Delaware
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95-2636730
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(State of incorporation)
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(I.R.S. Employer Identification No.)
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Large accelerated filer
x
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Accelerated filer
o
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Non-accelerated filer
o
(Do not check if a smaller reporting company)
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Smaller reporting company
o
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PART I – FINANCIAL INFORMATION
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Page
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Item 1.
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Financial Statements
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Item 2.
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Item 3.
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Item 4.
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PART II – OTHER INFORMATION
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Item 1.
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Item 1A.
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Item 2.
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Item 3.
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Item 4.
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Item 5.
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Item 6.
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•
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changes in worldwide production volumes and demand, including economic conditions that might impact demand;
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•
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volatility of commodity prices for crude oil, natural gas and NGLs and the risk of an extended period of depressed prices;
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•
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reductions in the borrowing base under our revolving credit facility;
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•
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impact of governmental policies and/or regulations, including changes in environmental and other laws, the interpretation and enforcement related to those laws and regulations, liabilities arising thereunder and the costs to comply with those laws and regulations;
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•
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declines in the value of our crude oil, natural gas and NGLs properties resulting in further impairments;
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•
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changes in estimates of proved reserves;
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•
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inaccuracy of reserve estimates and expected production rates;
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•
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potential for production decline rates from our wells being greater than expected;
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•
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timing and extent of our success in discovering, acquiring, developing and producing reserves;
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•
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availability of sufficient pipeline, gathering and other transportation facilities and related infrastructure to process and transport our production and the impact of these facilities and regional capacity on the prices we receive for our production;
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•
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timing and receipt of necessary regulatory permits;
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•
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risks incidental to the drilling and operation of crude oil and natural gas wells;
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•
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future cash flows, liquidity and financial condition;
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•
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competition within the oil and gas industry;
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•
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availability and cost of capital;
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•
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our success in marketing crude oil, natural gas and NGLs;
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•
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effect of crude oil and natural gas derivatives activities;
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•
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impact of environmental events, governmental and other third-party responses to such events, and our ability to insure adequately against such events;
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•
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cost of pending or future litigation;
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•
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effect that acquisitions we may pursue have on our capital expenditures;
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•
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our ability to retain or attract senior management and key technical employees; and
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•
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success of strategic plans, expectations and objectives for our future operations.
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September 30, 2016
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December 31, 2015
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||||
Assets
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Current assets:
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||||
Cash and cash equivalents
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$
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1,197,692
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$
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850
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Accounts receivable, net
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99,895
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104,274
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Fair value of derivatives
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65,604
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221,659
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Prepaid expenses and other current assets
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4,854
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5,266
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Total current assets
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1,368,045
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332,049
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Properties and equipment, net
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1,932,274
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1,940,552
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Fair value of derivatives
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8,423
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44,387
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Other assets
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108,538
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53,555
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Total Assets
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$
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3,417,280
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$
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2,370,543
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||||
Liabilities and Shareholders' Equity
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Liabilities
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Current liabilities:
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Accounts payable
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$
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62,350
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$
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92,613
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Production tax liability
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22,141
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26,524
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Fair value of derivatives
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22,563
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1,595
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Funds held for distribution
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51,107
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29,894
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Current portion of long-term debt
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—
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112,940
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Accrued interest payable
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19,364
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9,057
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Other accrued expenses
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41,756
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28,709
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Total current liabilities
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219,281
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301,332
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Long-term debt
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1,041,575
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529,437
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Deferred income taxes
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44,340
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143,452
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Asset retirement obligation
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82,509
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84,032
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Fair value of derivatives
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17,885
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695
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Other liabilities
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25,630
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24,398
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Total liabilities
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1,431,220
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1,083,346
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Commitments and contingent liabilities
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Shareholders' equity
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||||
Preferred shares - par value $0.01 per share, 50,000,000 shares authorized, none issued
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—
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—
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Common shares - par value $0.01 per share, 150,000,000 authorized, 56,280,544 and 40,174,776 issued as of September 30, 2016 and December 31, 2015, respectively
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563
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402
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Additional paid-in capital
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1,796,664
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907,382
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Retained earnings
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190,133
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380,422
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Treasury shares - at cost, 25,854 and 20,220
as of September 30, 2016 and December 31, 2015, respectively
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(1,300
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)
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(1,009
|
)
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Total shareholders' equity
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1,986,060
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1,287,197
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Total Liabilities and Shareholders' Equity
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$
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3,417,280
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$
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2,370,543
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Three Months Ended September 30,
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Nine Months Ended September 30,
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||||||||||||
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2016
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2015
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2016
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2015
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Revenues
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Crude oil, natural gas and NGLs sales
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$
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141,805
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$
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104,483
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$
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328,013
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$
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275,520
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Sales from natural gas marketing
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2,678
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2,580
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6,728
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8,336
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||||
Commodity price risk management gain (loss), net
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19,397
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123,549
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(62,348
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)
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141,170
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Well operations, pipeline income and other
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10
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|
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488
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|
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2,425
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1,666
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||||
Total revenues
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163,890
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231,100
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274,818
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426,692
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|
||||
Costs, expenses and other
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||||||||
Lease operating expenses
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14,001
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13,825
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43,006
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42,749
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|
||||
Production taxes
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9,568
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|
|
5,476
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|
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19,682
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|
|
13,206
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|
||||
Transportation, gathering and processing expenses
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5,048
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|
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3,938
|
|
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13,554
|
|
|
6,584
|
|
||||
Cost of natural gas marketing
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3,092
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|
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2,781
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|
|
7,795
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8,875
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Exploration expense
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|
241
|
|
|
252
|
|
|
688
|
|
|
812
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|
||||
Impairment of properties and equipment
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|
933
|
|
|
154,031
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6,104
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|
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161,207
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|
||||
General and administrative expense
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32,510
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|
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20,277
|
|
|
78,868
|
|
|
62,050
|
|
||||
Depreciation, depletion and amortization
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|
112,927
|
|
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80,947
|
|
|
317,329
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|
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206,873
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|
||||
Provision for uncollectible notes receivable
|
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(700
|
)
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—
|
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44,038
|
|
|
—
|
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||||
Accretion of asset retirement obligations
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1,777
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|
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1,594
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|
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5,400
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|
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4,742
|
|
||||
Gain on sale of properties and equipment
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(219
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)
|
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(74
|
)
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(43
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)
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(302
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)
|
||||
Total cost, expenses and other
|
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179,178
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|
283,047
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536,421
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|
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506,796
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|
||||
Loss from operations
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(15,288
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)
|
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(51,947
|
)
|
|
(261,603
|
)
|
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(80,104
|
)
|
||||
Interest expense
|
|
(20,193
|
)
|
|
(12,092
|
)
|
|
(42,759
|
)
|
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(35,384
|
)
|
||||
Interest income
|
|
140
|
|
|
1,378
|
|
|
1,875
|
|
|
3,626
|
|
||||
Loss before income taxes
|
|
(35,341
|
)
|
|
(62,661
|
)
|
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(302,487
|
)
|
|
(111,862
|
)
|
||||
Provision for income taxes
|
|
12,032
|
|
|
21,167
|
|
|
112,198
|
|
|
40,560
|
|
||||
Net loss
|
|
$
|
(23,309
|
)
|
|
$
|
(41,494
|
)
|
|
$
|
(190,289
|
)
|
|
$
|
(71,302
|
)
|
|
|
|
|
|
|
|
|
|
||||||||
Earnings per share:
|
|
|
|
|
|
|
|
|
||||||||
Basic
|
|
$
|
(0.48
|
)
|
|
$
|
(1.04
|
)
|
|
$
|
(4.16
|
)
|
|
$
|
(1.84
|
)
|
Diluted
|
|
$
|
(0.48
|
)
|
|
$
|
(1.04
|
)
|
|
$
|
(4.16
|
)
|
|
$
|
(1.84
|
)
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted-average common shares outstanding:
|
|
|
|
|
|
|
|
|
||||||||
Basic
|
|
48,839
|
|
|
40,085
|
|
|
45,741
|
|
|
38,837
|
|
||||
Diluted
|
|
48,839
|
|
|
40,085
|
|
|
45,741
|
|
|
38,837
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended September 30,
|
||||||
|
|
2016
|
|
2015
|
||||
Cash flows from operating activities:
|
|
|
|
|
||||
Net loss
|
|
$
|
(190,289
|
)
|
|
$
|
(71,302
|
)
|
Adjustments to net loss to reconcile to net cash from operating activities:
|
|
|
|
|
||||
Net change in fair value of unsettled derivatives
|
|
230,177
|
|
|
21,322
|
|
||
Depreciation, depletion and amortization
|
|
317,329
|
|
|
206,873
|
|
||
Provision for uncollectible notes receivable
|
|
44,038
|
|
|
—
|
|
||
Impairment of properties and equipment
|
|
6,104
|
|
|
161,207
|
|
||
Accretion of asset retirement obligation
|
|
5,400
|
|
|
4,742
|
|
||
Stock-based compensation
|
|
15,205
|
|
|
14,278
|
|
||
Gain on sale of properties and equipment
|
|
(43
|
)
|
|
(302
|
)
|
||
Amortization of debt discount and issuance costs
|
|
12,951
|
|
|
5,308
|
|
||
Deferred income taxes
|
|
(114,136
|
)
|
|
(44,770
|
)
|
||
Non-cash interest income
|
|
(1,194
|
)
|
|
(3,624
|
)
|
||
Other
|
|
668
|
|
|
(174
|
)
|
||
Changes in assets and liabilities
|
|
34,621
|
|
|
(10,552
|
)
|
||
Net cash from operating activities
|
|
360,831
|
|
|
283,006
|
|
||
Cash flows from investing activities:
|
|
|
|
|
||||
Capital expenditures
|
|
(353,722
|
)
|
|
(489,036
|
)
|
||
Acquisition of crude oil and natural gas properties
|
|
(100,000
|
)
|
|
—
|
|
||
Proceeds from sale of properties and equipment
|
|
4,945
|
|
|
319
|
|
||
Net cash from investing activities
|
|
(448,777
|
)
|
|
(488,717
|
)
|
||
Cash flows from financing activities:
|
|
|
|
|
||||
Proceeds from sale of equity, net of issuance cost
|
|
855,072
|
|
|
202,851
|
|
||
Proceeds from senior notes
|
|
392,250
|
|
|
—
|
|
||
Proceeds from convertible senior notes
|
|
193,979
|
|
|
—
|
|
||
Proceeds from revolving credit facility
|
|
85,000
|
|
|
325,000
|
|
||
Repayment of revolving credit facility
|
|
(122,000
|
)
|
|
(331,000
|
)
|
||
Redemption of convertible notes
|
|
(115,000
|
)
|
|
—
|
|
||
Other
|
|
(4,513
|
)
|
|
(3,516
|
)
|
||
Net cash from financing activities
|
|
1,284,788
|
|
|
193,335
|
|
||
Net change in cash and cash equivalents
|
|
1,196,842
|
|
|
(12,376
|
)
|
||
Cash and cash equivalents, beginning of period
|
|
850
|
|
|
16,066
|
|
||
Cash and cash equivalents, end of period
|
|
$
|
1,197,692
|
|
|
$
|
3,690
|
|
|
|
|
|
|
||||
Supplemental cash flow information:
|
|
|
|
|
||||
Cash payments for:
|
|
|
|
|
||||
Interest, net of capitalized interest
|
|
$
|
22,975
|
|
|
$
|
23,467
|
|
Income taxes
|
|
167
|
|
|
9,936
|
|
||
Non-cash investing and financing activities:
|
|
|
|
|
||||
Change in accounts payable related to purchases of properties and equipment
|
|
$
|
(31,497
|
)
|
|
$
|
(68,529
|
)
|
Change in asset retirement obligation, with a corresponding change to crude oil and natural gas properties, net of disposals
|
|
1,137
|
|
|
1,642
|
|
||
Purchase of properties and equipment under capital leases
|
|
1,231
|
|
|
1,479
|
|
Nine Months Ended September 30,
|
|
2016
|
|
2015
|
||||
Common shares, issued:
|
|
|
|
|
||||
Shares beginning of period
|
|
40,174,776
|
|
|
35,927,985
|
|
||
Shares issued pursuant to sale of equity
|
|
15,799,906
|
|
|
4,002,000
|
|
||
Exercise of stock options
|
|
46,084
|
|
|
—
|
|
||
Issuance of stock awards, net of forfeitures
|
|
259,778
|
|
|
191,623
|
|
||
Shares end of period
|
|
56,280,544
|
|
|
40,121,608
|
|
||
Treasury shares:
|
|
|
|
|
||||
Shares beginning of period
|
|
20,220
|
|
|
21,643
|
|
||
Purchase of treasury shares
|
|
90,695
|
|
|
93,898
|
|
||
Issuance of treasury shares
|
|
(91,895
|
)
|
|
(97,995
|
)
|
||
Non-employee directors' deferred compensation plan
|
|
6,834
|
|
|
4,872
|
|
||
Shares end of period
|
|
25,854
|
|
|
22,418
|
|
||
Common shares outstanding
|
|
56,254,690
|
|
|
40,099,190
|
|
||
|
|
|
|
|
||||
Equity:
|
|
|
|
|
||||
Shareholders' equity
|
|
|
|
|
||||
Preferred shares, par value $0.01 per share:
|
|
|
|
|
||||
Balance beginning and end of period
|
|
$
|
—
|
|
|
$
|
—
|
|
Common shares, par value $0.01 per share:
|
|
|
|
|
||||
Balance beginning of period
|
|
402
|
|
|
359
|
|
||
Shares issued pursuant to sale of equity and note conversion
|
|
158
|
|
|
40
|
|
||
Issuance of stock awards, net of forfeitures
|
|
3
|
|
|
2
|
|
||
Balance end of period
|
|
563
|
|
|
401
|
|
||
Additional paid-in capital:
|
|
|
|
|
||||
Balance beginning of period
|
|
907,383
|
|
|
689,209
|
|
||
Convertible debt discount, net of issuance costs and tax
|
|
23,264
|
|
|
—
|
|
||
Proceeds from sale of equity, net of issuance costs
|
|
854,932
|
|
|
202,811
|
|
||
Stock-based compensation expense
|
|
15,202
|
|
|
14,419
|
|
||
Issuance of treasury shares
|
|
(5,180
|
)
|
|
(4,633
|
)
|
||
Tax impact of stock-based compensation
|
|
1,063
|
|
|
1,232
|
|
||
Balance end of period
|
|
1,796,664
|
|
|
903,038
|
|
||
Retained earnings:
|
|
|
|
|
||||
Balance beginning of period
|
|
380,422
|
|
|
448,702
|
|
||
Net loss
|
|
(190,289
|
)
|
|
(71,302
|
)
|
||
Balance end of period
|
|
190,133
|
|
|
377,400
|
|
||
Treasury shares, at cost:
|
|
|
|
|
||||
Balance beginning of period
|
|
(1,009
|
)
|
|
(911
|
)
|
||
Purchase of treasury shares
|
|
(5,106
|
)
|
|
(4,575
|
)
|
||
Issuance of treasury shares
|
|
5,179
|
|
|
4,632
|
|
||
Non-employee directors' deferred compensation plan
|
|
(364
|
)
|
|
(249
|
)
|
||
Balance end of period
|
|
(1,300
|
)
|
|
(1,103
|
)
|
||
Total shareholders' equity
|
|
$
|
1,986,060
|
|
|
$
|
1,279,736
|
|
|
|
|
|
|
|
September 30, 2016
|
|
December 31, 2015
|
||||||||||||||||||||
|
Significant Other
Observable Inputs (Level 2) |
|
Significant
Unobservable Inputs (Level 3) |
|
Total
|
|
Significant Other
Observable Inputs (Level 2) |
|
Significant
Unobservable Inputs (Level 3) |
|
Total
|
||||||||||||
|
(in thousands)
|
||||||||||||||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Commodity-based derivative contracts
|
$
|
49,021
|
|
|
$
|
24,582
|
|
|
$
|
73,603
|
|
|
$
|
174,657
|
|
|
$
|
91,288
|
|
|
$
|
265,945
|
|
Basis protection derivative contracts
|
424
|
|
|
—
|
|
|
424
|
|
|
101
|
|
|
—
|
|
|
101
|
|
||||||
Total assets
|
49,445
|
|
|
24,582
|
|
|
74,027
|
|
|
174,758
|
|
|
91,288
|
|
|
266,046
|
|
||||||
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Commodity-based derivative contracts
|
30,917
|
|
|
8,650
|
|
|
39,567
|
|
|
738
|
|
|
—
|
|
|
738
|
|
||||||
Basis protection derivative contracts
|
881
|
|
|
—
|
|
|
881
|
|
|
1,552
|
|
|
—
|
|
|
1,552
|
|
||||||
Total liabilities
|
31,798
|
|
|
8,650
|
|
|
40,448
|
|
|
2,290
|
|
|
—
|
|
|
2,290
|
|
||||||
Net asset
|
$
|
17,647
|
|
|
$
|
15,932
|
|
|
$
|
33,579
|
|
|
$
|
172,468
|
|
|
$
|
91,288
|
|
|
$
|
263,756
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
|
|
(in thousands)
|
||||||||||||||
Fair value, net asset beginning of period
|
|
$
|
27,285
|
|
|
$
|
58,256
|
|
|
$
|
91,288
|
|
|
$
|
62,356
|
|
Changes in fair value included in condensed consolidated statement of operations line item:
|
|
|
|
|
|
|
|
|
||||||||
Commodity price risk management gain (loss), net
|
|
4,234
|
|
|
38,085
|
|
|
(16,023
|
)
|
|
42,525
|
|
||||
Sales from natural gas marketing
|
|
—
|
|
|
51
|
|
|
(20
|
)
|
|
51
|
|
||||
Settlements included in statement of operations line items:
|
|
|
|
|
|
|
|
|
||||||||
Commodity price risk management gain (loss), net
|
|
(15,587
|
)
|
|
(12,530
|
)
|
|
(59,243
|
)
|
|
(21,063
|
)
|
||||
Sales from natural gas marketing
|
|
—
|
|
|
—
|
|
|
(70
|
)
|
|
(7
|
)
|
||||
Fair value, net asset end of period
|
|
$
|
15,932
|
|
|
$
|
83,862
|
|
|
$
|
15,932
|
|
|
$
|
83,862
|
|
|
|
|
|
|
|
|
|
|
||||||||
Net change in fair value of unsettled derivatives included in condensed consolidated statement of operations line item:
|
|
|
|
|
|
|
|
|
||||||||
Commodity price risk management gain (loss), net
|
|
$
|
(2,240
|
)
|
|
$
|
34,564
|
|
|
$
|
(8,273
|
)
|
|
$
|
31,794
|
|
|
|
|
|
|
|
|
|
|
Counterparty Name
|
|
Fair Value of
Derivative Assets |
||
|
|
(in thousands)
|
||
Canadian Imperial Bank of Commerce (1)
|
|
$
|
21,343
|
|
JP Morgan Chase Bank, N.A (1)
|
|
17,929
|
|
|
Bank of Nova Scotia (1)
|
|
15,166
|
|
|
Wells Fargo Bank, N.A. (1)
|
|
9,891
|
|
|
NATIXIS (1)
|
|
7,171
|
|
|
Other lenders in our revolving credit facility
|
|
2,491
|
|
|
Various (2)
|
|
36
|
|
|
Total
|
|
$
|
74,027
|
|
|
|
|
|
Amount
|
||
|
(in thousands)
|
||
Note receivable:
|
|
||
Principal outstanding, December 31, 2015
|
$
|
43,069
|
|
Paid-in-kind interest
|
969
|
|
|
Principal outstanding, September 30, 2016
|
44,038
|
|
|
Allowance for uncollectible notes receivable
|
(44,038
|
)
|
|
Note receivable, net
|
$
|
—
|
|
•
|
For crude oil and natural gas sales, we enter into derivative contracts to protect against price declines in future periods. While we structure these derivatives to reduce our exposure to changes in price associated with the derivative commodity, they also limit the benefit we might otherwise have received from price increases in the physical market; and
|
•
|
For natural gas marketing, we enter into fixed-price physical purchase and sale agreements that qualify as derivative contracts. In order to offset the fixed-price physical derivatives in our natural gas marketing, we enter into financial derivative instruments that have the effect of locking in the prices we will receive or pay for the same volumes and period, offsetting the physical derivative.
|
|
|
|
|
|
Fair Value
|
||||||
Derivative instruments:
|
|
Condensed Consolidated Balance sheet line item
|
|
September 30, 2016
|
|
December 31, 2015
|
|||||
|
|
|
|
|
(in thousands)
|
||||||
Derivative assets:
|
Current
|
|
|
|
|
|
|
||||
|
Commodity contracts
|
|
|
|
|
|
|
||||
|
Related to crude oil and natural gas sales
|
|
Fair value of derivatives
|
|
$
|
65,191
|
|
|
$
|
221,161
|
|
|
Related to natural gas marketing
|
|
Fair value of derivatives
|
|
270
|
|
|
441
|
|
||
|
Basis protection contracts
|
|
|
|
|
|
|
||||
|
Related to crude oil and natural gas sales
|
|
Fair value of derivatives
|
|
143
|
|
|
57
|
|
||
|
|
|
|
|
65,604
|
|
|
221,659
|
|
||
|
Non-current
|
|
|
|
|
|
|
||||
|
Commodity contracts
|
|
|
|
|
|
|
||||
|
Related to crude oil and natural gas sales
|
|
Fair value of derivatives
|
|
8,122
|
|
|
44,292
|
|
||
|
Related to natural gas marketing
|
|
Fair value of derivatives
|
|
20
|
|
|
51
|
|
||
|
Basis protection contracts
|
|
|
|
|
|
|
||||
|
Related to crude oil and natural gas sales
|
|
Fair value of derivatives
|
|
281
|
|
|
44
|
|
||
|
|
|
|
|
8,423
|
|
|
44,387
|
|
||
Total derivative assets
|
|
|
|
|
$
|
74,027
|
|
|
$
|
266,046
|
|
|
|
|
|
|
|
|
|
||||
Derivative liabilities:
|
Current
|
|
|
|
|
|
|
||||
|
Commodity contracts
|
|
|
|
|
|
|
||||
|
Related to crude oil and natural gas sales
|
|
Fair value of derivatives
|
|
$
|
21,639
|
|
|
$
|
—
|
|
|
Related to natural gas marketing
|
|
Fair value of derivatives
|
|
221
|
|
|
417
|
|
||
|
Basis protection contracts
|
|
|
|
|
|
|
||||
|
Related to crude oil and natural gas sales
|
|
Fair value of derivatives
|
|
703
|
|
|
1,178
|
|
||
|
|
|
|
|
22,563
|
|
|
1,595
|
|
||
|
Non-current
|
|
|
|
|
|
|
||||
|
Commodity contracts
|
|
|
|
|
|
|
||||
|
Related to crude oil and natural gas sales
|
|
Fair value of derivatives
|
|
17,698
|
|
|
275
|
|
||
|
Related to natural gas marketing
|
|
Fair value of derivatives
|
|
9
|
|
|
46
|
|
||
|
Basis protection contracts
|
|
|
|
|
|
|
||||
|
Related to crude oil and natural gas sales
|
|
Fair value of derivatives
|
|
178
|
|
|
374
|
|
||
|
|
|
|
|
17,885
|
|
|
695
|
|
||
Total derivative liabilities
|
|
|
|
|
$
|
40,448
|
|
|
$
|
2,290
|
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
Condensed consolidated statement of operations line item
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
|
|
(in thousands)
|
||||||||||||||
Commodity price risk management gain (loss), net
|
|
|
|
|
|
|
|
|
||||||||
Net settlements
|
|
$
|
47,728
|
|
|
$
|
67,993
|
|
|
$
|
167,859
|
|
|
$
|
162,454
|
|
Net change in fair value of unsettled derivatives
|
|
(28,331
|
)
|
|
55,556
|
|
|
(230,207
|
)
|
|
(21,284
|
)
|
||||
Total commodity price risk management gain (loss), net
|
|
$
|
19,397
|
|
|
$
|
123,549
|
|
|
$
|
(62,348
|
)
|
|
$
|
141,170
|
|
Sales from natural gas marketing
|
|
|
|
|
|
|
|
|
||||||||
Net settlements
|
|
$
|
122
|
|
|
$
|
165
|
|
|
$
|
420
|
|
|
$
|
561
|
|
Net change in fair value of unsettled derivatives
|
|
255
|
|
|
(5
|
)
|
|
(263
|
)
|
|
(298
|
)
|
||||
Total sales from natural gas marketing
|
|
$
|
377
|
|
|
$
|
160
|
|
|
$
|
157
|
|
|
$
|
263
|
|
Cost of natural gas marketing
|
|
|
|
|
|
|
|
|
||||||||
Net settlements
|
|
$
|
(103
|
)
|
|
$
|
(157
|
)
|
|
$
|
(380
|
)
|
|
$
|
(531
|
)
|
Net change in fair value of unsettled derivatives
|
|
(277
|
)
|
|
(5
|
)
|
|
293
|
|
|
260
|
|
||||
Total cost of natural gas marketing
|
|
$
|
(380
|
)
|
|
$
|
(162
|
)
|
|
$
|
(87
|
)
|
|
$
|
(271
|
)
|
|
|
|
|
|
|
|
|
|
As of September 30, 2016
|
|
Derivative instruments, recorded in condensed consolidated balance sheet, gross
|
|
Effect of master netting agreements
|
|
Derivative instruments, net
|
||||||
|
|
(in thousands)
|
||||||||||
Asset derivatives:
|
|
|
|
|
|
|
||||||
Derivative instruments, at fair value
|
|
$
|
74,027
|
|
|
$
|
(22,520
|
)
|
|
$
|
51,507
|
|
|
|
|
|
|
|
|
||||||
Liability derivatives:
|
|
|
|
|
|
|
||||||
Derivative instruments, at fair value
|
|
$
|
40,448
|
|
|
$
|
(22,520
|
)
|
|
$
|
17,928
|
|
|
|
|
|
|
|
|
As of December 31, 2015
|
|
Derivative instruments, recorded in condensed consolidated balance sheet, gross
|
|
Effect of master netting agreements
|
|
Derivative instruments, net
|
||||||
|
|
(in thousands)
|
||||||||||
Asset derivatives:
|
|
|
|
|
|
|
||||||
Derivative instruments, at fair value
|
|
$
|
266,046
|
|
|
$
|
(1,921
|
)
|
|
$
|
264,125
|
|
|
|
|
|
|
|
|
||||||
Liability derivatives:
|
|
|
|
|
|
|
||||||
Derivative instruments, at fair value
|
|
$
|
2,290
|
|
|
$
|
(1,921
|
)
|
|
$
|
369
|
|
|
|
|
|
|
|
|
|
September 30, 2016
|
|
December 31, 2015
|
||||
|
(in thousands)
|
||||||
Properties and equipment, net:
|
|
|
|
||||
Crude oil and natural gas properties
|
|
|
|
||||
Proved
|
$
|
3,183,772
|
|
|
$
|
2,881,189
|
|
Unproved
|
61,838
|
|
|
60,498
|
|
||
Total crude oil and natural gas properties
|
3,245,610
|
|
|
2,941,687
|
|
||
Equipment and other
|
31,410
|
|
|
30,098
|
|
||
Land and buildings
|
10,900
|
|
|
12,667
|
|
||
Construction in progress
|
107,794
|
|
|
113,115
|
|
||
Properties and equipment, at cost
|
3,395,714
|
|
|
3,097,567
|
|
||
Accumulated DD&A
|
(1,463,440
|
)
|
|
(1,157,015
|
)
|
||
Properties and equipment, net
|
$
|
1,932,274
|
|
|
$
|
1,940,552
|
|
|
|
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
|
(in thousands)
|
||||||||||||||
|
|
|
|
|
|
|
|
||||||||
Impairment of proved and unproved properties
|
$
|
338
|
|
|
$
|
150,840
|
|
|
$
|
2,391
|
|
|
$
|
152,764
|
|
Amortization of individually insignificant unproved properties
|
595
|
|
|
3,191
|
|
|
681
|
|
|
8,443
|
|
||||
Impairment of crude oil and natural gas properties
|
933
|
|
|
154,031
|
|
|
3,072
|
|
|
161,207
|
|
||||
Land and buildings
|
—
|
|
|
—
|
|
|
3,032
|
|
|
—
|
|
||||
Impairment of properties and equipment
|
$
|
933
|
|
|
$
|
154,031
|
|
|
$
|
6,104
|
|
|
$
|
161,207
|
|
|
September 30, 2016
|
|
December 31, 2015
|
||||
|
(in thousands)
|
||||||
Senior notes:
|
|
|
|
||||
1.125% Convertible senior notes due 2021:
|
|
|
|
||||
Principal amount
|
$
|
200,000
|
|
|
$
|
—
|
|
Unamortized discount
|
(39,199
|
)
|
|
—
|
|
||
Unamortized debt issuance costs
|
(4,793
|
)
|
|
—
|
|
||
1.125% Convertible senior notes due 2021, net of unamortized discount and debt issuance costs
|
156,008
|
|
|
—
|
|
||
|
|
|
|
||||
6.125% Senior notes due 2024:
|
|
|
|
||||
Principal amount
|
400,000
|
|
|
—
|
|
||
Unamortized debt issuance costs
|
(7,710
|
)
|
|
—
|
|
||
6.125% Senior notes due 2024, net of unamortized debt issuance costs
|
392,290
|
|
|
—
|
|
||
|
|
|
|
||||
7.75% Senior notes due 2022:
|
|
|
|
||||
Principal amount
|
500,000
|
|
|
500,000
|
|
||
Unamortized debt issuance costs
|
(6,723
|
)
|
|
(7,563
|
)
|
||
7.75% Senior notes due 2022, net of unamortized debt issuance costs
|
493,277
|
|
|
492,437
|
|
||
|
|
|
|
||||
3.25% Convertible senior notes due 2016:
|
|
|
|
||||
Principal amount
|
—
|
|
|
115,000
|
|
||
Unamortized discount
|
—
|
|
|
(1,852
|
)
|
||
Unamortized debt issuance costs
|
—
|
|
|
(208
|
)
|
||
3.25% Convertible senior notes due 2016, net of unamortized discount and debt issuance costs
|
—
|
|
|
112,940
|
|
||
Total senior notes
|
1,041,575
|
|
|
605,377
|
|
||
|
|
|
|
||||
Revolving credit facility
|
—
|
|
|
37,000
|
|
||
Total debt, net of unamortized discount and debt issuance costs
|
1,041,575
|
|
|
642,377
|
|
||
Less current portion of long-term debt
|
—
|
|
|
112,940
|
|
||
Long-term debt
|
$
|
1,041,575
|
|
|
$
|
529,437
|
|
|
|
Amount
|
||
|
|
(in thousands)
|
||
Vehicles
|
|
$
|
2,801
|
|
Accumulated depreciation
|
|
(613
|
)
|
|
|
|
$
|
2,188
|
|
For the Twelve Months Ending September 30,
|
|
Amount
|
||
|
|
(in thousands)
|
||
2017
|
|
$
|
860
|
|
2018
|
|
1,167
|
|
|
2019
|
|
553
|
|
|
|
|
2,580
|
|
|
Less executory cost
|
|
(101
|
)
|
|
Less amount representing interest
|
|
(280
|
)
|
|
Present value of minimum lease payments
|
|
$
|
2,199
|
|
|
|
|
|
|
Short-term capital lease obligations
|
|
$
|
646
|
|
Long-term capital lease obligations
|
|
1,553
|
|
|
|
|
$
|
2,199
|
|
|
Amount
|
||
|
(in thousands)
|
||
|
|
||
Balance at beginning of period, January 1, 2016
|
$
|
89,492
|
|
Obligations incurred with development activities
|
1,137
|
|
|
Accretion expense
|
5,400
|
|
|
Obligations discharged with disposal of properties and asset retirements
|
(6,620
|
)
|
|
Balance end of period, September 30, 2016
|
89,409
|
|
|
Less current portion
|
(6,900
|
)
|
|
Long-term portion
|
$
|
82,509
|
|
|
|
|
|
For the Twelve Months Ending September 30,
|
|
|
|
|
||||||||||||||||||||
Area
|
|
2017
|
|
2018
|
|
2019
|
|
2020
|
|
2021 and
Through Expiration |
|
Total
|
|
Expiration
Date |
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Natural gas (MMcf)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Gas Marketing segment
|
|
7,117
|
|
|
7,117
|
|
|
7,117
|
|
|
7,136
|
|
|
13,344
|
|
|
41,831
|
|
|
August 31, 2022
|
||||||
Utica Shale
|
|
2,738
|
|
|
2,738
|
|
|
2,738
|
|
|
2,745
|
|
|
7,754
|
|
|
18,713
|
|
|
July 22, 2023
|
||||||
Total
|
|
9,855
|
|
|
9,855
|
|
|
9,855
|
|
|
9,881
|
|
|
21,098
|
|
|
60,544
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Crude oil (MBbls)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Wattenberg Field
|
|
2,413
|
|
|
2,413
|
|
|
2,413
|
|
|
1,813
|
|
|
—
|
|
|
9,052
|
|
|
June 30, 2020
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Dollar commitment (in thousands)
|
|
$
|
17,470
|
|
|
$
|
16,324
|
|
|
$
|
16,324
|
|
|
$
|
13,205
|
|
|
$
|
8,102
|
|
|
$
|
71,425
|
|
|
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
|
|
(in thousands)
|
||||||||||||||
|
|
|
|
|
|
|
|
|
||||||||
Stock-based compensation expense
|
|
$
|
4,079
|
|
|
$
|
4,813
|
|
|
$
|
15,205
|
|
|
$
|
14,278
|
|
Income tax benefit
|
|
(1,552
|
)
|
|
(1,828
|
)
|
|
(5,786
|
)
|
|
(5,423
|
)
|
||||
Net stock-based compensation expense
|
|
$
|
2,527
|
|
|
$
|
2,985
|
|
|
$
|
9,419
|
|
|
$
|
8,855
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended September 30,
|
||||||
|
2016
|
|
2015
|
||||
|
|
|
|
||||
Expected term of award
|
6.0 years
|
|
|
5.2 years
|
|
||
Risk-free interest rate
|
1.8
|
%
|
|
1.4
|
%
|
||
Expected volatility
|
54.5
|
%
|
|
58.0
|
%
|
||
Weighted-average grant date fair value per share
|
$
|
26.96
|
|
|
$
|
22.23
|
|
|
Nine Months Ended September 30,
|
||||||||||||||||||||||||
|
2016
|
|
2015
|
||||||||||||||||||||||
|
Number of
SARs |
|
Weighted-Average
Exercise Price |
|
Average Remaining Contractual
Term (in years) |
|
Aggregate Intrinsic
Value (in thousands) |
|
Number of
SARs |
|
Weighted-Average
Exercise Price |
|
Average Remaining Contractual
Term (in years) |
|
Aggregate Intrinsic
Value (in thousands) |
||||||||||
Outstanding beginning of year, January 1,
|
326,453
|
|
|
$
|
38.99
|
|
|
|
|
|
|
279,011
|
|
|
$
|
38.77
|
|
|
|
|
|
||||
Awarded
|
58,709
|
|
|
51.63
|
|
|
|
|
|
|
68,274
|
|
|
39.63
|
|
|
|
|
|
||||||
Exercised
|
(141,084
|
)
|
|
40.16
|
|
|
|
|
$
|
2,770
|
|
|
—
|
|
|
—
|
|
|
|
|
|
||||
Outstanding at September 30,
|
244,078
|
|
|
41.36
|
|
|
7.1
|
|
6,273
|
|
|
347,285
|
|
|
38.94
|
|
|
7.5
|
|
$
|
4,888
|
|
|||
Vested and expected to vest at September 30,
|
238,671
|
|
|
41.20
|
|
|
7.1
|
|
6,171
|
|
|
341,423
|
|
|
38.89
|
|
|
7.5
|
|
4,821
|
|
||||
Exercisable at September 30,
|
136,644
|
|
|
36.74
|
|
|
5.9
|
|
4,143
|
|
|
191,149
|
|
|
35.68
|
|
|
6.6
|
|
3,312
|
|
|
Shares
|
|
Weighted-Average
Grant Date Fair Value |
|||
|
|
|
|
|||
Non-vested at December 31, 2015
|
525,081
|
|
|
$
|
50.23
|
|
Granted
|
269,709
|
|
|
57.12
|
|
|
Vested
|
(256,976
|
)
|
|
48.60
|
|
|
Forfeited
|
(14,716
|
)
|
|
55.70
|
|
|
Non-vested at September 30, 2016
|
523,098
|
|
|
54.43
|
|
|
|
|
|
|
|
As of/for the Nine Months Ended September 30,
|
||||||
|
2016
|
|
2015
|
||||
|
(in thousands, except per share data)
|
||||||
|
|
|
|
||||
Total intrinsic value of time-based awards vested
|
$
|
14,675
|
|
|
$
|
13,061
|
|
Total intrinsic value of time-based awards non-vested
|
35,079
|
|
|
30,959
|
|
||
Market price per common share as of September 30,
|
67.06
|
|
|
53.01
|
|
||
Weighted-average grant date fair value per share
|
57.12
|
|
|
48.58
|
|
|
Nine Months Ended September 30,
|
||||||
|
2016
|
|
2015
|
||||
|
|
|
|
||||
Expected term of award
|
3 years
|
|
|
3 years
|
|
||
Risk-free interest rate
|
1.2
|
%
|
|
0.9
|
%
|
||
Expected volatility
|
52.3
|
%
|
|
53.0
|
%
|
||
Weighted-average grant date fair value per share
|
$
|
72.54
|
|
|
$
|
66.16
|
|
|
|
Shares
|
|
Weighted-Average
Grant Date Fair Value per Share |
|||
|
|
|
|
|
|||
Non-vested at December 31, 2015
|
|
71,549
|
|
|
$
|
63.60
|
|
Granted
|
|
24,280
|
|
|
72.54
|
|
|
Vested (1)
|
|
(11,283
|
)
|
|
98.50
|
|
|
Non-vested at September 30, 2016
|
|
84,546
|
|
|
61.51
|
|
|
|
|
|
|
|
|
As of/for the Nine Months Ended September 30,
|
||||||
|
2016
|
|
2015
|
||||
|
(in thousands, except per share data)
|
||||||
|
|
|
|
||||
Total intrinsic value of market-based awards vested
|
$
|
1,174
|
|
|
$
|
—
|
|
Total intrinsic value of market-based awards non-vested
|
5,670
|
|
|
5,996
|
|
||
Market price per common share as of September 30,
|
67.06
|
|
|
53.01
|
|
||
Weighted-average grant date fair value per share
|
72.54
|
|
|
66.16
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||
|
(in thousands)
|
||||||||||
|
|
|
|
|
|
|
|
||||
Weighted-average common shares outstanding - basic
|
48,839
|
|
|
40,085
|
|
|
45,741
|
|
|
38,837
|
|
Weighted-average common shares and equivalents outstanding - diluted
|
48,839
|
|
|
40,085
|
|
|
45,741
|
|
|
38,837
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||
|
(in thousands)
|
||||||||||
|
|
|
|
|
|
|
|
||||
Weighted-average common share equivalents excluded from diluted earnings
|
|
|
|
|
|
|
|
||||
per share due to their anti-dilutive effect:
|
|
|
|
|
|
|
|
||||
Restricted stock
|
660
|
|
|
816
|
|
|
705
|
|
|
836
|
|
Convertible notes
|
—
|
|
|
468
|
|
|
345
|
|
|
505
|
|
Other equity-based awards
|
97
|
|
|
95
|
|
|
103
|
|
|
97
|
|
Total anti-dilutive common share equivalents
|
757
|
|
|
1,379
|
|
|
1,153
|
|
|
1,438
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
|
(in thousands)
|
||||||||||||||
Segment revenues:
|
|
|
|
|
|
|
|
||||||||
Oil and gas exploration and production
|
$
|
161,212
|
|
|
$
|
228,520
|
|
|
$
|
268,090
|
|
|
$
|
418,356
|
|
Gas marketing
|
2,678
|
|
|
2,580
|
|
|
6,728
|
|
|
8,336
|
|
||||
Total revenues
|
$
|
163,890
|
|
|
$
|
231,100
|
|
|
$
|
274,818
|
|
|
$
|
426,692
|
|
|
|
|
|
|
|
|
|
||||||||
Segment income (loss) before income taxes:
|
|
|
|
|
|
|
|
||||||||
Oil and gas exploration and production
|
$
|
17,809
|
|
|
$
|
(30,296
|
)
|
|
$
|
(134,731
|
)
|
|
$
|
(14,134
|
)
|
Gas marketing
|
(414
|
)
|
|
(201
|
)
|
|
(1,067
|
)
|
|
(539
|
)
|
||||
Unallocated
|
(52,736
|
)
|
|
(32,164
|
)
|
|
(166,689
|
)
|
|
(97,189
|
)
|
||||
Loss before income taxes
|
$
|
(35,341
|
)
|
|
$
|
(62,661
|
)
|
|
$
|
(302,487
|
)
|
|
$
|
(111,862
|
)
|
|
|
|
|
|
|
|
|
|
September 30, 2016
|
|
December 31, 2015
|
||||
|
(in thousands)
|
||||||
Segment assets:
|
|
|
|
||||
Oil and gas exploration and production
|
$
|
3,390,005
|
|
|
$
|
2,294,288
|
|
Gas marketing
|
3,735
|
|
|
4,217
|
|
||
Unallocated
|
23,540
|
|
|
72,038
|
|
||
Total assets
|
$
|
3,417,280
|
|
|
$
|
2,370,543
|
|
|
|
|
|
•
|
Negative net change in the fair value of unsettled derivative positions during the three months ended
September 30, 2016
was
$28.3 million
compared to a positive net change in the fair value of unsettled derivative positions of
$55.5 million
during the same prior year period. The decrease in fair value of unsettled derivative positions was primarily attributable to a less significant upward shift in the crude oil and natural gas forward curves, offset by the impact of the beginning of period fair value of derivative instruments settled in the respective periods, during the current quarter as compared to the three months ended
September 30, 2015
;
|
•
|
Impairment of properties and equipment decreased to
$0.9 million
for the three months ended
September 30, 2016
compared to
$154 million
in the same prior year period, primarily related to the $150.3 million write-down of our Utica Shale producing and non-producing crude oil and natural gas properties to their estimated fair value in the three months ended September 30, 2015;
|
•
|
General and administrative expense increased to
$32.5 million
for the three months ended
September 30, 2016
compared to
$20.3 million
in the same prior year period, primarily due to $11.3 million of fees and expenses related to the pending Delaware Basin Acquisition;
|
•
|
Depreciation, depletion and amortization expense increased to
$112.9 million
during the three months ended
September 30, 2016
compared to
$80.9 million
in the same prior year period, primarily due to increased production; and
|
•
|
Interest expense increased to
$20.2 million
for the three months ended
September 30, 2016
compared to
$12.1 million
in the same prior year period, primarily attributable to a $9 million charge for the bridge loan commitment related to the Delaware Basin Acquisition.
|
•
|
Negative net change in the fair value of unsettled derivative positions during the
nine
months ended
September 30, 2016
was
$230.2 million
compared to a negative net change in the fair value of unsettled derivative positions of
$21.3 million
during the same prior year period. The decrease in fair value of unsettled derivative positions was primarily attributable to an upward shift in the crude oil and natural gas forward curves that occurred during 2016;
|
•
|
Impairment of properties and equipment decreased to
$6.1 million
for the nine months ended
September 30, 2016
compared to
$161.2 million
in the same prior year period, primarily related to the $150.3 million write-down of our Utica Shale producing and non-producing crude oil and natural gas properties to their estimated fair value in the three months ended September 30, 2015;
|
•
|
General and administrative expense increased to
$78.9 million
for the
nine
months ended
September 30, 2016
compared to
$62.1 million
in the same prior year period, primarily due to $11.3 million of fees and expenses related to the Delaware Basin Acquisition;
|
•
|
Depreciation, depletion and amortization expense increased to
$317.3 million
during the
nine
months ended
September 30, 2016
compared to
$206.9 million
in the same prior year period, primarily due to increased production and, to a lesser extent, a higher weighted-average depreciation, depletion and amortization rate;
|
•
|
During the first quarter of 2016, we determined that collection of a third-party note receivable arising from the sale of our interest in properties in the Marcellus Shale was not reasonably assured based then current market conditions and new information made available to us. As a result, we recognized a provision and recorded an allowance for uncollectible notes receivable for the $44 million outstanding balance as of March 31, 2016. As of
September 30, 2016
, there has been no change to our assessment of the collectibility of the note. See Note 3,
Fair Value of Financial Instruments - Notes Receivable
, to our condensed consolidated financial statements included elsewhere in this report for additional information; and
|
•
|
Interest expense increased to
$42.8 million
for the
nine
months ended
September 30, 2016
compared to
$35.4 million
in the same prior year period, primarily attributable to a $9 million charge for the bridge loan commitment related to the Delaware Basin Acquisition.
|
As of September 30, 2016
|
|
Amount
|
||
|
|
(in millions)
|
||
Cash and cash equivalents
|
|
$
|
1,197.7
|
|
Available for borrowing under our credit facility
|
|
438.3
|
|
|
Available liquidity
|
|
1,636.0
|
|
|
Increase in aggregate commitments under our revolving credit facility
|
|
250.0
|
|
|
Cash due upon closing of the Delaware Basin Acquisition (1)
|
|
(840.0
|
)
|
|
Adjusted liquidity
|
|
$
|
1,046.0
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||||||||
|
2016
|
|
2015
|
|
Percentage Change
|
|
2016
|
|
2015
|
|
Percentage Change
|
||||||||||
|
(dollars in millions, except per unit data)
|
||||||||||||||||||||
Production (1)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Crude oil (MBbls)
|
2,339.8
|
|
|
2,007.8
|
|
|
16.5
|
%
|
|
6,240.2
|
|
|
4,895.9
|
|
|
27.5
|
%
|
||||
Natural gas (MMcf)
|
13,417.4
|
|
|
9,148.9
|
|
|
46.7
|
%
|
|
36,768.2
|
|
|
22,997.0
|
|
|
59.9
|
%
|
||||
NGLs (MBbls)
|
1,428.1
|
|
|
793.0
|
|
|
80.1
|
%
|
|
3,402.8
|
|
|
1,858.5
|
|
|
83.1
|
%
|
||||
Crude oil equivalent (MBoe) (2)
|
6,004.2
|
|
|
4,325.6
|
|
|
38.8
|
%
|
|
15,771.0
|
|
|
10,587.3
|
|
|
49.0
|
%
|
||||
Average MBoe per day
|
65.3
|
|
|
47.0
|
|
|
38.8
|
%
|
|
57.6
|
|
|
38.8
|
|
|
49.0
|
%
|
||||
Crude Oil, Natural Gas and NGLs Sales
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Crude oil
|
$
|
98.5
|
|
|
$
|
78.3
|
|
|
25.8
|
%
|
|
$
|
233.0
|
|
|
$
|
206.7
|
|
|
12.7
|
%
|
Natural gas
|
27.4
|
|
|
18.8
|
|
|
45.7
|
%
|
|
59.6
|
|
|
49.4
|
|
|
20.6
|
%
|
||||
NGLs
|
15.9
|
|
|
7.4
|
|
|
114.9
|
%
|
|
35.4
|
|
|
19.4
|
|
|
82.5
|
%
|
||||
Total crude oil, natural gas and NGLs sales
|
$
|
141.8
|
|
|
$
|
104.5
|
|
|
35.7
|
%
|
|
$
|
328.0
|
|
|
$
|
275.5
|
|
|
19.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net Settlements on Derivatives (3)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Crude oil
|
$
|
39.5
|
|
|
$
|
60.7
|
|
|
(34.9
|
)%
|
|
$
|
131.6
|
|
|
$
|
142.4
|
|
|
(7.6
|
)%
|
Natural gas
|
8.2
|
|
|
7.3
|
|
|
12.3
|
%
|
|
36.3
|
|
|
20.1
|
|
|
80.6
|
%
|
||||
Total net settlements on derivatives
|
$
|
47.7
|
|
|
$
|
68.0
|
|
|
(29.9
|
)%
|
|
$
|
167.9
|
|
|
$
|
162.5
|
|
|
3.3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Average Sales Price (excluding net settlements on derivatives)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Crude oil (per Bbl)
|
$
|
42.11
|
|
|
$
|
38.98
|
|
|
8.0
|
%
|
|
$
|
37.33
|
|
|
$
|
42.22
|
|
|
(11.6
|
)%
|
Natural gas (per Mcf)
|
2.04
|
|
|
2.05
|
|
|
(0.5
|
)%
|
|
1.62
|
|
|
2.15
|
|
|
(24.7
|
)%
|
||||
NGLs (per Bbl)
|
11.12
|
|
|
9.40
|
|
|
18.3
|
%
|
|
10.41
|
|
|
10.45
|
|
|
(0.4
|
)%
|
||||
Crude oil equivalent (per Boe)
|
23.62
|
|
|
24.15
|
|
|
(2.2
|
)%
|
|
20.80
|
|
|
26.02
|
|
|
(20.1
|
)%
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Average Lease Operating Expenses (per Boe) (4)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Wattenberg Field
|
$
|
2.39
|
|
|
$
|
3.31
|
|
|
(27.8
|
)%
|
|
$
|
2.77
|
|
|
$
|
4.24
|
|
|
(34.7
|
)%
|
Utica Shale
|
1.27
|
|
|
1.74
|
|
|
(27.0
|
)%
|
|
1.87
|
|
|
1.77
|
|
|
5.6
|
%
|
||||
Weighted-average
|
2.33
|
|
|
3.20
|
|
|
(27.2
|
)%
|
|
2.73
|
|
|
4.04
|
|
|
(32.4
|
)%
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Natural Gas Marketing Contribution Margin (5)
|
$
|
(0.4
|
)
|
|
$
|
(0.2
|
)
|
|
100.0
|
%
|
|
$
|
(1.1
|
)
|
|
$
|
(0.6
|
)
|
|
(83.3
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Other Costs and Expenses
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Production taxes
|
$
|
9.6
|
|
|
$
|
5.5
|
|
|
74.7
|
%
|
|
$
|
19.7
|
|
|
$
|
13.2
|
|
|
49.0
|
%
|
Transportation, gathering and processing expenses
|
5.0
|
|
|
3.9
|
|
|
28.2
|
%
|
|
13.6
|
|
|
6.6
|
|
|
105.9
|
%
|
||||
Impairment of properties and equipment
|
0.9
|
|
|
154.0
|
|
|
(99.4
|
)%
|
|
6.1
|
|
|
161.2
|
|
|
(96.2
|
)%
|
||||
General and administrative expense
|
32.5
|
|
|
20.3
|
|
|
60.3
|
%
|
|
78.9
|
|
|
62.1
|
|
|
27.1
|
%
|
||||
Depreciation, depletion and amortization
|
112.9
|
|
|
80.9
|
|
|
39.5
|
%
|
|
317.3
|
|
|
206.9
|
|
|
53.4
|
%
|
||||
Provision for uncollectible notes receivable
|
(0.7
|
)
|
|
—
|
|
|
*
|
|
|
44.0
|
|
|
—
|
|
|
*
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest expense
|
$
|
20.2
|
|
|
$
|
12.1
|
|
|
67.0
|
%
|
|
$
|
42.8
|
|
|
$
|
35.4
|
|
|
20.8
|
%
|
*
|
Percentage change is not meaningful or equal to or greater than 300%.
|
(1)
|
Production is net and determined by multiplying the gross production volume of properties in which we have an interest by our ownership percentage.
|
(2)
|
One Bbl of crude oil or NGL equals six Mcf of natural gas.
|
(3)
|
Represents net settlements on derivatives related to crude oil and natural gas sales, which do not include net settlements on derivatives related to natural gas marketing.
|
(4)
|
Represents lease operating expenses, exclusive of production taxes, on a per unit basis.
|
(5)
|
Represents sales from natural gas marketing, net of costs of natural gas marketing, including net settlements and net change in fair value of unsettled derivatives related to natural gas marketing activities.
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||||
Production by Operating Region
|
|
2016
|
|
2015
|
|
Percentage Change
|
|
2016
|
|
2015
|
|
Percentage Change
|
||||||
Crude oil (MBbls)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Wattenberg Field
|
|
2,216.3
|
|
|
1,868.6
|
|
|
18.6
|
%
|
|
5,928.5
|
|
|
4,509.5
|
|
|
31.5
|
%
|
Utica Shale
|
|
123.5
|
|
|
139.2
|
|
|
(11.3
|
)%
|
|
311.7
|
|
|
386.4
|
|
|
(19.3
|
)%
|
Total
|
|
2,339.8
|
|
|
2,007.8
|
|
|
16.5
|
%
|
|
6,240.2
|
|
|
4,895.9
|
|
|
27.5
|
%
|
Natural gas (MMcf)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Wattenberg Field
|
|
12,700.0
|
|
|
8,478.3
|
|
|
49.8
|
%
|
|
34,968.2
|
|
|
21,040.7
|
|
|
66.2
|
%
|
Utica Shale
|
|
717.4
|
|
|
670.6
|
|
|
7.0
|
%
|
|
1,800.0
|
|
|
1,956.3
|
|
|
(8.0
|
)%
|
Total
|
|
13,417.4
|
|
|
9,148.9
|
|
|
46.7
|
%
|
|
36,768.2
|
|
|
22,997.0
|
|
|
59.9
|
%
|
NGLs (MBbls)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Wattenberg Field
|
|
1,353.0
|
|
|
730.6
|
|
|
85.2
|
%
|
|
3,240.4
|
|
|
1,692.5
|
|
|
91.5
|
%
|
Utica Shale
|
|
75.1
|
|
|
62.4
|
|
|
20.4
|
%
|
|
162.4
|
|
|
166.0
|
|
|
(2.2
|
)%
|
Total
|
|
1,428.1
|
|
|
793.0
|
|
|
80.1
|
%
|
|
3,402.8
|
|
|
1,858.5
|
|
|
83.1
|
%
|
Crude oil equivalent (MBoe)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Wattenberg Field
|
|
5,686.0
|
|
|
4,012.3
|
|
|
41.7
|
%
|
|
14,996.9
|
|
|
9,708.8
|
|
|
54.5
|
%
|
Utica Shale
|
|
318.2
|
|
|
313.3
|
|
|
1.6
|
%
|
|
774.1
|
|
|
878.5
|
|
|
(11.9
|
)%
|
Total
|
|
6,004.2
|
|
|
4,325.6
|
|
|
38.8
|
%
|
|
15,771.0
|
|
|
10,587.3
|
|
|
49.0
|
%
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||||||||
Average Sales Price by Operating Region
|
|
|
|
|
|
Percentage Change
|
|
|
|
|
|
Percentage Change
|
||||||||||
(excluding net settlements on derivatives)
|
|
2016
|
|
2015
|
|
|
2016
|
|
2015
|
|
||||||||||||
Crude oil (per Bbl)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Wattenberg Field
|
|
$
|
42.29
|
|
|
$
|
38.90
|
|
|
8.7
|
%
|
|
$
|
37.42
|
|
|
$
|
42.13
|
|
|
(11.2
|
)%
|
Utica Shale
|
|
38.93
|
|
|
40.02
|
|
|
(2.7
|
)%
|
|
35.61
|
|
|
43.28
|
|
|
(17.7
|
)%
|
||||
Weighted-average price
|
|
42.11
|
|
|
38.98
|
|
|
8.0
|
%
|
|
37.33
|
|
|
42.22
|
|
|
(11.6
|
)%
|
||||
Natural gas (per Mcf)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Wattenberg Field
|
|
$
|
2.08
|
|
|
$
|
2.11
|
|
|
(1.4
|
)%
|
|
$
|
1.63
|
|
|
$
|
2.17
|
|
|
(24.9
|
)%
|
Utica Shale
|
|
1.33
|
|
|
1.36
|
|
|
(2.2
|
)%
|
|
1.44
|
|
|
1.92
|
|
|
(25.0
|
)%
|
||||
Weighted-average price
|
|
2.04
|
|
|
2.05
|
|
|
(0.5
|
)%
|
|
1.62
|
|
|
2.15
|
|
|
(24.7
|
)%
|
||||
NGLs (per Bbl)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Wattenberg Field
|
|
$
|
11.07
|
|
|
$
|
9.62
|
|
|
15.1
|
%
|
|
$
|
10.32
|
|
|
$
|
10.36
|
|
|
(0.4
|
)%
|
Utica Shale
|
|
12.14
|
|
|
6.80
|
|
|
78.5
|
%
|
|
12.22
|
|
|
11.40
|
|
|
7.2
|
%
|
||||
Weighted-average price
|
|
11.12
|
|
|
9.40
|
|
|
18.3
|
%
|
|
10.41
|
|
|
10.45
|
|
|
(0.4
|
)%
|
||||
Crude oil equivalent (per Boe)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Wattenberg Field
|
|
$
|
23.77
|
|
|
$
|
24.32
|
|
|
(2.3
|
)%
|
|
$
|
20.83
|
|
|
$
|
26.07
|
|
|
(20.1
|
)%
|
Utica Shale
|
|
20.98
|
|
|
22.04
|
|
|
(4.8
|
)%
|
|
20.26
|
|
|
25.47
|
|
|
(20.5
|
)%
|
||||
Weighted-average price
|
|
23.62
|
|
|
24.15
|
|
|
(2.2
|
)%
|
|
20.80
|
|
|
26.02
|
|
|
(20.1
|
)%
|
|
September 30, 2016
|
||||||
|
Three Months Ended
|
|
Nine Months Ended
|
||||
|
(in millions)
|
||||||
Increase in production
|
$
|
27.7
|
|
|
$
|
102.5
|
|
Increase (decrease) in average crude oil price
|
7.3
|
|
|
(30.5
|
)
|
||
Decrease in average natural gas price
|
(0.1
|
)
|
|
(19.4
|
)
|
||
Increase (decrease) in average NGLs price
|
2.4
|
|
|
(0.1
|
)
|
||
Total increase in crude oil, natural gas and NGLs sales revenue
|
$
|
37.3
|
|
|
$
|
52.5
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
|
(in millions)
|
||||||||||||||
Commodity price risk management gain (loss), net:
|
|
|
|
|
|
|
|
||||||||
Net settlements:
|
|
|
|
|
|
|
|
||||||||
Crude oil
|
$
|
39.5
|
|
|
$
|
60.7
|
|
|
$
|
131.6
|
|
|
$
|
142.4
|
|
Natural gas
|
8.2
|
|
|
7.3
|
|
|
36.3
|
|
|
20.1
|
|
||||
Total net settlements
|
47.7
|
|
|
68.0
|
|
|
167.9
|
|
|
162.5
|
|
||||
Change in fair value of unsettled derivatives:
|
|
|
|
|
|
|
|
||||||||
Reclassification of settlements included in prior period changes in fair value of derivatives
|
(40.6
|
)
|
|
(48.1
|
)
|
|
(169.5
|
)
|
|
(140.2
|
)
|
||||
Crude oil fixed price swaps
|
3.3
|
|
|
50.4
|
|
|
(33.8
|
)
|
|
51.4
|
|
||||
Crude oil collars
|
1.5
|
|
|
28.5
|
|
|
(14.5
|
)
|
|
28.6
|
|
||||
Natural gas fixed price swaps
|
5.4
|
|
|
19.5
|
|
|
(10.7
|
)
|
|
31.0
|
|
||||
Natural gas basis swaps
|
1.4
|
|
|
(1.0
|
)
|
|
0.7
|
|
|
(2.4
|
)
|
||||
Natural gas collars
|
0.7
|
|
|
6.2
|
|
|
(2.4
|
)
|
|
10.3
|
|
||||
Net change in fair value of unsettled derivatives
|
(28.3
|
)
|
|
55.5
|
|
|
(230.2
|
)
|
|
(21.3
|
)
|
||||
Total commodity price risk management gain (loss), net
|
$
|
19.4
|
|
|
$
|
123.5
|
|
|
$
|
(62.3
|
)
|
|
$
|
141.2
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
|
(in millions)
|
||||||||||||||
|
|
|
|
|
|
|
|
||||||||
Impairment of proved and unproved properties
|
$
|
0.3
|
|
|
$
|
150.8
|
|
|
$
|
2.4
|
|
|
$
|
152.8
|
|
Amortization of individually insignificant unproved properties
|
0.6
|
|
|
3.2
|
|
|
0.7
|
|
|
8.4
|
|
||||
Impairment of crude oil and natural gas properties
|
0.9
|
|
|
154.0
|
|
|
3.1
|
|
|
161.2
|
|
||||
Land and buildings
|
—
|
|
|
—
|
|
|
3.0
|
|
|
—
|
|
||||
Impairment of properties and equipment
|
$
|
0.9
|
|
|
$
|
154.0
|
|
|
$
|
6.1
|
|
|
$
|
161.2
|
|
|
|
September 30, 2016
|
||||||
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||
|
|
(in millions)
|
||||||
Increase in production
|
|
$
|
32.0
|
|
|
$
|
104.1
|
|
Increase in weighted-average depreciation, depletion and amortization rates
|
|
0.3
|
|
|
6.8
|
|
||
Total increase in DD&A expense related to crude oil and natural gas properties
|
|
$
|
32.3
|
|
|
$
|
110.9
|
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
Operating Region/Area
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
|
|
(per Boe)
|
||||||||||||||
Wattenberg Field
|
|
$
|
19.17
|
|
|
$
|
19.10
|
|
|
$
|
20.42
|
|
|
$
|
19.92
|
|
Utica Shale
|
|
9.59
|
|
|
10.08
|
|
|
10.52
|
|
|
11.49
|
|
||||
Total weighted-average
|
|
18.66
|
|
|
18.44
|
|
|
19.94
|
|
|
19.22
|
|
|
|
Net Drilling Activity
|
||||||||||||||||||||||||||||
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||||||||||||||||
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||||||||||||||||
Operating Region/Area
|
|
Productive
|
|
In-Process
|
|
Dry (1)
|
|
Productive
|
|
In-Process
|
|
Dry (1)
|
|
Productive
|
|
In-Process
|
|
Dry (1)
|
|
Productive
|
|
In-Process
|
|
Dry (1)
|
||||||
Development Wells
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Wattenberg Field, operated wells
|
|
34.7
|
|
40.1
|
|
—
|
|
26.5
|
|
52.8
|
|
1.1
|
|
87.4
|
|
|
40.1
|
|
|
0.4
|
|
75.0
|
|
|
52.8
|
|
|
2.1
|
|
|
Wattenberg Field, non-operated wells
|
|
1.8
|
|
2.2
|
|
—
|
|
1.2
|
|
4.9
|
|
—
|
|
5.0
|
|
|
2.2
|
|
|
—
|
|
5.4
|
|
|
4.9
|
|
|
—
|
|
|
Utica Shale
|
|
—
|
|
1.7
|
|
—
|
|
—
|
|
—
|
|
—
|
|
2.8
|
|
|
1.7
|
|
|
—
|
|
3.0
|
|
|
—
|
|
|
—
|
|
|
Total drilling activity
|
|
36.5
|
|
44.0
|
|
—
|
|
27.7
|
|
57.7
|
|
1.1
|
|
95.2
|
|
|
44.0
|
|
|
0.4
|
|
|
83.4
|
|
|
57.7
|
|
|
2.1
|
|
•
|
operating performance and return on capital as compared to our peers;
|
•
|
financial performance of our assets and our valuation without regard to financing methods, capital structure or historical cost basis;
|
•
|
our ability to generate sufficient cash to service our debt obligations; and
|
•
|
the viability of acquisition opportunities and capital expenditure projects, including the related rate of return.
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
|
(in millions)
|
||||||||||||||
Adjusted cash flows from operations:
|
|
|
|
|
|
|
|
||||||||
Adjusted cash flows from operations
|
$
|
122.6
|
|
|
$
|
122.7
|
|
|
$
|
326.2
|
|
|
$
|
293.6
|
|
Changes in assets and liabilities
|
40.4
|
|
|
13.8
|
|
|
34.6
|
|
|
(10.6
|
)
|
||||
Net cash from operating activities
|
$
|
163.0
|
|
|
$
|
136.5
|
|
|
$
|
360.8
|
|
|
$
|
283.0
|
|
|
|
|
|
|
|
|
|
||||||||
Adjusted net loss:
|
|
|
|
|
|
|
|
||||||||
Adjusted net loss
|
$
|
(5.8
|
)
|
|
$
|
(75.9
|
)
|
|
$
|
(47.7
|
)
|
|
$
|
(58.1
|
)
|
Gain (loss) on commodity derivative instruments
|
19.4
|
|
|
123.5
|
|
|
(62.3
|
)
|
|
141.2
|
|
||||
Net settlements on commodity derivative instruments
|
(47.7
|
)
|
|
(68.0
|
)
|
|
(167.9
|
)
|
|
(162.5
|
)
|
||||
Tax effect of above adjustments
|
10.8
|
|
|
(21.1
|
)
|
|
87.6
|
|
|
8.1
|
|
||||
Net loss
|
$
|
(23.3
|
)
|
|
$
|
(41.5
|
)
|
|
$
|
(190.3
|
)
|
|
$
|
(71.3
|
)
|
|
|
|
|
|
|
|
|
||||||||
Adjusted EBITDA to net loss:
|
|
|
|
|
|
|
|
||||||||
Adjusted EBITDA
|
$
|
128.7
|
|
|
$
|
129.1
|
|
|
$
|
297.4
|
|
|
$
|
314.0
|
|
Gain (loss) on commodity derivative instruments
|
19.4
|
|
|
123.5
|
|
|
(62.3
|
)
|
|
141.2
|
|
||||
Net settlements on commodity derivative instruments
|
(47.7
|
)
|
|
(68.0
|
)
|
|
(167.9
|
)
|
|
(162.5
|
)
|
||||
Interest expense, net
|
(20.1
|
)
|
|
(10.7
|
)
|
|
(40.9
|
)
|
|
(31.8
|
)
|
||||
Income tax provision
|
12.0
|
|
|
21.2
|
|
|
112.2
|
|
|
40.6
|
|
||||
Impairment of properties and equipment
|
(0.9
|
)
|
|
(154.0
|
)
|
|
(6.1
|
)
|
|
(161.2
|
)
|
||||
Depreciation, depletion and amortization
|
(112.9
|
)
|
|
(81.0
|
)
|
|
(317.3
|
)
|
|
(206.9
|
)
|
||||
Accretion of asset retirement obligations
|
(1.8
|
)
|
|
(1.6
|
)
|
|
(5.4
|
)
|
|
(4.7
|
)
|
||||
Net loss
|
$
|
(23.3
|
)
|
|
$
|
(41.5
|
)
|
|
$
|
(190.3
|
)
|
|
$
|
(71.3
|
)
|
|
|
|
|
|
|
|
|
||||||||
Adjusted EBITDA to net cash from operating activities:
|
|
|
|
|
|
|
|
||||||||
Adjusted EBITDA
|
$
|
128.7
|
|
|
$
|
129.1
|
|
|
$
|
297.4
|
|
|
$
|
314.0
|
|
Interest expense, net
|
(20.1
|
)
|
|
(10.7
|
)
|
|
(40.9
|
)
|
|
(31.8
|
)
|
||||
Stock-based compensation
|
4.1
|
|
|
4.8
|
|
|
15.2
|
|
|
14.3
|
|
||||
Amortization of debt discount and issuance costs
|
9.9
|
|
|
1.8
|
|
|
12.9
|
|
|
5.3
|
|
||||
Gain on sale of properties and equipment
|
(0.2
|
)
|
|
(0.1
|
)
|
|
—
|
|
|
(0.3
|
)
|
||||
Other
|
0.2
|
|
|
(2.2
|
)
|
|
41.6
|
|
|
(7.9
|
)
|
||||
Changes in assets and liabilities
|
40.4
|
|
|
13.8
|
|
|
34.6
|
|
|
(10.6
|
)
|
||||
Net cash from operating activities
|
$
|
163.0
|
|
|
$
|
136.5
|
|
|
$
|
360.8
|
|
|
$
|
283.0
|
|
|
|
Collars
|
|
Fixed-Price Swaps
|
|
Basis Protection Swaps
|
|
|
|||||||||||||||||||||
Commodity/ Index/
Maturity Period
|
|
Quantity
(Gas -
BBtu
(1)
Oil - MBbls)
|
|
Weighted-Average
Contract Price
|
|
Quantity
(Gas -
BBtu
(1)
Oil - MBbls)
|
|
Weighted-
Average
Contract
Price
|
|
Quantity
(BBtu)
(1)
|
|
Weighted-
Average
Contract
Price
|
|
Fair Value
September 30,
2016 (2)
(in millions)
|
|||||||||||||||
|
|
Floors
|
|
Ceilings
|
|
|
|
|
|
||||||||||||||||||||
Natural Gas
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
NYMEX
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
2016
|
|
900.0
|
|
|
$
|
3.75
|
|
|
$
|
4.04
|
|
|
7,805.0
|
|
|
$
|
3.67
|
|
|
8,403.2
|
|
|
$
|
(0.27
|
)
|
|
$
|
5.3
|
|
2017
|
|
7,920.0
|
|
|
3.59
|
|
|
4.13
|
|
|
27,290.0
|
|
|
3.55
|
|
|
12,000.0
|
|
|
(0.28
|
)
|
|
17.0
|
|
|||||
2018
|
|
1,230.0
|
|
|
3.00
|
|
|
3.67
|
|
|
45,280.0
|
|
|
2.94
|
|
|
16,200.0
|
|
|
(0.28
|
)
|
|
2.4
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total Natural Gas
|
|
10,050.0
|
|
|
|
|
|
|
80,375.0
|
|
|
|
|
36,603.2
|
|
|
|
|
24.7
|
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Crude Oil
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
NYMEX
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
2016
|
|
435.0
|
|
|
77.59
|
|
|
97.55
|
|
|
930.0
|
|
|
72.21
|
|
|
—
|
|
|
—
|
|
|
34.0
|
|
|||||
2017
|
|
1,464.0
|
|
|
49.22
|
|
|
65.95
|
|
|
3,004.0
|
|
|
44.92
|
|
|
—
|
|
|
—
|
|
|
(15.1
|
)
|
|||||
2018
|
|
1,512.0
|
|
|
41.85
|
|
|
54.31
|
|
|
1,512.0
|
|
|
51.06
|
|
|
—
|
|
|
—
|
|
|
(10.1
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total Crude Oil
|
|
3,411.0
|
|
|
|
|
|
|
5,446.0
|
|
|
|
|
—
|
|
|
|
|
8.8
|
|
|||||||||
Total Natural Gas and Crude Oil
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
33.5
|
|
|||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
A standard unit of measurement for natural gas (one BBtu equals one MMcf).
|
(2)
|
Approximately 33.1% of the fair value of our derivative assets and 19.2% of the fair value of our derivative liabilities were measured using significant unobservable inputs (Level 3). See Note 3, Fair Value Measurements, to the condensed consolidated financial statements included elsewhere in this report.
|
|
Three Months Ended
|
|
Nine Months Ended
|
|
Year Ended
|
||||||
|
September 30, 2016
|
|
September 30, 2016
|
|
December 31, 2015
|
||||||
Average Index Closing Price:
|
|
|
|
|
|
||||||
Crude oil (per Bbl)
|
|
|
|
|
|
||||||
NYMEX
|
$
|
44.94
|
|
|
$
|
41.33
|
|
|
$
|
48.80
|
|
Natural gas (per MMBtu)
|
|
|
|
|
|
||||||
NYMEX
|
$
|
2.81
|
|
|
$
|
2.29
|
|
|
$
|
2.66
|
|
CIG
|
2.47
|
|
|
1.98
|
|
|
2.44
|
|
|||
TETCO M-2 (1)
|
1.47
|
|
|
1.31
|
|
|
1.49
|
|
|||
|
|
|
|
|
|
||||||
Average Sales Price Realized:
|
|
|
|
|
|
||||||
Excluding net settlements on derivatives
|
|
|
|
|
|
||||||
Crude oil (per Bbl)
|
$
|
42.11
|
|
|
$
|
37.33
|
|
|
$
|
40.14
|
|
Natural gas (per Mcf)
|
2.04
|
|
|
1.62
|
|
|
2.04
|
|
|||
NGLs (per Bbl)
|
11.12
|
|
|
10.41
|
|
|
10.72
|
|
•
|
We must pay costs related to the acquisition including, among others, legal, accounting and financial advisory fees, whether the acquisition is completed or not.
|
•
|
In some circumstances set forth in the acquisition agreements, we could be required to forfeit the $100 million aggregate deposit we made at the time the agreements were executed.
|
•
|
We may experience negative reactions from the financial markets.
|
•
|
We could be subject to litigation related to the failure to complete the acquisition.
|
Period
|
|
Total Number of Shares Purchased (1)
|
|
Average Price Paid per Share
|
|||
|
|
|
|
|
|||
July 1 - 31, 2016
|
|
19,261
|
|
|
$
|
54.38
|
|
August 1 - 31, 2016
|
|
440
|
|
|
55.48
|
|
|
September 1 - 30, 2016
|
|
—
|
|
|
—
|
|
|
Total third quarter purchases
|
|
19,701
|
|
|
54.40
|
|
|
|
|
|
|
|
(1)
|
Purchases primarily represent shares purchased from employees for the payment of their tax liabilities related to the vesting of securities issued pursuant to our stock-based compensation plans.
|
|
PDC Energy, Inc.
|
|
(Registrant)
|
|
|
|
|
|
|
|
|
Date: November 3, 2016
|
/s/ Barton R. Brookman
|
|
Barton R. Brookman
|
|
President and Chief Executive Officer
|
|
(principal executive officer)
|
|
|
|
/s/ R. Scott Meyers
|
|
R. Scott Meyers
|
|
Chief Accounting Officer
|
|
(principal financial officer)
|
|
|
|
|
|
|
|
|
|
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of PDC Energy, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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a.
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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;
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b.
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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;
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c.
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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
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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
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5.
|
The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
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
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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.
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Date:
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November 3, 2016
|
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/s/ Barton R. Brookman
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|
Barton R. Brookman
|
|
President and Chief Executive Officer
|
1.
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I have reviewed this Quarterly Report on Form 10-Q of PDC Energy, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
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
|
5.
|
The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
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.
|
Date:
|
November 3, 2016
|
|
/s/ R. Scott Meyers
|
|
R. Scott Meyers
|
|
Chief Accounting Officer (Principal Financial 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/ Barton R. Brookman
|
|
November 3, 2016
|
Barton R. Brookman
|
|
|
President and Chief Executive Officer
|
|
|
|
|
|
|
|
|
/s/ R. Scott Meyers
|
|
November 3, 2016
|
R. Scott Meyers
|
|
|
Chief Accounting Officer (Principal Financial Officer)
|
|
|
SECTION 1.
|
Amendments to Credit Agreement.
Subject to the satisfaction or waiver in writing of each condition precedent set forth in
Section 3
of this Amendment, and in reliance on the representations, warranties, covenants and agreements contained in this Amendment, the Credit Agreement shall be amended in the manner provided in this
Section 1
.
|