Short-term derivative liability (158) 65 (93) Long-term derivative liability (49) 5 (44) Total derivatives $ (118) $ — $ (118) Effect of Derivative Instruments – Condensed Consolidated Statements of Operations The components of oil and natural gas derivatives are presented below: Successor Predecessor Three Months Ended Three Months Ended Losses on undesignated oil and natural gas derivatives $ (740) $ (165) Losses on terminated cash flow hedges — (8) Total oil and natural gas derivatives $ (740) $ (173) Successor Predecessor Period from February 10, 2021 through June 30, 2021 Period from January 1, 2021 through February 9, 2021 Six Months Ended Gains (losses) on undesignated oil and natural gas derivatives $ (694) $ (379) $ 751 Losses on terminated cash flow hedges — (3) (17) Total oil and natural gas derivatives $ (694) $ (382) $ 734 Effect of Derivative Instruments – Accumulated Other Comprehensive Income (Loss) A reconciliation of the changes in accumulated other comprehensive income (loss) in our condensed consolidated statements of stockholders’ equity related to our cash flow hedges is presented below: Successor Predecessor Three Months Ended Three Months Ended Before After Before After Balance, beginning of period $ — $ — $ (36) $ 21 Losses reclassified to income — — 8 8 Balance, end of period $ — $ — $ (28) $ 29 Successor Predecessor Period from Period from Six Months Ended Before After Before After Before After Balance, beginning of period $ — $ — $ (12) $ 45 $ (45) $ 12 Losses reclassified to income — — 3 3 17 17 Fresh start adjustments — — 9 9 — — Elimination of tax effects — — — (57) — — Balance, end of period $ — $ — $ — $ — $ (28) $ 29 Our accumulated other comprehensive loss balance represented the net deferred loss associated with commodity derivative contracts that were previously designated as cash flow hedges for which the original contract months were yet to occur. The remaining deferred gain or loss amounts were to be recognized in earnings in the month for which the original contract months were to occur. In connection with our adoption of fresh start accounting we recorded a fair value adjustment to eliminate the accumulated other comprehensive income related to hedging settlements including the elimination of tax effects. See Note 3 for a discussion of fresh start accounting adjustments. Credit Risk Considerations Our derivative instruments expose us to our counterparties’ credit risk. To mitigate this risk, we enter into derivative contracts only with counterparties that are highly rated or are deemed by us to have acceptable credit strength and deemed by management to be competent and competitive market-makers, and we attempt to limit our exposure to non-performance by any single counterparty. As of June 30, 2021, our oil and natural gas derivative instruments were spread among eight counterparties. Hedging Arrangements Certain of our hedging arrangements are with counterparties that are also lenders (or affiliates of lenders) under our Exit Credit Facility. The contracts entered into with these counterparties are secured by the same collateral that secures the Exit Credit Facility. The counterparties’ obligations must be secured by cash or letters of credit to the extent that any mark-to-market amounts owed to us exceed defined thresholds. As of June 30, 2021, we did not have any cash or letters of credit posted as collateral for our commodity derivatives. Fair Value The fair value of our derivatives is based on third-party pricing models, which utilize inputs that are either readily available in the public market, such as oil, natural gas and NGL forward curves and discount rates, or can be corroborated from active markets or broker quotes. These values are compared to the values given by our counterparties for reasonableness. As our oil, natural gas and NGL derivatives do not include optionality and therefore generally have no unobservable inputs, they are classified as Level 2. Derivatives are also subject to the risk that either party to a contract will be unable to meet its obligations. We factor non-performance risk into the valuation of our derivatives using current published credit default swap rates. To date, this has not had a material impact on the values of our derivatives. The following table provides information for financial assets (liabilities) measured at fair value on a recurring basis as of June 30, 2021 and December 31, 2020: Successor Predecessor Significant Other Observable Inputs (Level 2) June 30, December 31, Derivative Assets (Liabilities): Commodity assets $ 29 $ 88 Commodity liabilities (1,020) (206) Total derivatives $ (991) $ (118) |
Exploration Expense
Exploration Expense | 6 Months Ended |
Jun. 30, 2021 | |
Extractive Industries [Abstract] | |
Exploration Expense | 13. Exploration Expense A summary of our exploration expense is as follows: Successor Predecessor Three Months Ended June 30, 2021 Three Months Ended June 30, 2020 Impairments of unproved properties $ — $ 127 Geological and geophysical expense and other 1 3 Exploration expense $ 1 $ 130 Successor Predecessor Period from February 10, 2021 through June 30, 2021 Period from January 1, 2021 through February 9, 2021 Six Months Ended June 30, 2020 Impairments of unproved properties $ — $ 2 $ 399 Dry hole expense — — 7 Geological and geophysical expense and other 2 — 6 Exploration expense $ 2 $ 2 $ 412 Unproved oil and natural gas properties are periodically assessed for impairment by considering future drilling and exploration plans, results of exploration activities, commodity price outlooks, planned future sales and expiration of all or a portion of the projects. The exploration expense charges during the 2020 Predecessor Quarter are the result of non-cash impairment charges in unproved properties, primarily in our Gulf Coast operating area. The exploration expense charges during the 2020 Predecessor Period are primarily the result of non-cash impairment charges in unproved properties, primarily in our Brazos Valley, Gulf Coast, Powder River Basin and Mid-Continent operating areas. |
Impairments
Impairments | 6 Months Ended |
Jun. 30, 2021 | |
Property, Plant and Equipment [Abstract] | |
Impairments | 14. Impairments During the 2020 Predecessor Period, the decrease in demand for crude oil primarily due to the combined impacts of COVID-19 and the OPEC+ production increases resulted in decreases in current and expected long-term crude oil and NGL sale prices. These conditions resulted in reductions to the market capitalization of peer companies in the energy industry. We determined these adverse market conditions represented a triggering event to perform an impairment assessment of our long-lived assets used in, and in support of, our operations, including proved oil and gas properties, and our sand mine assets. Proved Oil and Gas Properties Our impairment test involved a Step 1 assessment to determine if the net book value of our proved oil and natural gas properties is expected to be recovered from the estimated undiscounted future cash flows. • We calculated the expected undiscounted future net cash flows of our long-lived assets using management’s assumptions and expectations of (i) commodity prices, which are based on the NYMEX strip pricing escalated by an inflationary rate, (ii) pricing adjustments for differentials, (iii) operating costs, (iv) capital investment plans, (v) future production volumes, and (vi) estimated proved reserves. • Unprecedented volatility in the price of oil due to the decrease in demand has led us to rely on NYMEX strip pricing, which represents a Level 1 input. Certain oil and gas properties in our South Texas, Brazos Valley, Powder River Basin, and Mid-Continent and other non-core operating areas failed the Step 1 assessment. For these assets, we used a discounted cash flow analysis to estimate fair value. The expected future net cash flows were discounted using a rate of 11%, which we believe represents the estimated weighted average cost of capital of a theoretical market participant. Based on Step 2 of our long-lived assets impairment test, we recognized an $8.446 billion impairment because the carrying value exceeded estimated fair market value as of March 31, 2020. • Significant inputs associated with the calculation of discounted future net cash flows include estimates of (i) recoverable reserves, (ii) production rates, (iii) future operating and development costs, (iv) future commodity prices escalated by an inflationary rate, adjusted for differentials, and (v) a market-based weighted average cost of capital. We utilized NYMEX strip pricing, adjusted for differentials, to value the reserves. The NYMEX strip pricing inputs used are classified as Level 1 fair value assumptions and all other inputs are classified as Level 3 fair value assumptions. Sand Mine Our in-field sand mine assets predominately service the oil and gas properties in our Brazos Valley operating area. Based on management’s assumptions and expectations of (i) future commodity prices, (ii) capital investment plans in the Brazos Valley operating area, and (iii) future operating cost of the sand mine, management expects the market for sand to significantly decrease for the foreseeable future. As a result, we recognized a $76 million impairment related to our sand mine assets for the difference between fair value and the carrying value as of March 31, 2020. The inputs used are classified as Level 3 fair value assumptions. |
Other Operating Expense (Income
Other Operating Expense (Income), Net | 6 Months Ended |
Jun. 30, 2021 | |
Other Income and Expenses [Abstract] | |
Other Operating Expense (Income), Net | 15. Other Operating Expense (Income), Net In the 2020 Predecessor Period, we terminated certain gathering, processing and transportation contracts and recognized a non-recurring $80 million expense related to the contract terminations. The contract terminations removed approximately $169 million of future commitments related to gathering, processing and transportation agreements. See Note 6 for further discussion of contingencies and commitments. The 2020 Predecessor Period contract termination expense is partially offset by $28 million of income from the amortization of volumetric production payment deferred revenue. |
Separation and Other Terminatio
Separation and Other Termination Costs | 6 Months Ended |
Jun. 30, 2021 | |
Restructuring and Related Activities [Abstract] | |
Separation and Other Termination Costs | 16. Separation and Other Termination Costs In the 2021 Successor Period, 2021 Predecessor Period and the 2020 Predecessor Period, we incurred charges of approximately $11 million, $22 million and $27 million, respectively, related to one-time termination benefits for certain employees. |
Basis of Presentation and Sum_2
Basis of Presentation and Summary of Significant Accounting Policies (Policy) | 6 Months Ended |
Jun. 30, 2021 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of PresentationThe accompanying unaudited condensed consolidated financial statements of Chesapeake were prepared in accordance with GAAP and the rules and regulations of the SEC. Pursuant to such rules and regulations, certain disclosures have been condensed or omitted. |
Segments | Segments Operating segments are defined as components of an enterprise that engage in activities from which it may earn revenues and incur expenses for which separate operational financial information is available and is regularly evaluated by the chief operating decision maker for the purpose of allocating an enterprise’s resources and assessing its operating performance. We have concluded that we have only one reportable operating segment due to the similar nature of the exploration and production business across Chesapeake and its consolidated subsidiaries and the fact that our marketing activities are ancillary to our operations. |
Restricted Cash | Restricted Cash As of June 30, 2021, we had restricted cash of $10 million. The restricted funds are maintained primarily to pay certain convenience class unsecured claims following our emergence from bankruptcy. |
Fresh Start Accounting (Tables)
Fresh Start Accounting (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Reorganizations [Abstract] | |
Schedule of Fresh Start Accounting Adjustments | The following table reconciles the enterprise value to the implied fair value of the Successor’s equity as of the Effective Date: February 9, 2021 Enterprise Value $ 4,851 Plus: Cash and cash equivalents (a) 48 Less: Fair value of debt (1,313) Successor equity value $ 3,586 ____________________________________________ (a) Cash and cash equivalents includes $8 million that was initially classified as restricted cash as of the Effective Date but subsequently released from escrow and returned to the Successor. Restricted cash exclusive of the $8 million is not included in the table above. The following table reconciles the enterprise value to the reorganization value as of the Effective Date: February 9, 2021 Enterprise Value $ 4,851 Plus: Cash and cash equivalents (a) 48 Plus: Current liabilities 1,582 Plus: Asset retirement obligations (non-current portion) 236 Plus: Other non-current liabilities 97 Reorganization value of Successor assets $ 6,814 ____________________________________________ (a) Cash and cash equivalents includes $8 million that was initially classified as restricted cash as of the Effective Date but subsequently released from escrow and returned to the Successor. Restricted cash exclusive of the $8 million is not included in the table above. The following consolidated balance sheet is as of February 9, 2021. This consolidated balance sheet includes adjustments that reflect the consummation of the transactions contemplated by the Plan (reflected in the column “Reorganization Adjustments”) as well as fair value adjustments as a result of the adoption of fresh start accounting (reflected in the column “Fresh Start Adjustments”) as of the Effective Date. The explanatory notes following the table below provide further details on the adjustments, including the assumptions and methods used to determine fair value for its assets, liabilities and warrants. Predecessor Reorganization Adjustments Fresh Start Adjustments Successor Assets Current assets: Cash and cash equivalents $ 243 $ (203) (a) $ — $ 40 Restricted cash — 86 (b) — 86 Accounts receivable, net 861 (18) (c) — 843 Short-term derivative assets — — — — Other current assets 66 (5) (d) — 61 Total current assets 1,170 (140) — 1,030 Property and equipment: Oil and natural gas properties, successful efforts method Proved oil and natural gas properties 25,794 — (21,108) (o) 4,686 Unproved properties 1,546 — (1,063) (o) 483 Other property and equipment 1,755 — (1,256) (o) 499 Total property and equipment 29,095 — (23,427) (o) 5,668 Less: accumulated depreciation, depletion and amortization (23,877) — 23,877 (o) — Property and equipment held for sale, net 9 — (7) (o) 2 Total property and equipment, net 5,227 — 443 (o) 5,670 Other long-term assets 198 — (84) (p) 114 Total assets $ 6,595 $ (140) $ 359 $ 6,814 Predecessor Reorganization Adjustments Fresh Start Adjustments Successor Liabilities and stockholders’ equity (deficit) Current liabilities: Accounts payable $ 391 $ 24 (e) $ — $ 415 Current maturities of long-term debt, net 1,929 (1,929) (f) — — Accrued interest 4 (4) (g) — — Short-term derivative liabilities 398 — — 398 Other current liabilities 645 124 (h) — 769 Total current liabilities 3,367 (1,785) — 1,582 Long-term debt, net — 1,261 (i) 52 (q) 1,313 Long-term derivative liabilities 90 — — 90 Asset retirement obligations, net of current portion 139 — 97 (r) 236 Other long-term liabilities 5 2 (j) — 7 Liabilities subject to compromise 9,574 (9,574) (k) — — Total liabilities 13,175 (10,096) 149 3,228 Contingencies and commitments ( Note 6 ) Stockholders’ equity (deficit): Predecessor preferred stock 1,631 (1,631) (l) — — Predecessor common stock — — — — Predecessor additional paid-in capital 16,940 (16,940) (l) — — Successor common stock — 1 (m) — 1 Successor additional paid-in-capital — 3,585 (m) — 3,585 Accumulated other comprehensive income 48 — (48) (s) — Accumulated deficit (25,199) 24,941 (n) 258 (t) — Total stockholders’ equity (deficit) (6,580) 9,956 210 3,586 Total liabilities and stockholders’ equity (deficit) $ 6,595 $ (140) $ 359 $ 6,814 Reorganization Adjustments (a) The table below reflects the sources and uses of cash on the Effective Date from implementation of the Plan: Sources: Proceeds from issuance of the Notes $ 1,000 Proceeds from Rights Offering 600 Proceeds from refunds of interest deposit for the Notes 5 Total sources of cash $ 1,605 Uses: Payment of roll-up of DIP Facility balance $ (1,179) Payment of Exit Credit Facility - Tranche A Loan (479) Transfers to restricted cash for professional fee reserve (76) Transfers to restricted cash for convenience claim distribution reserve (10) Payment of professional fees (31) Payment of DIP Facility interest and fees (12) Payment of FLLO alternative transaction fee (12) Payment of the Notes fees funded out of escrow (8) Payment of RBL interest and fees (1) Total uses of cash $ (1,808) Net cash used $ (203) (b) Represents the transfer of funds to a restricted cash account for purposes of funding the professional fee reserve and the convenience claim distribution reserve. (c) Reflects the removal of an insurance receivable associated with a discharged legal liability. (d) Reflects the collection of an interest deposit for the senior unsecured notes. (e) Changes in accounts payable include the following: Accrual of professional service provider success fees $ 38 Accrual of convenience claim distribution reserve 10 Accrual of professional service provider fees 5 Reinstatement of accounts payable from liabilities subject to compromise 2 Payment of professional fees (31) Net impact to accounts payable $ 24 (f) Reflects payment of the pre-petition credit facility for $1.179 billion and transfer of the Tranche A and Tranche B Loans to long-term debt for $750 million. (g) Reflect payments of accrued interest and fees on the DIP Facility. (h) Changes in other current liabilities include the following: Reinstatement of other current liabilities from liabilities subject to compromise $ 191 Accrual of the Notes fees 2 Settlement of Put Option Premium through issuance of Successor Common Stock (60) Payment of DIP Facility fees (9) Net impact to other current liabilities $ 124 (i) Change in long-term debt include the following: Issuance of the Notes $ 1,000 Issuance of Tranche A and Tranche B Loans 750 Payments on Tranche A Loans (479) Debt issuance costs for the Notes (10) Net impact to long-term debt, net $ 1,261 (j) Reflects reinstatement of a long-term lease liability. (k) On the Effective Date, liabilities subject to compromise were settled in accordance with the Plan as follows: Liabilities subject to compromise pre-emergence $ 9,574 To be reinstated on the Effective Date: Accounts payable $ (2) Other current liabilities (191) Other long-term liabilities (2) Total liabilities reinstated $ (195) Consideration provided to settle amounts per the Plan or Reorganization: Issuance of Successor common stock associated with the Rights Offering and Backstop Commitment and settlement of the Put Option Premium $ (2,311) Proceeds from issuance of Successor common stock associated with the Rights Offering and Backstop Commitment 600 Issuance of Successor common stock to FLLO Term Loan holders, incremental to the Rights Offering and Backstop Commitment (783) Issuance of Successor common stock to second lien note holders, incremental to the Rights Offering and Backstop Commitment (124) Issuance of Successor common stock to unsecured note holders (45) Issuance of Successor common stock to general unsecured claims (8) Fair value of Class A Warrants (93) Fair value of Class B Warrants (94) Fair value of Class C Warrants (68) Proceeds to holders of general unsecured claims (10) Total consideration provided to settle amounts per the Plan $ (2,936) Gain on settlement of liabilities subject to compromise $ 6,443 (l) Pursuant to the Plan, as of the Effective Date, all equity interests in Predecessor, including Predecessor’s common and preferred stock, were cancelled without any distribution. (m) Reflects the Successor equity including the issuance of 97,907,081 shares of New Common Stock, 11,111,111 shares of Class A Warrants, 12,345,679 shares of Class B Warrants and 9,768,527 shares of Class C Warrants pursuant to the Plan. Issuance of Successor equity associated with the Rights Offering and Backstop Commitment $ 2,371 Issuance of Successor equity to holders of the FLLO Term Loan, incremental to the Rights Offering and Backstop Commitment 783 Issuance of Successor equity to holders of the Second Lien Notes, incremental to the Rights Offering and Backstop Commitment 124 Issuance of Successor equity to holders of the unsecured senior notes 45 Issuance of Successor equity to holders of allowed general unsecured claims 8 Fair value of Class A warrants 93 Fair value of Class B warrants 94 Fair value of Class C warrants 68 Total change in Successor common stock and additional paid-in capital 3,586 Less: par value of Successor common stock (1) Change in Successor additional paid-in capital $ 3,585 (n) Reflects the cumulative net impact of the effects on accumulated deficit as follows: Gain on settlement of liabilities subject to compromise $ 6,443 Accrual of professional service provider success fees (38) Accrual of professional service provider fees (5) Surrender of other receivable (18) Payment of FLLO alternative transaction fee (12) Total reorganization items, net 6,370 Cancellation of predecessor equity 18,571 Net impact on accumulated deficit $ 24,941 Fresh Start Adjustments (o) Reflects fair value adjustments to our (i) proved oil and natural gas properties, (ii) unproved properties, (iii) other property and equipment (iv) property and equipment held for sale, and the elimination of accumulated depletion, depreciation and amortization. (p) Reflects the fair value adjustment to record historical contracts at their fair values. (q) Reflects the fair value adjustments to the 2026 Notes and 2029 Notes for $22 million and $30 million, respectively. (r) Reflects the adjustment to our asset retirement obligations using assumptions as of the Effective Date, including an inflation factor of 2% and an average credit-adjusted risk-free rate of 5.18%. (s) Reflects the fair value adjustment to eliminate the accumulated other comprehensive income of $9 million related to hedging settlements offset by the elimination of $57 million of income tax effects which has resulted in the recording of an income tax benefit of $57 million. See Note 9 for a discussion of income taxes. (t) Reflects the net cumulative impact of the fresh start adjustments on accumulated deficit as follows: Fresh start adjustments to property and equipment $ 443 Fresh start adjustments to other long-term assets (84) Fresh start adjustments to long-term debt (52) Fresh start adjustments to long-term asset retirement obligations (97) Fresh start adjustments to accumulated other comprehensive income (9) Total fresh start adjustments impacting reorganizations items, net 201 Income tax effects on accumulated other comprehensive income 57 Net impact to accumulated deficit $ 258 |
Schedule of Reorganization Items | The following table summarizes the components in reorganization items, net included in our unaudited condensed consolidated statements of operations: Successor Predecessor Three Months Ended Three Months Ended Write off of unamortized debt premiums (discounts) on Predecessor debt $ — $ 518 Write off of unamortized debt issuance costs on Predecessor debt — (61) DIP Facility financing costs — (63) Total reorganization items, net $ — $ 394 Successor Predecessor Period from February 10, 2021 through June 30, 2021 Period from January 1, 2021 through February 9, 2021 Six Months Ended Gains on the settlement of liabilities subject to compromise $ — $ 6,443 $ — Accrual for allowed claims — (1,002) — Write off of unamortized debt premiums (discounts) on Predecessor debt — — 518 Write off of unamortized debt issuance costs on Predecessor debt — — (61) Gain on fresh start adjustments — 201 — Gain from release of commitment liabilities — 55 — DIP Facility financing costs — — (63) Professional service provider fees and other — (60) — Success fees for professional service providers — (38) — Surrender of other receivable — (18) — FLLO alternative transaction fee — (12) — Total reorganization items, net $ — $ 5,569 $ 394 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | The reconciliations between basic and diluted earnings (loss) per share are as follows: Successor Predecessor Three Months Ended June 30, 2021 Three Months Ended Numerator Net loss, basic and diluted $ (439) $ (276) Denominator (in thousands) Weighted average common shares outstanding, basic 97,931 9,779 Effect of potentially dilutive securities Preferred stock — — Warrants — — Restricted stock — — Weighted average common shares outstanding, diluted 97,931 9,779 Loss per common share Loss per common share, basic $ (4.48) $ (28.22) Loss per common share, diluted $ (4.48) $ (28.22) Successor During the 2021 Successor Quarter, the diluted earnings (loss) per share calculation excludes the effect of 2,092,918 reserved shares of common stock and 3,948,893 reserved Class C warrants related to the settlement of general unsecured claims associated with the Chapter 11 Cases as all necessary conditions had not been met to be considered dilutive shares as of the 2021 Successor Quarter. Additionally, the 2021 Successor Quarter had a net loss and therefore the diluted earnings (loss) per share calculation excludes the antidilutive effect of 12,186,128 issuable shares related to warrants and 121,348 shares of restricted stock. Predecessor The diluted earnings (loss) per share calculation for the 2020 Predecessor Quarter excludes the antidilutive effect of 290,716 shares of common stock equivalent of our preferred stock. We had the option to settle conversions of the 5.5% convertible senior notes due 2026 with cash, shares or common stock or any combination thereof. As the price of our common stock was below the conversion threshold level for any time during the conversion period, there was no impact to diluted earnings (loss) per share. Successor Predecessor Period from February 10, 2021 through June 30, 2021 Period from January 1, 2021 through Six Months Ended Numerator Net income (loss), basic and diluted $ (144) $ 5,383 $ (8,595) Denominator (in thousands) Weighted average common shares outstanding, basic 97,922 9,781 9,765 Effect of potentially dilutive securities Preferred stock — 290 — Warrants — — — Restricted stock — — — Weighted average common shares outstanding, diluted 97,922 10,071 9,765 Earnings (loss) per common share Earnings (loss) per common share, basic $ (1.47) $ 550.35 $ (880.18) Earnings (loss) per common share, diluted $ (1.47) $ 534.51 $ (880.18) |
Debt (Tables)
Debt (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Debt Disclosure [Abstract] | |
Schedule of long-term debt | Our long-term debt consisted of the following as of June 30, 2021 and December 31, 2020: Successor Predecessor June 30, 2021 December 31, 2020 Carrying Amount Fair Value (a) Carrying Amount Fair Value (a) Exit Credit Facility - Tranche A Loans $ — $ — $ — $ — Exit Credit Facility - Tranche B Loans 221 221 — — 5.5% senior notes due 2026 500 527 — — 5.875% senior notes due 2029 500 541 — — DIP Facility — — — — Pre-petition revolving credit facility — — 1,929 1,929 Term loan due 2024 — — 1,500 1,220 11.5% senior secured second lien notes due 2025 — — 2,330 373 6.625% senior notes due 2020 — — 176 8 6.875% senior notes due 2020 — — 73 3 6.125% senior notes due 2021 — — 167 7 5.375% senior notes due 2021 — — 127 5 4.875% senior notes due 2022 — — 272 12 5.75% senior notes due 2023 — — 167 8 7.00% senior notes due 2024 — — 624 29 6.875% senior notes due 2025 — — 2 2 8.00% senior notes due 2025 — — 246 10 5.5% convertible senior notes due 2026 — — 1,064 42 7.5% senior notes due 2026 — — 119 5 8.00% senior notes due 2026 — — 46 2 8.00% senior notes due 2027 — — 253 11 Premiums on senior notes 50 — — — Debt issuance costs (10) — — — Total debt, net 1,261 1,289 9,095 3,666 Less current maturities of long-term debt — — (1,929) (1,929) Less amounts reclassified to liabilities subject to compromise — — (7,166) (1,737) Total long-term debt, net $ 1,261 $ 1,289 $ — $ — ____________________________________________ (a) The carrying value of borrowings under our Exit Credit Facility approximate fair value as the interest rates are based on prevailing market rates; therefore, they are a Level 1 fair value measurement. For all other debt, a market approach, based upon quotes from major financial institutions, which are Level 2 inputs, is used to measure the fair value. |
Contingencies and Commitments (
Contingencies and Commitments (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of contractual obligation | The aggregate undiscounted commitments under our gathering, processing and transportation agreements, excluding any reimbursement from working interest and royalty interest owners, credits for third-party volumes or future costs under cost-of-service agreements, are presented below: Successor June 30, Remainder of 2021 $ 330 2022 569 2023 458 2024 390 2025 310 2026 – 2033 1,539 Total $ 3,596 |
Other Current Liabilities (Tabl
Other Current Liabilities (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Other Liabilities Disclosure [Abstract] | |
Other current liabilities | Other current liabilities as of June 30, 2021 and December 31, 2020 are detailed below: Successor Predecessor June 30, December 31, Revenues and royalties due others $ 404 $ 236 Accrued drilling and production costs 91 104 Other accrued taxes 62 82 Accrued compensation and benefits 48 59 Hedging 45 7 Operating leases 18 24 Debt and equity financing fees — 69 Joint interest prepayments received 13 8 Other 100 134 Total other current liabilities $ 781 $ 723 |
Revenue (Tables)
Revenue (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of disaggregation of revenue | The following table shows revenue disaggregated by operating area and product type: Successor Three months ended June 30, 2021 Oil Natural Gas NGL Total Appalachia $ — $ 226 $ — $ 226 Gulf Coast — 124 — 124 South Texas 224 25 36 285 Brazos Valley 162 6 5 173 Powder River Basin 58 16 10 84 Oil, natural gas and NGL revenue $ 444 $ 397 $ 51 $ 892 Marketing revenue $ 340 $ 146 $ 53 $ 539 Predecessor Three months ended June 30, 2020 Oil Natural Gas NGL Total Appalachia $ — $ 131 $ — $ 131 Gulf Coast — 67 — 67 South Texas 73 21 14 108 Brazos Valley 76 3 1 80 Powder River Basin 29 7 3 39 Mid-Continent 8 5 2 15 Oil, natural gas and NGL revenue $ 186 $ 234 $ 20 $ 440 Marketing revenue from contracts with customers $ 121 $ 96 $ 15 $ 232 Other marketing revenue 6 2 — 8 Marketing revenue $ 127 $ 98 $ 15 $ 240 Successor Period from Oil Natural Gas NGL Total Appalachia $ — $ 389 $ — $ 389 Gulf Coast — 194 — 194 South Texas 341 53 55 449 Brazos Valley 251 21 9 281 Powder River Basin 86 30 16 132 Oil, natural gas and NGL revenue $ 678 $ 687 $ 80 $ 1,445 Marketing revenue $ 502 $ 243 $ 71 $ 816 Predecessor Period from Oil Natural Gas NGL Total Appalachia $ — $ 119 $ — $ 119 Gulf Coast — 53 — 53 South Texas 92 15 15 122 Brazos Valley 67 2 2 71 Powder River Basin 20 7 6 33 Oil, natural gas and NGL revenue $ 179 $ 196 $ 23 $ 398 Marketing revenue $ 141 $ 78 $ 20 $ 239 Predecessor Six Months Ended June 30, 2020 Oil Natural Gas NGL Total Appalachia $ — $ 306 $ — $ 306 Gulf Coast — 151 — 151 South Texas 350 52 34 436 Brazos Valley 248 7 5 260 Powder River Basin 97 23 10 130 Mid-Continent 30 15 6 51 Oil, natural gas and NGL revenue $ 725 $ 554 $ 55 $ 1,334 Marketing revenue from contracts with customers $ 629 $ 220 $ 45 $ 894 Other marketing revenue 67 3 — 70 Marketing revenue $ 696 $ 223 $ 45 $ 964 |
Schedule of accounts receivable | Accounts receivable as of June 30, 2021 and December 31, 2020 are detailed below: Successor Predecessor June 30, December 31, Oil, natural gas and NGL sales $ 531 $ 589 Joint interest 117 119 Other 27 68 Allowance for doubtful accounts (1) (30) Total accounts receivable, net $ 674 $ 746 |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Summary of the changes in unvested restricted stock | A summary of the changes in unvested restricted stock is presented below: Shares of Weighted Average (in thousands) Unvested as of February 10, 2021 — $ — Granted 727 $ 44.28 Vested (1) $ 44.30 Forfeited/canceled (18) $ 44.30 Unvested as of June 30, 2021 708 $ 44.28 Shares of Weighted Average (in thousands) Unvested as of January 1, 2021 1 $ 616.57 Granted — $ — Vested — $ — Forfeited/canceled (1) $ 611.47 Unvested as of February 9, 2021 — $ — |
Schedule Valuation Assumptions | The following table presents the assumptions used in the valuation of the PSUs granted in 2021. Assumption Share Price Hurdle TSR, rTSR Risk-free interest rate 0.30 % 0.23 % Volatility 68.4 % 71.4 % |
Summary of the changes in unvested performance share | A summary of the changes in unvested PSUs is presented below: Unvested Performance Share Units Weighted Average (in thousands) Unvested as of February 10, 2021 — $ — Granted 142 $ 54.23 Vested — $ — Forfeited/canceled — $ — Unvested as of June 30, 2021 142 $ 54.23 |
Schedule of stock option activity | The following table provides information related to stock option activity: Number of Weighted Weighted Average Contract Life in Years Aggregate Intrinsic Value (a) (in thousands) Outstanding as of January 1, 2021 20 $ 1,429 4.27 $ — Granted — $ — Exercised — $ — $ — Expired (1) $ 742 Forfeited/canceled (19) $ 1,452 Outstanding as of February 9, 2021 — $ — — $ — Exercisable as of February 9, 2021 — $ — — $ — ___________________________________________ (a) The intrinsic value of a stock option is the amount by which the current market value or the market value upon exercise of the underlying stock exceeds the exercise price of the option. |
Schedule of Share-based Compensation Arrangements | We recognized the following compensation costs, net of actual forfeitures, related to restricted stock, stock options, and PSUs for the Successor and Predecessor Periods: Successor Predecessor Three Months Ended Three Months Ended General and administrative expenses $ 2 $ 4 Oil and natural gas properties 1 — Total restricted stock, stock option, and PSU compensation $ 3 $ 4 Successor Predecessor Period from February 10, 2021 through June 30, 2021 Period from January 1, 2021 through February 9, 2021 Six Months Ended General and administrative expenses $ 2 $ 3 $ 8 Oil and natural gas properties 1 — 1 Oil, natural gas and NGL production expenses — — 1 Total restricted stock, stock option, and PSU compensation $ 3 $ 3 $ 10 |
Derivative and Hedging Activi_2
Derivative and Hedging Activities (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of estimated fair values of oil, natural gas and NGL derivative instruments | The estimated fair values of our oil, natural gas and NGL derivative instrument assets (liabilities) as of June 30, 2021 and December 31, 2020 are provided below: Successor Predecessor June 30, 2021 December 31, 2020 Notional Volume Fair Value Notional Volume Fair Value Oil (MMBbl): Fixed-price swaps 22 $ (524) 27 $ (136) Basis protection swaps 13 (5) 7 (1) Total oil 35 (529) 34 (137) Natural gas (Bcf): Fixed-price swaps 536 (410) 728 10 Collars 113 (46) 53 8 Basis protection swaps 179 (6) 66 1 Total natural gas 828 (462) 847 19 Total estimated fair value $ (991) $ (118) |
Schedule of effect of derivative instruments, condensed consolidated balance sheets | The following table presents the fair value and location of each classification of derivative instrument included in the condensed consolidated balance sheets as of June 30, 2021 and December 31, 2020 on a gross basis and after same-counterparty netting: Gross Fair Value Amounts Netted in the Consolidated Balance Sheets Net Fair Value Presented in the Consolidated Balance Sheets Successor As of June 30, 2021 Commodity Contracts: Short-term derivative asset $ 23 $ (23) $ — Long-term derivative asset 6 (6) — Short-term derivative liability (803) 23 (780) Long-term derivative liability (217) 6 (211) Total derivatives $ (991) $ — $ (991) Predecessor As of December 31, 2020 Commodity Contracts: Short-term derivative asset $ 84 $ (65) $ 19 Long-term derivative asset 5 (5) — Short-term derivative liability (158) 65 (93) Long-term derivative liability (49) 5 (44) Total derivatives $ (118) $ — $ (118) |
Schedule of effect of derivative instruments, condensed consolidated statements of operations | The components of oil and natural gas derivatives are presented below: Successor Predecessor Three Months Ended Three Months Ended Losses on undesignated oil and natural gas derivatives $ (740) $ (165) Losses on terminated cash flow hedges — (8) Total oil and natural gas derivatives $ (740) $ (173) Successor Predecessor Period from February 10, 2021 through June 30, 2021 Period from January 1, 2021 through February 9, 2021 Six Months Ended Gains (losses) on undesignated oil and natural gas derivatives $ (694) $ (379) $ 751 Losses on terminated cash flow hedges — (3) (17) Total oil and natural gas derivatives $ (694) $ (382) $ 734 |
Schedule of effect of derivative instruments, accumulated other comprehensive income (loss) | A reconciliation of the changes in accumulated other comprehensive income (loss) in our condensed consolidated statements of stockholders’ equity related to our cash flow hedges is presented below: Successor Predecessor Three Months Ended Three Months Ended Before After Before After Balance, beginning of period $ — $ — $ (36) $ 21 Losses reclassified to income — — 8 8 Balance, end of period $ — $ — $ (28) $ 29 Successor Predecessor Period from Period from Six Months Ended Before After Before After Before After Balance, beginning of period $ — $ — $ (12) $ 45 $ (45) $ 12 Losses reclassified to income — — 3 3 17 17 Fresh start adjustments — — 9 9 — — Elimination of tax effects — — — (57) — — Balance, end of period $ — $ — $ — $ — $ (28) $ 29 |
Schedule of financial assets (liabilities) | The following table provides information for financial assets (liabilities) measured at fair value on a recurring basis as of June 30, 2021 and December 31, 2020: Successor Predecessor Significant Other Observable Inputs (Level 2) June 30, December 31, Derivative Assets (Liabilities): Commodity assets $ 29 $ 88 Commodity liabilities (1,020) (206) Total derivatives $ (991) $ (118) |
Exploration Expense (Tables)
Exploration Expense (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Extractive Industries [Abstract] | |
Schedule of exploration expense | A summary of our exploration expense is as follows: Successor Predecessor Three Months Ended June 30, 2021 Three Months Ended June 30, 2020 Impairments of unproved properties $ — $ 127 Geological and geophysical expense and other 1 3 Exploration expense $ 1 $ 130 Successor Predecessor Period from February 10, 2021 through June 30, 2021 Period from January 1, 2021 through February 9, 2021 Six Months Ended June 30, 2020 Impairments of unproved properties $ — $ 2 $ 399 Dry hole expense — — 7 Geological and geophysical expense and other 2 — 6 Exploration expense $ 2 $ 2 $ 412 |
Basis of Presentation and Sum_3
Basis of Presentation and Summary of Significant Accounting Policies (Details) $ in Millions | 6 Months Ended | |
Jun. 30, 2021USD ($)segment | Dec. 31, 2020USD ($) | |
Accounting Policies [Abstract] | ||
Number of reportable segments | 1 | |
Number of operating segments | 1 | |
Restricted cash | $ | $ 10 | $ 0 |
Chapter 11 Emergence (Details)
Chapter 11 Emergence (Details) - USD ($) $ in Millions | Feb. 09, 2021 | Jun. 28, 2020 |
2021 Long Term Incentive Plan | ||
Debt Instrument [Line Items] | ||
Common stock, reserved for future issuance (in shares) | 6,800,000 | |
Class C Warrants | ||
Debt Instrument [Line Items] | ||
Warrants issued (in shares) | 9,768,527 | |
New Common Stock | ||
Debt Instrument [Line Items] | ||
Stock issued during period, new issues (in shares) | 97,907,081 | |
Common stock, reserved for future issuance (in shares) | 2,092,918 | |
New Common Stock | Backstop Parties, Put Option Premium | ||
Debt Instrument [Line Items] | ||
Stock issued during period, new issues (in shares) | 6,337,031 | |
New Common Stock | Backstop Parties, Obligations | ||
Debt Instrument [Line Items] | ||
Stock issued during period, new issues (in shares) | 442,991 | |
New Common Stock | 2021 Long Term Incentive Plan | ||
Debt Instrument [Line Items] | ||
Stock issued during period, new issues (in shares) | 62,927,320 | |
New Common Stock | Class A Warrants | ||
Debt Instrument [Line Items] | ||
Warrants issued (in shares) | 11,111,111 | |
New Common Stock | Class B Warrants | ||
Debt Instrument [Line Items] | ||
Warrants issued (in shares) | 12,345,679 | |
New Common Stock | Class C Warrants | ||
Debt Instrument [Line Items] | ||
Common stock, reserved for future issuance (in shares) | 3,948,893 | |
Warrants issued (in shares) | 9,768,527 | |
New Common Stock | FLLO Term Loan Facility | ||
Debt Instrument [Line Items] | ||
Pro rata share received by holder (in shares) | 23,022,420 | |
New Common Stock | Second Lien Notes | ||
Debt Instrument [Line Items] | ||
Pro rata share received by holder (in shares) | 3,635,118 | |
New Common Stock | Second Lien Notes | Class A Warrants | ||
Debt Instrument [Line Items] | ||
Stock issued during period, new issues (in shares) | 11,111,111 | |
Warrants issued (in shares) | 11,111,111 | |
New Common Stock | Second Lien Notes | Class B Warrants | ||
Debt Instrument [Line Items] | ||
Stock issued during period, new issues (in shares) | 12,345,679 | |
Warrants issued (in shares) | 12,345,679 | |
New Common Stock | Second Lien Notes | Class C Warrants | ||
Debt Instrument [Line Items] | ||
Stock issued during period, new issues (in shares) | 6,858,710 | |
Warrants issued (in shares) | 6,858,710 | |
New Common Stock | Allowed Unsecured Notes | ||
Debt Instrument [Line Items] | ||
Pro rata share received by holder (in shares) | 1,311,089 | |
New Common Stock | Allowed Unsecured Notes | Class C Warrants | ||
Debt Instrument [Line Items] | ||
Stock issued during period, new issues (in shares) | 2,473,757 | |
Warrants issued (in shares) | 2,473,757 | |
New Common Stock | Allowed General Unsecured Claim | ||
Debt Instrument [Line Items] | ||
Pro rata share received by holder (in shares) | 231,112 | |
Pro rata share received by holder | $ 10 | |
Percent of convenience claim | 5.00% | |
New Common Stock | Allowed General Unsecured Claim | Class C Warrants | ||
Debt Instrument [Line Items] | ||
Stock issued during period, new issues (in shares) | 436,060 | |
Warrants issued (in shares) | 436,060 | |
New Common Stock | Upon Exercise of Warrants | ||
Debt Instrument [Line Items] | ||
Common stock, reserved for future issuance (in shares) | 37,174,210 |
Fresh Start Accounting - Additi
Fresh Start Accounting - Additional Information (Details) - USD ($) $ in Millions | Jun. 30, 2021 | Feb. 09, 2021 | Dec. 31, 2020 |
Reorganization, Chapter 11 [Line Items] | |||
Assets | $ 6,999 | $ 6,814 | $ 6,584 |
Liabilities | 3,586 | 3,228 | 11,925 |
Liabilities and Equity | 6,999 | 6,814 | $ 6,584 |
Enterprise value | 4,851 | ||
Predecessor | |||
Reorganization, Chapter 11 [Line Items] | |||
Assets | 6,595 | ||
Liabilities | 13,175 | ||
Liabilities and Equity | 6,595 | ||
Fresh Start Adjustments | |||
Reorganization, Chapter 11 [Line Items] | |||
Assets | 359 | ||
Liabilities | 149 | ||
Liabilities and Equity | $ 201 | 359 | |
Minimum | Fresh Start Adjustments | |||
Reorganization, Chapter 11 [Line Items] | |||
Assets | 3,500 | ||
Liabilities and Equity | $ 3,500 | ||
Maximum | |||
Reorganization, Chapter 11 [Line Items] | |||
Percent of voting shares received by holders | 50.00% | ||
Maximum | Fresh Start Adjustments | |||
Reorganization, Chapter 11 [Line Items] | |||
Assets | $ 4,900 | ||
Liabilities and Equity | $ 4,900 |
Fresh Start Accounting - Succes
Fresh Start Accounting - Successor’s Equity (Details) - USD ($) $ in Millions | Jun. 30, 2021 | Feb. 09, 2021 | Dec. 31, 2020 | Jun. 30, 2020 |
Reorganization, Chapter 11 [Line Items] | ||||
Enterprise Value | $ 4,851 | |||
Plus: Cash and cash equivalents | $ 612 | 40 | $ 279 | $ 82 |
Less: Fair value of debt | (1,313) | |||
Successor equity value | 3,413 | 3,586 | $ (5,341) | |
Restricted cash | 86 | |||
Fresh Start Adjustments | ||||
Reorganization, Chapter 11 [Line Items] | ||||
Plus: Cash and cash equivalents | 48 | |||
Less: Fair value of debt | $ 52 | (52) | ||
Successor equity value | 210 | |||
Restricted cash | $ 8 |
Fresh Start Accounting - Enterp
Fresh Start Accounting - Enterprise Value Reconciliation (Details) - USD ($) $ in Millions | Jun. 30, 2021 | Feb. 09, 2021 | Dec. 31, 2020 | Jun. 30, 2020 |
Reorganization, Chapter 11 [Line Items] | ||||
Enterprise Value | $ 4,851 | |||
Plus: Cash and cash equivalents | $ 612 | 40 | $ 279 | $ 82 |
Plus: Current liabilities | 1,866 | 1,582 | 3,094 | |
Plus: Asset retirement obligations (non-current portion) | 236 | |||
Plus: Other non-current liabilities | 7 | |||
Assets | $ 6,999 | 6,814 | $ 6,584 | |
Restricted cash | 86 | |||
Fresh Start Adjustments | ||||
Reorganization, Chapter 11 [Line Items] | ||||
Plus: Cash and cash equivalents | 48 | |||
Plus: Current liabilities | 0 | |||
Plus: Asset retirement obligations (non-current portion) | 97 | |||
Plus: Other non-current liabilities | 97 | |||
Assets | 359 | |||
Restricted cash | $ 8 |
Fresh Start Accounting - Debt a
Fresh Start Accounting - Debt and Warrants (Details) - USD ($) | Jun. 30, 2021 | Jun. 10, 2021 | Feb. 09, 2021 | Jun. 28, 2020 |
Debt Instrument [Line Items] | ||||
Implied stock price (in dollars per share) | $ 20.52 | |||
Expected volatility rate | 58.00% | |||
Debt | $ 1,313,000,000 | |||
Class A Warrants | ||||
Debt Instrument [Line Items] | ||||
Warrant, exercise price (in dollars per share) | $ 27.44 | $ 27.63 | ||
Class B Warrants | ||||
Debt Instrument [Line Items] | ||||
Warrant, exercise price (in dollars per share) | 31.91 | 32.13 | ||
Class C Warrants | ||||
Debt Instrument [Line Items] | ||||
Warrant, exercise price (in dollars per share) | $ 35.93 | $ 36.18 | ||
5.5% senior notes due 2026 | ||||
Debt Instrument [Line Items] | ||||
Interest rate, stated percentage | 5.50% | |||
Senior Notes | 5.5% senior notes due 2026 | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, principal amount | $ 500,000,000 | |||
Interest rate, stated percentage | 0.055% | 5.50% | ||
Senior Notes | 5.875% senior notes due 2029 | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, principal amount | $ 500,000,000 | |||
Interest rate, stated percentage | 0.05875% | 5.875% | ||
Term Loan | Debtor-in-Possession Credit Agreement | ||||
Debt Instrument [Line Items] | ||||
Debt | $ 1,179,000,000 | |||
Secured Debt | Debtor-in-Possession Credit Agreement | ||||
Debt Instrument [Line Items] | ||||
Exit credit facilities borrowing capacity | $ 750,000,000 |
Fresh Start Accounting - Conden
Fresh Start Accounting - Condensed Consolidated Balance Sheet (Details) - USD ($) $ in Millions | Jun. 30, 2021 | Feb. 09, 2021 | Dec. 31, 2020 | Jun. 30, 2020 |
Current assets: | ||||
Cash and cash equivalents | $ 612 | $ 40 | $ 279 | $ 82 |
Restricted cash | 86 | |||
Accounts receivable, net | 843 | |||
Short-term derivative assets | 0 | |||
Other current assets | 61 | |||
Total current assets | 1,354 | 1,030 | 1,108 | |
Property and equipment: | ||||
Proved oil and natural gas properties | 4,686 | |||
Unproved properties | 483 | |||
Other property and equipment | 491 | 499 | 1,754 | |
Total property and equipment | 5,668 | |||
Less: accumulated depreciation, depletion and amortization | (346) | 0 | (23,806) | |
Property and equipment held for sale, net | 2 | |||
Total property and equipment, net | 5,670 | |||
Other long-term assets | 95 | 114 | 234 | |
Total assets | 6,999 | 6,814 | 6,584 | |
Current liabilities: | ||||
Accounts payable | 281 | 415 | 346 | |
Current maturities of long-term debt | 0 | 0 | 1,929 | |
Accrued interest | 0 | |||
Short-term derivative liabilities | 398 | |||
Other current liabilities | 781 | 769 | 723 | |
Total current liabilities | 1,866 | 1,582 | 3,094 | |
Debt | 1,313 | |||
Long-term derivative liabilities | 90 | |||
Asset retirement obligations, net of current portion | 236 | |||
Other long-term liabilities | 7 | |||
Liabilities subject to compromise | 0 | 0 | 8,643 | |
Total liabilities | 3,586 | 3,228 | 11,925 | |
Contingencies and commitments (Note 6) | ||||
Stockholders’ equity (deficit): | ||||
Predecessor preferred stock | 0 | 1,631 | ||
Additional paid-in capital | 3,590 | 16,937 | ||
Common stock | 1 | 1 | 0 | |
Successor additional paid-in-capital | 3,585 | |||
Predecessor accumulated other comprehensive income | 0 | 45 | ||
Accumulated deficit | (178) | 0 | (23,954) | |
Total stockholders’ equity (deficit) | 3,413 | 3,586 | (5,341) | |
Total liabilities and stockholders’ equity (deficit) | 6,999 | 6,814 | $ 6,584 | |
Predecessor | ||||
Current assets: | ||||
Cash and cash equivalents | 243 | |||
Restricted cash | 0 | |||
Accounts receivable, net | 861 | |||
Short-term derivative assets | 0 | |||
Other current assets | 66 | |||
Total current assets | 1,170 | |||
Property and equipment: | ||||
Proved oil and natural gas properties | 25,794 | |||
Unproved properties | 1,546 | |||
Other property and equipment | 1,755 | |||
Total property and equipment | 29,095 | |||
Less: accumulated depreciation, depletion and amortization | (23,877) | |||
Property and equipment held for sale, net | 9 | |||
Total property and equipment, net | 5,227 | |||
Other long-term assets | 198 | |||
Total assets | 6,595 | |||
Current liabilities: | ||||
Accounts payable | 391 | |||
Current maturities of long-term debt | 1,929 | |||
Accrued interest | 4 | |||
Short-term derivative liabilities | 398 | |||
Other current liabilities | 645 | |||
Total current liabilities | 3,367 | |||
Debt | 0 | |||
Long-term derivative liabilities | 90 | |||
Asset retirement obligations, net of current portion | 139 | |||
Other long-term liabilities | 5 | |||
Liabilities subject to compromise | 9,574 | |||
Total liabilities | 13,175 | |||
Contingencies and commitments (Note 6) | ||||
Stockholders’ equity (deficit): | ||||
Predecessor preferred stock | 1,631 | |||
Additional paid-in capital | 16,940 | |||
Common stock | 0 | |||
Successor additional paid-in-capital | 0 | |||
Predecessor accumulated other comprehensive income | 48 | |||
Accumulated deficit | (25,199) | |||
Total stockholders’ equity (deficit) | (6,580) | |||
Total liabilities and stockholders’ equity (deficit) | 6,595 | |||
Reorganization Adjustments | ||||
Current assets: | ||||
Cash and cash equivalents | (203) | |||
Restricted cash | 86 | |||
Accounts receivable, net | (18) | |||
Short-term derivative assets | 0 | |||
Other current assets | (5) | |||
Total current assets | (140) | |||
Property and equipment: | ||||
Proved oil and natural gas properties | 0 | |||
Unproved properties | 0 | |||
Other property and equipment | 0 | |||
Total property and equipment | 0 | |||
Less: accumulated depreciation, depletion and amortization | 0 | |||
Property and equipment held for sale, net | 0 | |||
Total property and equipment, net | 0 | |||
Other long-term assets | 0 | |||
Total assets | (140) | |||
Current liabilities: | ||||
Accounts payable | 24 | |||
Current maturities of long-term debt | (1,929) | |||
Accrued interest | (4) | |||
Short-term derivative liabilities | 0 | |||
Other current liabilities | 124 | |||
Total current liabilities | (1,785) | |||
Debt | 1,261 | |||
Long-term derivative liabilities | 0 | |||
Asset retirement obligations, net of current portion | 0 | |||
Other long-term liabilities | 2 | |||
Liabilities subject to compromise | (9,574) | |||
Total liabilities | (10,096) | |||
Contingencies and commitments (Note 6) | ||||
Stockholders’ equity (deficit): | ||||
Predecessor preferred stock | (1,631) | |||
Additional paid-in capital | (16,940) | |||
Common stock | 1 | |||
Successor additional paid-in-capital | 3,585 | |||
Predecessor accumulated other comprehensive income | 0 | |||
Accumulated deficit | 24,941 | |||
Total stockholders’ equity (deficit) | 9,956 | |||
Total liabilities and stockholders’ equity (deficit) | (140) | |||
Fresh Start Adjustments | ||||
Current assets: | ||||
Cash and cash equivalents | 48 | |||
Restricted cash | 8 | |||
Accounts receivable, net | 0 | |||
Short-term derivative assets | 0 | |||
Other current assets | 0 | |||
Total current assets | 0 | |||
Property and equipment: | ||||
Proved oil and natural gas properties | (21,108) | |||
Unproved properties | (1,063) | |||
Other property and equipment | (1,256) | |||
Total property and equipment | (23,427) | |||
Less: accumulated depreciation, depletion and amortization | 23,877 | |||
Property and equipment held for sale, net | (7) | |||
Total property and equipment, net | (443) | 443 | ||
Other long-term assets | 84 | (84) | ||
Total assets | 359 | |||
Current liabilities: | ||||
Accounts payable | 0 | |||
Current maturities of long-term debt | 0 | |||
Accrued interest | 0 | |||
Short-term derivative liabilities | 0 | |||
Other current liabilities | 0 | |||
Total current liabilities | 0 | |||
Debt | (52) | 52 | ||
Long-term derivative liabilities | 0 | |||
Asset retirement obligations, net of current portion | 97 | |||
Other long-term liabilities | 97 | |||
Liabilities subject to compromise | 0 | |||
Total liabilities | 149 | |||
Contingencies and commitments (Note 6) | ||||
Stockholders’ equity (deficit): | ||||
Predecessor preferred stock | 0 | |||
Additional paid-in capital | 0 | |||
Common stock | 0 | |||
Successor additional paid-in-capital | 0 | |||
Predecessor accumulated other comprehensive income | (9) | (48) | ||
Accumulated deficit | 258 | |||
Total stockholders’ equity (deficit) | 210 | |||
Total liabilities and stockholders’ equity (deficit) | $ 201 | $ 359 |
Fresh Start Accounting - Source
Fresh Start Accounting - Sources and Uses of Cash (Details) - USD ($) $ in Millions | Feb. 09, 2021 | Feb. 09, 2021 | Jun. 30, 2021 | Jun. 30, 2020 |
Sources: | ||||
Proceeds from issuance of the Notes | $ 1,000 | $ 0 | $ 0 | |
Uses: | ||||
Payments on pre-petition revolving credit facility borrowings | $ 0 | $ 0 | $ (3,467) | |
Reorganization Adjustments | ||||
Sources: | ||||
Proceeds from issuance of the Notes | $ 1,000 | |||
Proceeds from Rights Offering | 600 | |||
Proceeds from refunds of interest deposit for the Notes | 5 | |||
Total sources of cash | 1,605 | |||
Uses: | ||||
Payment of roll-up of DIP Facility balance | (1,179) | |||
Payments on pre-petition revolving credit facility borrowings | (479) | |||
Transfers to restricted cash for professional fee reserve | (76) | |||
Transfers to restricted cash for convenience claim distribution reserve | (10) | |||
Payment of professional fees | (31) | |||
Payment of DIP Facility interest and fees | (12) | |||
Payment of FLLO alternative transaction fee | (12) | |||
Payment of the Notes fees funded out of escrow | (8) | |||
Payment of RBL interest and fees | (1) | |||
Total uses of cash | (1,808) | |||
Net cash used | $ (203) |
Fresh Start Accounting - Change
Fresh Start Accounting - Changes in Accounts Payable (Details) - USD ($) $ in Millions | Jun. 30, 2021 | Feb. 09, 2021 | Dec. 31, 2020 |
Reorganization, Chapter 11 [Line Items] | |||
Net impact to accounts payable | $ 281 | $ 415 | $ 346 |
Reorganization Adjustments | |||
Reorganization, Chapter 11 [Line Items] | |||
Accrual of professional service provider success fees | 38 | ||
Accrual of convenience claim distribution reserve | 10 | ||
Accrual of professional service provider fees | 5 | ||
Reinstatement of accounts payable from liabilities subject to compromise | 2 | ||
Payment of professional fees | (31) | ||
Net impact to accounts payable | $ 24 |
Fresh Start Accounting - Chan_2
Fresh Start Accounting - Changes in Other Current Liabilities (Details) - USD ($) $ in Millions | Jun. 30, 2021 | Feb. 09, 2021 | Dec. 31, 2020 |
Reorganization, Chapter 11 [Line Items] | |||
Total other current liabilities | $ 781 | $ 769 | $ 723 |
Reorganization Adjustments | |||
Reorganization, Chapter 11 [Line Items] | |||
Reinstatement of other current liabilities from liabilities subject to compromise | 191 | ||
Accrual of the Notes fees | 2 | ||
Settlement of Put Option Premium through issuance of Successor Common Stock | (60) | ||
Payment of DIP Facility fees | (9) | ||
Total other current liabilities | $ 124 |
Fresh Start Accounting - Chan_3
Fresh Start Accounting - Changes in Long-Term Debt (Details) $ in Millions | Feb. 09, 2021USD ($) |
Reorganization, Chapter 11 [Line Items] | |
Debt | $ 1,313 |
Reorganization Adjustments | |
Reorganization, Chapter 11 [Line Items] | |
Issuance of the Notes | 1,000 |
Issuance of Tranche A and Tranche B Loans | 750 |
Payments on Tranche A Loans | (479) |
Debt issuance costs for the Notes | (10) |
Debt | $ 1,261 |
Fresh Start Accounting - Liabil
Fresh Start Accounting - Liabilities Subject to Compromise (Details) - USD ($) $ in Millions | Feb. 09, 2021 | Jun. 30, 2021 | Dec. 31, 2020 |
Reorganization, Chapter 11 [Line Items] | |||
Liabilities subject to compromise | $ 0 | $ 0 | $ 8,643 |
Consideration provided to settle amounts per the Plan or Reorganization: | |||
Issuance of Successor common stock to FLLO Term Loan holders, incremental to the Rights Offering and Backstop Commitment | (783) | ||
Issuance of Successor common stock to second lien note holders, incremental to the Rights Offering and Backstop Commitment | (124) | ||
Issuance of Successor common stock to unsecured note holders | (45) | ||
Issuance of Successor common stock to general unsecured claims | (8) | ||
Class A Warrants | |||
Consideration provided to settle amounts per the Plan or Reorganization: | |||
Warrants | (93) | ||
Class B Warrants | |||
Consideration provided to settle amounts per the Plan or Reorganization: | |||
Warrants | (94) | ||
Class C Warrants | |||
Consideration provided to settle amounts per the Plan or Reorganization: | |||
Warrants | (68) | ||
Predecessor | |||
Reorganization, Chapter 11 [Line Items] | |||
Liabilities subject to compromise | 9,574 | ||
To be reinstated on the Effective Date: | |||
Accounts payable | (2) | ||
Other current liabilities | (191) | ||
Other long-term liabilities | (2) | ||
Total liabilities reinstated | (195) | ||
Consideration provided to settle amounts per the Plan or Reorganization: | |||
Issuance of Successor common stock associated with the Rights Offering and Backstop Commitment and settlement of the Put Option Premium | (2,311) | ||
Proceeds from issuance of Successor common stock associated with the Rights Offering and Backstop Commitment | 600 | ||
Issuance of Successor common stock to FLLO Term Loan holders, incremental to the Rights Offering and Backstop Commitment | (783) | ||
Issuance of Successor common stock to second lien note holders, incremental to the Rights Offering and Backstop Commitment | (124) | ||
Issuance of Successor common stock to unsecured note holders | (45) | ||
Issuance of Successor common stock to general unsecured claims | (8) | ||
Proceeds to holders of general unsecured claims | (10) | ||
Total consideration provided to settle amounts per the Plan | (2,936) | ||
Gain on settlement of liabilities subject to compromise | 6,443 | ||
Predecessor | Class A Warrants | |||
Consideration provided to settle amounts per the Plan or Reorganization: | |||
Warrants | (93) | ||
Predecessor | Class B Warrants | |||
Consideration provided to settle amounts per the Plan or Reorganization: | |||
Warrants | (94) | ||
Predecessor | Class C Warrants | |||
Consideration provided to settle amounts per the Plan or Reorganization: | |||
Warrants | $ (68) |
Fresh Start Accounting - Equity
Fresh Start Accounting - Equity Issuance (Details) | Feb. 09, 2021shares |
Class C Warrants | |
Debt Instrument [Line Items] | |
Warrants issued (in shares) | 9,768,527 |
New Common Stock | |
Debt Instrument [Line Items] | |
Stock issued during period, new issues (in shares) | 97,907,081 |
New Common Stock | Class A Warrants | |
Debt Instrument [Line Items] | |
Warrants issued (in shares) | 11,111,111 |
New Common Stock | Class B Warrants | |
Debt Instrument [Line Items] | |
Warrants issued (in shares) | 12,345,679 |
New Common Stock | Class C Warrants | |
Debt Instrument [Line Items] | |
Warrants issued (in shares) | 9,768,527 |
Fresh Start Accounting - Chan_4
Fresh Start Accounting - Change in Successor Additional Paid-in Capital (Details) - USD ($) $ in Millions | Feb. 09, 2021 | Jun. 30, 2021 | Dec. 31, 2020 |
Class of Stock [Line Items] | |||
Issuance of Successor equity associated with the Rights Offering and Backstop Commitment | $ 2,371 | ||
Issuance of Successor equity to holders of the FLLO Term Loan, incremental to the Rights Offering and Backstop Commitment | 783 | ||
Issuance of Successor common stock to second lien note holders, incremental to the Rights Offering and Backstop Commitment | 124 | ||
Issuance of Successor common stock to unsecured note holders | 45 | ||
Issuance of Successor common stock to general unsecured claims | 8 | ||
Total change in Successor common stock and additional paid-in capital | 3,586 | ||
Less: par value of Successor common stock | (1) | $ (1) | $ 0 |
Change in Successor additional paid-in capital | 3,585 | ||
Class A Warrants | |||
Class of Stock [Line Items] | |||
Warrants | 93 | ||
Class B Warrants | |||
Class of Stock [Line Items] | |||
Warrants | 94 | ||
Class C Warrants | |||
Class of Stock [Line Items] | |||
Warrants | $ 68 |
Fresh Start Accounting - Cumula
Fresh Start Accounting - Cumulative Net Impact on Accumulated Deficit (Details) - USD ($) $ in Millions | Feb. 09, 2021 | Feb. 09, 2021 | Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 |
Reorganization, Chapter 11 [Line Items] | |||||||
Total reorganization items, net | $ (5,569) | $ 0 | $ (394) | $ 0 | $ (394) | ||
Net impact on accumulated deficit | $ 0 | 0 | $ (178) | (178) | $ (23,954) | ||
Reorganization Adjustments | |||||||
Reorganization, Chapter 11 [Line Items] | |||||||
Gain on settlement of liabilities subject to compromise | 6,443 | ||||||
Accrual of professional service provider success fees | (38) | (38) | |||||
Accrual of professional service provider fees | (5) | (5) | |||||
Surrender of other receivable | (18) | (18) | 0 | 0 | |||
Payment of FLLO alternative transaction fee | (12) | ||||||
Total reorganization items, net | 6,370 | (5,569) | $ 0 | $ (394) | |||
Cancellation of predecessor equity | 18,571 | 18,571 | |||||
Net impact on accumulated deficit | $ 24,941 | $ 24,941 |
Fresh Start Accounting - Fresh
Fresh Start Accounting - Fresh Start Adjustments (Details) - USD ($) $ in Millions | 1 Months Ended | 3 Months Ended | 5 Months Ended | 6 Months Ended | |||
Feb. 09, 2021 | Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 | |
Reorganization, Chapter 11 [Line Items] | |||||||
Predecessor accumulated other comprehensive income | $ 0 | $ 45 | |||||
Inflation factor | 2.00% | ||||||
Average credit-adjusted risk-free rate | 5.18% | ||||||
Income tax effects on accumulated other comprehensive income | $ 57 | $ 57 | $ 57 | ||||
Income tax benefit | $ 57 | 0 | $ 0 | 0 | 57 | $ 13 | |
Fresh Start Adjustments | |||||||
Reorganization, Chapter 11 [Line Items] | |||||||
Predecessor accumulated other comprehensive income | (48) | (9) | (9) | (9) | |||
Income tax effects on accumulated other comprehensive income | $ 57 | $ 57 | $ 57 | ||||
Senior Notes | 5.5% senior notes due 2026 | |||||||
Reorganization, Chapter 11 [Line Items] | |||||||
Debt, fair value adjustments | 22 | ||||||
Senior Notes | 5.875% senior notes due 2029 | |||||||
Reorganization, Chapter 11 [Line Items] | |||||||
Debt, fair value adjustments | $ 30 |
Fresh Start Accounting - Impact
Fresh Start Accounting - Impact on Accumulated Deficit (Details) - USD ($) $ in Millions | Jun. 30, 2021 | Feb. 09, 2021 | Dec. 31, 2020 |
Reorganization, Chapter 11 [Line Items] | |||
Total property and equipment, net | $ (5,670) | ||
Other long-term assets | $ (95) | (114) | $ (234) |
Debt | 1,313 | ||
Asset retirement obligations, net of current portion | 241 | 139 | |
Predecessor accumulated other comprehensive income | 0 | 45 | |
Total liabilities and stockholders’ equity (deficit) | 6,999 | 6,814 | $ 6,584 |
Income tax effects on accumulated other comprehensive income | 57 | ||
Fresh Start Adjustments | |||
Reorganization, Chapter 11 [Line Items] | |||
Total property and equipment, net | 443 | (443) | |
Other long-term assets | (84) | 84 | |
Debt | (52) | 52 | |
Asset retirement obligations, net of current portion | (97) | ||
Predecessor accumulated other comprehensive income | (9) | (48) | |
Total liabilities and stockholders’ equity (deficit) | 201 | $ 359 | |
Income tax effects on accumulated other comprehensive income | 57 | ||
Net impact to accumulated deficit | $ 258 |
Fresh Start Accounting - Reorga
Fresh Start Accounting - Reorganization Items, Net (Details) - USD ($) $ in Millions | Feb. 09, 2021 | Feb. 09, 2021 | Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 |
Reorganization, Chapter 11 [Line Items] | ||||||
Write off of unamortized debt premiums (discounts) on Predecessor debt | $ 0 | $ 0 | $ 518 | $ 0 | $ 518 | |
Write off of unamortized debt issuance costs on Predecessor debt | 0 | 0 | (61) | 0 | (61) | |
DIP Facility financing costs | 0 | 0 | (63) | 0 | (63) | |
Total reorganization items, net | 5,569 | $ 0 | $ 394 | 0 | 394 | |
Reorganization Adjustments | ||||||
Reorganization, Chapter 11 [Line Items] | ||||||
Gains on the settlement of liabilities subject to compromise | 6,443 | 0 | 0 | |||
Accrual for allowed claims | (1,002) | 0 | 0 | |||
Gain on fresh start adjustments | 201 | 0 | 0 | |||
Gain from release of commitment liabilities | 55 | 0 | 0 | |||
Professional service provider fees and other | (60) | 0 | 0 | |||
Success fees for professional service providers | (38) | 0 | 0 | |||
Surrender of other receivable | $ (18) | (18) | 0 | 0 | ||
FLLO alternative transaction fee | (12) | 0 | 0 | |||
Total reorganization items, net | $ (6,370) | $ 5,569 | $ 0 | $ 394 |
Earnings Per Share - Reconcilia
Earnings Per Share - Reconciliation (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 1 Months Ended | 3 Months Ended | 5 Months Ended | 6 Months Ended | |
Feb. 09, 2021 | Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Earnings Per Share [Abstract] | |||||
Net income (loss), basic and diluted | $ 5,383 | $ (439,000) | $ (276,000) | $ (144,000) | $ (8,595) |
Weighted average common shares outstanding, basic (in shares) | 9,781 | 97,931 | 9,779 | 97,922 | 9,765 |
Effect of potentially dilutive securities | |||||
Preferred stock (in shares) | 290 | 0 | 0 | 0 | 0 |
Warrants (in shares) | 0 | 0 | 0 | 0 | 0 |
Restricted stock (in shares) | 0 | 0 | 0 | 0 | 0 |
Diluted (in shares) | 10,071 | 97,931 | 9,779 | 97,922 | 9,765 |
Loss per common share | |||||
Loss per common share, basic (in dollars per share) | $ 550.35 | $ (4.48) | $ (28.22) | $ (1.47) | $ (880.18) |
Loss per common share, diluted (in dollars per share) | $ 534.51 | $ (4.48) | $ (28.22) | $ (1.47) | $ (880.18) |
Earnings Per Share - Additional
Earnings Per Share - Additional Information (Details) - shares | 3 Months Ended | 5 Months Ended | 6 Months Ended | |
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Class C Warrants | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Securities excluded from the calculation of diluted EPS (in shares) | 3,948,893 | |||
Warrant | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Securities excluded from the calculation of diluted EPS (in shares) | 12,186,128 | 11,275,229 | ||
Restricted stock | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Securities excluded from the calculation of diluted EPS (in shares) | 121,348 | 66,817 | ||
Convertible Debt | 5.5% Convertible Senior Notes due 2026 | ||||
Debt Instrument [Line Items] | ||||
Interest rate, stated percentage | 0.00055% | 0.00055% | ||
PREFERRED STOCK | Common stock equivalent of our preferred stock outstanding prior to exchange | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Securities excluded from the calculation of diluted EPS (in shares) | 290,716 | |||
COMMON STOCK | Common stock equivalent of our convertible senior notes outstanding | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Securities excluded from the calculation of diluted EPS (in shares) | 290,716 | 2,092,918 |
Debt - Long-Term Debt Table (De
Debt - Long-Term Debt Table (Details) - USD ($) $ in Millions | Jun. 30, 2021 | Feb. 09, 2021 | Dec. 31, 2020 | Jun. 28, 2020 |
Debt Instrument [Line Items] | ||||
Carrying amount | $ 1,261 | $ 9,095 | ||
Fair value | 1,289 | 3,666 | ||
Debt issuance costs | (10) | 0 | ||
Less current maturities of long-term debt | 0 | $ 0 | (1,929) | |
Less current maturities of long-term debt | 0 | (1,929) | ||
Less amounts reclassified to liabilities subject to compromise | 0 | (7,166) | ||
Less amounts reclassified to liabilities subject to compromise | 0 | (1,737) | ||
Total long-term debt, net | 1,261 | 0 | ||
Total long-term debt, net | $ 1,289 | 0 | ||
5.5% senior notes due 2026 | ||||
Debt Instrument [Line Items] | ||||
Interest rate, stated percentage | 5.50% | |||
Line of Credit | Debtor-in-Possession Credit Agreement | ||||
Debt Instrument [Line Items] | ||||
Chesapeake revolving credit facility | $ 0 | 0 | ||
Fair value | 0 | 0 | ||
Line of Credit | Exit Credit Facility - Tranche A Loans | ||||
Debt Instrument [Line Items] | ||||
Chesapeake revolving credit facility | 0 | 0 | ||
Fair value | 0 | 0 | ||
Line of Credit | Exit Credit Facility - Tranche B Loans | ||||
Debt Instrument [Line Items] | ||||
Chesapeake revolving credit facility | 221 | 0 | ||
Fair value | 221 | 0 | ||
Line of Credit | Revolving credit facility | ||||
Debt Instrument [Line Items] | ||||
Chesapeake revolving credit facility | 0 | 1,929 | ||
Fair value | 0 | 1,929 | ||
Line of Credit | Revolving credit facility | Debtor-in-Possession Credit Agreement | ||||
Debt Instrument [Line Items] | ||||
Carrying amount | $ 750 | |||
Term Loan | ||||
Debt Instrument [Line Items] | ||||
Carrying amount | 0 | 1,500 | ||
Fair value | 0 | 1,220 | ||
Senior Notes | ||||
Debt Instrument [Line Items] | ||||
Unamortized premium | $ 50 | 0 | ||
Senior Notes | 5.5% senior notes due 2026 | ||||
Debt Instrument [Line Items] | ||||
Interest rate, stated percentage | 0.055% | 5.50% | ||
Carrying amount | $ 500 | 0 | ||
Fair value | $ 527 | 0 | ||
Senior Notes | 5.875% senior notes due 2029 | ||||
Debt Instrument [Line Items] | ||||
Interest rate, stated percentage | 0.05875% | 5.875% | ||
Carrying amount | $ 500 | 0 | ||
Fair value | $ 541 | 0 | ||
Senior Notes | 11.5% senior secured second lien notes due 2025 | ||||
Debt Instrument [Line Items] | ||||
Interest rate, stated percentage | 0.00115% | |||
Carrying amount | $ 0 | 2,330 | ||
Fair value | $ 0 | 373 | ||
Senior Notes | 6.625% senior notes due 2020 | ||||
Debt Instrument [Line Items] | ||||
Interest rate, stated percentage | 0.06625% | |||
Carrying amount | $ 0 | 176 | ||
Fair value | $ 0 | 8 | ||
Senior Notes | 6.875% senior notes due 2020 | ||||
Debt Instrument [Line Items] | ||||
Interest rate, stated percentage | 0.06875% | |||
Carrying amount | $ 0 | 73 | ||
Fair value | $ 0 | 3 | ||
Senior Notes | 6.125% senior notes due 2021 | ||||
Debt Instrument [Line Items] | ||||
Interest rate, stated percentage | 0.06125% | |||
Carrying amount | $ 0 | 167 | ||
Fair value | $ 0 | 7 | ||
Senior Notes | 5.375% senior notes due 2021 | ||||
Debt Instrument [Line Items] | ||||
Interest rate, stated percentage | 0.05375% | |||
Carrying amount | $ 0 | 127 | ||
Fair value | $ 0 | 5 | ||
Senior Notes | 4.875% senior notes due 2022 | ||||
Debt Instrument [Line Items] | ||||
Interest rate, stated percentage | 0.04875% | |||
Carrying amount | $ 0 | 272 | ||
Fair value | $ 0 | 12 | ||
Senior Notes | 5.75% senior notes due 2023 | ||||
Debt Instrument [Line Items] | ||||
Interest rate, stated percentage | 0.00058% | |||
Carrying amount | $ 0 | 167 | ||
Fair value | $ 0 | 8 | ||
Senior Notes | 7.00% senior notes due 2024 | ||||
Debt Instrument [Line Items] | ||||
Interest rate, stated percentage | 0.0007% | |||
Carrying amount | $ 0 | 624 | ||
Fair value | $ 0 | 29 | ||
Senior Notes | 6.875% senior notes due 2025 | ||||
Debt Instrument [Line Items] | ||||
Interest rate, stated percentage | 0.06875% | |||
Carrying amount | $ 0 | 2 | ||
Fair value | $ 0 | 2 | ||
Senior Notes | 8.00% senior notes due 2025 | ||||
Debt Instrument [Line Items] | ||||
Interest rate, stated percentage | 0.0008% | |||
Carrying amount | $ 0 | 246 | ||
Fair value | $ 0 | 10 | ||
Senior Notes | 7.5% senior notes due 2026 | ||||
Debt Instrument [Line Items] | ||||
Interest rate, stated percentage | 0.00075% | |||
Carrying amount | $ 0 | 119 | ||
Fair value | $ 0 | 5 | ||
Senior Notes | 8.00% senior notes due 2026 | ||||
Debt Instrument [Line Items] | ||||
Interest rate, stated percentage | 0.0008% | |||
Carrying amount | $ 0 | 46 | ||
Fair value | $ 0 | 2 | ||
Senior Notes | 8.00% senior notes due 2027 | ||||
Debt Instrument [Line Items] | ||||
Interest rate, stated percentage | 0.0008% | |||
Carrying amount | $ 0 | 253 | ||
Fair value | $ 0 | 11 | ||
Convertible Debt | 5.5% convertible senior notes due 2026 | ||||
Debt Instrument [Line Items] | ||||
Interest rate, stated percentage | 0.00055% | |||
Carrying amount | $ 0 | 1,064 | ||
Fair value | $ 0 | $ 42 |
Debt - Successor Debt (Details)
Debt - Successor Debt (Details) | Jun. 28, 2020USD ($) | Jun. 30, 2021USD ($) | Feb. 09, 2021USD ($) | Feb. 02, 2021USD ($) | Dec. 31, 2020USD ($) |
Line of Credit | Exit credit facility | |||||
Debt Instrument [Line Items] | |||||
Maximum borrowing capacity | $ 2,500,000,000 | ||||
LIBOR Floor | 1.00% | ||||
First lien leverage ratio | 2.75 | ||||
Leverage ratio | 3.50 | ||||
Current ratio | 1 | ||||
Unused capacity, commitment fee percentage | 0.50% | ||||
Line of Credit | Exit credit facility | Minimum | |||||
Debt Instrument [Line Items] | |||||
Asset coverage ratio | 1.50 | ||||
Line of Credit | Exit credit facility | Letter of Credit | |||||
Debt Instrument [Line Items] | |||||
Maximum borrowing capacity | $ 200,000,000 | ||||
Line of Credit | Exit credit facility | Letter of Credit | Alternative Base Rate | Minimum | |||||
Debt Instrument [Line Items] | |||||
Variable rate percentage | 2.25% | ||||
Line of Credit | Exit credit facility | Letter of Credit | Alternative Base Rate | Maximum | |||||
Debt Instrument [Line Items] | |||||
Variable rate percentage | 3.25% | ||||
Line of Credit | Exit credit facility | Letter of Credit | LIBOR | Minimum | |||||
Debt Instrument [Line Items] | |||||
Variable rate percentage | 3.25% | ||||
Line of Credit | Exit credit facility | Letter of Credit | LIBOR | Maximum | |||||
Debt Instrument [Line Items] | |||||
Variable rate percentage | 4.25% | ||||
Line of Credit | Revolving Tranche A | Revolving Credit Facility | |||||
Debt Instrument [Line Items] | |||||
Maximum borrowing capacity | $ 1,750,000,000 | ||||
Term | 3 years | ||||
Line of Credit | Tranche B Loans | |||||
Debt Instrument [Line Items] | |||||
Maximum borrowing capacity | $ 221,000,000 | ||||
Term | 4 years | ||||
Senior Notes | |||||
Debt Instrument [Line Items] | |||||
Unamortized premium | $ 50,000,000 | $ 0 | |||
Senior Notes | 5.5% Senior Notes due 2026 | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, principal amount | $ 500,000,000 | ||||
Unamortized premium | $ 52,000,000 | ||||
Senior Notes | 5.875% Senior Notes due 2029 | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, principal amount | $ 500,000,000 |
Debt - Chapter 11 Proceedings -
Debt - Chapter 11 Proceedings - Predecessor Debt (Details) - FLLO Term Loan, Second Lien Notes, and Unsecured Senior and Convertible Senior Notes | 1 Months Ended | 5 Months Ended | 6 Months Ended |
Feb. 09, 2021 | Jun. 30, 2021 | Jun. 30, 2021 | |
Debt Instrument [Line Items] | |||
Applicable margin | 7.00% | 2.00% | |
LIBOR | |||
Debt Instrument [Line Items] | |||
Variable rate percentage | 8.00% | ||
Alternative Base Rate | |||
Debt Instrument [Line Items] | |||
Variable rate percentage | 3.25% |
Debt - Debtor-in-Possession Cre
Debt - Debtor-in-Possession Credit Agreement (Details) - USD ($) | Jun. 30, 2021 | Feb. 09, 2021 | Dec. 31, 2020 | Jun. 28, 2020 |
Debt Instrument [Line Items] | ||||
Debt | $ 1,313,000,000 | |||
Outstanding borrowings | $ 1,261,000,000 | $ 9,095,000,000 | ||
Debtor-in-Possession Credit Agreement | ||||
Debt Instrument [Line Items] | ||||
Maximum borrowing capacity | $ 2,104,000,000 | |||
Debtor-in-Possession Credit Agreement | Term Loan | ||||
Debt Instrument [Line Items] | ||||
Debt | 1,179,000,000 | |||
Debtor-in-Possession Credit Agreement | Revolving Credit Facility | ||||
Debt Instrument [Line Items] | ||||
Maximum borrowing capacity | 925,000,000 | |||
Letters of credit outstanding, amount | 200,000,000 | |||
Debtor-in-Possession Credit Agreement | Revolving Credit Facility | Line of Credit | ||||
Debt Instrument [Line Items] | ||||
Outstanding borrowings | 750,000,000 | |||
Debtor-in-Possession Credit Agreement | New Money Roll-Up Loans | Term Loan | ||||
Debt Instrument [Line Items] | ||||
Debt | 925,000,000 | |||
Debtor-in-Possession Credit Agreement | Incremental Roll-Up Loans | Term Loan | ||||
Debt Instrument [Line Items] | ||||
Debt | $ 254,000,000 |
Debt - Senior Notes (Details)
Debt - Senior Notes (Details) - Senior Notes $ in Millions | 6 Months Ended |
Jun. 30, 2020USD ($) | |
Debt Instrument [Line Items] | |
Debt instrument, repurchased face amount | $ 160 |
Debt repurchased, principal | 95 |
Gain on repurchase of debt | $ 65 |
Contingencies and Commitments -
Contingencies and Commitments - Narrative (Details) $ in Millions | 6 Months Ended |
Jun. 30, 2021USD ($) | |
Pennsylvania Department of Environmental Protection (PADEP) | Pending litigation | |
Loss Contingencies [Line Items] | |
Loss contingency, damages sought, value | $ 0.3 |
Contingencies and Commitments_2
Contingencies and Commitments - Gathering Processing and Transportation Commitments Table (Details) - Gathering, processing and transportation agreement $ in Millions | Jun. 30, 2021USD ($) |
Other Commitments [Line Items] | |
Remainder of 2021 | $ 330 |
2022 | 569 |
2023 | 458 |
2024 | 390 |
2025 | 310 |
2026 – 2033 | 1,539 |
Total | $ 3,596 |
Other Current Liabilities (Deta
Other Current Liabilities (Details) - USD ($) $ in Millions | Jun. 30, 2021 | Feb. 09, 2021 | Dec. 31, 2020 |
Other Liabilities Disclosure [Abstract] | |||
Revenues and royalties due others | $ 404 | $ 236 | |
Accrued drilling and production costs | 91 | 104 | |
Other accrued taxes | 62 | 82 | |
Accrued compensation and benefits | 48 | 59 | |
Hedging | 45 | 7 | |
Operating leases | 18 | 24 | |
Debt and equity financing fees | 0 | 69 | |
Joint interest prepayments received | 13 | 8 | |
Other | 100 | 134 | |
Total other current liabilities | $ 781 | $ 769 | $ 723 |
Revenue - Disaggregated Revenue
Revenue - Disaggregated Revenue (Details) - USD ($) $ in Millions | 1 Months Ended | 3 Months Ended | 5 Months Ended | 6 Months Ended | |
Feb. 09, 2021 | Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Disaggregation of Revenue [Line Items] | |||||
Total revenues and other | $ 260 | $ 693 | $ 507 | $ 1,573 | $ 3,032 |
Oil, natural gas and NGL revenue | |||||
Disaggregation of Revenue [Line Items] | |||||
Total revenues and other | 398 | 892 | 440 | 1,445 | 1,334 |
Marketing | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenues | 232 | 894 | |||
Total revenues and other | 239 | 539 | 240 | 816 | 964 |
Other marketing revenue | |||||
Disaggregation of Revenue [Line Items] | |||||
Total revenues and other | 8 | 70 | |||
Appalachia | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenues | 119 | 226 | 131 | 389 | 306 |
Gulf Coast | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenues | 53 | 124 | 67 | 194 | 151 |
South Texas | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenues | 122 | 285 | 108 | 449 | 436 |
Brazos Valley | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenues | 71 | 173 | 80 | 281 | 260 |
Powder River Basin | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenues | 33 | 84 | 39 | 132 | 130 |
Mid-Continent | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenues | 15 | 51 | |||
Oil | Oil, natural gas and NGL revenue | |||||
Disaggregation of Revenue [Line Items] | |||||
Total revenues and other | 179 | 444 | 186 | 678 | 725 |
Oil | Marketing | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenues | 121 | 629 | |||
Total revenues and other | 141 | 340 | 127 | 502 | 696 |
Oil | Other marketing revenue | |||||
Disaggregation of Revenue [Line Items] | |||||
Total revenues and other | 6 | 67 | |||
Oil | Appalachia | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenues | 0 | 0 | 0 | 0 | 0 |
Oil | Gulf Coast | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenues | 0 | 0 | 0 | 0 | 0 |
Oil | South Texas | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenues | 92 | 224 | 73 | 341 | 350 |
Oil | Brazos Valley | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenues | 67 | 162 | 76 | 251 | 248 |
Oil | Powder River Basin | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenues | 20 | 58 | 29 | 86 | 97 |
Oil | Mid-Continent | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenues | 8 | 30 | |||
Natural Gas | Oil, natural gas and NGL revenue | |||||
Disaggregation of Revenue [Line Items] | |||||
Total revenues and other | 196 | 397 | 234 | 687 | 554 |
Natural Gas | Marketing | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenues | 96 | 220 | |||
Total revenues and other | 78 | 146 | 98 | 243 | 223 |
Natural Gas | Other marketing revenue | |||||
Disaggregation of Revenue [Line Items] | |||||
Total revenues and other | 2 | 3 | |||
Natural Gas | Appalachia | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenues | 119 | 226 | 131 | 389 | 306 |
Natural Gas | Gulf Coast | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenues | 53 | 124 | 67 | 194 | 151 |
Natural Gas | South Texas | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenues | 15 | 25 | 21 | 53 | 52 |
Natural Gas | Brazos Valley | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenues | 2 | 6 | 3 | 21 | 7 |
Natural Gas | Powder River Basin | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenues | 7 | 16 | 7 | 30 | 23 |
Natural Gas | Mid-Continent | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenues | 5 | 15 | |||
NGL | Oil, natural gas and NGL revenue | |||||
Disaggregation of Revenue [Line Items] | |||||
Total revenues and other | 23 | 51 | 20 | 80 | 55 |
NGL | Marketing | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenues | 15 | 45 | |||
Total revenues and other | 20 | 53 | 15 | 71 | 45 |
NGL | Other marketing revenue | |||||
Disaggregation of Revenue [Line Items] | |||||
Total revenues and other | 0 | 0 | |||
NGL | Appalachia | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenues | 0 | 0 | 0 | 0 | 0 |
NGL | Gulf Coast | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenues | 0 | 0 | 0 | 0 | 0 |
NGL | South Texas | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenues | 15 | 36 | 14 | 55 | 34 |
NGL | Brazos Valley | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenues | 2 | 5 | 1 | 9 | 5 |
NGL | Powder River Basin | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenues | $ 6 | $ 10 | 3 | $ 16 | 10 |
NGL | Mid-Continent | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenues | $ 2 | $ 6 |
Revenue - Accounts Receivable (
Revenue - Accounts Receivable (Details) - USD ($) $ in Millions | Jun. 30, 2021 | Dec. 31, 2020 |
Disaggregation of Revenue [Line Items] | ||
Allowance for doubtful accounts | $ (1) | $ (30) |
Total accounts receivable, net | 674 | 746 |
Oil, natural gas and NGL sales | ||
Disaggregation of Revenue [Line Items] | ||
Accounts receivable, gross | 531 | 589 |
Joint interest | ||
Disaggregation of Revenue [Line Items] | ||
Accounts receivable, gross | 117 | 119 |
Other | ||
Disaggregation of Revenue [Line Items] | ||
Accounts receivable, gross | $ 27 | $ 68 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Millions | 1 Months Ended | 3 Months Ended | 5 Months Ended | 6 Months Ended | |||
Feb. 09, 2021 | Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2019 | |
Business Acquisition [Line Items] | |||||||
Effective income tax rate | 1.10% | 0.00% | 0.20% | ||||
Income tax benefit | $ 57 | $ 0 | $ 0 | $ 0 | $ 57 | $ 13 | |
Deferred tax asset, operating loss carryforward, limitations | 54 | 54 | 54 | ||||
Cancellation of debt income | 5,000 | ||||||
Federal | |||||||
Business Acquisition [Line Items] | |||||||
NOL carryforwards, subject to expiration | 900 | 900 | 900 | ||||
Federal | Minimum | |||||||
Business Acquisition [Line Items] | |||||||
NOL carryforwards | $ 2,500 | ||||||
NOL carryforwards, not subject to expiration | 1,600 | 1,600 | 1,600 | ||||
Federal | Maximum | |||||||
Business Acquisition [Line Items] | |||||||
NOL carryforwards | $ 3,000 | ||||||
NOL carryforwards, not subject to expiration | $ 2,100 | $ 2,100 | $ 2,100 |
Equity (Details)
Equity (Details) - $ / shares | Feb. 09, 2021 | Jun. 30, 2021 | Aug. 10, 2021 | Jun. 10, 2021 |
Class of Stock [Line Items] | ||||
Conversion of Stock, Shares Issued | 46,035 | |||
Class A Warrants | ||||
Class of Stock [Line Items] | ||||
Warrant, exercise price (in dollars per share) | $ 27.63 | $ 27.44 | ||
Warrant converted to shares (in shares) | 9,068 | |||
Class B Warrants | ||||
Class of Stock [Line Items] | ||||
Warrant, exercise price (in dollars per share) | $ 32.13 | 31.91 | ||
Warrant converted to shares (in shares) | 32,221 | |||
Class C Warrants | ||||
Class of Stock [Line Items] | ||||
Warrants issued (in shares) | 9,768,527 | |||
Warrant, exercise price (in dollars per share) | $ 36.18 | $ 35.93 | ||
Warrants reserved for future issuance (in shares) | 3,948,893 | |||
Warrant converted to shares (in shares) | 5,702 | |||
Subsequent Event | ||||
Class of Stock [Line Items] | ||||
Dividends payable (in dollars per share) | $ 0.34375 | |||
New Common Stock | ||||
Class of Stock [Line Items] | ||||
Stock issued during period, new issues (in shares) | 97,907,081 | |||
Shares issued (in dollars per share) | $ 0.01 | |||
Common stock, reserved for future issuance (in shares) | 2,092,918 | |||
New Common Stock | Class A Warrants | ||||
Class of Stock [Line Items] | ||||
Warrants issued (in shares) | 11,111,111 | |||
New Common Stock | Class B Warrants | ||||
Class of Stock [Line Items] | ||||
Warrants issued (in shares) | 12,345,679 | |||
New Common Stock | Class C Warrants | ||||
Class of Stock [Line Items] | ||||
Common stock, reserved for future issuance (in shares) | 3,948,893 | |||
Warrants issued (in shares) | 9,768,527 |
Share-Based Compensation - Narr
Share-Based Compensation - Narrative (Details) - USD ($) $ in Millions | 5 Months Ended | 6 Months Ended | |
Jun. 30, 2021 | Jun. 30, 2021 | Jun. 28, 2020 | |
Restricted stock | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Intrinsic value of restricted stock, vested | $ 0.1 | ||
Unrecognized compensation expense | $ 28 | $ 28 | |
Share-based compensation expense, weighted average period for recognition | 2 years 8 months 1 day | ||
Restricted stock | Employee | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based compensation, award vesting period | 3 years | ||
Restricted stock | Non-employee Directors | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based compensation, award vesting period | 1 year | ||
Performance share units | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Unrecognized compensation expense | $ 7 | $ 7 | |
Share-based compensation expense, weighted average period for recognition | 2 years 10 months 13 days | ||
Performance share units | Minimum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share price hurdle, percent of payout of target units | 0.00% | ||
Total shareholder return and relative total shareholder return, percent of payout of target units | 0.00% | ||
Performance share units | Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share price hurdle, percent of payout of target units | 100.00% | ||
Total shareholder return and relative total shareholder return, percent of payout of target units | 200.00% | ||
Performance share units | Management | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based compensation, award vesting period | 3 years | ||
Stock option | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based compensation, award vesting period | 3 years | ||
Stock option | Management | Minimum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expiration period | 7 years | ||
Stock option | Management | Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expiration period | 10 years | ||
2021 Long Term Incentive Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Common stock, reserved for future issuance (in shares) | 6,800,000 |
Share-Based Compensation - Rest
Share-Based Compensation - Restricted Stock (Details) - Participating securities - $ / shares shares in Thousands | 1 Months Ended | 5 Months Ended |
Feb. 09, 2021 | Jun. 30, 2021 | |
Shares of Unvested Restricted Stock | ||
Unvested restricted stock, beginning balance (in shares) | 1 | 0 |
Granted (in shares) | 0 | 727 |
Vested (in shares) | 0 | (1) |
Forfeited/canceled (in shares) | (1) | (18) |
Unvested restricted stock, ending balance (in shares) | 0 | 708 |
Weighted Average Grant Date Fair Value Per Share | ||
Unvested restricted stock, beginning balance (in dollars per share) | $ 616.57 | $ 0 |
Granted (in dollars per share) | 0 | 44.28 |
Vested (in dollars per share) | 0 | 44.30 |
Forfeited/canceled (in dollars per share) | 611.47 | 44.30 |
Unvested restricted stock, ending balance (in dollars per share) | $ 0 | $ 44.28 |
Share-Based Compensation - Assu
Share-Based Compensation - Assumptions (Details) - Performance share units | 5 Months Ended |
Jun. 30, 2021 | |
Share Price Hurdle | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Risk-free interest rate | 0.30% |
Volatility | 68.40% |
TSR, rTSR | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Risk-free interest rate | 0.23% |
Volatility | 71.40% |
Share-Based Compensation - Perf
Share-Based Compensation - Performance Share (Details) - Performance share units shares in Thousands | 5 Months Ended |
Jun. 30, 2021$ / sharesshares | |
Shares of Unvested Restricted Stock | |
Unvested restricted stock, beginning balance (in shares) | shares | 0 |
Granted (in shares) | shares | 142 |
Vested (in shares) | shares | 0 |
Forfeited/canceled (in shares) | shares | 0 |
Unvested restricted stock, ending balance (in shares) | shares | 142 |
Weighted Average Grant Date Fair Value Per Share | |
Unvested restricted stock, beginning balance (in dollars per share) | $ / shares | $ 0 |
Granted (in dollars per share) | $ / shares | 54.23 |
Vested (in dollars per share) | $ / shares | 0 |
Forfeited/canceled (in dollars per share) | $ / shares | 0 |
Unvested restricted stock, ending balance (in dollars per share) | $ / shares | $ 54.23 |
Share-Based Compensation - Stoc
Share-Based Compensation - Stock Option Activity Table (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions | 1 Months Ended | 3 Months Ended | |
Feb. 09, 2021 | Mar. 31, 2021 | Dec. 31, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | |||
Outstanding, beginning balance (in shares options) | 20 | 20 | |
Granted (in shares options) | 0 | ||
Exercised (in shares options) | 0 | ||
Expired (in shares options) | (1) | ||
Forfeited/canceled (in shares options) | (19) | ||
Outstanding, ending balance (in shares options) | 0 | ||
Weighted Average Exercise Price Per Share | |||
Outstanding, beginning (in dollars per share) | $ 1,429 | $ 1,429 | |
Granted (in dollars per share) | 0 | ||
Exercised (in dollars per share) | 0 | ||
Expired (in dollars per share) | 742 | ||
Forfeited/canceled (in dollars per share) | 1,452 | ||
Outstanding, ending (in dollars per share) | $ 0 | ||
Weighted average contract life, outstanding | 4 years 3 months 7 days | ||
Aggregate intrinsic value, outstanding | $ 0 | $ 0 | |
Aggregate intrinsic value, exercised | $ 0 | ||
Exercisable (in shares options) | 0 | ||
Weighted average exercise price, exercisable (in dollars per share) | $ 0 | ||
Aggregate intrinsic value, exercisable | $ 0 |
Share-Based Compensation - Comp
Share-Based Compensation - Compensation Expense (Details) - USD ($) $ in Millions | 1 Months Ended | 3 Months Ended | 5 Months Ended | 6 Months Ended | |
Feb. 09, 2021 | Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Share-based compensation expense | $ 3 | $ 3 | $ 4 | $ 3 | $ 10 |
General and administrative expenses | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Share-based compensation expense | 3 | 2 | 4 | 2 | 8 |
Oil and natural gas properties | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Share-based compensation expense | 0 | $ 1 | $ 0 | 1 | 1 |
Oil, natural gas and NGL production expenses | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Share-based compensation expense | $ 0 | $ 0 | $ 1 |
Derivative and Hedging Activi_3
Derivative and Hedging Activities - Derivative Instruments (Details) - Energy related derivative $ in Millions | 3 Months Ended | 6 Months Ended | |
Mar. 31, 2021BcfMMBbls | Jun. 30, 2021USD ($)MMBblsBcf | Dec. 31, 2020USD ($) | |
Derivative [Line Items] | |||
Derivative assets (liabilities), at fair value, net | $ (991) | $ (118) | |
Oil | |||
Derivative [Line Items] | |||
Derivative, nonmonetary notional amount, volume | MMBbls | 34,000,000 | 35,000,000 | |
Derivative assets (liabilities), at fair value, net | $ (529) | (137) | |
Oil | Fixed-price swaps | |||
Derivative [Line Items] | |||
Derivative, nonmonetary notional amount, volume | MMBbls | 27,000,000 | 22,000,000 | |
Derivative assets (liabilities), at fair value, net | $ (524) | (136) | |
Oil | Basis protection swaps | |||
Derivative [Line Items] | |||
Derivative, nonmonetary notional amount, volume | MMBbls | 7,000,000 | 13,000,000 | |
Derivative assets (liabilities), at fair value, net | $ (5) | (1) | |
Natural Gas | |||
Derivative [Line Items] | |||
Derivative, nonmonetary notional amount, volume | Bcf | 847,000,000 | 828,000,000 | |
Derivative assets (liabilities), at fair value, net | $ (462) | 19 | |
Natural Gas | Fixed-price swaps | |||
Derivative [Line Items] | |||
Derivative, nonmonetary notional amount, volume | Bcf | 728,000,000 | 536,000,000 | |
Derivative assets (liabilities), at fair value, net | $ (410) | 10 | |
Natural Gas | Collars | |||
Derivative [Line Items] | |||
Derivative, nonmonetary notional amount, volume | Bcf | 53,000,000 | 113,000,000 | |
Derivative assets (liabilities), at fair value, net | $ (46) | 8 | |
Natural Gas | Basis protection swaps | |||
Derivative [Line Items] | |||
Derivative, nonmonetary notional amount, volume | Bcf | 66,000,000 | 179,000,000 | |
Derivative assets (liabilities), at fair value, net | $ (6) | $ 1 |
Derivative and Hedging Activi_4
Derivative and Hedging Activities - Derivative Instruments in Balance Sheet Table (Details) - Not designated as hedging instrument - Commodity contract - USD ($) $ in Millions | Jun. 30, 2021 | Dec. 31, 2020 |
Derivatives, Fair Value [Line Items] | ||
Derivative asset (liability), fair value, gross asset (liability) | $ (991) | $ (118) |
Derivative asset (liability) fair value, net asset (liability), netted | 0 | 0 |
Derivative assets (liabilities), at fair value, net | (991) | (118) |
Short-term derivative asset | ||
Derivatives, Fair Value [Line Items] | ||
Derivative asset, fair value, gross asset | 23 | 84 |
Derivative asset, fair value, gross liability, netted | (23) | (65) |
Derivative asset | 0 | 19 |
Long-term derivative asset | ||
Derivatives, Fair Value [Line Items] | ||
Derivative asset, fair value, gross asset | 6 | 5 |
Derivative asset, fair value, gross liability, netted | (6) | (5) |
Derivative asset | 0 | 0 |
Short-term derivative liability | ||
Derivatives, Fair Value [Line Items] | ||
Derivative liability, fair value, gross liability | (803) | (158) |
Derivative liability, fair value, gross asset, netted | 23 | 65 |
Derivative liability | (780) | (93) |
Long-term derivative liability | ||
Derivatives, Fair Value [Line Items] | ||
Derivative liability, fair value, gross liability | (217) | (49) |
Derivative liability, fair value, gross asset, netted | 6 | 5 |
Derivative liability | $ (211) | $ (44) |
Derivative and Hedging Activi_5
Derivative and Hedging Activities - Oil, Natural Gas and NGL Revenues (Details) - USD ($) $ in Millions | 1 Months Ended | 3 Months Ended | 5 Months Ended | 6 Months Ended | |
Feb. 09, 2021 | Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Derivative [Line Items] | |||||
Total revenues and other | $ 260 | $ 693 | $ 507 | $ 1,573 | $ 3,032 |
Not designated as hedging instrument | Oil, natural gas and NGL sales | |||||
Derivative [Line Items] | |||||
Losses on terminated cash flow hedges | (3) | 0 | (8) | 0 | (17) |
Total revenues and other | (382) | (740) | (173) | (694) | 734 |
Not designated as hedging instrument | Oil, natural gas and NGL sales | Commodity contract | |||||
Derivative [Line Items] | |||||
Gains (losses) on undesignated oil and natural gas derivatives | $ (379) | $ (740) | $ (165) | $ (694) | $ 751 |
Derivative and Hedging Activi_6
Derivative and Hedging Activities - Cash Flow Hedges Components of AOCI (Details) - USD ($) $ in Millions | 1 Months Ended | 2 Months Ended | 3 Months Ended | 5 Months Ended | 6 Months Ended | |
Feb. 09, 2021 | Mar. 31, 2021 | Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||||
AOCI, after tax, beginning of period | $ 45 | $ 0 | $ 0 | |||
Losses reclassified to income, after tax | 3 | $ 0 | $ 8 | 0 | $ 17 | |
AOCI, after tax, end of period | 0 | |||||
Cash flow hedging | ||||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||||
AOCI, before tax, beginning of period | (12) | 0 | 0 | (36) | 0 | (45) |
AOCI, after tax, beginning of period | 45 | 0 | 0 | 21 | 0 | 12 |
Losses reclassified to income, before tax | 3 | 0 | 0 | 8 | 17 | |
Losses reclassified to income, after tax | 3 | 0 | 0 | 8 | 17 | |
Fresh start adjustments, before tax | 9 | 0 | 0 | |||
Fresh start adjustments, after tax | 9 | 0 | 0 | |||
Elimination of tax effects, before tax | 0 | 0 | 0 | |||
Elimination of tax effects, after tax | (57) | 0 | 0 | |||
AOCI, before tax, end of period | 0 | 0 | 0 | (28) | 0 | (28) |
AOCI, after tax, end of period | $ 0 | $ 0 | $ 0 | $ 29 | $ 0 | $ 29 |
Derivative and Hedging Activi_7
Derivative and Hedging Activities - Fair Value of Recurring Assets and Liabilities (Details) - Significant Other Observable Inputs (Level 2) - USD ($) $ in Millions | Jun. 30, 2021 | Dec. 31, 2020 |
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Derivative assets (liabilities), at fair value, net | $ (991) | $ (118) |
Commodity contract | ||
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Derivative asset | 29 | 88 |
Derivative liability | $ (1,020) | $ (206) |
Exploration Expense (Details)
Exploration Expense (Details) - USD ($) $ in Millions | 1 Months Ended | 3 Months Ended | 5 Months Ended | 6 Months Ended | |
Feb. 09, 2021 | Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Extractive Industries [Abstract] | |||||
Impairments of unproved properties | $ 2 | $ 0 | $ 127 | $ 0 | $ 399 |
Dry hole expense | 0 | 0 | 7 | ||
Geological and geophysical expense and other | 0 | 1 | 3 | 2 | 6 |
Exploration expense | $ 2 | $ 1 | $ 130 | $ 2 | $ 412 |
Impairments (Details)
Impairments (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended |
Mar. 31, 2021 | Jun. 30, 2021 | |
Proved oil and natural gas properties | ||
Property, Plant and Equipment [Line Items] | ||
Rate used to discount expected future net cash flows | 11.00% | |
Total impairments | $ 8,446 | |
Sand Mine | ||
Property, Plant and Equipment [Line Items] | ||
Total impairments | $ 76 |
Other Operating Expense (Inco_2
Other Operating Expense (Income), Net (Details) $ in Millions | 6 Months Ended |
Jun. 30, 2020USD ($) | |
Other Income and Expenses [Abstract] | |
Termination agreement, expenses recognized | $ 80 |
Decrease In future commitments | 169 |
Income from amortization of volumetric production payment deferred revenue | $ 28 |
Separation and Other Terminat_2
Separation and Other Termination Costs (Details) - USD ($) $ in Millions | 1 Months Ended | 3 Months Ended | 5 Months Ended | 6 Months Ended | |
Feb. 09, 2021 | Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring and other termination costs | $ 22 | $ 11 | $ 22 | $ 11 | $ 27 |
One-time termination benefits | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring and other termination costs | $ 22 | $ 11 | $ 27 |