Delaware
|
95-2636730
|
(State of incorporation)
|
(I.R.S. Employer Identification No.)
|
Large accelerated filer
x
|
Accelerated filer
o
|
Non-accelerated filer
o
(Do not check if a smaller reporting company)
|
Smaller reporting company
o
|
|
Emerging growth company
o
|
|
PART I – FINANCIAL INFORMATION
|
|
Page
|
|
|
|
|
Item 1.
|
Financial Statements
|
|
|
|
|
||
|
|
||
|
|
||
|
|
||
|
|
||
Item 2.
|
|
||
Item 3.
|
|
||
Item 4.
|
|
||
|
|
|
|
PART II – OTHER INFORMATION
|
|||
|
|
|
|
Item 1.
|
|
||
Item 1A.
|
|
||
Item 2.
|
|
||
Item 3.
|
|
||
Item 4.
|
|
||
Item 5.
|
|
||
Item 6.
|
|
||
|
|
|
|
|
|
•
|
changes in worldwide production volumes and demand, including economic conditions that might impact demand and prices for the products we produce;
|
•
|
volatility of commodity prices for crude oil, natural gas, and natural gas liquids ("NGLs") and the risk of an extended period of depressed prices;
|
•
|
reductions in the borrowing base under our revolving credit facility;
|
•
|
impact of governmental policies and/or regulations, including changes in environmental and other laws, the interpretation and enforcement of those laws and regulations, liabilities arising thereunder, and the costs to comply with those laws and regulations;
|
•
|
declines in the value of our crude oil, natural gas, and NGLs properties resulting in impairments;
|
•
|
changes in estimates of proved reserves;
|
•
|
inaccuracy of reserve estimates and expected production rates;
|
•
|
potential for production decline rates from our wells being greater than expected;
|
•
|
timing and extent of our success in discovering, acquiring, developing, and producing reserves;
|
•
|
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;
|
•
|
timing and receipt of necessary regulatory permits;
|
•
|
risks incidental to the drilling and operation of crude oil and natural gas wells;
|
•
|
losses from our gas marketing business exceeding our expectations;
|
•
|
difficulties in integrating our operations as a result of any significant acquisitions, including our pending acquisitions and acreage exchanges in the Wattenberg Field;
|
•
|
increases or changes in operating costs, severance and ad valorem taxes, and increases or changes in drilling, completion, and facilities costs;
|
•
|
availability of supplies, materials, contractors, and services that may delay the drilling or completion of our wells;
|
•
|
potential losses of acreage due to lease expirations or otherwise;
|
•
|
increases or adverse changes in construction costs and procurement costs associated with future build out of midstream-related assets;
|
•
|
future cash flows, liquidity, and financial condition;
|
•
|
competition within the oil and gas industry;
|
•
|
availability and cost of capital;
|
•
|
our success in marketing crude oil, natural gas, and NGLs;
|
•
|
effect of crude oil and natural gas derivatives activities;
|
•
|
impact of environmental events, governmental and other third-party responses to such events, and our ability to insure adequately against such events;
|
•
|
cost of pending or future litigation, including recent environmental litigation;
|
•
|
effect that acquisitions we may pursue have on our capital requirements;
|
•
|
our ability to retain or attract senior management and key technical employees; and
|
•
|
success of strategic plans, expectations, and objectives for our future operations.
|
|
|
September 30, 2017
|
|
December 31, 2016
|
||||
Assets
|
|
|
|
|
||||
Current assets:
|
|
|
|
|
||||
Cash and cash equivalents
|
|
$
|
136,429
|
|
|
$
|
244,100
|
|
Accounts receivable, net
|
|
167,276
|
|
|
143,392
|
|
||
Fair value of derivatives
|
|
22,916
|
|
|
8,791
|
|
||
Prepaid expenses and other current assets
|
|
8,081
|
|
|
3,542
|
|
||
Total current assets
|
|
334,702
|
|
|
399,825
|
|
||
Properties and equipment, net
|
|
3,882,700
|
|
|
4,002,994
|
|
||
Assets held-for-sale, net
|
|
41,484
|
|
|
5,272
|
|
||
Fair value of derivatives
|
|
4,605
|
|
|
2,386
|
|
||
Goodwill
|
|
—
|
|
|
62,041
|
|
||
Other assets
|
|
43,796
|
|
|
13,324
|
|
||
Total Assets
|
|
$
|
4,307,287
|
|
|
$
|
4,485,842
|
|
|
|
|
|
|
||||
Liabilities and Stockholders' Equity
|
|
|
|
|
||||
Liabilities
|
|
|
|
|
||||
Current liabilities:
|
|
|
|
|
||||
Accounts payable
|
|
$
|
164,080
|
|
|
$
|
66,322
|
|
Production tax liability
|
|
36,954
|
|
|
24,767
|
|
||
Fair value of derivatives
|
|
25,987
|
|
|
53,595
|
|
||
Funds held for distribution
|
|
94,387
|
|
|
71,339
|
|
||
Accrued interest payable
|
|
18,929
|
|
|
15,930
|
|
||
Other accrued expenses
|
|
33,451
|
|
|
38,625
|
|
||
Total current liabilities
|
|
373,788
|
|
|
270,578
|
|
||
Long-term debt
|
|
1,051,571
|
|
|
1,043,954
|
|
||
Deferred income taxes
|
|
326,472
|
|
|
400,867
|
|
||
Asset retirement obligations
|
|
78,188
|
|
|
82,612
|
|
||
Fair value of derivatives
|
|
7,261
|
|
|
27,595
|
|
||
Other liabilities
|
|
43,405
|
|
|
37,482
|
|
||
Total liabilities
|
|
1,880,685
|
|
|
1,863,088
|
|
||
|
|
|
|
|
||||
Commitments and contingent liabilities
|
|
|
|
|
||||
|
|
|
|
|
||||
Stockholders' equity
|
|
|
|
|
||||
Common shares - par value $0.01 per share, 150,000,000 authorized, 65,928,295 and 65,704,568 issued as of September 30, 2017 and December 31, 2016, respectively
|
|
659
|
|
|
657
|
|
||
Additional paid-in capital
|
|
2,500,532
|
|
|
2,489,557
|
|
||
Retained earnings (deficit)
|
|
(70,933
|
)
|
|
134,208
|
|
||
Treasury shares - at cost, 62,772 and 28,763
as of September 30, 2017 and December 31, 2016, respectively
|
|
(3,656
|
)
|
|
(1,668
|
)
|
||
Total stockholders' equity
|
|
2,426,602
|
|
|
2,622,754
|
|
||
Total Liabilities and Stockholders' Equity
|
|
$
|
4,307,287
|
|
|
$
|
4,485,842
|
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Revenues
|
|
|
|
|
|
|
|
|
||||||||
Crude oil, natural gas, and NGLs sales
|
|
$
|
232,733
|
|
|
$
|
141,805
|
|
|
$
|
636,027
|
|
|
$
|
328,013
|
|
Commodity price risk management gain (loss), net of settlements
|
|
(52,178
|
)
|
|
19,397
|
|
|
86,458
|
|
|
(62,348
|
)
|
||||
Other income
|
|
2,680
|
|
|
2,688
|
|
|
9,615
|
|
|
9,153
|
|
||||
Total revenues
|
|
183,235
|
|
|
163,890
|
|
|
732,100
|
|
|
274,818
|
|
||||
Costs, expenses and other
|
|
|
|
|
|
|
|
|
||||||||
Lease operating expenses
|
|
25,353
|
|
|
14,001
|
|
|
65,170
|
|
|
43,006
|
|
||||
Production taxes
|
|
15,516
|
|
|
9,568
|
|
|
42,957
|
|
|
19,682
|
|
||||
Transportation, gathering and processing expenses
|
|
9,794
|
|
|
5,048
|
|
|
22,184
|
|
|
13,554
|
|
||||
General and administrative expense
|
|
29,299
|
|
|
32,510
|
|
|
85,145
|
|
|
78,868
|
|
||||
Exploration, geologic, and geophysical expense
|
|
41,908
|
|
|
241
|
|
|
43,895
|
|
|
688
|
|
||||
Depreciation, depletion and amortization
|
|
125,238
|
|
|
112,927
|
|
|
360,567
|
|
|
317,329
|
|
||||
Impairment of properties and equipment
|
|
252,740
|
|
|
933
|
|
|
282,499
|
|
|
6,104
|
|
||||
Impairment of goodwill
|
|
75,121
|
|
|
—
|
|
|
75,121
|
|
|
—
|
|
||||
Accretion of asset retirement obligations
|
|
1,472
|
|
|
1,777
|
|
|
4,906
|
|
|
5,400
|
|
||||
Gain on sale of properties and equipment
|
|
(62
|
)
|
|
(219
|
)
|
|
(754
|
)
|
|
(43
|
)
|
||||
Provision for uncollectible notes receivable
|
|
—
|
|
|
(700
|
)
|
|
(40,203
|
)
|
|
44,038
|
|
||||
Other expenses
|
|
2,947
|
|
|
3,092
|
|
|
10,365
|
|
|
7,795
|
|
||||
Total costs, expenses and other
|
|
579,326
|
|
|
179,178
|
|
|
951,852
|
|
|
536,421
|
|
||||
Loss from operations
|
|
(396,091
|
)
|
|
(15,288
|
)
|
|
(219,752
|
)
|
|
(261,603
|
)
|
||||
Interest expense
|
|
(19,275
|
)
|
|
(20,193
|
)
|
|
(58,359
|
)
|
|
(42,759
|
)
|
||||
Interest income
|
|
479
|
|
|
140
|
|
|
1,487
|
|
|
1,875
|
|
||||
Loss before income taxes
|
|
(414,887
|
)
|
|
(35,341
|
)
|
|
(276,624
|
)
|
|
(302,487
|
)
|
||||
Income tax benefit
|
|
122,350
|
|
|
12,032
|
|
|
71,483
|
|
|
112,198
|
|
||||
Net loss
|
|
$
|
(292,537
|
)
|
|
$
|
(23,309
|
)
|
|
$
|
(205,141
|
)
|
|
$
|
(190,289
|
)
|
|
|
|
|
|
|
|
|
|
||||||||
Earnings per share:
|
|
|
|
|
|
|
|
|
||||||||
Basic
|
|
$
|
(4.44
|
)
|
|
$
|
(0.48
|
)
|
|
$
|
(3.12
|
)
|
|
$
|
(4.16
|
)
|
Diluted
|
|
$
|
(4.44
|
)
|
|
$
|
(0.48
|
)
|
|
$
|
(3.12
|
)
|
|
$
|
(4.16
|
)
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted-average common shares outstanding:
|
|
|
|
|
|
|
|
|
||||||||
Basic
|
|
65,865
|
|
|
48,839
|
|
|
65,825
|
|
|
45,741
|
|
||||
Diluted
|
|
65,865
|
|
|
48,839
|
|
|
65,825
|
|
|
45,741
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended September 30,
|
||||||
|
|
2017
|
|
2016
|
||||
Cash flows from operating activities:
|
|
|
|
|
||||
Net loss
|
|
$
|
(205,141
|
)
|
|
$
|
(190,289
|
)
|
Adjustments to net loss to reconcile to net cash from operating activities:
|
|
|
|
|
||||
Net change in fair value of unsettled commodity derivatives
|
|
(64,307
|
)
|
|
230,177
|
|
||
Depreciation, depletion and amortization
|
|
360,567
|
|
|
317,329
|
|
||
Impairment of properties and equipment
|
|
282,499
|
|
|
6,104
|
|
||
Impairment of goodwill
|
|
75,121
|
|
|
—
|
|
||
Exploratory dry hole costs
|
|
41,187
|
|
|
—
|
|
||
Provision for uncollectible notes receivable
|
|
(40,203
|
)
|
|
44,038
|
|
||
Accretion of asset retirement obligations
|
|
4,906
|
|
|
5,400
|
|
||
Non-cash stock-based compensation
|
|
14,587
|
|
|
15,205
|
|
||
Gain on sale of properties and equipment
|
|
(754
|
)
|
|
(43
|
)
|
||
Amortization of debt discount and issuance costs
|
|
9,628
|
|
|
12,951
|
|
||
Deferred income taxes
|
|
(71,529
|
)
|
|
(114,136
|
)
|
||
Other
|
|
986
|
|
|
(526
|
)
|
||
Changes in assets and liabilities
|
|
3,855
|
|
|
34,621
|
|
||
Net cash from operating activities
|
|
411,402
|
|
|
360,831
|
|
||
Cash flows from investing activities:
|
|
|
|
|
||||
Capital expenditures for development of crude oil and natural gas properties
|
|
(528,850
|
)
|
|
(352,213
|
)
|
||
Capital expenditures for other properties and equipment
|
|
(3,740
|
)
|
|
(1,509
|
)
|
||
Acquisition of crude oil and natural gas properties, including settlement adjustments and deposit for pending acquisition
|
|
(14,482
|
)
|
|
(100,000
|
)
|
||
Proceeds from sale of properties and equipment
|
|
3,322
|
|
|
4,945
|
|
||
Sale of promissory note
|
|
40,203
|
|
|
—
|
|
||
Restricted cash
|
|
(9,250
|
)
|
|
—
|
|
||
Sale of short-term investments
|
|
49,890
|
|
|
—
|
|
||
Purchase of short-term investments
|
|
(49,890
|
)
|
|
—
|
|
||
Net cash from investing activities
|
|
(512,797
|
)
|
|
(448,777
|
)
|
||
Cash flows from financing activities:
|
|
|
|
|
||||
Proceeds from issuance of equity, net of issuance cost
|
|
—
|
|
|
855,072
|
|
||
Proceeds from senior notes
|
|
—
|
|
|
392,250
|
|
||
Proceeds from convertible senior notes
|
|
—
|
|
|
193,979
|
|
||
Proceeds from revolving credit facility
|
|
—
|
|
|
85,000
|
|
||
Repayment of revolving credit facility
|
|
—
|
|
|
(122,000
|
)
|
||
Redemption of convertible notes
|
|
—
|
|
|
(115,000
|
)
|
||
Purchase of treasury shares
|
|
(5,325
|
)
|
|
(5,106
|
)
|
||
Other
|
|
(951
|
)
|
|
593
|
|
||
Net cash from financing activities
|
|
(6,276
|
)
|
|
1,284,788
|
|
||
Net change in cash and cash equivalents
|
|
(107,671
|
)
|
|
1,196,842
|
|
||
Cash and cash equivalents, beginning of period
|
|
244,100
|
|
|
850
|
|
||
Cash and cash equivalents, end of period
|
|
$
|
136,429
|
|
|
$
|
1,197,692
|
|
|
|
|
|
|
||||
Supplemental cash flow information:
|
|
|
|
|
||||
Cash payments (receipts) for:
|
|
|
|
|
||||
Interest, net of capitalized interest
|
|
$
|
45,719
|
|
|
$
|
19,499
|
|
Income taxes
|
|
(2,623
|
)
|
|
167
|
|
||
Non-cash investing and financing activities:
|
|
|
|
|
||||
Change in accounts payable related to purchases of properties and equipment
|
|
$
|
89,974
|
|
|
$
|
(31,497
|
)
|
Change in asset retirement obligations, with a corresponding change to crude oil and natural gas properties, net of disposals
|
|
3,357
|
|
|
1,137
|
|
||
Purchase of properties and equipment under capital leases
|
|
3,363
|
|
|
1,231
|
|
|
Common Stock
|
|
|
|
Treasury Stock
|
|
|
|
|
||||||||||||||||
|
Shares
|
|
Amount
|
|
Additional Paid-in Capital
|
|
Shares
|
|
Amount
|
|
Retained Earnings (Deficit)
|
|
Total Stockholders' Equity
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Balance, December 31, 2016
|
65,704,568
|
|
|
$
|
657
|
|
|
$
|
2,489,557
|
|
|
(28,763
|
)
|
|
$
|
(1,668
|
)
|
|
$
|
134,208
|
|
|
$
|
2,622,754
|
|
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(205,141
|
)
|
|
(205,141
|
)
|
|||||
Purchase of treasury shares
|
—
|
|
|
—
|
|
|
—
|
|
|
(80,572
|
)
|
|
(5,325
|
)
|
|
—
|
|
|
(5,325
|
)
|
|||||
Issuance of treasury shares
|
(49,446
|
)
|
|
—
|
|
|
(3,513
|
)
|
|
49,446
|
|
|
3,513
|
|
|
—
|
|
|
—
|
|
|||||
Non-employee directors' deferred compensation plan
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,883
|
)
|
|
(176
|
)
|
|
—
|
|
|
(176
|
)
|
|||||
Issuance of stock awards, net of forfeitures
|
273,173
|
|
|
2
|
|
|
(2
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Stock-based compensation expense
|
—
|
|
|
—
|
|
|
14,587
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
14,587
|
|
|||||
Other
|
—
|
|
|
—
|
|
|
(97
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(97
|
)
|
|||||
Balance, September 30, 2017
|
65,928,295
|
|
|
$
|
659
|
|
|
$
|
2,500,532
|
|
|
(62,772
|
)
|
|
$
|
(3,656
|
)
|
|
$
|
(70,933
|
)
|
|
$
|
2,426,602
|
|
|
September 30, 2017
|
||
Acquisition costs:
|
|
||
Cash, net of cash acquired
|
$
|
905,962
|
|
Retirement of seller's debt
|
40,000
|
|
|
Total cash consideration
|
945,962
|
|
|
Common stock, 9.4 million shares
|
690,702
|
|
|
Other purchase price adjustments
|
426
|
|
|
Total acquisition costs
|
$
|
1,637,090
|
|
|
|
||
Recognized amounts of identifiable assets acquired and liabilities assumed:
|
|
||
Assets acquired:
|
|
||
Current assets
|
$
|
6,401
|
|
Crude oil and natural gas properties - proved
|
216,000
|
|
|
Crude oil and natural gas properties - unproved
|
1,697,000
|
|
|
Infrastructure, pipeline, and other
|
33,153
|
|
|
Construction in progress
|
12,323
|
|
|
Goodwill
|
75,121
|
|
|
Total assets acquired
|
2,039,998
|
|
|
Liabilities assumed:
|
|
||
Current liabilities
|
(24,496
|
)
|
|
Asset retirement obligations
|
(3,705
|
)
|
|
Deferred tax liabilities, net
|
(374,707
|
)
|
|
Total liabilities assumed
|
(402,908
|
)
|
|
Total identifiable net assets acquired
|
$
|
1,637,090
|
|
|
Amount
|
||
|
(in thousands)
|
||
|
|
||
Preliminary purchase price allocation
|
$
|
62,041
|
|
Adjustments
|
13,080
|
|
|
Final purchase price allocation
|
$
|
75,121
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
|
(in thousands)
|
||||||||||||||
|
|
|
|
|
|
|
|
||||||||
Exploratory dry hole costs
|
$
|
41,187
|
|
|
$
|
—
|
|
|
$
|
41,187
|
|
|
$
|
—
|
|
Geological and geophysical costs, including seismic purchases
|
463
|
|
|
—
|
|
|
1,790
|
|
|
—
|
|
||||
Operating, personnel and other
|
258
|
|
|
241
|
|
|
918
|
|
|
688
|
|
||||
Total exploration, geologic, and geophysical expense
|
$
|
41,908
|
|
|
$
|
241
|
|
|
$
|
43,895
|
|
|
$
|
688
|
|
|
|
|
|
|
|
|
|
|
September 30, 2017
|
|
December 31, 2016
|
||||
|
(in thousands)
|
||||||
Properties and equipment, net:
|
|
|
|
||||
Crude oil and natural gas properties
|
|
|
|
||||
Proved
|
$
|
3,759,501
|
|
|
$
|
3,499,718
|
|
Unproved
|
1,559,717
|
|
|
1,874,671
|
|
||
Total crude oil and natural gas properties
|
5,319,218
|
|
|
5,374,389
|
|
||
Infrastructure, pipeline, and other
|
104,568
|
|
|
62,093
|
|
||
Land and buildings
|
10,714
|
|
|
6,392
|
|
||
Construction in progress
|
177,341
|
|
|
122,591
|
|
||
Properties and equipment, at cost
|
5,611,841
|
|
|
5,565,465
|
|
||
Accumulated DD&A
|
(1,729,141
|
)
|
|
(1,562,471
|
)
|
||
Properties and equipment, net
|
$
|
3,882,700
|
|
|
$
|
4,002,994
|
|
|
|
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
|
(in thousands)
|
||||||||||||||
|
|
|
|
|
|
|
|
||||||||
Impairment of unproved properties
|
$
|
252,623
|
|
|
$
|
338
|
|
|
$
|
282,188
|
|
|
$
|
2,391
|
|
Amortization of individually insignificant unproved properties
|
117
|
|
|
595
|
|
|
311
|
|
|
681
|
|
||||
Impairment of crude oil and natural gas properties
|
252,740
|
|
|
933
|
|
|
282,499
|
|
|
3,072
|
|
||||
Land and buildings
|
—
|
|
|
—
|
|
|
—
|
|
|
3,032
|
|
||||
Total impairment of properties and equipment
|
$
|
252,740
|
|
|
$
|
933
|
|
|
$
|
282,499
|
|
|
$
|
6,104
|
|
|
September 30, 2017
|
|
December 31, 2016
|
||||
|
(in thousands)
|
||||||
Assets
|
|
|
|
||||
Properties and equipment, net
|
$
|
41,983
|
|
|
$
|
5,272
|
|
Total assets
|
$
|
41,983
|
|
|
$
|
5,272
|
|
|
|
|
|
||||
Liabilities
|
|
|
|
||||
Asset retirement obligation
|
$
|
499
|
|
|
$
|
—
|
|
Total liabilities
|
$
|
499
|
|
|
$
|
—
|
|
|
|
|
|
||||
Net assets
|
$
|
41,484
|
|
|
$
|
5,272
|
|
|
|
|
|
|
Fair Value
|
||||||
Derivative instruments:
|
|
Condensed consolidated balance sheet line item
|
|
September 30, 2017
|
|
December 31, 2016
|
|||||
|
|
|
|
|
(in thousands)
|
||||||
Derivative assets:
|
Current
|
|
|
|
|
|
|
||||
|
Commodity derivative contracts
|
|
Fair value of derivatives
|
|
$
|
19,042
|
|
|
$
|
8,490
|
|
|
Basis protection derivative contracts
|
|
Fair value of derivatives
|
|
3,874
|
|
|
301
|
|
||
|
|
|
|
|
22,916
|
|
|
8,791
|
|
||
|
Non-current
|
|
|
|
|
|
|
||||
|
Commodity derivative contracts
|
|
Fair value of derivatives
|
|
3,942
|
|
|
1,123
|
|
||
|
Basis protection derivative contracts
|
|
Fair value of derivatives
|
|
663
|
|
|
1,263
|
|
||
|
|
|
|
|
4,605
|
|
|
2,386
|
|
||
Total derivative assets
|
|
|
|
$
|
27,521
|
|
|
$
|
11,177
|
|
|
|
|
|
|
|
|
|
|
||||
Derivative liabilities:
|
Current
|
|
|
|
|
|
|
||||
|
Commodity derivative contracts
|
|
Fair value of derivatives
|
|
$
|
25,895
|
|
|
$
|
53,565
|
|
|
Basis protection derivative contracts
|
|
Fair value of derivatives
|
|
92
|
|
|
30
|
|
||
|
|
|
|
|
25,987
|
|
|
53,595
|
|
||
|
Non-current
|
|
|
|
|
|
|
||||
|
Commodity derivative contracts
|
|
Fair value of derivatives
|
|
7,244
|
|
|
27,595
|
|
||
|
Basis protection derivative contracts
|
|
Fair value of derivatives
|
|
17
|
|
|
—
|
|
||
|
|
|
|
|
7,261
|
|
|
27,595
|
|
||
Total derivative liabilities
|
|
|
|
$
|
33,248
|
|
|
$
|
81,190
|
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
Condensed consolidated statement of operations line item
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
|
|
(in thousands)
|
||||||||||||||
Commodity price risk management gain, net
|
|
|
|
|
|
|
|
|
||||||||
Net settlements
|
|
$
|
9,585
|
|
|
$
|
47,728
|
|
|
$
|
22,151
|
|
|
$
|
167,859
|
|
Net change in fair value of unsettled derivatives
|
|
(61,763
|
)
|
|
(28,331
|
)
|
|
64,307
|
|
|
(230,207
|
)
|
||||
Total commodity price risk management gain, net
|
|
$
|
(52,178
|
)
|
|
$
|
19,397
|
|
|
$
|
86,458
|
|
|
$
|
(62,348
|
)
|
|
|
|
|
|
|
|
|
|
As of September 30, 2017
|
|
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
|
|
$
|
27,521
|
|
|
$
|
(15,010
|
)
|
|
$
|
12,511
|
|
|
|
|
|
|
|
|
||||||
Liability derivatives:
|
|
|
|
|
|
|
||||||
Derivative instruments, at fair value
|
|
$
|
33,248
|
|
|
$
|
(15,010
|
)
|
|
$
|
18,238
|
|
|
|
|
|
|
|
|
As of December 31, 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
|
|
$
|
11,177
|
|
|
$
|
(10,930
|
)
|
|
$
|
247
|
|
|
|
|
|
|
|
|
||||||
Liability derivatives:
|
|
|
|
|
|
|
||||||
Derivative instruments, at fair value
|
|
$
|
81,190
|
|
|
$
|
(10,930
|
)
|
|
$
|
70,260
|
|
|
|
|
|
|
|
|
|
September 30, 2017
|
|
December 31, 2016
|
||||||||||||||||||||
|
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:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Total assets
|
$
|
24,553
|
|
|
$
|
2,968
|
|
|
$
|
27,521
|
|
|
$
|
6,350
|
|
|
$
|
4,827
|
|
|
$
|
11,177
|
|
Total liabilities
|
(23,811
|
)
|
|
(9,437
|
)
|
|
(33,248
|
)
|
|
(66,789
|
)
|
|
(14,401
|
)
|
|
(81,190
|
)
|
||||||
Net asset (liability)
|
$
|
742
|
|
|
$
|
(6,469
|
)
|
|
$
|
(5,727
|
)
|
|
$
|
(60,439
|
)
|
|
$
|
(9,574
|
)
|
|
$
|
(70,013
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
|
|
(in thousands)
|
||||||||||||||
Fair value of Level 3 instruments, net
asset (liability)
beginning of period
|
|
$
|
8,619
|
|
|
$
|
27,375
|
|
|
$
|
(9,574
|
)
|
|
$
|
91,288
|
|
Changes in fair value included in condensed consolidated statement of operations line item:
|
|
|
|
|
|
|
|
|
||||||||
Commodity price risk management gain (loss), net
|
|
(14,075
|
)
|
|
4,234
|
|
|
8,547
|
|
|
(16,023
|
)
|
||||
Settlements included in condensed consolidated statement of operations line items:
|
|
|
|
|
|
|
|
|
||||||||
Commodity price risk management gain (
loss)
, net
|
|
(1,013
|
)
|
|
(15,587
|
)
|
|
(5,442
|
)
|
|
(59,243
|
)
|
||||
Fair value of Level 3 instruments, net
asset
end of period
|
|
$
|
(6,469
|
)
|
|
$
|
16,022
|
|
|
$
|
(6,469
|
)
|
|
$
|
16,022
|
|
|
|
|
|
|
|
|
|
|
||||||||
Net change in fair value of Level 3 unsettled derivatives included in condensed consolidated statement of operations line item:
|
|
|
|
|
|
|
|
|
||||||||
Commodity price risk management gain (
loss)
, net
|
|
$
|
(8,711
|
)
|
|
$
|
(2,240
|
)
|
|
$
|
(583
|
)
|
|
$
|
(8,273
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Estimated Fair Value
|
|
Percent of Par
|
|||
|
|
(in millions)
|
|
|
|||
Senior notes:
|
|
|
|
||||
|
2021 Convertible Notes
|
$
|
196.3
|
|
|
98.1
|
%
|
|
2022 Senior Notes
|
521.9
|
|
|
104.4
|
%
|
|
|
2024 Senior Notes
|
412.5
|
|
|
103.1
|
%
|
|
September 30, 2017
|
|
December 31, 2016
|
||||
|
(in thousands)
|
||||||
Senior notes:
|
|
|
|
||||
1.125% Convertible Notes due 2021:
|
|
|
|
||||
Principal amount
|
$
|
200,000
|
|
|
$
|
200,000
|
|
Unamortized discount
|
(32,153
|
)
|
|
(37,475
|
)
|
||
Unamortized debt issuance costs
|
(3,859
|
)
|
|
(4,584
|
)
|
||
1.125% Convertible Notes due 2021, net of unamortized discount and debt issuance costs
|
163,988
|
|
|
157,941
|
|
||
|
|
|
|
||||
7.75% Senior Notes due 2022:
|
|
|
|
||||
Principal amount
|
500,000
|
|
|
500,000
|
|
||
Unamortized debt issuance costs
|
(5,602
|
)
|
|
(6,443
|
)
|
||
7.75% Senior Notes due 2022, net of unamortized debt issuance costs
|
494,398
|
|
|
493,557
|
|
||
|
|
|
|
||||
6.125% Senior Notes due 2024:
|
|
|
|
||||
Principal amount
|
400,000
|
|
|
400,000
|
|
||
Unamortized debt issuance costs
|
(6,815
|
)
|
|
(7,544
|
)
|
||
6.125% Senior Notes due 2024, net of unamortized debt issuance costs
|
393,185
|
|
|
392,456
|
|
||
|
|
|
|
||||
Total senior notes
|
1,051,571
|
|
|
1,043,954
|
|
||
|
|
|
|
||||
Revolving credit facility
|
—
|
|
|
—
|
|
||
Total long-term debt, net of unamortized discount and debt issuance costs
|
$
|
1,051,571
|
|
|
$
|
1,043,954
|
|
|
|
September 30, 2017
|
|
December 31, 2016
|
||||
|
|
(in thousands)
|
||||||
|
|
|
|
|
||||
Employee benefits
|
|
$
|
14,401
|
|
|
$
|
22,282
|
|
Asset retirement obligations
|
|
13,128
|
|
|
9,775
|
|
||
Other
|
|
5,922
|
|
|
6,568
|
|
||
Other accrued expenses
|
|
$
|
33,451
|
|
|
$
|
38,625
|
|
|
|
|
|
|
|
|
September 30, 2017
|
|
December 31, 2016
|
||||
|
|
(in thousands)
|
||||||
Vehicles
|
|
$
|
6,301
|
|
|
$
|
2,975
|
|
Accumulated depreciation
|
|
(1,435
|
)
|
|
(776
|
)
|
||
|
|
$
|
4,866
|
|
|
$
|
2,199
|
|
For the Twelve Months Ending September 30,
|
|
Amount
|
||
|
|
(in thousands)
|
||
2018
|
|
$
|
2,207
|
|
2019
|
|
1,617
|
|
|
2020
|
|
1,758
|
|
|
|
|
5,582
|
|
|
Less executory cost
|
|
(258
|
)
|
|
Less amount representing interest
|
|
(615
|
)
|
|
Present value of minimum lease payments
|
|
$
|
4,709
|
|
|
|
|
|
|
Short-term capital lease obligations
|
|
$
|
1,768
|
|
Long-term capital lease obligations
|
|
2,941
|
|
|
|
|
$
|
4,709
|
|
|
Amount
|
||
|
(in thousands)
|
||
|
|
||
Balance at December 31, 2016
|
$
|
92,387
|
|
Obligations incurred with development activities
|
3,296
|
|
|
Accretion expense
|
4,906
|
|
|
Revisions in estimated cash flows
|
155
|
|
|
Obligations discharged with asset retirements
|
(8,929
|
)
|
|
Balance at September 30, 2017
|
91,815
|
|
|
Less liabilities held for sale
|
(499
|
)
|
|
Less current portion
|
(13,128
|
)
|
|
Long-term portion
|
$
|
78,188
|
|
|
|
|
|
For the Twelve Months Ending September 30,
|
|
|
|
|
||||||||||||||||||||
Area
|
|
2018
|
|
2019
|
|
2020
|
|
2021
|
|
2022 and
Through Expiration |
|
Total
|
|
Expiration
Date |
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Natural gas (MMcf)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Wattenberg Field
|
|
—
|
|
|
16,760
|
|
|
30,850
|
|
|
31,025
|
|
|
131,287
|
|
|
209,922
|
|
|
March 31, 2026
|
||||||
Delaware Basin
|
|
14,600
|
|
|
14,600
|
|
|
14,640
|
|
|
3,680
|
|
|
—
|
|
|
47,520
|
|
|
December 31, 2020
|
||||||
Gas Marketing
|
|
7,117
|
|
|
7,117
|
|
|
7,136
|
|
|
7,117
|
|
|
6,227
|
|
|
34,714
|
|
|
August 31, 2022
|
||||||
Utica Shale
|
|
2,738
|
|
|
2,738
|
|
|
2,745
|
|
|
2,738
|
|
|
5,016
|
|
|
15,975
|
|
|
July 22, 2023
|
||||||
Total
|
|
24,455
|
|
|
41,215
|
|
|
55,371
|
|
|
44,560
|
|
|
142,530
|
|
|
308,131
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Crude oil (MBbls)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Wattenberg Field
|
|
2,413
|
|
|
2,413
|
|
|
1,812
|
|
|
—
|
|
|
—
|
|
|
6,638
|
|
|
June 30, 2020
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Dollar commitment (in thousands)
|
|
$
|
18,410
|
|
|
$
|
35,170
|
|
|
$
|
44,949
|
|
|
$
|
33,776
|
|
|
$
|
129,546
|
|
|
$
|
261,851
|
|
|
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
|
|
(in thousands)
|
||||||||||||||
|
|
|
|
|
|
|
|
|
||||||||
Stock-based compensation expense
|
|
$
|
4,761
|
|
|
$
|
4,079
|
|
|
$
|
14,587
|
|
|
$
|
15,205
|
|
Income tax benefit
|
|
(1,781
|
)
|
|
(1,552
|
)
|
|
(5,457
|
)
|
|
(5,786
|
)
|
||||
Net stock-based compensation expense
|
|
$
|
2,980
|
|
|
$
|
2,527
|
|
|
$
|
9,130
|
|
|
$
|
9,419
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended September 30,
|
||||||
|
2017
|
|
2016
|
||||
|
|
|
|
||||
Expected term of award (in years)
|
6
|
|
|
6
|
|
||
Risk-free interest rate
|
2.0
|
%
|
|
1.8
|
%
|
||
Expected volatility
|
53.3
|
%
|
|
54.5
|
%
|
||
Weighted-average grant date fair value per share
|
$
|
38.58
|
|
|
$
|
26.96
|
|
|
Number of
SARs |
|
Weighted-Average
Exercise Price |
|
Average Remaining Contractual
Term (in years) |
|
Aggregate Intrinsic
Value (in thousands) |
||||||
Outstanding at December 31, 2016
|
244,078
|
|
|
$
|
41.36
|
|
|
6.9
|
|
|
$
|
7,620
|
|
Awarded
|
54,142
|
|
|
74.57
|
|
|
—
|
|
|
—
|
|
||
Outstanding at September 30, 2017
|
298,220
|
|
|
47.39
|
|
|
6.7
|
|
|
2,043
|
|
||
Exercisable at September 30, 2017
|
186,248
|
|
|
39.38
|
|
|
5.6
|
|
|
1,867
|
|
|
Shares
|
|
Weighted-Average
Grant Date Fair Value per Share |
|||
|
|
|
|
|||
Non-vested at December 31, 2016
|
479,642
|
|
|
$
|
56.09
|
|
Granted
|
260,019
|
|
|
66.00
|
|
|
Vested
|
(206,242
|
)
|
|
56.44
|
|
|
Forfeited
|
(7,990
|
)
|
|
64.32
|
|
|
Non-vested at September 30, 2017
|
525,429
|
|
|
60.73
|
|
|
|
|
|
|
|
As of/Nine Months Ended September 30,
|
||||||
|
2017
|
|
2016
|
||||
|
(in thousands, except per share data)
|
||||||
|
|
|
|
||||
Total intrinsic value of time-based awards vested
|
$
|
13,266
|
|
|
$
|
14,675
|
|
Total intrinsic value of time-based awards non-vested
|
25,762
|
|
|
35,079
|
|
||
Market price per common share as of September 30,
|
49.03
|
|
|
67.06
|
|
||
Weighted-average grant date fair value per share
|
66.00
|
|
|
57.12
|
|
|
Nine Months Ended September 30,
|
||||||
|
2017
|
|
2016
|
||||
|
|
|
|
||||
Expected term of award (in years)
|
3
|
|
|
3
|
|
||
Risk-free interest rate
|
1.4
|
%
|
|
1.2
|
%
|
||
Expected volatility
|
51.4
|
%
|
|
52.3
|
%
|
||
Weighted-average grant date fair value per share
|
$
|
94.02
|
|
|
$
|
72.54
|
|
|
|
Shares
|
|
Weighted-Average
Grant Date Fair Value per Share |
|||
|
|
|
|
|
|||
Non-vested at December 31, 2016
|
|
48,420
|
|
|
$
|
64.97
|
|
Granted
|
|
28,069
|
|
|
94.02
|
|
|
Non-vested at September 30, 2017
|
|
76,489
|
|
|
75.63
|
|
|
|
|
|
|
|
|
As of /Nine Months Ended September 30,
|
||||||
|
2017
|
|
2016
|
||||
|
(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
|
3,750
|
|
|
5,670
|
|
||
Market price per common share as of September 30,
|
49.03
|
|
|
67.06
|
|
||
Weighted-average grant date fair value per share
|
94.02
|
|
|
72.54
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||
|
(in thousands)
|
||||||||||
|
|
|
|
|
|
|
|
||||
Weighted-average common shares outstanding - basic
|
65,865
|
|
|
48,839
|
|
|
65,825
|
|
|
45,741
|
|
Weighted-average common shares and equivalents outstanding - diluted
|
65,865
|
|
|
48,839
|
|
|
65,825
|
|
|
45,741
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||
|
(in thousands)
|
||||||||||
|
|
|
|
|
|
|
|
||||
Weighted-average common share equivalents excluded from diluted earnings per share due to their anti-dilutive effect:
|
|
|
|
|
|
|
|
||||
Restricted stock
|
588
|
|
|
660
|
|
|
585
|
|
|
705
|
|
Convertible notes
|
—
|
|
|
—
|
|
|
—
|
|
|
345
|
|
Other equity-based awards
|
48
|
|
|
97
|
|
|
82
|
|
|
103
|
|
Total anti-dilutive common share equivalents
|
636
|
|
|
757
|
|
|
667
|
|
|
1,153
|
|
|
|
|
|
|
|
|
|
(i)
|
PDC Energy, Inc. ("Parent"), the issuer of the guaranteed obligations, including non-material subsidiaries;
|
(ii)
|
PDC Permian, Inc., the guarantor subsidiary ("Guarantor"), as specified in the indentures related to our Notes;
|
(iii)
|
Eliminations representing adjustments to (a) eliminate intercompany transactions between or among Parent, Guarantor, and our other subsidiaries and (b) eliminate the investments in our subsidiaries; and
|
(iv)
|
Parent and subsidiaries on a consolidated basis ("Consolidated").
|
|
|
Condensed Consolidating Balance Sheets
|
||||||||||||||
|
|
September 30, 2017
|
||||||||||||||
|
|
Parent
|
|
Guarantor
|
|
Eliminations
|
|
Consolidated
|
||||||||
|
|
(in thousands)
|
||||||||||||||
Assets
|
|
|
|
|
|
|
|
|
||||||||
Current assets
|
|
$
|
299,239
|
|
|
$
|
35,463
|
|
|
$
|
—
|
|
|
$
|
334,702
|
|
Properties and equipment, net
|
|
1,911,759
|
|
|
1,970,941
|
|
|
—
|
|
|
3,882,700
|
|
||||
Intercompany receivable
|
|
199,871
|
|
|
—
|
|
|
(199,871
|
)
|
|
—
|
|
||||
Investment in subsidiaries
|
|
1,467,623
|
|
|
—
|
|
|
(1,467,623
|
)
|
|
—
|
|
||||
Noncurrent assets
|
|
89,245
|
|
|
640
|
|
|
—
|
|
|
89,885
|
|
||||
Total Assets
|
|
$
|
3,967,737
|
|
|
$
|
2,007,044
|
|
|
$
|
(1,667,494
|
)
|
|
$
|
4,307,287
|
|
|
|
|
|
|
|
|
|
|
||||||||
Liabilities and Stockholders' Equity
|
|
|
|
|
|
|
|
|
||||||||
Current liabilities
|
|
$
|
310,997
|
|
|
$
|
62,791
|
|
|
$
|
—
|
|
|
$
|
373,788
|
|
Intercompany payable
|
|
—
|
|
|
199,871
|
|
|
(199,871
|
)
|
|
—
|
|
||||
Long-term debt
|
|
1,051,571
|
|
|
—
|
|
|
—
|
|
|
1,051,571
|
|
||||
Other noncurrent liabilities
|
|
178,567
|
|
|
276,759
|
|
|
—
|
|
|
455,326
|
|
||||
Stockholders' equity
|
|
2,426,602
|
|
|
1,467,623
|
|
|
(1,467,623
|
)
|
|
2,426,602
|
|
||||
Total Liabilities and Stockholders' Equity
|
|
$
|
3,967,737
|
|
|
$
|
2,007,044
|
|
|
$
|
(1,667,494
|
)
|
|
$
|
4,307,287
|
|
|
|
Condensed Consolidating Balance Sheets
|
||||||||||||||
|
|
December 31, 2016
|
||||||||||||||
|
|
Parent
|
|
Guarantor
|
|
Eliminations
|
|
Consolidated
|
||||||||
|
|
(in thousands)
|
||||||||||||||
Assets
|
|
|
|
|
|
|
|
|
||||||||
Current assets
|
|
$
|
387,309
|
|
|
$
|
12,516
|
|
|
$
|
—
|
|
|
$
|
399,825
|
|
Properties and equipment, net
|
|
1,884,147
|
|
|
2,118,847
|
|
|
—
|
|
|
4,002,994
|
|
||||
Intercompany receivable
|
|
9,415
|
|
|
—
|
|
|
(9,415
|
)
|
|
—
|
|
||||
Investment in subsidiaries
|
|
1,765,092
|
|
|
—
|
|
|
(1,765,092
|
)
|
|
—
|
|
||||
Goodwill
|
|
—
|
|
|
62,041
|
|
|
—
|
|
|
62,041
|
|
||||
Noncurrent assets
|
|
20,811
|
|
|
171
|
|
|
—
|
|
|
20,982
|
|
||||
Total Assets
|
|
$
|
4,066,774
|
|
|
$
|
2,193,575
|
|
|
$
|
(1,774,507
|
)
|
|
$
|
4,485,842
|
|
|
|
|
|
|
|
|
|
|
||||||||
Liabilities and Stockholders' Equity
|
|
|
|
|
|
|
|
|
||||||||
Current liabilities
|
|
$
|
235,121
|
|
|
$
|
35,457
|
|
|
$
|
—
|
|
|
$
|
270,578
|
|
Intercompany payable
|
|
—
|
|
|
9,415
|
|
|
(9,415
|
)
|
|
—
|
|
||||
Long-term debt
|
|
1,043,954
|
|
|
—
|
|
|
—
|
|
|
1,043,954
|
|
||||
Other noncurrent liabilities
|
|
164,945
|
|
|
383,611
|
|
|
—
|
|
|
548,556
|
|
||||
Stockholders' equity
|
|
2,622,754
|
|
|
1,765,092
|
|
|
(1,765,092
|
)
|
|
2,622,754
|
|
||||
Total Liabilities and Stockholders' Equity
|
|
$
|
4,066,774
|
|
|
$
|
2,193,575
|
|
|
$
|
(1,774,507
|
)
|
|
$
|
4,485,842
|
|
|
|
Condensed Consolidating Statements of Operations
|
||||||||||||||
|
|
Three Months Ended September 30, 2017
|
||||||||||||||
|
|
Parent
|
|
Guarantor
|
|
Eliminations
|
|
Consolidated
|
||||||||
|
|
(in thousands)
|
||||||||||||||
|
|
|
|
|
|
|
|
|
||||||||
Operating and other revenues
|
|
$
|
150,015
|
|
|
$
|
33,220
|
|
|
$
|
—
|
|
|
$
|
183,235
|
|
Production and other operating expenses
|
|
41,891
|
|
|
13,129
|
|
|
—
|
|
|
55,020
|
|
||||
General and administrative
|
|
26,207
|
|
|
3,092
|
|
|
—
|
|
|
29,299
|
|
||||
Exploration, geologic, and geophysical expense
|
|
217
|
|
|
41,691
|
|
|
—
|
|
|
41,908
|
|
||||
Depreciation depletion and amortization
|
|
106,623
|
|
|
18,615
|
|
|
—
|
|
|
125,238
|
|
||||
Impairment of properties and equipment
|
|
1,148
|
|
|
251,592
|
|
|
—
|
|
|
252,740
|
|
||||
Impairment of goodwill
|
|
—
|
|
|
75,121
|
|
|
—
|
|
|
75,121
|
|
||||
Interest (expense) income
|
|
(19,168
|
)
|
|
372
|
|
|
—
|
|
|
(18,796
|
)
|
||||
Loss before income taxes
|
|
(45,239
|
)
|
|
(369,648
|
)
|
|
—
|
|
|
(414,887
|
)
|
||||
Income tax benefit
|
|
30,274
|
|
|
92,076
|
|
|
—
|
|
|
122,350
|
|
||||
Equity in loss of subsidiary
|
|
(277,572
|
)
|
|
—
|
|
|
277,572
|
|
|
—
|
|
||||
Net loss
|
|
$
|
(292,537
|
)
|
|
$
|
(277,572
|
)
|
|
$
|
277,572
|
|
|
$
|
(292,537
|
)
|
|
|
Condensed Consolidating Statements of Operations
|
||||||||||||||
|
|
Nine Months Ended September 30, 2017
|
||||||||||||||
|
|
Parent
|
|
Guarantor
|
|
Eliminations
|
|
Consolidated
|
||||||||
|
|
(in thousands)
|
||||||||||||||
|
|
|
|
|
|
|
|
|
||||||||
Operating and other revenues
|
|
$
|
657,102
|
|
|
$
|
74,998
|
|
|
$
|
—
|
|
|
$
|
732,100
|
|
Production and other operating expenses
|
|
118,779
|
|
|
26,049
|
|
|
—
|
|
|
144,828
|
|
||||
General and administrative
|
|
76,353
|
|
|
8,792
|
|
|
—
|
|
|
85,145
|
|
||||
Exploration, geologic, and geophysical expense
|
|
744
|
|
|
43,151
|
|
|
—
|
|
|
43,895
|
|
||||
Depreciation depletion and amortization
|
|
317,088
|
|
|
43,479
|
|
|
—
|
|
|
360,567
|
|
||||
Impairment of properties and equipment
|
|
2,282
|
|
|
280,217
|
|
|
—
|
|
|
282,499
|
|
||||
Impairment of goodwill
|
|
—
|
|
|
75,121
|
|
|
—
|
|
|
75,121
|
|
||||
Provision for uncollectible notes receivable
|
|
(40,203
|
)
|
|
—
|
|
|
—
|
|
|
(40,203
|
)
|
||||
Interest (expense) income
|
|
(57,557
|
)
|
|
685
|
|
|
—
|
|
|
(56,872
|
)
|
||||
Income (loss) before income taxes
|
|
124,502
|
|
|
(401,126
|
)
|
|
—
|
|
|
(276,624
|
)
|
||||
Income tax expense (benefit)
|
|
(32,174
|
)
|
|
103,657
|
|
|
—
|
|
|
71,483
|
|
||||
Equity in loss of subsidiary
|
|
(297,469
|
)
|
|
—
|
|
|
297,469
|
|
|
—
|
|
||||
Net loss
|
|
$
|
(205,141
|
)
|
|
$
|
(297,469
|
)
|
|
$
|
297,469
|
|
|
$
|
(205,141
|
)
|
|
|
Condensed Consolidating Statements of Cash Flows
|
||||||||||||||
|
|
Nine Months Ended September 30, 2017
|
||||||||||||||
|
|
Parent
|
|
Guarantor
|
|
Eliminations
|
|
Consolidated
|
||||||||
|
|
(in thousands)
|
||||||||||||||
|
|
|
|
|
|
|
|
|
||||||||
Cash flows from operating activities
|
|
$
|
382,715
|
|
|
$
|
28,687
|
|
|
$
|
—
|
|
|
$
|
411,402
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
||||||||
Capital expenditures for development of crude oil and natural properties
|
|
(315,718
|
)
|
|
(213,132
|
)
|
|
—
|
|
|
(528,850
|
)
|
||||
Capital expenditures for other properties and equipment
|
|
(2,488
|
)
|
|
(1,252
|
)
|
|
—
|
|
|
(3,740
|
)
|
||||
Acquisition of crude oil and natural gas properties, including settlement adjustments and deposit for pending acquisition
|
|
(19,761
|
)
|
|
5,279
|
|
|
—
|
|
|
(14,482
|
)
|
||||
Proceeds from sale of properties and equipment
|
|
3,322
|
|
|
—
|
|
|
—
|
|
|
3,322
|
|
||||
Sale of promissory note
|
|
40,203
|
|
|
—
|
|
|
—
|
|
|
40,203
|
|
||||
Restricted cash
|
|
(9,250
|
)
|
|
—
|
|
|
—
|
|
|
(9,250
|
)
|
||||
Sales of short-term investments
|
|
49,890
|
|
|
—
|
|
|
—
|
|
|
49,890
|
|
||||
Purchases of short-term investments
|
|
(49,890
|
)
|
|
—
|
|
|
—
|
|
|
(49,890
|
)
|
||||
Intercompany transfers
|
|
(189,239
|
)
|
|
—
|
|
|
189,239
|
|
|
—
|
|
||||
Net cash from investing activities
|
|
(492,931
|
)
|
|
(209,105
|
)
|
|
189,239
|
|
|
(512,797
|
)
|
||||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
||||||||
Purchase of treasury stock
|
|
(5,325
|
)
|
|
—
|
|
|
—
|
|
|
(5,325
|
)
|
||||
Other
|
|
(906
|
)
|
|
(45
|
)
|
|
—
|
|
|
(951
|
)
|
||||
Intercompany transfers
|
|
—
|
|
|
189,239
|
|
|
(189,239
|
)
|
|
—
|
|
||||
Net cash from financing activities
|
|
(6,231
|
)
|
|
189,194
|
|
|
(189,239
|
)
|
|
(6,276
|
)
|
||||
Net change in cash and cash equivalents
|
|
(116,447
|
)
|
|
8,776
|
|
|
—
|
|
|
(107,671
|
)
|
||||
Cash and cash equivalents, beginning of period
|
|
240,487
|
|
|
3,613
|
|
|
—
|
|
|
244,100
|
|
||||
Cash and cash equivalents, end of period
|
|
$
|
124,040
|
|
|
$
|
12,389
|
|
|
$
|
—
|
|
|
$
|
136,429
|
|
|
|
Wells Operated by PDC
|
||||||||||||||||
|
|
Wattenberg Field
|
|
Delaware Basin
|
|
Total
|
||||||||||||
|
|
Gross
|
|
Net
|
|
Gross
|
|
Net
|
|
Gross
|
|
Net
|
||||||
In-process as of December 31, 2016
|
|
64
|
|
|
52.7
|
|
|
5
|
|
|
4.8
|
|
|
69
|
|
|
57.5
|
|
Wells spud
|
|
119
|
|
|
105.6
|
|
|
18
|
|
|
16.6
|
|
|
137
|
|
|
122.2
|
|
Wells turned-in-line to sales
|
|
(111
|
)
|
|
(93.6
|
)
|
|
(11
|
)
|
|
(10.2
|
)
|
|
(122
|
)
|
|
(103.8
|
)
|
Exploratory dry holes
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
|
(2.0
|
)
|
|
(2
|
)
|
|
(2.0
|
)
|
In-process as of September 30, 2017
|
|
72
|
|
|
64.7
|
|
|
10
|
|
|
9.2
|
|
|
82
|
|
|
73.9
|
|
|
|
Wells Operated by Others
|
||||||||||||||||
|
|
Wattenberg Field
|
|
Delaware Basin
|
|
Total
|
||||||||||||
|
|
Gross
|
|
Net
|
|
Gross
|
|
Net
|
|
Gross
|
|
Net
|
||||||
In-process as of December 31, 2016
|
|
18
|
|
|
3.4
|
|
|
—
|
|
|
—
|
|
|
18
|
|
|
3.4
|
|
Wells spud
|
|
89
|
|
|
12.2
|
|
|
7
|
|
|
1.0
|
|
|
96
|
|
|
13.2
|
|
Wells turned-in-line to sales
|
|
(40
|
)
|
|
(4.5
|
)
|
|
(2
|
)
|
|
(0.4
|
)
|
|
(42
|
)
|
|
(4.9
|
)
|
In-process as of September 30, 2017
|
|
67
|
|
|
11.1
|
|
|
5
|
|
|
0.6
|
|
|
72
|
|
|
11.7
|
|
*
|
Percentage change is not meaningful.
|
|
September 30, 2017
|
||||||
|
Three Months Ended
|
|
Nine Months Ended
|
||||
|
(in millions)
|
||||||
Increase in production
|
$
|
63.0
|
|
|
$
|
154.5
|
|
Increase in average crude oil price
|
12.2
|
|
|
86.0
|
|
||
Increase in average natural gas price
|
2.5
|
|
|
31.7
|
|
||
Increase in average NGLs price
|
13.2
|
|
|
35.8
|
|
||
Total increase in crude oil, natural gas and NGLs sales revenue
|
$
|
90.9
|
|
|
$
|
308.0
|
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||||
Production by Operating Region
|
|
2017
|
|
2016
|
|
Percentage Change
|
|
2017
|
|
2016
|
|
Percentage Change
|
||||||
Crude oil (MBbls)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Wattenberg Field
|
|
2,943
|
|
|
2,216
|
|
|
32.8
|
%
|
|
7,883
|
|
|
5,929
|
|
|
33.0
|
%
|
Delaware Basin
|
|
436
|
|
|
—
|
|
|
*
|
|
|
1,075
|
|
|
—
|
|
|
*
|
|
Utica Shale
|
|
60
|
|
|
124
|
|
|
(51.4
|
)%
|
|
226
|
|
|
312
|
|
|
(27.7
|
)%
|
Total
|
|
3,439
|
|
|
2,340
|
|
|
47.0
|
%
|
|
9,184
|
|
|
6,241
|
|
|
47.2
|
%
|
Natural gas (MMcf)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Wattenberg Field
|
|
15,788
|
|
|
12,700
|
|
|
24.3
|
%
|
|
44,694
|
|
|
34,968
|
|
|
27.8
|
%
|
Delaware Basin
|
|
2,781
|
|
|
—
|
|
|
*
|
|
|
6,052
|
|
|
—
|
|
|
*
|
|
Utica Shale
|
|
501
|
|
|
717
|
|
|
(30.2
|
)%
|
|
1,691
|
|
|
1,800
|
|
|
(6.0
|
)%
|
Total
|
|
19,070
|
|
|
13,417
|
|
|
42.1
|
%
|
|
52,437
|
|
|
36,768
|
|
|
42.6
|
%
|
NGLs (MBbls)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Wattenberg Field
|
|
1,564
|
|
|
1,353
|
|
|
15.6
|
%
|
|
4,473
|
|
|
3,240
|
|
|
38.0
|
%
|
Delaware Basin
|
|
282
|
|
|
—
|
|
|
*
|
|
|
625
|
|
|
—
|
|
|
*
|
|
Utica Shale
|
|
46
|
|
|
75
|
|
|
(38.7
|
)%
|
|
151
|
|
|
162
|
|
|
(7.3
|
)%
|
Total
|
|
1,892
|
|
|
1,428
|
|
|
32.5
|
%
|
|
5,249
|
|
|
3,402
|
|
|
54.3
|
%
|
Crude oil equivalent (MBoe)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Wattenberg Field
|
|
7,138
|
|
|
5,686
|
|
|
25.5
|
%
|
|
19,805
|
|
|
14,997
|
|
|
32.1
|
%
|
Delaware Basin
|
|
1,182
|
|
|
—
|
|
|
*
|
|
|
2,709
|
|
|
—
|
|
|
*
|
|
Utica Shale
|
|
189
|
|
|
318
|
|
|
(40.6
|
)%
|
|
658
|
|
|
774
|
|
|
(15.0
|
)%
|
Total
|
|
8,509
|
|
|
6,004
|
|
|
41.7
|
%
|
|
23,172
|
|
|
15,771
|
|
|
46.9
|
%
|
Average crude oil equivalent per day (Boe)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Wattenberg Field
|
|
77,582
|
|
|
61,804
|
|
|
25.5
|
%
|
|
72,545
|
|
|
54,733
|
|
|
32.5
|
%
|
Delaware Basin
|
|
12,845
|
|
|
—
|
|
|
*
|
|
|
9,923
|
|
|
—
|
|
|
*
|
|
Utica Shale
|
|
2,064
|
|
|
3,459
|
|
|
(40.3
|
)%
|
|
2,412
|
|
|
2,825
|
|
|
(14.6
|
)%
|
Total
|
|
92,491
|
|
|
65,263
|
|
|
41.7
|
%
|
|
84,880
|
|
|
57,558
|
|
|
47.5
|
%
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||||||||
Weighted-Average Realized Sales Price by Operating Region
|
|
|
|
|
|
Percentage Change
|
|
|
|
|
|
Percentage Change
|
||||||||||
(excluding net settlements on derivatives)
|
|
2017
|
|
2016
|
|
|
2017
|
|
2016
|
|
||||||||||||
Crude oil (per Bbl)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Wattenberg Field
|
|
$
|
45.80
|
|
|
$
|
42.29
|
|
|
8.3
|
%
|
|
$
|
46.84
|
|
|
$
|
37.42
|
|
|
25.2
|
%
|
Delaware Basin
|
|
45.06
|
|
|
—
|
|
|
*
|
|
|
46.05
|
|
|
—
|
|
|
*
|
|
||||
Utica Shale
|
|
43.03
|
|
|
38.93
|
|
|
10.5
|
%
|
|
44.51
|
|
|
35.61
|
|
|
25.0
|
%
|
||||
Weighted-average price
|
|
45.66
|
|
|
42.11
|
|
|
8.4
|
%
|
|
46.69
|
|
|
37.33
|
|
|
25.1
|
%
|
||||
Natural gas (per Mcf)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Wattenberg Field
|
|
$
|
2.09
|
|
|
$
|
2.08
|
|
|
0.5
|
%
|
|
$
|
2.23
|
|
|
$
|
1.63
|
|
|
36.8
|
%
|
Delaware Basin
|
|
2.74
|
|
|
—
|
|
|
*
|
|
|
2.13
|
|
|
—
|
|
|
*
|
|
||||
Utica Shale
|
|
1.81
|
|
|
1.33
|
|
|
36.1
|
%
|
|
2.56
|
|
|
1.44
|
|
|
77.8
|
%
|
||||
Weighted-average price
|
|
2.17
|
|
|
2.04
|
|
|
6.4
|
%
|
|
2.23
|
|
|
1.62
|
|
|
37.7
|
%
|
||||
NGLs (per Bbl)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Wattenberg Field
|
|
$
|
17.49
|
|
|
$
|
11.07
|
|
|
58.0
|
%
|
|
$
|
16.68
|
|
|
$
|
10.32
|
|
|
61.6
|
%
|
Delaware Basin
|
|
20.87
|
|
|
—
|
|
|
*
|
|
|
20.02
|
|
|
—
|
|
|
*
|
|
||||
Utica Shale
|
|
22.00
|
|
|
12.14
|
|
|
81.2
|
%
|
|
22.40
|
|
|
12.22
|
|
|
83.3
|
%
|
||||
Weighted-average price
|
|
18.11
|
|
|
11.12
|
|
|
62.9
|
%
|
|
17.24
|
|
|
10.41
|
|
|
65.6
|
%
|
||||
Crude oil equivalent (per Boe)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Wattenberg Field
|
|
$
|
27.33
|
|
|
$
|
23.77
|
|
|
15.0
|
%
|
|
$
|
27.44
|
|
|
$
|
20.83
|
|
|
31.7
|
%
|
Delaware Basin
|
|
28.07
|
|
|
—
|
|
|
*
|
|
|
27.65
|
|
|
—
|
|
|
*
|
|
||||
Utica Shale
|
|
23.75
|
|
|
20.98
|
|
|
13.2
|
%
|
|
26.98
|
|
|
20.26
|
|
|
33.2
|
%
|
||||
Weighted-average price
|
|
27.35
|
|
|
23.62
|
|
|
15.8
|
%
|
|
27.45
|
|
|
20.80
|
|
|
32.0
|
%
|
For the three months ended
September 30, 2017
|
|
Average NYMEX Price
|
|
Average Realization Percentage Before Transportation, Gathering and Processing Expenses
|
|
Average Realized Price Before Transportation, Gathering and Processing Expenses
|
|
Average Transportation, Gathering and Processing Expenses
|
|
Average Realized Price After Transportation, Gathering and Processing Expenses
|
|||||||||
Crude oil (per Bbl)
|
|
$
|
48.20
|
|
|
95
|
%
|
|
$
|
45.66
|
|
|
$
|
1.41
|
|
|
$
|
44.25
|
|
Natural gas (per MMBtu)
|
|
3.00
|
|
|
72
|
%
|
|
2.17
|
|
|
0.24
|
|
|
1.93
|
|
||||
NGLs (per Bbl)
|
|
48.20
|
|
|
38
|
%
|
|
18.11
|
|
|
0.25
|
|
|
17.86
|
|
||||
Crude oil equivalent (per Boe)
|
|
36.92
|
|
|
74
|
%
|
|
27.35
|
|
|
1.15
|
|
|
26.20
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||
For the three months ended
September 30, 2016
|
|
Average NYMEX Price
|
|
Average Realization Percentage Before Transportation, Gathering and Processing Expenses
|
|
Average Realized Price Before Transportation, Gathering and Processing Expenses
|
|
Average Transportation, Gathering and Processing Expenses
|
|
Average Realized Price After Transportation, Gathering and Processing Expenses
|
|||||||||
Crude oil (per Bbl)
|
|
$
|
44.94
|
|
|
94
|
%
|
|
$
|
42.11
|
|
|
$
|
1.52
|
|
|
$
|
40.59
|
|
Natural gas (per MMBtu)
|
|
2.81
|
|
|
73
|
%
|
|
2.04
|
|
|
0.08
|
|
|
1.96
|
|
||||
NGLs (per Bbl)
|
|
44.94
|
|
|
25
|
%
|
|
11.12
|
|
|
0.29
|
|
|
10.83
|
|
||||
Crude oil equivalent (per Boe)
|
|
34.48
|
|
|
69
|
%
|
|
23.62
|
|
|
0.84
|
|
|
22.78
|
|
For the nine months ended
September 30, 2017
|
|
Average NYMEX Price
|
|
Average Realization Percentage Before Transportation, Gathering and Processing Expenses
|
|
Average Realized Price Before Transportation, Gathering and Processing Expenses
|
|
Average Transportation, Gathering and Processing Expenses
|
|
Average Realized Price After Transportation, Gathering and Processing Expenses
|
|||||||||
Crude oil (per Bbl)
|
|
$
|
49.47
|
|
|
94
|
%
|
|
$
|
46.69
|
|
|
$
|
1.42
|
|
|
$
|
45.27
|
|
Natural gas (per MMBtu)
|
|
3.17
|
|
|
70
|
%
|
|
2.23
|
|
|
0.15
|
|
|
2.08
|
|
||||
NGLs (per Bbl)
|
|
49.47
|
|
|
35
|
%
|
|
17.24
|
|
|
0.29
|
|
|
16.95
|
|
||||
Crude oil equivalent (per Boe)
|
|
37.99
|
|
|
72
|
%
|
|
27.45
|
|
|
0.96
|
|
|
26.49
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||
For the nine months ended
September 30, 2016
|
|
Average NYMEX Price
|
|
Average Realization Percentage Before Transportation, Gathering and Processing Expenses
|
|
Average Realized Price Before Transportation, Gathering and Processing Expenses
|
|
Average Transportation, Gathering and Processing Expenses
|
|
Average Realized Price After Transportation, Gathering and Processing Expenses
|
|||||||||
Crude oil (per Bbl)
|
|
$
|
41.33
|
|
|
90
|
%
|
|
$
|
37.33
|
|
|
$
|
1.56
|
|
|
$
|
35.77
|
|
Natural gas (per MMBtu)
|
|
2.29
|
|
|
71
|
%
|
|
1.62
|
|
|
0.08
|
|
|
1.54
|
|
||||
NGLs (per Bbl)
|
|
41.33
|
|
|
25
|
%
|
|
10.41
|
|
|
0.29
|
|
|
10.12
|
|
||||
Crude oil equivalent (per Boe)
|
|
30.61
|
|
|
68
|
%
|
|
20.80
|
|
|
0.86
|
|
|
19.94
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
|
(in millions)
|
||||||||||||||
Commodity price risk management gain (loss), net:
|
|
|
|
|
|
|
|
||||||||
Net settlements of commodity derivative instruments:
|
|
|
|
|
|
|
|
||||||||
Crude oil fixed price swaps and collars
|
$
|
5.4
|
|
|
$
|
39.5
|
|
|
$
|
7.4
|
|
|
$
|
131.6
|
|
Natural gas fixed price swaps and collars
|
5.1
|
|
|
7.7
|
|
|
13.5
|
|
|
35.8
|
|
||||
Natural gas basis protection swaps
|
1.2
|
|
|
0.5
|
|
|
3.3
|
|
|
0.5
|
|
||||
NGLs (propane portion) fixed price swaps
|
(2.1
|
)
|
|
—
|
|
|
(2.0
|
)
|
|
—
|
|
||||
Total net settlements of commodity derivative instruments
|
9.6
|
|
|
47.7
|
|
|
22.2
|
|
|
167.9
|
|
||||
Change in fair value of unsettled commodity derivative instruments:
|
|
|
|
|
|
|
|
||||||||
Reclassification of settlements included in prior period changes in fair value of commodity derivative instruments
|
(15.6
|
)
|
|
(40.6
|
)
|
|
31.0
|
|
|
(169.5
|
)
|
||||
Crude oil fixed price swaps and collars
|
(40.0
|
)
|
|
4.8
|
|
|
26.3
|
|
|
(48.3
|
)
|
||||
Natural gas fixed price swaps and collars
|
(2.1
|
)
|
|
6.1
|
|
|
9.2
|
|
|
(13.1
|
)
|
||||
Natural gas basis protection swaps
|
1.5
|
|
|
1.4
|
|
|
3.4
|
|
|
0.7
|
|
||||
NGLs (propane portion) fixed price swaps
|
(5.6
|
)
|
|
—
|
|
|
(5.6
|
)
|
|
—
|
|
||||
Net change in fair value of unsettled commodity derivative instruments
|
(61.8
|
)
|
|
(28.3
|
)
|
|
64.3
|
|
|
(230.2
|
)
|
||||
Total commodity price risk management gain (loss), net
|
$
|
(52.2
|
)
|
|
$
|
19.4
|
|
|
$
|
86.5
|
|
|
$
|
(62.3
|
)
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
|
(in millions)
|
||||||||||||||
|
|
|
|
|
|
|
|
||||||||
Exploratory dry hole costs
|
$
|
41.2
|
|
|
$
|
—
|
|
|
$
|
41.2
|
|
|
$
|
—
|
|
Geological and geophysical costs, including seismic purchases
|
0.5
|
|
|
—
|
|
|
1.8
|
|
|
—
|
|
||||
Operating, personnel and other
|
0.2
|
|
|
0.2
|
|
|
0.9
|
|
|
0.7
|
|
||||
Total exploration, geologic, and geophysical expense
|
$
|
41.9
|
|
|
$
|
0.2
|
|
|
$
|
43.9
|
|
|
$
|
0.7
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
|
(in millions)
|
||||||||||||||
|
|
|
|
|
|
|
|
||||||||
Impairment of unproved properties
|
$
|
252.6
|
|
|
$
|
0.3
|
|
|
$
|
282.2
|
|
|
$
|
2.4
|
|
Amortization of individually insignificant unproved properties
|
0.1
|
|
|
0.6
|
|
|
0.3
|
|
|
0.7
|
|
||||
Impairment of crude oil and natural gas properties
|
252.7
|
|
|
0.9
|
|
|
282.5
|
|
|
3.1
|
|
||||
Land and buildings
|
—
|
|
|
—
|
|
|
—
|
|
|
3.0
|
|
||||
Total impairment of properties and equipment
|
$
|
252.7
|
|
|
$
|
0.9
|
|
|
$
|
282.5
|
|
|
$
|
6.1
|
|
|
|
September 30, 2017
|
||||||
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||
|
|
(in millions)
|
||||||
Increase in production
|
|
$
|
44.5
|
|
|
$
|
138.5
|
|
Decrease in weighted-average depreciation, depletion and amortization rates
|
|
(33.0
|
)
|
|
(97.2
|
)
|
||
Total increase in DD&A expense related to crude oil and natural gas properties
|
|
$
|
11.5
|
|
|
$
|
41.3
|
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
Operating Region/Area
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
|
|
(per Boe)
|
||||||||||||||
Wattenberg Field
|
|
$
|
14.60
|
|
|
$
|
19.17
|
|
|
$
|
15.53
|
|
|
$
|
20.42
|
|
Delaware Basin
|
|
15.14
|
|
|
—
|
|
|
15.32
|
|
|
—
|
|
||||
Utica Shale
|
|
7.64
|
|
|
9.59
|
|
|
10.21
|
|
|
10.52
|
|
||||
Total weighted-average
|
|
14.52
|
|
|
18.66
|
|
|
15.35
|
|
|
19.94
|
|
•
|
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,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
|
(in millions)
|
||||||||||||||
Adjusted cash flows from operations:
|
|
|
|
|
|
|
|
||||||||
Net cash from operating activities
|
$
|
148.2
|
|
|
$
|
163.0
|
|
|
411.4
|
|
|
$
|
360.8
|
|
|
Changes in assets and liabilities
|
2.7
|
|
|
(40.4
|
)
|
|
(3.9
|
)
|
|
(34.6
|
)
|
||||
Adjusted cash flows from operations
|
$
|
150.9
|
|
|
$
|
122.6
|
|
|
$
|
407.5
|
|
|
$
|
326.2
|
|
|
|
|
|
|
|
|
|
||||||||
Adjusted net loss:
|
|
|
|
|
|
|
|
||||||||
Net loss
|
$
|
(292.5
|
)
|
|
$
|
(23.3
|
)
|
|
$
|
(205.1
|
)
|
|
$
|
(190.3
|
)
|
(Gain) loss on commodity derivative instruments
|
52.2
|
|
|
(19.4
|
)
|
|
(86.5
|
)
|
|
62.3
|
|
||||
Net settlements on commodity derivative instruments
|
9.6
|
|
|
47.7
|
|
|
22.2
|
|
|
167.9
|
|
||||
Tax effect of above adjustments
|
(23.2
|
)
|
|
(10.8
|
)
|
|
24.0
|
|
|
(87.6
|
)
|
||||
Adjusted net loss
|
$
|
(253.9
|
)
|
|
$
|
(5.8
|
)
|
|
$
|
(245.4
|
)
|
|
$
|
(47.7
|
)
|
|
|
|
|
|
|
|
|
||||||||
Net loss to adjusted EBITDAX:
|
|
|
|
|
|
|
|
||||||||
Net loss
|
$
|
(292.5
|
)
|
|
$
|
(23.3
|
)
|
|
$
|
(205.1
|
)
|
|
$
|
(190.3
|
)
|
(Gain) loss on commodity derivative instruments
|
52.2
|
|
|
(19.4
|
)
|
|
(86.5
|
)
|
|
62.3
|
|
||||
Net settlements on commodity derivative instruments
|
9.6
|
|
|
47.7
|
|
|
22.2
|
|
|
167.9
|
|
||||
Non-cash stock-based compensation
|
4.8
|
|
|
4.1
|
|
|
14.6
|
|
|
15.2
|
|
||||
Interest expense, net
|
18.8
|
|
|
20.1
|
|
|
56.9
|
|
|
40.9
|
|
||||
Income tax benefit
|
(122.4
|
)
|
|
(12.0
|
)
|
|
(71.5
|
)
|
|
(112.2
|
)
|
||||
Impairment of properties and equipment
|
252.7
|
|
|
0.9
|
|
|
282.5
|
|
|
6.1
|
|
||||
Impairment of goodwill
|
75.1
|
|
|
—
|
|
|
75.1
|
|
|
—
|
|
||||
Exploration, geologic, and geophysical expense
|
41.9
|
|
|
0.2
|
|
|
43.9
|
|
|
0.7
|
|
||||
Depreciation, depletion, and amortization
|
125.2
|
|
|
112.9
|
|
|
360.6
|
|
|
317.3
|
|
||||
Accretion of asset retirement obligations
|
1.5
|
|
|
1.8
|
|
|
4.9
|
|
|
5.4
|
|
||||
Adjusted EBITDAX
|
$
|
166.9
|
|
|
$
|
133.0
|
|
|
$
|
497.6
|
|
|
$
|
313.3
|
|
|
|
|
|
|
|
|
|
||||||||
Cash from operating activities to adjusted EBITDAX:
|
|
|
|
|
|
|
|
||||||||
Net cash from operating activities
|
$
|
148.2
|
|
|
$
|
163.0
|
|
|
$
|
411.4
|
|
|
$
|
360.8
|
|
Interest expense, net
|
18.8
|
|
|
20.1
|
|
|
56.9
|
|
|
40.9
|
|
||||
Amortization of debt discount and issuance costs
|
(3.2
|
)
|
|
(9.9
|
)
|
|
(9.6
|
)
|
|
(13.0
|
)
|
||||
Gain on sale of properties and equipment
|
0.1
|
|
|
0.2
|
|
|
0.8
|
|
|
—
|
|
||||
Exploration, geologic, and geophysical expense
|
41.9
|
|
|
0.2
|
|
|
43.9
|
|
|
0.7
|
|
||||
Exploratory dry hole costs
|
(41.2
|
)
|
|
—
|
|
|
(41.2
|
)
|
|
—
|
|
||||
Other
|
(0.4
|
)
|
|
(0.2
|
)
|
|
39.3
|
|
|
(41.5
|
)
|
||||
Changes in assets and liabilities
|
2.7
|
|
|
(40.4
|
)
|
|
(3.9
|
)
|
|
(34.6
|
)
|
||||
Adjusted EBITDAX
|
$
|
166.9
|
|
|
$
|
133.0
|
|
|
$
|
497.6
|
|
|
$
|
313.3
|
|
|
|
Collars
|
|
Fixed-Price Swaps
|
|
|
||||||||||||||||
Commodity/ Index/
Maturity Period
|
|
Quantity
(Gas -
BBtu
Oil - MBbls)
|
|
Weighted-Average
Contract Price
|
|
Quantity
(Oil - MBbls
Gas and Basis-
BBtu
Propane - MBbls)
|
|
Weighted-
Average
Contract
Price
|
|
Fair Value
September 30,
2017 (1)
(in millions)
|
||||||||||||
|
|
Floors
|
|
Ceilings
|
|
|
|
|||||||||||||||
Crude Oil
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
NYMEX
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
2017
|
|
616.0
|
|
|
$
|
49.54
|
|
|
$
|
62.32
|
|
|
1,837.1
|
|
|
$
|
50.13
|
|
|
$
|
(2.6
|
)
|
2018
|
|
1,512.0
|
|
|
41.85
|
|
|
54.31
|
|
|
7,972.0
|
|
|
52.11
|
|
|
(0.6
|
)
|
||||
2019
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,400.0
|
|
|
50.25
|
|
|
(1.8
|
)
|
||||
Total Crude Oil
|
|
2,128.0
|
|
|
|
|
|
|
12,209.1
|
|
|
|
|
$
|
(5.0
|
)
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Natural Gas
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
NYMEX
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
2017
|
|
2,895.1
|
|
|
$
|
3.38
|
|
|
$
|
4.02
|
|
|
10,310.0
|
|
|
$
|
3.39
|
|
|
$
|
4.6
|
|
2018
|
|
5,230.0
|
|
|
3.00
|
|
|
3.54
|
|
|
51,280.0
|
|
|
2.95
|
|
|
(4.1
|
)
|
||||
Total Natural Gas
|
|
8,125.1
|
|
|
|
|
|
|
61,590.0
|
|
|
|
|
$
|
0.5
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Basis Protection
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
CIG
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
2017
|
|
—
|
|
|
—
|
|
|
—
|
|
|
13,264.2
|
|
|
$
|
(0.34
|
)
|
|
$
|
0.6
|
|
||
2018
|
|
—
|
|
|
—
|
|
|
—
|
|
|
30,200.0
|
|
|
(0.34
|
)
|
|
3.7
|
|
||||
Waha
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
2018
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6,000.0
|
|
|
(0.50
|
)
|
|
0.1
|
|
||||
Total Basis Protection
|
|
—
|
|
|
|
|
|
|
49,464.2
|
|
|
|
|
$
|
4.4
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Propane
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Mont Belvieu
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
2017
|
|
—
|
|
|
—
|
|
|
—
|
|
|
411.9
|
|
|
$
|
27.22
|
|
|
$
|
(4.3
|
)
|
||
2018
|
|
—
|
|
|
—
|
|
|
—
|
|
|
428.6
|
|
|
29.14
|
|
|
(1.3
|
)
|
||||
Total Propane
|
|
|
|
|
|
|
|
840.5
|
|
|
|
|
$
|
(5.6
|
)
|
|||||||
Commodity Derivatives Fair Value
|
|
|
|
|
|
|
|
$
|
(5.7
|
)
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Approximately 10.8 percent of the fair value of our commodity derivative assets and 28.4 percent of the fair value of our commodity derivative liabilities were measured using significant unobservable inputs (Level 3).
|
|
|
Fixed-Price Swaps
|
|||||
Commodity/ Index/
Maturity Period
|
|
Quantity
(Oil - MBbls
Gas and Basis-
BBtu
Propane - MBbls)
|
|
Weighted-
Average
Contract
Price
|
|||
|
|
||||||
Crude Oil
|
|
|
|
|
|||
NYMEX
|
|
|
|
|
|||
2018
|
|
600.0
|
|
|
$
|
53.30
|
|
2019
|
|
600.0
|
|
|
$
|
51.43
|
|
|
|
|
|
|
|||
Total Crude Oil
|
|
1,200.0
|
|
|
|
||
|
|
|
|
|
|||
Basis Protection
|
|
|
|
|
|||
CIG
|
|
|
|
|
|||
2018
|
|
5,000.0
|
|
|
$
|
(0.51
|
)
|
|
|
|
|
|
|||
El Paso
|
|
|
|
|
|||
2018
|
|
3,000.0
|
|
|
$
|
(0.62
|
)
|
|
|
|
|
|
|||
Total Basis Swaps
|
|
8,000.0
|
|
|
|
||
|
|
|
|
|
|||
Rollfactor (1)
|
|
|
|
|
|||
2018
|
|
3,648.0
|
|
|
$
|
0.03
|
|
(1)
|
These positions hedge the timing risk associated with our physical sales. We generally sell crude oil for the delivery month at a sales price based on the average NYMEX West Texas Intermediate price during that month, plus an adjustment calculated as a spread between the weighted average prices of the delivery month, the next month and the following month during the period when the delivery month is the first month (the "trade month roll").
|
Period
|
|
Total Number of Shares Purchased (1)
|
|
Average Price Paid per Share
|
|||
|
|
|
|
|
|||
July 1 - 31, 2017
|
|
1,360
|
|
|
$
|
42.68
|
|
August 1 - 31, 2017
|
|
—
|
|
|
—
|
|
|
September 1 - 30, 2017
|
|
12
|
|
|
39.58
|
|
|
Total third quarter 2017 purchases
|
|
1,372
|
|
|
$
|
42.65
|
|
|
|
|
|
|
(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 6, 2017
|
/s/ Barton R. Brookman
|
|
Barton R. Brookman
|
|
President and Chief Executive Officer
|
|
(principal executive officer)
|
|
|
|
/s/ David W. Honeyfield
|
|
David W. Honeyfield
|
|
Senior Vice President and Chief Financial Officer
|
|
(principal financial officer)
|
|
|
|
|
|
|
|
|
|
|
|
PDC ENERGY, INC.
, as Borrower
|
|
|
|
|
|
By:
/s/ David W. Honeyfield
|
|
Name:David W. Honeyfield
|
|
Title:Senior Vice President and Chief Financial Officer
|
|
|
|
|
|
RILEY NATURAL GAS COMPANY
, as a Guarantor
|
|
|
|
|
|
By:
/s/ Darwin L. Stump
|
|
Name:Darwin L. Stump
|
|
Title:Treasurer
|
|
|
|
|
|
PDC PERMIAN, INC.
, as a Guarantor
|
|
|
|
|
|
By:
/s/ Nicole L. Martinet
|
|
Name:Nicole L. Martinet
|
|
Title:Vice President, Associate General Counsel and Secretary
|
|
JPMORGAN CHASE BANK, N.A.
, as Administrative Agent, Issuing Bank, Swingline Lender and as a Lender
|
|
|
|
|
|
By:
/s/ Jo Linda Papadakis
|
|
Name:Jo Linda Papadakis
|
|
Title:Authorized Officer
|
|
|
|
WELLS FARGO BANK, N.A.
, as a Lender
|
|
|
|
|
|
By:
/s/ Dalton Harris
|
|
Name:Dalton Harris
|
|
Title:Vice President
|
|
|
|
BANK OF AMERICA, N.A.
, as a Lender
|
|
|
|
|
|
By:
/s/ Ronald E. McKaig
|
|
Name:Ronald E. McKaig
|
|
Title:Managing Director
|
|
|
|
BANK OF MONTREAL
, as a Lender
|
|
|
|
|
|
By:
/s/ Gumaro Tijerina
|
|
Name:Gumaro Tijerina
|
|
Title:Managing Director
|
|
|
|
TORONTO DOMINION (TEXAS), LLC
, as a Lender
|
|
|
|
|
|
By:
/s/ Savo Bozic
|
|
Name:Savo Bozic
|
|
Title:Authorized Signatory
|
|
|
|
COMPASS BANK
, as a Lender
|
|
|
|
|
|
By:
/s/ Gabriela Azcarate
|
|
Name:Gabriela Azcarate
|
|
Title:Vice President
|
|
|
|
U.S. BANK NATIONAL ASSOCIATION
, as a Lender
|
|
|
|
|
|
By:
/s/ Ben Leonard
|
|
Name:Ben Leonard
|
|
Title:Vice President
|
|
|
|
CAPITAL ONE, NATIONAL ASSOCIATION
, as a Lender
|
|
|
|
|
|
By:
/s/ Christopher Kuna
|
|
Name:Christopher Kuna
|
|
Title:Vice President
|
|
|
|
THE BANK OF NOVA SCOTIA
, as a Lender
|
|
|
|
|
|
By:
/s/ Alan Dawson
|
|
Name:Alan Dawson
|
|
Title:Director
|
|
|
|
CREDIT AGRICOLE CORPORATE AND INVESTMENT BANK
, as a Lender
|
|
|
|
|
|
By:
/s/ Page Dillehunt
|
|
Name:Page Dillehunt
|
|
Title:Managing Director
|
|
|
|
|
|
|
|
By:
/s/ Michael Willis
|
|
Name:Michael Willis
|
|
Title:Managing Director
|
|
KEYBANK NATIONAL ASSOCIATION
, as a Lender
|
|
|
|
|
|
By:
/s/ Paul J. Pace
|
|
Name:Paul J. Pace
|
|
Title:Senior Vice President
|
|
|
|
NATIXIS, NEW YORK BRANCH
, as a Lender
|
|
|
|
|
|
By:
/s/ Timothy Polvado
|
|
Name:Timothy Polvado
|
|
Title:Senior Managing Director
|
|
|
|
|
|
|
|
By:
/s/ Vikram Nath
|
|
Name:Vikram Nath
|
|
Title:Director
|
|
TEXAS CAPITAL BANK, N.A.
, as a Lender
|
|
|
|
|
|
By:
/s/ Gabriela A. Ramirez
|
|
Name:Gabriela A. Ramirez
|
|
Title:Vice President
|
|
|
|
BOKF, NA D/B/A BANK OF OKLAHOMA
, as a Lender
|
|
|
|
|
|
By:
/s/ Benjamin H. Adler
|
|
Name:Benjamin H. Adler
|
|
Title:Vice President
|
|
|
|
COMERICA BANK
, as a Lender
|
|
|
|
|
|
By:
/s/ Garrett R. Merrell
|
|
Name:Garrett R. Merrell
|
|
Title:Assistant Vice President
|
|
|
|
CANADIAN IMPERIAL BANK OF COMMERCE, NEW YORK BRANCH
, as a Lender
|
|
|
|
|
|
By:
/s/ William M. Reid
|
|
Name:William M. Reid
|
|
Title:Authorized Signatory
|
|
|
|
|
|
|
|
By:
/s/ Trudy Nelson
|
|
Name:Trudy Nelson
|
|
Title:Authorized Signatory
|
|
ABN AMRO CAPITAL USA LLC
, as a Lender
|
|
|
|
|
|
By:
/s/ Kelly Hall
|
|
Name:Kelly Hall
|
|
Title:Director
|
|
|
|
|
|
|
|
By:
/s/ Darrell Holley
|
|
Name:Darrell Holley
|
|
Title:Managing Director
|
|
FIFTH THIRD BANK
, as a Lender
|
|
|
|
|
|
By:
/s/ Jonathan H. Lee
|
|
Name:Jonathan H. Lee
|
|
Title:Director
|
|
|
|
GOLDMAN SACHS BANK USA
, as a Lender
|
|
|
|
|
|
By:
/s/ Chris Lam
|
|
Name:Chris Lam
|
|
Title:Authorized Signatory
|
|
|
|
PNC BANK, NATIONAL ASSOCIATION
, as a Lender
|
|
|
|
|
|
By:
/s/ Sandra Aultman
|
|
Name:Sandra Aultman
|
|
Title:Managing Director
|
|
|
|
SCOTIABANC INC.
, as a Lender
|
|
|
|
|
|
By:
/s/ J.F. Todd
|
|
Name:J.F. Todd
|
|
Title:Managing Director
|
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:
|
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 6, 2017
|
|
/s/ Barton R. Brookman
|
|
Barton R. Brookman
|
|
President and Chief Executive Officer
|
|
(principal executive 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:
|
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 6, 2017
|
|
/s/ David W. Honeyfield
|
|
David W. Honeyfield
|
|
Senior Vice President and Chief Financial 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 6, 2017
|
Barton R. Brookman
|
|
|
President and Chief Executive Officer
|
|
|
(principal executive officer)
|
|
|
|
|
|
/s/ David W. Honeyfield
|
|
November 6, 2017
|
David W. Honeyfield
|
|
|
Senior Vice President and Chief Financial Officer
|
|
|
(principal financial officer)
|
|
|