|
ý
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Virginia
|
|
23-1184320
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(State or other jurisdiction of
incorporation or organization)
|
|
(I.R.S. Employer
Identification Number)
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Large accelerated filer
|
ý
|
|
Accelerated filer
|
o
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Non-accelerated filer
|
o
|
|
Smaller reporting company
|
o
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|
|
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Emerging growth company
|
o
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Title of each class
|
|
Trading Symbol(s)
|
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Name of each exchange on which registered
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Common Stock, $0.01 Par Value
|
|
PVAC
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The Nasdaq Global Select Market
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|
Part I - Financial Information
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||
Item
|
|
Page
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1.
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Financial Statements - unaudited.
|
|
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Condensed Consolidated Statements of Operations
|
|
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Condensed Consolidated Statements of Comprehensive Income
|
|
|
Condensed Consolidated Balance Sheets
|
|
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Condensed Consolidated Statements of Cash Flows
|
|
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Notes to Condensed Consolidated Financial Statements:
|
|
|
1. Nature of Operations
|
|
|
2. Basis of Presentation
|
|
|
3. Acquisitions and Divestitures
|
|
|
4. Accounts Receivable and Revenues from Contracts with Customers
|
|
|
5. Derivative Instruments
|
|
|
6. Property and Equipment
|
|
|
7. Long-Term Debt
|
|
|
8. Income Taxes
|
|
|
9. Leases
|
|
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10. Additional Balance Sheet Detail
|
|
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11. Fair Value Measurements
|
|
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12. Commitments and Contingencies
|
|
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13. Shareholders’ Equity
|
|
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14. Share-Based Compensation and Other Benefit Plans
|
|
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15. Interest Expense
|
|
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16. Earnings per Share
|
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Forward-Looking Statements
|
||
2.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations.
|
|
|
Overview and Executive Summary
|
|
|
Key Developments
|
|
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Financial Condition
|
|
|
Results of Operations
|
|
|
Off Balance Sheet Arrangements
|
|
|
Critical Accounting Estimates
|
|
3.
|
Quantitative and Qualitative Disclosures About Market Risk.
|
|
4.
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Controls and Procedures.
|
|
Part II - Other Information
|
||
1.
|
Legal Proceedings.
|
|
1A.
|
Risk Factors.
|
|
5.
|
Other Information
|
|
6.
|
Exhibits.
|
|
Signatures
|
Item 1.
|
Financial Statements.
|
|
Three Months Ended March 31,
|
||||||
|
2019
|
|
2018
|
||||
Revenues
|
|
|
|
||||
Crude oil
|
$
|
94,812
|
|
|
$
|
71,258
|
|
Natural gas liquids
|
5,548
|
|
|
2,946
|
|
||
Natural gas
|
4,277
|
|
|
2,790
|
|
||
Gain on sales of assets, net
|
25
|
|
|
75
|
|
||
Other revenues, net
|
566
|
|
|
142
|
|
||
Total revenues
|
105,228
|
|
|
77,211
|
|
||
Operating expenses
|
|
|
|
||||
Lease operating
|
11,004
|
|
|
7,296
|
|
||
Gathering, processing and transportation
|
3,929
|
|
|
3,359
|
|
||
Production and ad valorem taxes
|
5,692
|
|
|
4,092
|
|
||
General and administrative
|
7,065
|
|
|
6,471
|
|
||
Depreciation, depletion and amortization
|
38,870
|
|
|
22,081
|
|
||
Total operating expenses
|
66,560
|
|
|
43,299
|
|
||
Operating income
|
38,668
|
|
|
33,912
|
|
||
Other income (expense)
|
|
|
|
||||
Interest expense
|
(9,478
|
)
|
|
(4,601
|
)
|
||
Derivatives
|
(68,017
|
)
|
|
(18,795
|
)
|
||
Other, net
|
106
|
|
|
(58
|
)
|
||
Income (loss) before income taxes
|
(38,721
|
)
|
|
10,458
|
|
||
Income tax benefit (expense)
|
24
|
|
|
(163
|
)
|
||
Net income (loss)
|
$
|
(38,697
|
)
|
|
$
|
10,295
|
|
Net income (loss) per share:
|
|
|
|
||||
Basic
|
$
|
(2.56
|
)
|
|
$
|
0.68
|
|
Diluted
|
$
|
(2.56
|
)
|
|
$
|
0.68
|
|
|
|
|
|
||||
Weighted average shares outstanding – basic
|
15,098
|
|
|
15,042
|
|
||
Weighted average shares outstanding – diluted
|
15,098
|
|
|
15,081
|
|
|
Three Months Ended March 31,
|
||||||
|
2019
|
|
2018
|
||||
Net income (loss)
|
$
|
(38,697
|
)
|
|
$
|
10,295
|
|
Other comprehensive income:
|
|
|
|
||||
Change in pension and postretirement obligations, net of tax
|
(1
|
)
|
|
—
|
|
||
|
(1
|
)
|
|
—
|
|
||
Comprehensive income (loss)
|
$
|
(38,698
|
)
|
|
$
|
10,295
|
|
|
March 31,
|
|
December 31,
|
||||
|
2019
|
|
2018
|
||||
Assets
|
|
|
|
|
|
||
Current assets
|
|
|
|
|
|
||
Cash and cash equivalents
|
$
|
4,655
|
|
|
$
|
17,864
|
|
Accounts receivable, net of allowance for doubtful accounts
|
70,148
|
|
|
66,038
|
|
||
Derivative assets
|
2,658
|
|
|
34,932
|
|
||
Income taxes receivable
|
3,707
|
|
|
2,471
|
|
||
Other current assets
|
4,553
|
|
|
5,125
|
|
||
Total current assets
|
85,721
|
|
|
126,430
|
|
||
Property and equipment, net (full cost method)
|
989,830
|
|
|
927,994
|
|
||
Derivative assets
|
229
|
|
|
10,100
|
|
||
Deferred income taxes
|
737
|
|
|
1,949
|
|
||
Other assets
|
4,555
|
|
|
2,481
|
|
||
Total assets
|
$
|
1,081,072
|
|
|
$
|
1,068,954
|
|
|
|
|
|
||||
Liabilities and Shareholders’ Equity
|
|
|
|
|
|
||
Current liabilities
|
|
|
|
|
|
||
Accounts payable and accrued liabilities
|
$
|
117,268
|
|
|
$
|
103,700
|
|
Derivative liabilities
|
25,107
|
|
|
991
|
|
||
Total current liabilities
|
142,375
|
|
|
104,691
|
|
||
Other liabilities
|
7,684
|
|
|
5,533
|
|
||
Derivative liabilities
|
6,150
|
|
|
—
|
|
||
Long-term debt, net
|
515,919
|
|
|
511,375
|
|
||
|
|
|
|
||||
Commitments and contingencies (Note 12)
|
|
|
|
|
|
||
|
|
|
|
||||
Shareholders’ equity:
|
|
|
|
|
|
||
Preferred stock of $0.01 par value – 5,000,000 shares authorized; none issued
|
—
|
|
|
—
|
|
||
Common stock of $0.01 par value – 45,000,000 shares authorized; 15,105,251 and 15,080,594 shares issued as of March 31, 2019 and December 31, 2018, respectively
|
151
|
|
|
151
|
|
||
Paid-in capital
|
198,011
|
|
|
197,630
|
|
||
Retained earnings
|
210,701
|
|
|
249,492
|
|
||
Accumulated other comprehensive income
|
81
|
|
|
82
|
|
||
Total shareholders’ equity
|
408,944
|
|
|
447,355
|
|
||
Total liabilities and shareholders’ equity
|
$
|
1,081,072
|
|
|
$
|
1,068,954
|
|
|
Three Months Ended March 31,
|
||||||
|
2019
|
|
2018
|
||||
Cash flows from operating activities
|
|
|
|
|
|
||
Net income (loss)
|
$
|
(38,697
|
)
|
|
$
|
10,295
|
|
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
|
|
|
|
|
|||
Depreciation, depletion and amortization
|
38,870
|
|
|
22,081
|
|
||
Derivative contracts:
|
|
|
|
||||
Net losses
|
68,017
|
|
|
18,795
|
|
||
Cash settlements, net
|
4,394
|
|
|
(7,576
|
)
|
||
Deferred income tax expense
|
1,212
|
|
|
163
|
|
||
Gain on sales of assets, net
|
(25
|
)
|
|
(75
|
)
|
||
Non-cash interest expense
|
921
|
|
|
796
|
|
||
Share-based compensation (equity-classified)
|
1,038
|
|
|
1,576
|
|
||
Other, net
|
13
|
|
|
13
|
|
||
Changes in operating assets and liabilities, net
|
(6,484
|
)
|
|
(7,386
|
)
|
||
Net cash provided by operating activities
|
69,259
|
|
|
38,682
|
|
||
|
|
|
|
||||
Cash flows from investing activities
|
|
|
|
|
|
||
Acquisitions, net
|
—
|
|
|
(83,338
|
)
|
||
Capital expenditures
|
(86,486
|
)
|
|
(77,839
|
)
|
||
Proceeds from sales of assets, net
|
18
|
|
|
1,551
|
|
||
Net cash used in investing activities
|
(86,468
|
)
|
|
(159,626
|
)
|
||
|
|
|
|
||||
Cash flows from financing activities
|
|
|
|
|
|
||
Proceeds from credit facility borrowings
|
12,000
|
|
|
118,000
|
|
||
Repayment of credit facility borrowings
|
(8,000
|
)
|
|
—
|
|
||
Debt issuance costs paid
|
—
|
|
|
(754
|
)
|
||
Net cash provided by financing activities
|
4,000
|
|
|
117,246
|
|
||
Net decrease in cash and cash equivalents
|
(13,209
|
)
|
|
(3,698
|
)
|
||
Cash and cash equivalents – beginning of period
|
17,864
|
|
|
11,017
|
|
||
Cash and cash equivalents – end of period
|
$
|
4,655
|
|
|
$
|
7,319
|
|
|
|
|
|
||||
Supplemental disclosures:
|
|
|
|
|
|
||
Cash paid for:
|
|
|
|
|
|
||
Interest, net of amounts capitalized
|
$
|
8,413
|
|
|
$
|
3,662
|
|
Reorganization items, net
|
$
|
79
|
|
|
$
|
161
|
|
Non-cash investing and financing activities:
|
|
|
|
||||
Changes in accounts receivable related to acquisitions
|
$
|
—
|
|
|
$
|
(26,627
|
)
|
Changes in other assets related to acquisitions
|
$
|
—
|
|
|
$
|
(2,469
|
)
|
Changes in accrued liabilities related to acquisitions
|
$
|
—
|
|
|
$
|
(15,320
|
)
|
Changes in accrued liabilities related to capital expenditures
|
$
|
13,569
|
|
|
$
|
9,616
|
|
Changes in other liabilities for asset retirement obligations related to acquisitions
|
$
|
—
|
|
|
$
|
356
|
|
1.
|
Nature of Operations
|
2.
|
Basis of Presentation
|
3.
|
Acquisitions and Divestitures
|
Assets
|
|
|
||
Oil and gas properties - proved
|
|
$
|
82,443
|
|
Oil and gas properties - unproved
|
|
16,339
|
|
|
Liabilities
|
|
|
||
Revenue suspense
|
|
1,448
|
|
|
Asset retirement obligations
|
|
356
|
|
|
Net assets acquired
|
|
$
|
96,978
|
|
|
|
|
||
Cash consideration paid to Hunt, net
|
|
$
|
82,955
|
|
Application of working capital adjustments
|
|
245
|
|
|
Accumulated costs, net of suspended revenues, for wells in which Hunt had rights to participate
|
|
13,778
|
|
|
Total acquisition costs incurred
|
|
$
|
96,978
|
|
|
|
Three Months Ended March 31,
|
||
|
|
2018
|
||
Total revenues
|
|
$
|
82,456
|
|
Net income
|
|
$
|
12,407
|
|
Net income per share - basic
|
|
$
|
0.82
|
|
Net income per share - diluted
|
|
$
|
0.82
|
|
|
March 31,
|
|
December 31,
|
||||
|
2019
|
|
2018
|
||||
Customers
|
$
|
61,560
|
|
|
$
|
59,030
|
|
Joint interest partners
|
8,010
|
|
|
6,404
|
|
||
Other
|
629
|
|
|
640
|
|
||
|
70,199
|
|
|
66,074
|
|
||
Less: Allowance for doubtful accounts
|
(51
|
)
|
|
(36
|
)
|
||
|
$
|
70,148
|
|
|
$
|
66,038
|
|
5.
|
Derivative Instruments
|
|
|
|
Average
|
|
Weighted
|
|
|
|
|
|||||||
|
|
|
Volume Per
|
|
Average
|
|
Fair Value
|
|||||||||
|
Instrument
|
|
Day
|
|
Price
|
|
Asset
|
|
Liability
|
|||||||
Crude Oil:
|
|
|
(barrels)
|
|
($/barrel)
|
|
|
|
|
|||||||
Second quarter 2019
|
Swaps-WTI
|
|
6,421
|
|
|
$
|
54.48
|
|
|
$
|
—
|
|
|
$
|
3,361
|
|
Second quarter 2019
|
Swaps-LLS
|
|
5,000
|
|
|
$
|
59.17
|
|
|
—
|
|
|
3,109
|
|
||
Second quarter 2019
|
Swaps-MEH
|
|
1,000
|
|
|
$
|
64.00
|
|
|
—
|
|
|
183
|
|
||
Third quarter 2019
|
Swaps-WTI
|
|
6,397
|
|
|
$
|
54.50
|
|
|
—
|
|
|
3,430
|
|
||
Third quarter 2019
|
Swaps-LLS
|
|
5,000
|
|
|
$
|
59.17
|
|
|
—
|
|
|
2,592
|
|
||
Third quarter 2019
|
Swaps-MEH
|
|
1,000
|
|
|
$
|
64.00
|
|
|
—
|
|
|
34
|
|
||
Fourth quarter 2019
|
Swaps-WTI
|
|
6,398
|
|
|
$
|
54.50
|
|
|
—
|
|
|
3,130
|
|
||
Fourth quarter 2019
|
Swaps-LLS
|
|
5,000
|
|
|
$
|
59.17
|
|
|
—
|
|
|
1,995
|
|
||
Fourth quarter 2019
|
Swaps-MEH
|
|
1,000
|
|
|
$
|
64.00
|
|
|
68
|
|
|
—
|
|
||
First quarter 2020
|
Swaps-WTI
|
|
6,000
|
|
|
$
|
54.09
|
|
|
—
|
|
|
2,904
|
|
||
First quarter 2020
|
Swaps-MEH
|
|
2,000
|
|
|
$
|
61.03
|
|
|
—
|
|
|
58
|
|
||
Second quarter 2020
|
Swaps-WTI
|
|
6,000
|
|
|
$
|
54.09
|
|
|
—
|
|
|
2,369
|
|
||
Second quarter 2020
|
Swaps-MEH
|
|
2,000
|
|
|
$
|
61.03
|
|
|
—
|
|
|
57
|
|
||
Third quarter 2020
|
Swaps-WTI
|
|
6,000
|
|
|
$
|
54.09
|
|
|
—
|
|
|
1,898
|
|
||
Third quarter 2020
|
Swaps-MEH
|
|
2,000
|
|
|
$
|
61.03
|
|
|
—
|
|
|
40
|
|
||
Fourth quarter 2020
|
Swaps-WTI
|
|
6,000
|
|
|
$
|
54.09
|
|
|
—
|
|
|
1,518
|
|
||
Fourth quarter 2020
|
Swaps-MEH
|
|
2,000
|
|
|
$
|
61.03
|
|
|
—
|
|
|
39
|
|
||
Settlements to be paid in subsequent period
|
|
|
|
|
|
|
|
|
|
1,721
|
|
|
Three Months Ended March 31,
|
||||||
|
2019
|
|
2018
|
||||
Derivative losses
|
$
|
(68,017
|
)
|
|
$
|
(18,795
|
)
|
|
|
|
|
March 31, 2019
|
|
December 31, 2018
|
||||||||||||
|
|
|
|
Derivative
|
|
Derivative
|
|
Derivative
|
|
Derivative
|
||||||||
Type
|
|
Balance Sheet Location
|
|
Assets
|
|
Liabilities
|
|
Assets
|
|
Liabilities
|
||||||||
Commodity contracts
|
|
Derivative assets/liabilities – current
|
|
$
|
2,658
|
|
|
$
|
25,107
|
|
|
$
|
34,932
|
|
|
$
|
991
|
|
Commodity contracts
|
|
Derivative assets/liabilities – noncurrent
|
|
229
|
|
|
6,150
|
|
|
10,100
|
|
|
—
|
|
||||
|
|
|
|
$
|
2,887
|
|
|
$
|
31,257
|
|
|
$
|
45,032
|
|
|
$
|
991
|
|
6.
|
Property and Equipment
|
|
March 31,
|
|
December 31,
|
||||
|
2019
|
|
2018
|
||||
Oil and gas properties:
|
|
|
|
|
|
||
Proved
|
$
|
1,135,580
|
|
|
$
|
1,037,993
|
|
Unproved
|
64,429
|
|
|
63,484
|
|
||
Total oil and gas properties
|
1,200,009
|
|
|
1,101,477
|
|
||
Other property and equipment
|
22,502
|
|
|
20,383
|
|
||
Total properties and equipment
|
1,222,511
|
|
|
1,121,860
|
|
||
Accumulated depreciation, depletion and amortization
|
(232,681
|
)
|
|
(193,866
|
)
|
||
|
$
|
989,830
|
|
|
$
|
927,994
|
|
7.
|
Long-Term Debt
|
|
March 31, 2019
|
|
December 31, 2018
|
||||||||||||
|
Principal
|
|
Unamortized Discount and Deferred Issuance Costs
1, 2
|
|
Principal
|
|
Unamortized Discount and Deferred Issuance Costs
1, 2
|
||||||||
Credit facility
|
$
|
325,000
|
|
|
|
|
$
|
321,000
|
|
|
|
||||
Second lien term loan
|
200,000
|
|
|
$
|
9,081
|
|
|
200,000
|
|
|
$
|
9,625
|
|
||
Totals
|
525,000
|
|
|
$
|
9,081
|
|
|
521,000
|
|
|
$
|
9,625
|
|
||
Less: Unamortized discount
|
(2,979
|
)
|
|
|
|
(3,159
|
)
|
|
|
||||||
Less: Unamortized deferred issuance costs
|
(6,102
|
)
|
|
|
|
(6,466
|
)
|
|
|
||||||
Long-term debt, net
|
$
|
515,919
|
|
|
|
|
$
|
511,375
|
|
|
|
1
|
Issuance costs of the Credit Facility, which represent costs attributable to the access to credit over its contractual term, have been presented as a component of Other assets (see Note 10) and are being amortized over the term of the Credit Facility using the straight-line method.
|
8.
|
Income Taxes
|
9.
|
Leases
|
Operating lease cost
|
|
$
|
163
|
|
Short-term lease cost
|
|
11,571
|
|
|
Variable lease cost
|
|
5,095
|
|
|
Less: Amounts charged as drilling costs
1
|
|
(10,851
|
)
|
|
Total lease cost recognized in the Condensed Consolidated Statement of Operations
2
|
|
$
|
5,978
|
|
1
|
Represents the combined gross amounts paid and (i) capitalized as drilling costs for our working interest share and (ii) billed to joint interest partners for their working interest share for short-term leases of operated drilling rigs.
|
2
|
Includes $
2.1 million
recognized in Gathering, processing and transportation, $
3.7 million
recognized in Lease operating and $
0.2 million
recognized in G&A.
|
Cash paid for amounts included in the measurement of lease liabilities:
|
|
|
||
Operating cash flows from operating leases
|
|
$
|
39
|
|
ROU assets obtained in exchange for lease obligations:
|
|
|
||
Operating leases
|
|
$
|
2,572
|
|
ROU assets - operating leases
|
|
$
|
2,451
|
|
|
|
|
||
Current operating lease obligations
|
|
$
|
689
|
|
Noncurrent operating lease obligations
|
|
2,109
|
|
|
Total operating lease obligations
|
|
$
|
2,798
|
|
|
|
|
||
Weighted-average remaining lease term
|
|
|
||
Operating leases
|
|
4.8 Years
|
|
|
|
|
|
||
Weighted-average discount rate
|
|
|
||
Operating leases
|
|
5.96
|
%
|
|
|
|
|
||
Maturities of operating lease obligations for the years ending December 31,
|
|
|
||
2019
|
|
$
|
516
|
|
2020
|
|
667
|
|
|
2021
|
|
647
|
|
|
2022
|
|
647
|
|
|
2023
|
|
644
|
|
|
2024 and thereafter
|
|
108
|
|
|
Total undiscounted lease payments
|
|
3,229
|
|
|
Less: imputed interest
|
|
(431
|
)
|
|
Total operating lease obligations
|
|
$
|
2,798
|
|
10.
|
Additional Balance Sheet Detail
|
|
March 31,
|
|
December 31,
|
||||
|
2019
|
|
2018
|
||||
Other current assets:
|
|
|
|
|
|
||
Tubular inventory and well materials
|
$
|
3,474
|
|
|
$
|
4,061
|
|
Prepaid expenses
|
1,079
|
|
|
1,064
|
|
||
|
$
|
4,553
|
|
|
$
|
5,125
|
|
Other assets:
|
|
|
|
|
|
||
Deferred issuance costs of the Credit Facility
|
$
|
2,060
|
|
|
$
|
2,437
|
|
Right-of-use assets – operating leases
|
2,451
|
|
|
—
|
|
||
Other
|
44
|
|
|
44
|
|
||
|
$
|
4,555
|
|
|
$
|
2,481
|
|
Accounts payable and accrued liabilities:
|
|
|
|
|
|
||
Trade accounts payable
|
$
|
23,020
|
|
|
$
|
16,507
|
|
Drilling costs
|
36,003
|
|
|
22,434
|
|
||
Royalties and revenue – related
|
46,521
|
|
|
51,212
|
|
||
Production, ad valorem and other taxes
|
3,747
|
|
|
2,418
|
|
||
Compensation – related
|
2,091
|
|
|
4,489
|
|
||
Interest
|
815
|
|
|
670
|
|
||
Current operating lease obligations
|
689
|
|
|
—
|
|
||
Other
|
4,382
|
|
|
5,970
|
|
||
|
$
|
117,268
|
|
|
$
|
103,700
|
|
Other liabilities:
|
|
|
|
|
|
||
Asset retirement obligations
|
$
|
4,370
|
|
|
$
|
4,314
|
|
Noncurrent operating lease obligations
|
2,109
|
|
|
—
|
|
||
Defined benefit pension obligations
|
828
|
|
|
857
|
|
||
Postretirement health care benefit obligations
|
377
|
|
|
362
|
|
||
|
$
|
7,684
|
|
|
$
|
5,533
|
|
11.
|
Fair Value Measurements
|
|
|
March 31, 2019
|
||||||||||||||
|
|
Fair Value
|
|
Fair Value Measurement Classification
|
||||||||||||
Description
|
|
Measurement
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Commodity derivative assets – current
|
|
$
|
2,658
|
|
|
$
|
—
|
|
|
$
|
2,658
|
|
|
$
|
—
|
|
Commodity derivative assets – noncurrent
|
|
229
|
|
|
—
|
|
|
229
|
|
|
—
|
|
||||
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Commodity derivative liabilities – current
|
|
$
|
(25,107
|
)
|
|
$
|
—
|
|
|
$
|
(25,107
|
)
|
|
$
|
—
|
|
Commodity derivative liabilities – noncurrent
|
|
(6,150
|
)
|
|
—
|
|
|
(6,150
|
)
|
|
—
|
|
|
|
December 31, 2018
|
||||||||||||||
|
|
Fair Value
|
|
Fair Value Measurement Classification
|
||||||||||||
Description
|
|
Measurement
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Commodity derivative assets – current
|
|
$
|
34,932
|
|
|
$
|
—
|
|
|
$
|
34,932
|
|
|
$
|
—
|
|
Commodity derivative assets - noncurrent
|
|
10,100
|
|
|
—
|
|
|
10,100
|
|
|
—
|
|
||||
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Commodity derivative liabilities – current
|
|
$
|
(991
|
)
|
|
$
|
—
|
|
|
$
|
(991
|
)
|
|
$
|
—
|
|
Commodity derivative liabilities – noncurrent
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
•
|
Commodity derivatives
: We determine the fair values of our commodity derivative instruments based on discounted cash flows derived from third-party quoted forward prices for
WTI
,
LLS
and
MEH
crude oil closing prices as of the end of the reporting periods. We generally use the income approach, using valuation techniques that convert future cash flows to a single discounted value. Each of these is a Level 2 input.
|
12.
|
Commitments and Contingencies
|
|
|
Common Stock
|
|
Paid-in Capital
|
|
Retained Earnings
|
|
Accumulated Other Comprehensive Income
|
|
Total Shareholders’ Equity
|
||||||||||
Balance as of December 31, 2018
|
|
$
|
151
|
|
|
$
|
197,630
|
|
|
$
|
249,492
|
|
|
$
|
82
|
|
|
$
|
447,355
|
|
Net loss
|
|
—
|
|
|
—
|
|
|
(38,697
|
)
|
|
—
|
|
|
(38,697
|
)
|
|||||
Cumulative effect of change in accounting principle
1
|
|
—
|
|
|
—
|
|
|
(94
|
)
|
|
—
|
|
|
(94
|
)
|
|||||
All other changes
2
|
|
—
|
|
|
381
|
|
|
—
|
|
|
(1
|
)
|
|
380
|
|
|||||
Balance as of March 31, 2019
|
|
$
|
151
|
|
|
$
|
198,011
|
|
|
$
|
210,701
|
|
|
$
|
81
|
|
|
$
|
408,944
|
|
1
|
Attributable to the adoption of ASC Topic 842 as of January 1, 2019 (see Note 9).
|
|
|
Common Stock
|
|
Paid-in Capital
|
|
Retained Earnings/(Accumulated Deficit)
|
|
Accumulated Other Comprehensive Income
|
|
Total Shareholders’ Equity
|
||||||||||
Balance as of December 31, 2017
|
|
$
|
150
|
|
|
$
|
194,123
|
|
|
$
|
27,366
|
|
|
$
|
—
|
|
|
$
|
221,639
|
|
Net income
|
|
—
|
|
|
—
|
|
|
10,295
|
|
|
—
|
|
|
10,295
|
|
|||||
Cumulative effect of change in accounting principle
1
|
|
—
|
|
|
—
|
|
|
(2,659
|
)
|
|
—
|
|
|
(2,659
|
)
|
|||||
All other changes
2
|
|
1
|
|
|
988
|
|
|
—
|
|
|
—
|
|
|
989
|
|
|||||
Balance as of March 31, 2018
|
|
$
|
151
|
|
|
$
|
195,111
|
|
|
$
|
35,002
|
|
|
$
|
—
|
|
|
$
|
230,264
|
|
1
|
Reflects a write-off for certain accounts receivable attributable to natural gas imbalances accounted for under the entitlements method prior to January 1, 2018, in connection with the adoption of ASC Topic 606,
Revenues from Contracts with Customers
.
|
14.
|
Share-Based Compensation and Other Benefit Plans
|
15.
|
Interest Expense
|
|
Three Months Ended March 31,
|
||||||
|
2019
|
|
2018
|
||||
Interest on borrowings and related fees
|
$
|
9,711
|
|
|
$
|
6,048
|
|
Accretion of original issue discount
1
|
180
|
|
|
165
|
|
||
Amortization of debt issuance costs
|
741
|
|
|
631
|
|
||
Capitalized interest
|
(1,154
|
)
|
|
(2,243
|
)
|
||
|
$
|
9,478
|
|
|
$
|
4,601
|
|
1
|
Attributable to the Second Lien Facility (see Note 7).
|
16.
|
Earnings per Share
|
|
Three Months Ended March 31,
|
||||||
|
2019
|
|
2018
|
||||
Net income (loss) - basic and diluted
|
$
|
(38,697
|
)
|
|
$
|
10,295
|
|
|
|
|
|
||||
Weighted-average shares – basic
|
15,098
|
|
|
15,042
|
|
||
Effect of dilutive securities
1
|
—
|
|
|
39
|
|
||
Weighted-average shares – diluted
|
15,098
|
|
|
15,081
|
|
1
|
For the
three months ended March 31, 2019
, approximately
0.2 million
potentially dilutive securities, represented by RSUs and PRSUs, had the effect of being anti-dilutive and were excluded from the calculation of diluted earnings per share.
|
•
|
risks related to completed acquisitions, including our ability to realize their expected benefits;
|
•
|
our ability to satisfy our short-term and long-term liquidity needs, including our inability to generate sufficient cash
|
•
|
negative events or publicity adversely affecting our ability to maintain our relationships with our suppliers, service
|
•
|
plans, objectives, expectations and intentions contained in this report that are not historical;
|
•
|
our ability to execute our business plan in volatile and depressed commodity price environments;
|
•
|
the decline in and volatility of commodity prices for oil, natural gas liquids, or NGLs, and natural gas;
|
•
|
our ability to develop, explore for, acquire and replace oil and gas reserves and sustain production;
|
•
|
our ability to generate profits or achieve targeted reserves in our development and exploratory drilling and well
|
•
|
our ability to meet guidance, market expectations and internal projections, including type curves;
|
•
|
any impairments, write-downs or write-offs of our reserves or assets;
|
•
|
the projected demand for and supply of oil, NGLs and natural gas;
|
•
|
our ability to contract for drilling rigs, frac crews, materials, supplies and services at reasonable costs;
|
•
|
our ability to renew or replace expiring contracts on acceptable terms;
|
•
|
our ability to obtain adequate pipeline transportation capacity or other transportation for our oil and gas production at reasonable cost and to sell our production at, or at reasonable discounts to, market prices;
|
•
|
the uncertainties inherent in projecting future rates of production for our wells and the extent to which actual
|
•
|
use of new techniques in our development, including choke management and longer laterals;
|
•
|
drilling and operating risks;
|
•
|
our ability to compete effectively against other oil and gas companies;
|
•
|
leasehold terms expiring before production can be established and our ability to replace expired leases;
|
•
|
environmental obligations, costs and liabilities that are not covered by an effective indemnity or insurance;
|
•
|
the timing of receipt of necessary regulatory permits;
|
•
|
the effect of commodity and financial derivative arrangements with other parties and counterparty risk related to the ability of these parties to meet their future obligations;
|
•
|
the occurrence of unusual weather or operating conditions, including force majeure events;
|
•
|
our ability to retain or attract senior management and key employees;
|
•
|
our reliance on a limited number of customers and a particular region for substantially all of our revenues and production;
|
•
|
compliance with and changes in governmental regulations or enforcement practices, especially with respect to
|
•
|
physical, electronic and cybersecurity breaches;
|
•
|
uncertainties relating to general domestic and international economic and political conditions;
|
•
|
the impact and costs associated with litigation or other legal matters; and
|
•
|
other factors set forth in our filings with the Securities and Exchange Commission, or SEC, including the risks set forth in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2018.
|
Item 2.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations.
|
•
|
Daily production decreased approximately four percent to 24,692 barrels of oil equivalent per day, or BOEPD, from 25,686 BOEPD due primarily to the timing of wells turned to sales, which included nine gross (7.8 net) wells turned to sales in the first quarter of 2019 and four gross (4.0 net wells) turned to sales in mid-March 2019, compared to 10 gross (8.9 net) wells turned to sales in the fourth quarter of 2018, the majority of which were turned to sales in October 2018. Total production declined to 2,222 thousand barrels of oil equivalent, or MBOE, from 2,363 MBOE.
|
•
|
Product revenues decreased approximately 16 percent to $104.6 million from $124.6 million due primarily to nine percent lower crude oil volume and seven percent lower crude oil prices. Lower NGL revenues were due to 19 percent lower prices partially offset by four percent higher volume. Lower natural gas revenues were due to 27 percent lower natural gas pricing partially offset by six percent higher volume.
|
•
|
Production and lifting costs (consisting of Lease operating expenses, or LOE, and Gathering, processing and transportation expenses, or GPT) decreased on an absolute basis to $14.9 million from $15.7 million, and increased on a per unit basis to $6.72 per barrel of oil equivalent, or BOE, from $6.65 per BOE due primarily to the effects of lower volume and lower chemical costs partially offset by higher gas lift and compression costs.
|
•
|
Production and ad valorem taxes decreased on an absolute and per unit basis to $5.7 million and $2.56 per BOE from $6.5 million and $2.75 per BOE, respectively, due to lower production volume and lower overall product pricing.
|
•
|
General and administrative, or G&A, expenses decreased on an absolute and per unit basis to $7.1 million and $3.18 per BOE from $8.1 million and $3.43 per BOE, respectively, due primarily to lower transaction costs associated with the merger with Denbury which was terminated in March 2019.
|
•
|
Depreciation, depletion and amortization, or DD&A, decreased on an absolute basis to $38.9 million and increased on a per unit basis to $17.49 per BOE from $39.6 million and $16.75 per BOE, respectively, due primarily to lower production volume partially offset by the effects of additional drilling and completion costs. The rate increase was due primarily to higher drilling costs in the 2019 period.
|
•
|
Operating income decreased to $38.7 million from $54.9 million due to the combined impact of the matters noted in the bullets above.
|
|
Three Months Ended
|
||||||||||
|
March 31,
|
|
December 31,
|
|
March 31,
|
||||||
|
2019
|
|
2018
|
|
2018
|
||||||
Total production (MBOE)
|
2,222
|
|
|
2,363
|
|
|
1,453
|
|
|||
Average daily production (BOEPD)
|
24,692
|
|
|
25,686
|
|
|
16,145
|
|
|||
Crude oil production (MBbl)
|
1,652
|
|
|
1,818
|
|
|
1,127
|
|
|||
Crude oil production as a percent of total
|
74
|
%
|
|
77
|
%
|
|
78
|
%
|
|||
Product revenues
|
$
|
104,637
|
|
|
$
|
124,572
|
|
|
$
|
76,994
|
|
Crude oil revenues
|
$
|
94,812
|
|
|
$
|
112,452
|
|
|
$
|
71,258
|
|
Crude oil revenues as a percent of total
|
91
|
%
|
|
90
|
%
|
|
93
|
%
|
|||
Realized prices:
|
|
|
|
|
|
||||||
Crude oil ($ per Bbl)
|
$
|
57.39
|
|
|
$
|
61.84
|
|
|
$
|
63.23
|
|
NGLs ($ per Bbl)
|
$
|
17.60
|
|
|
$
|
21.79
|
|
|
$
|
17.94
|
|
Natural gas ($ per Mcf)
|
$
|
2.79
|
|
|
$
|
3.80
|
|
|
$
|
2.87
|
|
Aggregate ($ per BOE)
|
$
|
47.08
|
|
|
$
|
52.72
|
|
|
$
|
52.99
|
|
Prices adjusted for derivatives:
|
|
|
|
|
|
||||||
Crude oil ($ per Bbl)
|
$
|
60.05
|
|
|
$
|
54.64
|
|
|
$
|
56.51
|
|
Aggregate ($ per BOE)
|
$
|
49.06
|
|
|
$
|
47.17
|
|
|
$
|
47.77
|
|
Production and lifting costs:
|
|
|
|
|
|
||||||
Lease operating ($ per BOE)
|
$
|
4.95
|
|
|
$
|
4.21
|
|
|
$
|
5.02
|
|
Gathering, processing and transportation ($ per BOE)
|
$
|
1.77
|
|
|
$
|
2.44
|
|
|
$
|
2.31
|
|
Production and ad valorem taxes ($ per BOE)
|
$
|
2.56
|
|
|
$
|
2.75
|
|
|
$
|
2.82
|
|
General and administrative ($ per BOE)
1
|
$
|
3.18
|
|
|
$
|
3.43
|
|
|
$
|
4.45
|
|
Depreciation, depletion and amortization ($ per BOE)
|
$
|
17.49
|
|
|
$
|
16.75
|
|
|
$
|
15.20
|
|
Capital expenditure program costs
2
|
$
|
101,288
|
|
|
$
|
105,099
|
|
|
$
|
84,228
|
|
Cash provided by operating activities
3
|
$
|
69,259
|
|
|
$
|
79,227
|
|
|
$
|
38,682
|
|
Cash paid for capital expenditures
4
|
$
|
86,486
|
|
|
$
|
107,333
|
|
|
$
|
77,839
|
|
Cash and cash equivalents at end of period
|
$
|
4,655
|
|
|
$
|
17,864
|
|
|
$
|
7,319
|
|
Debt outstanding at end of period, net
|
$
|
515,919
|
|
|
$
|
511,375
|
|
|
$
|
383,766
|
|
Credit available under credit facility at end of period
|
$
|
124,600
|
|
|
$
|
128,600
|
|
|
$
|
144,245
|
|
Net development wells drilled and completed
|
7.8
|
|
|
8.9
|
|
|
10.0
|
|
1
|
Includes combined amounts of
$0.79
, $1.56 and
$1.55
per BOE for the
three months ended March 31, 2019
, December 31, 2018 and March 31, 2018, respectively, attributable to equity-classified share-based compensation and significant special charges, including acquisition, divestiture and strategic transaction and other costs, as described in the discussion of “
Results of Operations - General and Administrative
” that follows.
|
2
|
Includes amounts accrued and excludes capitalized interest and capitalized labor.
|
3
|
Includes net cash received from derivative settlements of $4.4 million for the
three months ended March 31, 2019
and net cash paid for derivative settlements of $13.1 million and $7.6 million for the three months ended December 31, 2018 and March 31, 2018, respectively. Reflects changes in operating assets and liabilities of $(6.5) million, $(0.7) million and $(7.4) million for the
three months ended March 31, 2019
, December 31, 2018 and March 31, 2018, respectively.
|
4
|
Represents actual cash paid for capital expenditures including capitalized interest and capitalized labor.
|
|
WTI Volumes
|
|
WTI Average Swap Price
|
|
LLS Volumes
|
|
LLS Average Swap Price
|
|
MEH Volumes
|
|
MEH Average Swap Price
|
||||||||||
|
(Barrels per day)
|
|
($ per barrel)
|
|
(Barrels per day)
|
|
($ per barrel)
|
|
(Barrels per day)
|
|
($ per barrel)
|
||||||||||
April - December 2019
|
7,300
|
|
|
$
|
55.58
|
|
|
5,000
|
|
|
$
|
59.17
|
|
|
$
|
1,000
|
|
|
$
|
64.00
|
|
2020
|
7,000
|
|
|
$
|
54.94
|
|
|
—
|
|
|
—
|
|
|
2,000
|
|
|
$
|
61.03
|
|
|
Borrowings Outstanding
|
|
|
|||||||
|
Weighted-
Average
|
|
Maximum
|
|
Weighted-
Average Rate
|
|||||
Three months ended March 31, 2019
|
$
|
319,133
|
|
|
$
|
325,000
|
|
|
6.00
|
%
|
|
Three Months Ended
|
||||||
|
March 31,
|
|
March 31,
|
||||
|
2019
|
|
2018
|
||||
Cash flows from operating activities
|
|
|
|
||||
Operating cash flows, net of working capital changes
|
$
|
75,031
|
|
|
$
|
50,762
|
|
Crude oil derivative settlements received (paid), net
|
4,394
|
|
|
(7,576
|
)
|
||
Interest payments, net of amounts capitalized
|
(8,413
|
)
|
|
(3,662
|
)
|
||
Acquisition, divestiture and strategic transaction costs paid
|
(1,674
|
)
|
|
(431
|
)
|
||
Reorganization-related administration fees and costs paid
|
(79
|
)
|
|
(161
|
)
|
||
Consulting costs paid to former Executive Chairman
|
—
|
|
|
(250
|
)
|
||
Net cash provided by operating activities
|
69,259
|
|
|
38,682
|
|
||
Cash flows from investing activities
|
|
|
|
||||
Acquisitions, net
|
—
|
|
|
(83,338
|
)
|
||
Capital expenditures
|
(86,486
|
)
|
|
(77,839
|
)
|
||
Proceeds from sales of assets, net
|
18
|
|
|
1,551
|
|
||
Net cash used in investing activities
|
(86,468
|
)
|
|
(159,626
|
)
|
||
Cash flows from financing activities
|
|
|
|
||||
Proceeds from credit facility borrowings, net
|
4,000
|
|
|
118,000
|
|
||
Debt issuance costs paid
|
—
|
|
|
(754
|
)
|
||
Net cash provided by financing activities
|
4,000
|
|
|
117,246
|
|
||
Net decrease in cash and cash equivalents
|
$
|
(13,209
|
)
|
|
$
|
(3,698
|
)
|
|
Three Months Ended
|
||||||
|
March 31,
|
|
March 31,
|
||||
|
2019
|
|
2018
|
||||
Drilling and completion
|
$
|
98,658
|
|
|
$
|
81,044
|
|
Lease acquisitions and other land-related costs
|
259
|
|
|
2,061
|
|
||
Pipeline, gathering facilities and other equipment, net
|
2,331
|
|
|
973
|
|
||
Geological and geophysical (seismic) costs
|
40
|
|
|
150
|
|
||
|
$
|
101,288
|
|
|
$
|
84,228
|
|
|
Three Months Ended
|
||||||
|
March 31,
|
|
March 31,
|
||||
|
2019
|
|
2018
|
||||
Total capital expenditures program costs (from above)
|
$
|
101,288
|
|
|
$
|
84,228
|
|
Increase in accrued capitalized costs
|
(13,569
|
)
|
|
(9,616
|
)
|
||
Less:
|
|
|
|
||||
Transfers from tubular inventory and well materials
|
(2,245
|
)
|
|
(1,335
|
)
|
||
Sales and use tax refunds received and applied to property accounts
|
(2,752
|
)
|
|
—
|
|
||
Other, net
|
(20
|
)
|
|
—
|
|
||
Add:
|
|
|
|
||||
Tubular inventory and well materials purchased in advance of drilling
|
1,658
|
|
|
1,580
|
|
||
Capitalized internal labor
|
972
|
|
|
739
|
|
||
Capitalized interest
|
1,154
|
|
|
2,243
|
|
||
Total cash paid for capital expenditures
|
$
|
86,486
|
|
|
$
|
77,839
|
|
|
March 31,
|
|
December 31,
|
||||
|
2019
|
|
2018
|
||||
Credit facility
|
$
|
325,000
|
|
|
$
|
321,000
|
|
Second lien term loan, net
|
190,919
|
|
|
190,375
|
|
||
Total debt, net
|
515,919
|
|
|
511,375
|
|
||
Shareholders’ equity
|
408,944
|
|
|
447,355
|
|
||
|
$
|
924,863
|
|
|
$
|
958,730
|
|
Debt as a % of total capitalization
|
56
|
%
|
|
53
|
%
|
|
Total Production
|
|
Average Daily Production
|
||||||||||||||
|
Three Months Ended
|
|
2019 vs. 2018
|
|
Three Months Ended
|
|
2019 vs. 2018
|
||||||||||
|
March 31,
|
|
March 31,
|
|
Favorable
|
|
March 31,
|
|
March 31,
|
|
Favorable
|
||||||
|
2019
|
|
2018
|
|
(Unfavorable)
|
|
2019
|
|
2018
|
|
(Unfavorable)
|
||||||
Crude oil (MBbl and BOPD)
|
1,652
|
|
|
1,127
|
|
|
525
|
|
|
18,355
|
|
|
12,522
|
|
|
5,833
|
|
NGLs (MBbl and BOPD)
|
315
|
|
|
164
|
|
|
151
|
|
|
3,503
|
|
|
1,825
|
|
|
1,678
|
|
Natural gas (MMcf and MMcfpd)
|
1,531
|
|
|
971
|
|
|
560
|
|
|
17
|
|
|
11
|
|
|
6
|
|
Total (MBOE and BOEPD)
|
2,222
|
|
|
1,453
|
|
|
769
|
|
|
24,692
|
|
|
16,145
|
|
|
8,547
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Three Months Ended
|
|
2019 vs. 2018
|
|
Three Months Ended
|
|
2019 vs. 2018
|
||||||||||
|
March 31,
|
|
March 31,
|
|
Favorable
|
|
March 31,
|
|
March 31,
|
|
Favorable
|
||||||
|
2019
|
|
2018
|
|
(Unfavorable)
|
|
2019
|
|
2018
|
|
(Unfavorable)
|
||||||
|
(MBOE)
|
|
|
|
(BOE per day)
|
|
|
||||||||||
South Texas
|
2,222
|
|
|
1,383
|
|
|
839
|
|
|
24,692
|
|
|
15,370
|
|
|
9,322
|
|
Mid-Continent
1
|
—
|
|
|
70
|
|
|
(70
|
)
|
|
—
|
|
|
775
|
|
|
(775
|
)
|
|
2,222
|
|
|
1,453
|
|
|
769
|
|
|
24,692
|
|
|
16,145
|
|
|
8,547
|
|
|
Total Product Revenues
|
|
Product Revenues per Unit of Volume
|
||||||||||||||||||||
|
Three Months Ended
|
|
2019 vs. 2018
|
|
Three Months Ended
|
|
2019 vs. 2018
|
||||||||||||||||
|
March 31,
|
|
March 31,
|
|
Favorable
|
|
March 31,
|
|
March 31,
|
|
Favorable
|
||||||||||||
|
2019
|
|
2018
|
|
(Unfavorable)
|
|
2019
|
|
2018
|
|
(Unfavorable)
|
||||||||||||
|
|
|
|
|
|
|
($ per unit of volume)
|
|
|
||||||||||||||
Crude oil
|
$
|
94,812
|
|
|
$
|
71,258
|
|
|
$
|
23,554
|
|
|
$
|
57.39
|
|
|
$
|
63.23
|
|
|
$
|
(5.84
|
)
|
NGLs
|
5,548
|
|
|
2,946
|
|
|
2,602
|
|
|
$
|
17.60
|
|
|
$
|
17.94
|
|
|
$
|
(0.34
|
)
|
|||
Natural gas
|
4,277
|
|
|
2,790
|
|
|
1,487
|
|
|
$
|
2.79
|
|
|
$
|
2.87
|
|
|
$
|
(0.08
|
)
|
|||
Total
|
$
|
104,637
|
|
|
$
|
76,994
|
|
|
$
|
27,643
|
|
|
$
|
47.08
|
|
|
$
|
52.99
|
|
|
$
|
(5.91
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Three Months Ended
|
|
2019 vs. 2018
|
|
Three Months Ended
|
|
2019 vs. 2018
|
||||||||||||||||
|
March 31,
|
|
March 31,
|
|
Favorable
|
|
March 31,
|
|
March 31,
|
|
Favorable
|
||||||||||||
|
2019
|
|
2018
|
|
(Unfavorable)
|
|
2019
|
|
2018
|
|
(Unfavorable)
|
||||||||||||
|
|
|
|
|
|
|
($ per BOE)
|
|
|
||||||||||||||
South Texas
|
$
|
104,637
|
|
|
$
|
75,316
|
|
|
$
|
29,321
|
|
|
$
|
47.08
|
|
|
$
|
54.45
|
|
|
$
|
(7.37
|
)
|
Mid-Continent
1
|
—
|
|
|
1,678
|
|
|
(1,678
|
)
|
|
$
|
—
|
|
|
$
|
24.05
|
|
|
$
|
(24.05
|
)
|
|||
|
$
|
104,637
|
|
|
$
|
76,994
|
|
|
$
|
27,643
|
|
|
$
|
47.08
|
|
|
$
|
52.99
|
|
|
$
|
(5.91
|
)
|
|
|
Three Months Ended
|
|
2019 vs. 2018
|
||||||||
|
|
March 31,
|
|
March 31,
|
|
Favorable
|
||||||
|
|
2019
|
|
2018
|
|
(Unfavorable)
|
||||||
Crude oil revenues, as reported
|
|
$
|
94,812
|
|
|
$
|
71,258
|
|
|
$
|
23,554
|
|
Derivative settlements, net
|
|
4,394
|
|
|
(7,576
|
)
|
|
11,970
|
|
|||
|
|
$
|
99,206
|
|
|
$
|
63,682
|
|
|
$
|
35,524
|
|
|
|
|
|
|
|
|
||||||
Crude oil prices per Bbl
|
|
$
|
57.39
|
|
|
$
|
63.23
|
|
|
$
|
(5.84
|
)
|
Derivative settlements per Bbl
|
|
2.66
|
|
|
(6.72
|
)
|
|
9.38
|
|
|||
|
|
$
|
60.05
|
|
|
$
|
56.51
|
|
|
$
|
3.54
|
|
|
|
Three Months Ended
|
|
2019 vs. 2018
|
||||||||
|
|
March 31,
|
|
March 31,
|
|
Favorable
|
||||||
|
|
2019
|
|
2018
|
|
(Unfavorable)
|
||||||
Gain on sales of assets, net
|
|
$
|
25
|
|
|
$
|
75
|
|
|
$
|
(50
|
)
|
|
|
Three Months Ended
|
|
2019 vs. 2018
|
||||||||
|
|
March 31,
|
|
March 31,
|
|
Favorable
|
||||||
|
|
2019
|
|
2018
|
|
(Unfavorable)
|
||||||
Other revenues, net
|
|
$
|
566
|
|
|
$
|
142
|
|
|
$
|
424
|
|
|
|
Three Months Ended
|
|
2019 vs. 2018
|
||||||||
|
|
March 31,
|
|
March 31,
|
|
Favorable
|
||||||
|
|
2019
|
|
2018
|
|
(Unfavorable)
|
||||||
Lease operating
|
|
$
|
11,004
|
|
|
$
|
7,296
|
|
|
$
|
(3,708
|
)
|
Per unit of production ($ per BOE)
|
|
$
|
4.95
|
|
|
$
|
5.02
|
|
|
$
|
0.07
|
|
% change per unit of production
|
|
|
|
|
|
1.4
|
%
|
|
|
Three Months Ended
|
|
2019 vs. 2018
|
||||||||
|
|
March 31,
|
|
March 31,
|
|
Favorable
|
||||||
|
|
2019
|
|
2018
|
|
(Unfavorable)
|
||||||
Gathering, processing and transportation
|
|
$
|
3,929
|
|
|
$
|
3,359
|
|
|
$
|
(570
|
)
|
Per unit of production ($ per BOE)
|
|
$
|
1.77
|
|
|
$
|
2.31
|
|
|
$
|
0.54
|
|
% change per unit of production
|
|
|
|
|
|
23.4
|
%
|
|
|
Three Months Ended
|
|
2019 vs. 2018
|
||||||||
|
|
March 31,
|
|
March 31,
|
|
Favorable
|
||||||
|
|
2019
|
|
2018
|
|
(Unfavorable)
|
||||||
Production and ad valorem taxes
|
|
|
|
|
|
|
||||||
Production/severance taxes
|
|
$
|
4,930
|
|
|
$
|
3,609
|
|
|
$
|
(1,321
|
)
|
Ad valorem taxes
|
|
762
|
|
|
483
|
|
|
(279
|
)
|
|||
|
|
$
|
5,692
|
|
|
$
|
4,092
|
|
|
$
|
(1,600
|
)
|
Per unit production ($ per BOE)
|
|
$
|
2.56
|
|
|
$
|
2.82
|
|
|
$
|
0.26
|
|
Production/severance tax rate as a percent of product revenue
|
|
4.7
|
%
|
|
4.7
|
%
|
|
|
|
|
Three Months Ended
|
|
2019 vs. 2018
|
||||||||
|
|
March 31,
|
|
March 31,
|
|
Favorable
|
||||||
|
|
2019
|
|
2018
|
|
(Unfavorable)
|
||||||
Primary G&A
|
|
$
|
5,303
|
|
|
$
|
4,214
|
|
|
$
|
(1,089
|
)
|
Share-based compensation (equity-classified)
|
|
1,038
|
|
|
1,576
|
|
|
538
|
|
|||
Significant special charges:
|
|
|
|
|
|
|
||||||
Acquisition, divestiture and strategic transaction costs
|
|
724
|
|
|
431
|
|
|
(293
|
)
|
|||
Executive retirement costs
|
|
—
|
|
|
250
|
|
|
250
|
|
|||
Total G&A
|
|
$
|
7,065
|
|
|
$
|
6,471
|
|
|
$
|
(594
|
)
|
Per unit of production ($ per BOE)
|
|
$
|
3.18
|
|
|
$
|
4.45
|
|
|
$
|
1.27
|
|
Per unit of production excluding share-based compensation and other significant special charges identified above ($ per BOE)
|
|
$
|
2.39
|
|
|
$
|
2.90
|
|
|
$
|
0.51
|
|
|
|
Three Months Ended
|
|
2019 vs. 2018
|
||||||||
|
|
March 31,
|
|
March 31,
|
|
Favorable
|
||||||
|
|
2019
|
|
2018
|
|
(Unfavorable)
|
||||||
DD&A expense
|
|
$
|
38,870
|
|
|
$
|
22,081
|
|
|
$
|
(16,789
|
)
|
DD&A Rate ($ per BOE)
|
|
$
|
17.49
|
|
|
$
|
15.20
|
|
|
$
|
(2.29
|
)
|
|
|
Three Months Ended
|
|
2019 vs. 2018
|
||||||||
|
|
March 31,
|
|
March 31,
|
|
Favorable
|
||||||
|
|
2019
|
|
2018
|
|
(Unfavorable)
|
||||||
Interest on borrowings and related fees
|
|
$
|
9,711
|
|
|
$
|
6,048
|
|
|
$
|
(3,663
|
)
|
Accretion of original issue discount
|
|
180
|
|
|
165
|
|
|
(15
|
)
|
|||
Amortization of debt issuance costs
|
|
741
|
|
|
631
|
|
|
(110
|
)
|
|||
Capitalized interest
|
|
(1,154
|
)
|
|
(2,243
|
)
|
|
(1,089
|
)
|
|||
|
|
$
|
9,478
|
|
|
$
|
4,601
|
|
|
$
|
(4,877
|
)
|
|
|
Three Months Ended
|
|
2019 vs. 2018
|
||||||||
|
|
March 31,
|
|
March 31,
|
|
Favorable
|
||||||
|
|
2019
|
|
2018
|
|
(Unfavorable)
|
||||||
Crude oil derivative losses
|
|
$
|
(68,017
|
)
|
|
$
|
(18,795
|
)
|
|
$
|
(49,222
|
)
|
|
|
Three Months Ended
|
|
2019 vs. 2018
|
||||||||
|
|
March 31,
|
|
March 31,
|
|
Favorable
|
||||||
|
|
2019
|
|
2018
|
|
(Unfavorable)
|
||||||
Other, net
|
|
$
|
106
|
|
|
$
|
(58
|
)
|
|
$
|
164
|
|
|
|
Three Months Ended
|
|
2019 vs. 2018
|
||||||||
|
|
March 31,
|
|
March 31,
|
|
Favorable
|
||||||
|
|
2019
|
|
2018
|
|
(Unfavorable)
|
||||||
Income tax benefit (expense)
|
|
$
|
24
|
|
|
$
|
(163
|
)
|
|
$
|
187
|
|
Effective tax rate
|
|
0.1
|
%
|
|
1.6
|
%
|
|
|
Item 3.
|
Quantitative and Qualitative Disclosures About Market Risk.
|
|
|
|
Average
|
|
Weighted
|
|
|
|
|
|||||||
|
|
|
Volume Per
|
|
Average
|
|
Fair Value
|
|||||||||
|
Instrument
|
|
Day
|
|
Price
|
|
Asset
|
|
Liability
|
|||||||
Crude Oil:
|
|
|
(barrels)
|
|
($/barrel)
|
|
|
|
|
|||||||
Second quarter 2019
|
Swaps-WTI
|
|
6,421
|
|
|
$
|
54.48
|
|
|
$
|
—
|
|
|
$
|
3,361
|
|
Second quarter 2019
|
Swaps-LLS
|
|
5,000
|
|
|
$
|
59.17
|
|
|
—
|
|
|
3,109
|
|
||
Second quarter 2019
|
Swaps-MEH
|
|
1,000
|
|
|
$
|
64.00
|
|
|
—
|
|
|
183
|
|
||
Third quarter 2019
|
Swaps-WTI
|
|
6,397
|
|
|
$
|
54.50
|
|
|
—
|
|
|
3,430
|
|
||
Third quarter 2019
|
Swaps-LLS
|
|
5,000
|
|
|
$
|
59.17
|
|
|
—
|
|
|
2,592
|
|
||
Third quarter 2019
|
Swaps-MEH
|
|
1,000
|
|
|
$
|
64.00
|
|
|
—
|
|
|
34
|
|
||
Fourth quarter 2019
|
Swaps-WTI
|
|
6,398
|
|
|
$
|
54.50
|
|
|
—
|
|
|
3,130
|
|
||
Fourth quarter 2019
|
Swaps-LLS
|
|
5,000
|
|
|
$
|
59.17
|
|
|
—
|
|
|
1,995
|
|
||
Fourth quarter 2019
|
Swaps-MEH
|
|
1,000
|
|
|
$
|
64.00
|
|
|
68
|
|
|
—
|
|
||
First quarter 2020
|
Swaps-WTI
|
|
6,000
|
|
|
$
|
54.09
|
|
|
—
|
|
|
2,904
|
|
||
First quarter 2020
|
Swaps-MEH
|
|
2,000
|
|
|
$
|
61.03
|
|
|
—
|
|
|
58
|
|
||
Second quarter 2020
|
Swaps-WTI
|
|
6,000
|
|
|
$
|
54.09
|
|
|
—
|
|
|
2,369
|
|
||
Second quarter 2020
|
Swaps-MEH
|
|
2,000
|
|
|
$
|
61.03
|
|
|
—
|
|
|
57
|
|
||
Third quarter 2020
|
Swaps-WTI
|
|
6,000
|
|
|
$
|
54.09
|
|
|
—
|
|
|
1,898
|
|
||
Third quarter 2020
|
Swaps-MEH
|
|
2,000
|
|
|
$
|
61.03
|
|
|
—
|
|
|
40
|
|
||
Fourth quarter 2020
|
Swaps-WTI
|
|
6,000
|
|
|
$
|
54.09
|
|
|
—
|
|
|
1,518
|
|
||
Fourth quarter 2020
|
Swaps-MEH
|
|
2,000
|
|
|
$
|
61.03
|
|
|
—
|
|
|
39
|
|
||
Settlements to be paid in subsequent period
|
|
|
|
|
|
|
|
|
|
1,721
|
|
|
Change of $10.00 per Bbl of Crude Oil
($ in millions)
|
||||||
|
Increase
|
|
Decrease
|
||||
Effect on the fair value of crude oil derivatives
1
|
$
|
(63.5
|
)
|
|
$
|
60.8
|
|
Effect of crude oil price changes for the remainder of 2019 on operating income, excluding derivatives
2
|
$
|
53.0
|
|
|
$
|
53.0
|
|
1
|
Based on derivatives outstanding as of
March 31, 2019
.
|
2
|
These sensitivities are subject to significant change.
|
Item 4.
|
Controls and Procedures.
|
Item 1.
|
Legal Proceedings.
|
Item 1A.
|
Risk Factors.
|
Item 5.
|
Other Information.
|
Item 6.
|
Exhibits.
|
(
2.1
)
|
Termination Agreement, dated as of March 21, 2019,among Denbury Resources Inc, Dragon Merger Sub Inc, DR Sub LLC and Penn Virginia Corporation (incorporated by reference to Exhibit 2.1 to Registrant’s Current Report on Form 8-K filed on March 22, 2019).
|
|
|
(
31.1)
*
|
Certification Pursuant to Rule 13a-14(a), as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
(
31.2
) *
|
Certification Pursuant to Rule 13a-14(a), as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
(
32.1
) †
|
Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
|
(
32.2
) †
|
Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
|
(101.INS) *
|
XBRL Instance Document
|
|
|
(101.SCH) *
|
XBRL Taxonomy Extension Schema Document
|
|
|
(101.CAL) *
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
|
|
(101.DEF) *
|
XBRL Taxonomy Extension Definition Linkbase Document
|
|
|
(101.LAB) *
|
XBRL Taxonomy Extension Label Linkbase Document
|
|
|
(101.PRE) *
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
*
|
Filed herewith.
|
†
|
Furnished herewith.
|
|
PENN VIRGINIA CORPORATION
|
|
|
|
|
|
|
May 10, 2019
|
By:
|
/s/ STEVEN A. HARTMAN
|
|
|
|
Steven A. Hartman
|
|
|
|
Senior Vice President, Chief Financial Officer and Treasurer
|
|
|
|
(Principal Financial Officer)
|
|
|
|
|
|
May 10, 2019
|
By:
|
/s/ TAMMY L. HINKLE
|
|
|
|
Tammy L. Hinkle
|
|
|
|
Vice President and Controller
|
|
|
|
(Principal Accounting Officer)
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this Report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this Report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this Report based on such evaluation; and
|
(d)
|
Disclosed in this Report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter (the Registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting.
|
/s/ JOHN A. BROOKS
|
|
John A. Brooks
|
|
President and Chief Executive Officer
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this Report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this Report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this Report based on such evaluation; and
|
(d)
|
Disclosed in this Report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter (the Registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting.
|
/s/ STEVEN A. HARTMAN
|
|
Steven A. Hartman
|
|
Senior Vice President, Chief Financial Officer and Treasurer
|
1.
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
2.
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
/s/ JOHN A. BROOKS
|
|
John A. Brooks
|
|
President and Chief Executive Officer
|
1.
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
2.
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
/s/ STEVEN A. HARTMAN
|
|
Steven A. Hartman
|
|
Senior Vice President, Chief Financial Officer and Treasurer
|