Title of each class
|
|
Trading symbol(s)
|
|
Name of each exchange on which registered
|
Common stock, $0.01 par value
|
|
SM
|
|
New York Stock Exchange
|
|
|||
Item
|
|
|
Page
|
|
|||
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|||
|
|
|
|
|
|||
|
|
|
|
|
|||
|
|
|
|
|
|||
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30,
2019 |
|
December 31,
2018 |
||||
ASSETS
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
12
|
|
|
$
|
77,965
|
|
Accounts receivable
|
165,757
|
|
|
167,536
|
|
||
Derivative assets
|
114,242
|
|
|
175,130
|
|
||
Prepaid expenses and other
|
8,723
|
|
|
8,632
|
|
||
Total current assets
|
288,734
|
|
|
429,263
|
|
||
Property and equipment (successful efforts method):
|
|
|
|
||||
Proved oil and gas properties
|
7,974,754
|
|
|
7,278,362
|
|
||
Accumulated depletion, depreciation, and amortization
|
(3,774,548
|
)
|
|
(3,417,953
|
)
|
||
Unproved oil and gas properties
|
1,445,985
|
|
|
1,581,401
|
|
||
Wells in progress
|
257,945
|
|
|
295,529
|
|
||
Properties held for sale, net
|
—
|
|
|
5,280
|
|
||
Other property and equipment, net of accumulated depreciation of $62,372 and $57,102, respectively
|
81,193
|
|
|
88,546
|
|
||
Total property and equipment, net
|
5,985,329
|
|
|
5,831,165
|
|
||
Noncurrent assets:
|
|
|
|
||||
Derivative assets
|
30,180
|
|
|
58,499
|
|
||
Other noncurrent assets
|
87,696
|
|
|
33,935
|
|
||
Total noncurrent assets
|
117,876
|
|
|
92,434
|
|
||
Total assets
|
$
|
6,391,939
|
|
|
$
|
6,352,862
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable and accrued expenses
|
$
|
407,883
|
|
|
$
|
403,199
|
|
Derivative liabilities
|
70,259
|
|
|
62,853
|
|
||
Other current liabilities
|
25,803
|
|
|
—
|
|
||
Total current liabilities
|
503,945
|
|
|
466,052
|
|
||
Noncurrent liabilities:
|
|
|
|
||||
Revolving credit facility
|
118,000
|
|
|
—
|
|
||
Senior Notes, net of unamortized deferred financing costs
|
2,450,737
|
|
|
2,448,439
|
|
||
Senior Convertible Notes, net of unamortized discount and deferred financing costs
|
152,503
|
|
|
147,894
|
|
||
Asset retirement obligations
|
95,194
|
|
|
91,859
|
|
||
Deferred income taxes
|
190,146
|
|
|
223,278
|
|
||
Derivative liabilities
|
12,431
|
|
|
12,496
|
|
||
Other noncurrent liabilities
|
67,140
|
|
|
42,522
|
|
||
Total noncurrent liabilities
|
3,086,151
|
|
|
2,966,488
|
|
||
|
|
|
|
||||
Commitments and contingencies (note 6)
|
|
|
|
|
|
||
|
|
|
|
||||
Stockholders’ equity:
|
|
|
|
||||
Common stock, $0.01 par value - authorized: 200,000,000 shares; issued and outstanding: 112,525,633 and 112,241,966 shares, respectively
|
1,125
|
|
|
1,122
|
|
||
Additional paid-in capital
|
1,779,665
|
|
|
1,765,738
|
|
||
Retained earnings
|
1,033,051
|
|
|
1,165,842
|
|
||
Accumulated other comprehensive loss
|
(11,998
|
)
|
|
(12,380
|
)
|
||
Total stockholders’ equity
|
2,801,843
|
|
|
2,920,322
|
|
||
Total liabilities and stockholders’ equity
|
$
|
6,391,939
|
|
|
$
|
6,352,862
|
|
|
For the Three Months Ended
June 30, |
|
For the Six Months Ended
June 30, |
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Operating revenues and other income:
|
|
|
|
|
|
|
|
||||||||
Oil, gas, and NGL production revenue
|
$
|
406,854
|
|
|
$
|
402,558
|
|
|
$
|
747,330
|
|
|
$
|
785,444
|
|
Net gain on divestiture activity
|
262
|
|
|
39,501
|
|
|
323
|
|
|
424,870
|
|
||||
Other operating revenues
|
56
|
|
|
1,857
|
|
|
449
|
|
|
3,197
|
|
||||
Total operating revenues and other income
|
407,172
|
|
|
443,916
|
|
|
748,102
|
|
|
1,213,511
|
|
||||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Oil, gas, and NGL production expense
|
123,050
|
|
|
117,400
|
|
|
244,355
|
|
|
238,279
|
|
||||
Depletion, depreciation, amortization, and asset retirement obligation liability accretion
|
206,330
|
|
|
151,765
|
|
|
384,076
|
|
|
282,238
|
|
||||
Exploration
|
10,877
|
|
|
14,056
|
|
|
22,225
|
|
|
27,783
|
|
||||
Abandonment and impairment of unproved properties
|
12,417
|
|
|
11,935
|
|
|
18,755
|
|
|
17,560
|
|
||||
General and administrative
|
30,920
|
|
|
28,920
|
|
|
63,006
|
|
|
56,602
|
|
||||
Net derivative (gain) loss
|
(79,655
|
)
|
|
63,749
|
|
|
97,426
|
|
|
71,278
|
|
||||
Other operating expenses, net
|
(934
|
)
|
|
(57
|
)
|
|
(599
|
)
|
|
4,555
|
|
||||
Total operating expenses
|
303,005
|
|
|
387,768
|
|
|
829,244
|
|
|
698,295
|
|
||||
Income (loss) from operations
|
104,167
|
|
|
56,148
|
|
|
(81,142
|
)
|
|
515,216
|
|
||||
Interest expense
|
(39,627
|
)
|
|
(41,654
|
)
|
|
(77,607
|
)
|
|
(84,739
|
)
|
||||
Other non-operating income (expense), net
|
(562
|
)
|
|
1,802
|
|
|
(879
|
)
|
|
2,211
|
|
||||
Income (loss) before income taxes
|
63,978
|
|
|
16,296
|
|
|
(159,628
|
)
|
|
432,688
|
|
||||
Income tax (expense) benefit
|
(13,590
|
)
|
|
901
|
|
|
32,448
|
|
|
(98,090
|
)
|
||||
Net income (loss)
|
$
|
50,388
|
|
|
$
|
17,197
|
|
|
$
|
(127,180
|
)
|
|
$
|
334,598
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic weighted-average common shares outstanding
|
112,262
|
|
|
111,701
|
|
|
112,257
|
|
|
111,698
|
|
||||
Diluted weighted-average common shares outstanding
|
112,932
|
|
|
113,630
|
|
|
112,257
|
|
|
113,267
|
|
||||
Basic net income (loss) per common share
|
$
|
0.45
|
|
|
$
|
0.15
|
|
|
$
|
(1.13
|
)
|
|
$
|
3.00
|
|
Diluted net income (loss) per common share
|
$
|
0.45
|
|
|
$
|
0.15
|
|
|
$
|
(1.13
|
)
|
|
$
|
2.95
|
|
Dividends per common share
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
0.05
|
|
|
$
|
0.05
|
|
|
For the Three Months Ended
June 30, |
|
For the Six Months Ended
June 30, |
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Net income (loss)
|
$
|
50,388
|
|
|
$
|
17,197
|
|
|
$
|
(127,180
|
)
|
|
$
|
334,598
|
|
Other comprehensive income, net of tax:
|
|
|
|
|
|
|
|
||||||||
Pension liability adjustment
|
119
|
|
|
198
|
|
|
382
|
|
|
458
|
|
||||
Total other comprehensive income, net of tax
|
119
|
|
|
198
|
|
|
382
|
|
|
458
|
|
||||
Total comprehensive income (loss)
|
$
|
50,507
|
|
|
$
|
17,395
|
|
|
$
|
(126,798
|
)
|
|
$
|
335,056
|
|
|
|
|
Additional Paid-in Capital
|
|
|
|
Accumulated Other Comprehensive Loss
|
|
Total Stockholders’ Equity
|
|||||||||||||
|
Common Stock
|
|
|
Retained Earnings
|
|
|
||||||||||||||||
|
Shares
|
|
Amount
|
|
|
|
|
|||||||||||||||
Balances, December 31, 2018
|
112,241,966
|
|
|
$
|
1,122
|
|
|
$
|
1,765,738
|
|
|
$
|
1,165,842
|
|
|
$
|
(12,380
|
)
|
|
$
|
2,920,322
|
|
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(177,568
|
)
|
|
—
|
|
|
(177,568
|
)
|
|||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
263
|
|
|
263
|
|
|||||
Cash dividends declared, $0.05 per share
|
—
|
|
|
—
|
|
|
—
|
|
|
(5,612
|
)
|
|
—
|
|
|
(5,612
|
)
|
|||||
Issuance of common stock upon vesting of RSUs, net of shares used for tax withholdings
|
2,579
|
|
|
—
|
|
|
(18
|
)
|
|
—
|
|
|
—
|
|
|
(18
|
)
|
|||||
Stock-based compensation expense
|
—
|
|
|
—
|
|
|
5,838
|
|
|
—
|
|
|
—
|
|
|
5,838
|
|
|||||
Balances, March 31, 2019
|
112,244,545
|
|
|
$
|
1,122
|
|
|
$
|
1,771,558
|
|
|
$
|
982,662
|
|
|
$
|
(12,117
|
)
|
|
$
|
2,743,225
|
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
50,388
|
|
|
—
|
|
|
50,388
|
|
|||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
119
|
|
|
119
|
|
|||||
Issuance of common stock under Employee Stock Purchase Plan
|
184,079
|
|
|
2
|
|
|
1,957
|
|
|
—
|
|
|
—
|
|
|
1,959
|
|
|||||
Issuance of common stock upon vesting of RSUs, net of shares used for tax withholdings
|
290
|
|
|
—
|
|
|
(2
|
)
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
|||||
Stock-based compensation expense
|
96,719
|
|
|
1
|
|
|
6,153
|
|
|
—
|
|
|
—
|
|
|
6,154
|
|
|||||
Other
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
1
|
|
|
—
|
|
|
—
|
|
|||||
Balances, June 30, 2019
|
112,525,633
|
|
|
$
|
1,125
|
|
|
$
|
1,779,665
|
|
|
$
|
1,033,051
|
|
|
$
|
(11,998
|
)
|
|
$
|
2,801,843
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
|
|
Additional Paid-in Capital
|
|
|
|
Accumulated Other Comprehensive Loss
|
|
Total Stockholders’ Equity
|
|||||||||||||
|
Common Stock
|
|
|
Retained Earnings
|
|
|
||||||||||||||||
|
Shares
|
|
Amount
|
|
|
|
|
|||||||||||||||
Balances, December 31, 2017
|
111,687,016
|
|
|
$
|
1,117
|
|
|
$
|
1,741,623
|
|
|
$
|
665,657
|
|
|
$
|
(13,789
|
)
|
|
$
|
2,394,608
|
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
317,401
|
|
|
—
|
|
|
317,401
|
|
|||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
260
|
|
|
260
|
|
|||||
Cash dividends declared, $0.05 per share
|
—
|
|
|
—
|
|
|
—
|
|
|
(5,584
|
)
|
|
—
|
|
|
(5,584
|
)
|
|||||
Stock-based compensation expense
|
|
|
—
|
|
|
5,412
|
|
|
—
|
|
|
—
|
|
|
5,412
|
|
||||||
Cumulative effect of accounting change
|
—
|
|
|
—
|
|
|
—
|
|
|
2,969
|
|
|
(2,969
|
)
|
|
—
|
|
|||||
Other
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
(1
|
)
|
|
—
|
|
|||||
Balances, March 31, 2018
|
111,687,016
|
|
|
$
|
1,117
|
|
|
$
|
1,747,035
|
|
|
$
|
980,444
|
|
|
$
|
(16,499
|
)
|
|
$
|
2,712,097
|
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
17,197
|
|
|
—
|
|
|
17,197
|
|
|||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
198
|
|
|
198
|
|
|||||
Issuance of common stock under Employee Stock Purchase Plan
|
100,249
|
|
|
1
|
|
|
1,880
|
|
|
—
|
|
|
—
|
|
|
1,881
|
|
|||||
Issuance of common stock upon vesting of RSUs, net of shares used for tax withholdings
|
1,161
|
|
|
—
|
|
|
(10
|
)
|
|
—
|
|
|
—
|
|
|
(10
|
)
|
|||||
Stock-based compensation expense
|
58,572
|
|
|
—
|
|
|
5,264
|
|
|
—
|
|
|
—
|
|
|
5,264
|
|
|||||
Balances, June 30, 2018
|
111,846,998
|
|
|
$
|
1,118
|
|
|
$
|
1,754,169
|
|
|
$
|
997,641
|
|
|
$
|
(16,301
|
)
|
|
$
|
2,736,627
|
|
|
For the Six Months Ended
June 30, |
||||||
|
2019
|
|
2018
|
||||
Cash flows from operating activities:
|
|
|
|
||||
Net income (loss)
|
$
|
(127,180
|
)
|
|
$
|
334,598
|
|
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
|
|
|
|
||||
Net gain on divestiture activity
|
(323
|
)
|
|
(424,870
|
)
|
||
Depletion, depreciation, amortization, and asset retirement obligation liability accretion
|
384,076
|
|
|
282,238
|
|
||
Abandonment and impairment of unproved properties
|
18,755
|
|
|
17,560
|
|
||
Stock-based compensation expense
|
11,992
|
|
|
10,676
|
|
||
Net derivative loss
|
97,426
|
|
|
71,278
|
|
||
Derivative settlement loss
|
(879
|
)
|
|
(61,193
|
)
|
||
Amortization of debt discount and deferred financing costs
|
7,633
|
|
|
7,750
|
|
||
Deferred income taxes
|
(33,237
|
)
|
|
97,505
|
|
||
Other, net
|
(1,287
|
)
|
|
(2,302
|
)
|
||
Net change in working capital
|
21,454
|
|
|
(21,722
|
)
|
||
Net cash provided by operating activities
|
378,430
|
|
|
311,518
|
|
||
|
|
|
|
||||
Cash flows from investing activities:
|
|
|
|
||||
Net proceeds from the sale of oil and gas properties (1)
|
12,520
|
|
|
742,215
|
|
||
Capital expenditures
|
(576,127
|
)
|
|
(723,319
|
)
|
||
Acquisition of proved and unproved oil and gas properties
|
319
|
|
|
(24,615
|
)
|
||
Net cash used in investing activities
|
(563,288
|
)
|
|
(5,719
|
)
|
||
|
|
|
|
||||
Cash flows from financing activities:
|
|
|
|
||||
Proceeds from credit facility
|
696,500
|
|
|
—
|
|
||
Repayment of credit facility
|
(578,500
|
)
|
|
—
|
|
||
Net proceeds from sale of common stock
|
1,959
|
|
|
1,881
|
|
||
Dividends paid
|
(5,612
|
)
|
|
(5,584
|
)
|
||
Other, net
|
(1,044
|
)
|
|
(133
|
)
|
||
Net cash provided by (used in) financing activities
|
113,303
|
|
|
(3,836
|
)
|
||
|
|
|
|
||||
Net change in cash, cash equivalents, and restricted cash
|
(71,555
|
)
|
|
301,963
|
|
||
Cash, cash equivalents, and restricted cash at beginning of period
|
77,965
|
|
|
313,943
|
|
||
Cash, cash equivalents, and restricted cash at end of period
|
$
|
6,410
|
|
|
$
|
615,906
|
|
|
|
|
|
||||
Supplemental schedule of additional cash flow information and non-cash activities:
|
|
|
|
||||
|
|
|
|
||||
Operating activities:
|
|
|
|
||||
Cash paid for interest, net of capitalized interest
|
$
|
(67,646
|
)
|
|
$
|
(77,803
|
)
|
|
|
|
|
||||
Investing activities:
|
|
|
|
||||
Changes in capital expenditure accruals and other
|
$
|
(10,097
|
)
|
|
$
|
62,167
|
|
|
|
|
|
||||
Supplemental non-cash investing activities:
|
|
|
|
||||
Carrying value of properties exchanged
|
$
|
66,588
|
|
|
$
|
—
|
|
|
|
|
|
||||
Reconciliation of cash, cash equivalents, and restricted cash:
|
|
|
|
||||
|
|
|
|
||||
Cash and cash equivalents
|
$
|
12
|
|
|
$
|
615,906
|
|
Restricted cash (1)
|
6,398
|
|
|
—
|
|
||
Cash, cash equivalents, and restricted cash at end of period
|
$
|
6,410
|
|
|
$
|
615,906
|
|
(1)
|
As of June 30, 2019, a portion of net proceeds from the sale of oil and gas properties was restricted for future property acquisitions. Restricted cash is included in the other noncurrent assets line item on the accompanying unaudited condensed consolidated balance sheets (“accompanying balance sheets”).
|
|
Permian
|
|
South Texas & Gulf Coast
|
|
Rocky Mountain
|
|
Total
|
||||||||||||||||||||||||
|
Three Months Ended June 30,
|
|
Three Months Ended June 30,
|
|
Three Months Ended June 30,
|
|
Three Months Ended June 30,
|
||||||||||||||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||||||||||
|
(in thousands)
|
||||||||||||||||||||||||||||||
Oil production revenue
|
$
|
288,447
|
|
|
$
|
227,636
|
|
|
$
|
15,697
|
|
|
$
|
19,346
|
|
|
$
|
—
|
|
|
$
|
19,168
|
|
|
$
|
304,144
|
|
|
$
|
266,150
|
|
Gas production revenue
|
16,449
|
|
|
31,734
|
|
|
48,775
|
|
|
52,235
|
|
|
—
|
|
|
95
|
|
|
65,224
|
|
|
84,064
|
|
||||||||
NGL production revenue
|
(43
|
)
|
|
129
|
|
|
37,529
|
|
|
52,248
|
|
|
—
|
|
|
(33
|
)
|
|
37,486
|
|
|
52,344
|
|
||||||||
Total
|
$
|
304,853
|
|
|
$
|
259,499
|
|
|
$
|
102,001
|
|
|
$
|
123,829
|
|
|
$
|
—
|
|
|
$
|
19,230
|
|
|
$
|
406,854
|
|
|
$
|
402,558
|
|
Relative percentage
|
75
|
%
|
|
64
|
%
|
|
25
|
%
|
|
31
|
%
|
|
—
|
%
|
|
5
|
%
|
|
100
|
%
|
|
100
|
%
|
|
Permian
|
|
South Texas & Gulf Coast
|
|
Rocky Mountain
|
|
Total
|
||||||||||||||||||||||||
|
Six Months Ended June 30,
|
|
Six Months Ended June 30,
|
|
Six Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||||||||||
|
(in thousands)
|
||||||||||||||||||||||||||||||
Oil production revenue
|
$
|
513,694
|
|
|
$
|
433,430
|
|
|
$
|
29,511
|
|
|
$
|
38,929
|
|
|
$
|
—
|
|
|
$
|
54,851
|
|
|
$
|
543,205
|
|
|
$
|
527,210
|
|
Gas production revenue
|
32,041
|
|
|
56,611
|
|
|
98,296
|
|
|
104,968
|
|
|
—
|
|
|
1,594
|
|
|
130,337
|
|
|
163,173
|
|
||||||||
NGL production revenue
|
(22
|
)
|
|
253
|
|
|
73,810
|
|
|
94,018
|
|
|
—
|
|
|
790
|
|
|
73,788
|
|
|
95,061
|
|
||||||||
Total
|
$
|
545,713
|
|
|
$
|
490,294
|
|
|
$
|
201,617
|
|
|
$
|
237,915
|
|
|
$
|
—
|
|
|
$
|
57,235
|
|
|
$
|
747,330
|
|
|
$
|
785,444
|
|
Relative percentage
|
73
|
%
|
|
63
|
%
|
|
27
|
%
|
|
30
|
%
|
|
—
|
%
|
|
7
|
%
|
|
100
|
%
|
|
100
|
%
|
|
For the Three Months Ended
June 30, |
|
For the Six Months Ended
June 30, |
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
|
(in thousands)
|
||||||||||||||
Current portion of income tax (expense) benefit:
|
|
|
|
|
|
|
|
||||||||
Federal
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
State
|
176
|
|
|
40
|
|
|
(789
|
)
|
|
(585
|
)
|
||||
Deferred portion of income tax (expense) benefit
|
(13,766
|
)
|
|
861
|
|
|
33,237
|
|
|
(97,505
|
)
|
||||
Income tax (expense) benefit
|
$
|
(13,590
|
)
|
|
$
|
901
|
|
|
$
|
32,448
|
|
|
$
|
(98,090
|
)
|
Effective tax rate
|
21.2
|
%
|
|
(5.5
|
)%
|
|
20.3
|
%
|
|
22.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
As of July 23, 2019
|
|
As of June 30, 2019
|
|
As of December 31, 2018
|
||||||
|
(in thousands)
|
||||||||||
Credit facility balance (1)
|
$
|
126,000
|
|
|
$
|
118,000
|
|
|
$
|
—
|
|
Letters of credit (2)
|
—
|
|
|
—
|
|
|
200
|
|
|||
Available borrowing capacity
|
1,074,000
|
|
|
1,082,000
|
|
|
999,800
|
|
|||
Total aggregate lender commitment amount
|
$
|
1,200,000
|
|
|
$
|
1,200,000
|
|
|
$
|
1,000,000
|
|
(1)
|
Unamortized deferred financing costs attributable to the credit facility are presented as a component of other noncurrent assets on the accompanying balance sheets and totaled $6.7 million and $6.4 million as of June 30, 2019, and December 31, 2018, respectively. These costs are being amortized over the term of the credit facility on a straight-line basis.
|
(2)
|
Letters of credit outstanding reduce the amount available under the credit facility on a dollar-for-dollar basis. The letter of credit outstanding as of December 31, 2018, was released during the three months ended March 31, 2019.
|
|
As of June 30, 2019
|
|
As of December 31, 2018
|
||||||||||||||||||||
|
Principal Amount
|
|
Unamortized Deferred Financing Costs
|
|
Principal Amount, Net of Unamortized Deferred Financing Costs
|
|
Principal Amount
|
|
Unamortized Deferred Financing Costs
|
|
Principal Amount, Net of Unamortized Deferred Financing Costs
|
||||||||||||
|
(in thousands)
|
||||||||||||||||||||||
6.125% Senior Notes due 2022
|
$
|
476,796
|
|
|
$
|
3,420
|
|
|
$
|
473,376
|
|
|
$
|
476,796
|
|
|
$
|
3,921
|
|
|
$
|
472,875
|
|
5.0% Senior Notes due 2024
|
500,000
|
|
|
4,227
|
|
|
495,773
|
|
|
500,000
|
|
|
4,688
|
|
|
495,312
|
|
||||||
5.625% Senior Notes due 2025
|
500,000
|
|
|
5,356
|
|
|
494,644
|
|
|
500,000
|
|
|
5,808
|
|
|
494,192
|
|
||||||
6.75% Senior Notes due 2026
|
500,000
|
|
|
5,989
|
|
|
494,011
|
|
|
500,000
|
|
|
6,407
|
|
|
493,593
|
|
||||||
6.625% Senior Notes due 2027
|
500,000
|
|
|
7,067
|
|
|
492,933
|
|
|
500,000
|
|
|
7,533
|
|
|
492,467
|
|
||||||
Total
|
$
|
2,476,796
|
|
|
$
|
26,059
|
|
|
$
|
2,450,737
|
|
|
$
|
2,476,796
|
|
|
$
|
28,357
|
|
|
$
|
2,448,439
|
|
|
As of June 30, 2019
|
|
As of December 31, 2018
|
||||
|
(in thousands)
|
||||||
Principal amount of Senior Convertible Notes
|
$
|
172,500
|
|
|
$
|
172,500
|
|
Unamortized debt discount
|
(18,162
|
)
|
|
(22,313
|
)
|
||
Unamortized deferred financing costs
|
(1,835
|
)
|
|
(2,293
|
)
|
||
Senior Convertible Notes, net of unamortized discount and deferred financing costs
|
$
|
152,503
|
|
|
$
|
147,894
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended
June 30, |
|
For the Six Months Ended
June 30, |
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
|
(in thousands)
|
||||||||||||||
Components of net periodic benefit cost:
|
|
|
|
|
|
|
|
||||||||
Service cost
|
$
|
1,108
|
|
|
$
|
1,705
|
|
|
$
|
2,791
|
|
|
$
|
3,365
|
|
Interest cost
|
739
|
|
|
637
|
|
|
1,395
|
|
|
1,310
|
|
||||
Expected return on plan assets that reduces periodic pension benefit cost
|
(321
|
)
|
|
(370
|
)
|
|
(787
|
)
|
|
(931
|
)
|
||||
Amortization of prior service cost
|
5
|
|
|
5
|
|
|
9
|
|
|
9
|
|
||||
Amortization of net actuarial loss
|
147
|
|
|
340
|
|
|
479
|
|
|
664
|
|
||||
Net periodic benefit cost
|
$
|
1,678
|
|
|
$
|
2,317
|
|
|
$
|
3,887
|
|
|
$
|
4,417
|
|
|
For the Three Months Ended
June 30, |
|
For the Six Months Ended
June 30, |
||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||
|
(in thousands)
|
||||||||||
Anti-dilutive
|
—
|
|
|
—
|
|
|
715
|
|
|
—
|
|
|
For the Three Months Ended
June 30, |
|
For the Six Months Ended
June 30, |
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
|
(in thousands, except per share data)
|
||||||||||||||
Net income (loss)
|
$
|
50,388
|
|
|
$
|
17,197
|
|
|
$
|
(127,180
|
)
|
|
$
|
334,598
|
|
|
|
|
|
|
|
|
|
||||||||
Basic weighted-average common shares outstanding
|
112,262
|
|
|
111,701
|
|
|
112,257
|
|
|
111,698
|
|
||||
Dilutive effect of non-vested RSUs and contingent PSUs
|
670
|
|
|
1,929
|
|
|
—
|
|
|
1,569
|
|
||||
Diluted weighted-average common shares outstanding
|
112,932
|
|
|
113,630
|
|
|
112,257
|
|
|
113,267
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Basic net income (loss) per common share
|
$
|
0.45
|
|
|
$
|
0.15
|
|
|
$
|
(1.13
|
)
|
|
$
|
3.00
|
|
Diluted net income (loss) per common share
|
$
|
0.45
|
|
|
$
|
0.15
|
|
|
$
|
(1.13
|
)
|
|
$
|
2.95
|
|
Contract Period
|
|
NYMEX WTI Volumes
|
|
Weighted-Average
Contract Price
|
|||
|
|
(MBbl)
|
|
(per Bbl)
|
|||
Third quarter 2019
|
|
1,217
|
|
|
$
|
61.41
|
|
Fourth quarter 2019
|
|
1,685
|
|
|
$
|
61.38
|
|
2020
|
|
6,711
|
|
|
$
|
59.96
|
|
Total
|
|
9,613
|
|
|
|
Contract Period
|
|
NYMEX WTI Volumes
|
|
Weighted-Average Floor Price
|
|
Weighted-Average Ceiling Price
|
|||||
|
|
(MBbl)
|
|
(per Bbl)
|
|
(per Bbl)
|
|||||
Third quarter 2019
|
|
2,547
|
|
|
$
|
49.50
|
|
|
$
|
62.64
|
|
Fourth quarter 2019
|
|
3,168
|
|
|
$
|
50.54
|
|
|
$
|
62.49
|
|
2020
|
|
5,094
|
|
|
$
|
55.00
|
|
|
$
|
63.68
|
|
Total
|
|
10,809
|
|
|
|
|
|
Contract Period
|
|
WTI Midland-NYMEX WTI Volumes
|
|
Weighted-Average
Contract Price (1)
|
|
NYMEX WTI-ICE Brent Volumes
|
|
Weighted-Average
Contract Price (2) |
||||||
|
|
(MBbl)
|
|
(per Bbl)
|
|
(MBbl)
|
|
(per Bbl)
|
||||||
Third quarter 2019
|
|
3,291
|
|
|
$
|
(2.86
|
)
|
|
—
|
|
|
$
|
—
|
|
Fourth quarter 2019
|
|
3,338
|
|
|
$
|
(2.87
|
)
|
|
—
|
|
|
$
|
—
|
|
2020
|
|
14,090
|
|
|
$
|
(0.73
|
)
|
|
2,750
|
|
|
$
|
(8.03
|
)
|
2021
|
|
3,708
|
|
|
$
|
0.33
|
|
|
3,650
|
|
|
$
|
(7.86
|
)
|
2022
|
|
—
|
|
|
$
|
—
|
|
|
3,650
|
|
|
$
|
(7.78
|
)
|
Total
|
|
24,427
|
|
|
|
|
10,050
|
|
|
|
(1)
|
Represents the price differential between WTI Midland (Midland, Texas) and NYMEX WTI (Cushing, Oklahoma).
|
(2)
|
Represents the price differential between NYMEX WTI (Cushing, Oklahoma) and ICE Brent (North Sea).
|
Contract Period
|
|
IF HSC Volumes
|
|
Weighted-Average
Contract Price
|
|
WAHA Volumes
|
|
Weighted-Average Contract Price
|
||||||
|
|
(BBtu)
|
|
(per MMBtu)
|
|
(BBtu)
|
|
(per MMBtu)
|
||||||
Third quarter 2019
|
|
14,102
|
|
|
$
|
2.84
|
|
|
4,340
|
|
|
$
|
1.30
|
|
Fourth quarter 2019
|
|
14,433
|
|
|
$
|
2.88
|
|
|
2,962
|
|
|
$
|
1.75
|
|
2020
|
|
10,963
|
|
|
$
|
2.90
|
|
|
4,034
|
|
|
$
|
1.91
|
|
Total (1)
|
|
39,498
|
|
|
|
|
11,336
|
|
|
|
(1)
|
The Company has natural gas swaps in place that settle against Inside FERC Houston Ship Channel (“IF HSC”), Inside FERC West Texas (“IF WAHA”), and Platt’s Gas Daily West Texas (“GD WAHA”). As of June 30, 2019, total volumes for gas swaps are comprised of 78 percent IF HSC, 11 percent GD Waha, and 11 percent IF Waha.
|
Contract Period
|
|
IF HSC Volumes
|
|
Weighted-Average Floor Price
|
|
Weighted-Average Ceiling Price
|
|||||
|
|
(BBtu)
|
|
(per MMBtu)
|
|
(per MMBtu)
|
|||||
Third quarter 2019
|
|
5,066
|
|
|
$
|
2.50
|
|
|
$
|
2.83
|
|
Fourth quarter 2019
|
|
4,818
|
|
|
$
|
2.50
|
|
|
$
|
2.83
|
|
Total
|
|
9,884
|
|
|
|
|
|
|
|
OPIS Ethane Purity Mont Belvieu
|
|
OPIS Propane Mont Belvieu Non-TET
|
|
OPIS Normal Butane Mont Belvieu Non-TET
|
|
OPIS Isobutane Mont Belvieu
Non-TET
|
|
OPIS Natural Gasoline Mont Belvieu Non-TET
|
||||||||||||||||||||
Contract Period
|
|
Volumes
|
Weighted-Average
Contract Price
|
|
Volumes
|
Weighted-Average
Contract Price |
|
Volumes
|
Weighted-Average
Contract Price |
|
Volumes
|
Weighted-Average
Contract Price |
|
Volumes
|
Weighted-Average
Contract Price |
|||||||||||||||
|
|
(MBbl)
|
(per Bbl)
|
|
(MBbl)
|
(per Bbl)
|
|
(MBbl)
|
(per Bbl)
|
|
(MBbl)
|
(per Bbl)
|
|
(MBbl)
|
(per Bbl)
|
|||||||||||||||
Third quarter 2019
|
|
907
|
|
$
|
12.34
|
|
|
708
|
|
$
|
30.98
|
|
|
39
|
|
$
|
35.64
|
|
|
30
|
|
$
|
35.70
|
|
|
50
|
|
$
|
50.93
|
|
Fourth quarter 2019
|
|
896
|
|
$
|
12.36
|
|
|
660
|
|
$
|
31.60
|
|
|
39
|
|
$
|
35.64
|
|
|
29
|
|
$
|
35.70
|
|
|
50
|
|
$
|
50.93
|
|
2020
|
|
711
|
|
$
|
11.38
|
|
|
420
|
|
$
|
27.99
|
|
|
—
|
|
$
|
—
|
|
|
—
|
|
$
|
—
|
|
|
—
|
|
$
|
—
|
|
Total
|
|
2,514
|
|
|
|
1,788
|
|
|
|
78
|
|
|
|
59
|
|
|
|
100
|
|
|
•
|
fixed price NYMEX WTI oil swap contracts through the fourth quarter of 2020 for a total of 0.6 MMBbl of oil production at a weighted-average contract price of $56.90 per Bbl;
|
•
|
NYMEX WTI costless collar contracts through the first quarter of 2021 for a total of 1.2 MMBbl of oil production with a weighted-average contract floor price of $55.00 per Bbl and a weighted-average contract ceiling price of $58.31 per Bbl;
|
•
|
a fixed price IF HSC gas swap contract for the third quarter of 2020 for a total of 810 BBtu of gas production at a contract price of $2.48 per MMBtu; and
|
•
|
a fixed price IF WAHA gas swap contract for the second quarter of 2020 for a total of 943 BBtu of gas production at a contract price of $0.83 per MMBtu.
|
|
As of June 30, 2019
|
|
As of December 31, 2018
|
||||
|
(in thousands)
|
||||||
Derivative assets:
|
|
|
|
||||
Current assets
|
$
|
114,242
|
|
|
$
|
175,130
|
|
Noncurrent assets
|
30,180
|
|
|
58,499
|
|
||
Total derivative assets
|
$
|
144,422
|
|
|
$
|
233,629
|
|
Derivative liabilities:
|
|
|
|
||||
Current liabilities
|
$
|
70,259
|
|
|
$
|
62,853
|
|
Noncurrent liabilities
|
12,431
|
|
|
12,496
|
|
||
Total derivative liabilities
|
$
|
82,690
|
|
|
$
|
75,349
|
|
|
Derivative Assets
|
|
Derivative Liabilities
|
||||||||||||
|
As of
|
|
As of
|
||||||||||||
|
June 30,
2019
|
|
December 31, 2018
|
|
June 30,
2019
|
|
December 31, 2018
|
||||||||
|
(in thousands)
|
||||||||||||||
Gross amounts presented in the accompanying balance sheets
|
$
|
144,422
|
|
|
$
|
233,629
|
|
|
$
|
(82,690
|
)
|
|
$
|
(75,349
|
)
|
Amounts not offset in the accompanying balance sheets
|
(60,210
|
)
|
|
(56,041
|
)
|
|
60,210
|
|
|
56,041
|
|
||||
Net amounts
|
$
|
84,212
|
|
|
$
|
177,588
|
|
|
$
|
(22,480
|
)
|
|
$
|
(19,308
|
)
|
|
For the Three Months Ended
June 30, |
|
For the Six Months Ended
June 30, |
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
|
(in thousands)
|
||||||||||||||
Derivative settlement (gain) loss:
|
|
|
|
|
|
|
|
||||||||
Oil contracts
|
$
|
10,689
|
|
|
$
|
24,430
|
|
|
$
|
12,058
|
|
|
$
|
45,178
|
|
Gas contracts
|
(5,668
|
)
|
|
757
|
|
|
(1,534
|
)
|
|
(5,653
|
)
|
||||
NGL contracts
|
(9,111
|
)
|
|
11,478
|
|
|
(9,645
|
)
|
|
21,668
|
|
||||
Total derivative settlement (gain) loss
|
$
|
(4,090
|
)
|
|
$
|
36,665
|
|
|
$
|
879
|
|
|
$
|
61,193
|
|
|
|
|
|
|
|
|
|
||||||||
Net derivative (gain) loss:
|
|
|
|
|
|
|
|
||||||||
Oil contracts
|
$
|
(34,552
|
)
|
|
$
|
22,402
|
|
|
$
|
151,245
|
|
|
$
|
36,368
|
|
Gas contracts
|
(25,996
|
)
|
|
7,000
|
|
|
(32,109
|
)
|
|
16,990
|
|
||||
NGL contracts
|
(19,107
|
)
|
|
34,347
|
|
|
(21,710
|
)
|
|
17,920
|
|
||||
Total net derivative (gain) loss
|
$
|
(79,655
|
)
|
|
$
|
63,749
|
|
|
$
|
97,426
|
|
|
$
|
71,278
|
|
•
|
Level 1 – quoted prices in active markets for identical assets or liabilities
|
•
|
Level 2 – quoted prices in active markets for similar assets or liabilities, quoted prices for identical or similar instruments in markets that are not active, and model-derived valuations whose inputs are observable or whose significant value drivers are observable
|
•
|
Level 3 – significant inputs to the valuation model are unobservable
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||
|
(in thousands)
|
||||||||||
Assets:
|
|
|
|
|
|
||||||
Derivatives (1)
|
$
|
—
|
|
|
$
|
144,422
|
|
|
$
|
—
|
|
Liabilities:
|
|
|
|
|
|
||||||
Derivatives (1)
|
$
|
—
|
|
|
$
|
82,690
|
|
|
$
|
—
|
|
(1)
|
This represents a financial asset or liability that is measured at fair value on a recurring basis.
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||
|
(in thousands)
|
||||||||||
Assets:
|
|
|
|
|
|
||||||
Derivatives (1)
|
$
|
—
|
|
|
$
|
233,629
|
|
|
$
|
—
|
|
Liabilities:
|
|
|
|
|
|
||||||
Derivatives (1)
|
$
|
—
|
|
|
$
|
75,349
|
|
|
$
|
—
|
|
(1)
|
This represents a financial asset or liability that is measured at fair value on a recurring basis.
|
|
As of June 30, 2019
|
|
As of December 31, 2018
|
||||||||||||
|
Principal Amount
|
|
Fair Value
|
|
Principal Amount
|
|
Fair Value
|
||||||||
|
(in thousands)
|
||||||||||||||
6.125% Senior Notes due 2022
|
$
|
476,796
|
|
|
$
|
472,963
|
|
|
$
|
476,796
|
|
|
$
|
452,336
|
|
5.0% Senior Notes due 2024
|
$
|
500,000
|
|
|
$
|
464,215
|
|
|
$
|
500,000
|
|
|
$
|
439,265
|
|
5.625% Senior Notes due 2025
|
$
|
500,000
|
|
|
$
|
455,650
|
|
|
$
|
500,000
|
|
|
$
|
436,460
|
|
6.75% Senior Notes due 2026
|
$
|
500,000
|
|
|
$
|
470,000
|
|
|
$
|
500,000
|
|
|
$
|
448,305
|
|
6.625% Senior Notes due 2027
|
$
|
500,000
|
|
|
$
|
463,900
|
|
|
$
|
500,000
|
|
|
$
|
442,500
|
|
1.50% Senior Convertible Notes due 2021
|
$
|
172,500
|
|
|
$
|
160,339
|
|
|
$
|
172,500
|
|
|
$
|
158,614
|
|
•
|
Discount Rate - Unless implicitly defined, the Company determines the present value of future lease payments using an estimated incremental borrowing rate based on a yield curve analysis that factors in certain assumptions, including the term of the lease and credit rating of the Company at lease inception.
|
•
|
Lease Term - The Company evaluates each contract containing a lease arrangement at inception to determine the length of the lease term when recognizing a ROU asset and corresponding lease liability. When determining the lease term, options available to extend or early terminate the arrangement are evaluated and included when it is reasonably certain an option will be exercised. Because of the Company’s intent to maintain financial and operational flexibility, there are no available options
|
|
For the Three Months Ended June 30, 2019
|
|
For the Six Months Ended June 30, 2019
|
||||
|
(in thousands)
|
||||||
Operating lease cost
|
$
|
11,479
|
|
|
$
|
20,458
|
|
Short-term lease cost (1)
|
102,085
|
|
|
237,002
|
|
||
Variable lease cost (2)
|
26,198
|
|
|
57,606
|
|
||
Total lease cost (3)
|
$
|
139,762
|
|
|
$
|
315,066
|
|
(1)
|
Costs associated with short-term lease agreements relate primarily to operational activities where underlying lease terms are less than one year. This amount is significant as it includes drilling and completion activities and field equipment rentals, most of which are contracted for 12 months or less. It is expected this amount will fluctuate primarily with the number of drilling rigs and completion crews the Company is operating under short-term agreements.
|
(2)
|
Variable lease payments include additional payments made that were not included in the initial measurement of the ROU asset and corresponding liability for lease agreements with terms longer than 12 months. Variable lease payments relate to the actual volumes transported under certain midstream agreements, actual usage associated with drilling rigs and completion crews, and variable utility costs associated with the Company’s leased office space. Fluctuations in variable lease payments are driven by actual volumes delivered and the number of drilling rigs and completion crews operating under long-term agreements.
|
(3)
|
Lease costs are either expensed on the accompanying statements of operations or capitalized on the accompanying balance sheets depending on the nature and use of the underlying ROU asset.
|
|
For the Six Months Ended June 30, 2019
|
||
|
(in thousands)
|
||
Cash paid for amounts included in the measurement of lease liabilities:
|
|
||
Operating cash flows from operating leases
|
$
|
20,774
|
|
Right-of-use assets obtained in exchange for new operating lease liabilities
|
$
|
22,729
|
|
|
As of June 30, 2019
|
||
|
(in thousands)
|
||
2019 (remaining after June 30, 2019)
|
$
|
13,581
|
|
2020
|
20,146
|
|
|
2021
|
11,699
|
|
|
2022
|
5,526
|
|
|
2023
|
3,476
|
|
|
Thereafter
|
3,721
|
|
|
Total Lease payments
|
$
|
58,149
|
|
Less: Imputed interest (1)
|
(4,161
|
)
|
|
Total
|
$
|
53,988
|
|
(1)
|
The weighted-average discount rate used to determine the operating lease liability as of June 30, 2019 was 6.6 percent.
|
|
As of June 30, 2019
|
||
|
(in thousands)
|
||
Other noncurrent assets
|
$
|
51,085
|
|
|
|
||
Other current liabilities
|
$
|
25,803
|
|
Other noncurrent liabilities
|
$
|
28,185
|
|
•
|
Average net daily production for the three months ended June 30, 2019, was 136.5 MBOE, compared with 115.2 MBOE for the same period in 2018. The increase in total production was driven by both our Midland Basin and South Texas assets, which had a 37 percent and a 10 percent increase, respectively, in production volumes in the second quarter of 2019 compared with the same period in 2018. Increased production volumes for 2019 were partially offset by the divestiture of our remaining Rocky Mountain region assets, which occurred in the second quarter of 2018 when we completed the Divide County Divestiture. Please refer to A Three-Month and Six-Month Overview of Selected Production and Financial Information, Including Trends below for additional discussion on production.
|
•
|
Oil, gas, and NGL production revenue was $406.9 million for the three months ended June 30, 2019, compared with $402.6 million for the same period in 2018. Oil, gas, and NGL production revenues were positively impacted by a 19 percent increase in production volumes, including a 24 percent increase in oil production; however, the majority of the increase in production volumes was offset by a decline in commodity prices for oil, gas, and NGLs leading to a 15 percent decrease in our realized price per BOE before the effects of derivative settlements in the second quarter of 2019 compared with the second quarter of 2018. Realized price before the effects of derivative settlements for oil, gas, and NGLs decreased eight percent, 30 percent, and 40 percent, respectively, for the three months ended June 30, 2019, compared with the same period in 2018. Please refer to Oil, Gas, and NGL Prices below for additional discussion on realized prices.
|
•
|
Net cash provided by operating activities was $259.9 million for the three months ended June 30, 2019, compared with $171.4 million for the same period in 2018. The increase in net cash provided by operating activities for the three months ended June 30, 2019, was primarily the result of increased oil, gas, and NGL production, lower net production costs per BOE, and lower interest payments compared to the same period in 2018. The increase in net cash provided by operating activities was partially offset by decreased realized prices for oil, gas, and NGLs; however, these negative impacts were largely offset by a derivative settlement gain of $4.1 million during the second quarter of 2019, compared to a derivative settlement loss of $36.7 million during the same period in 2018. Please refer to Overview of Liquidity and Capital Resources and Comparison of Financial Results and Trends Between the Three Months and Six Months Ended June 30, 2019, and 2018 below for additional discussion.
|
•
|
We recorded net income of $50.4 million, or $0.45 per diluted share, for the three months ended June 30, 2019, compared with net income of $17.2 million, or $0.15 per diluted share, for the same period in 2018. The increase in net income for the three months ended June 30, 2019, was primarily the result of a net derivative gain of $79.7 million during the second quarter of 2019, compared to a net derivative loss of $63.7 million during the same period in 2018. The net derivative gain for the three months ended June 30, 2019, was partially offset by an increase in depletion, depreciation, amortization, and asset retirement obligation liability accretion (“DD&A”) expense of $54.6 million, and a decrease in net gain on divestiture activity of $39.2 million for the three months ended June 30, 2019, compared with the same period in 2018. Please refer to Comparison of Financial Results and Trends Between the Three Months and Six Months Ended June 30, 2019, and 2018 below for additional discussion regarding the components of net income (loss) for each of the periods presented.
|
•
|
Adjusted EBITDAX, a non-GAAP financial measure, for the three months ended June 30, 2019, was $263.0 million, compared with $225.0 million for the same period in 2018. The increase in the second quarter of 2019 compared with the same period in 2018 was primarily the result of a settlement gain on derivatives of $4.1 million during the second quarter of 2019, compared to a derivative settlement loss of $36.7 million during the same period in 2018. Please refer to Non-GAAP Financial Measures below for additional discussion, including our definition of adjusted EBITDAX and reconciliations to net income (loss) and net cash provided by operating activities.
|
|
Midland Basin
|
|
South Texas
|
|
Total
|
||||||||||||
|
Gross
|
|
Net
|
|
Gross
|
|
Net
|
|
Gross
|
|
Net
|
||||||
Wells drilled but not completed at December 31, 2018
|
61
|
|
|
55
|
|
|
29
|
|
|
23
|
|
|
90
|
|
|
78
|
|
Wells drilled
|
31
|
|
|
28
|
|
|
8
|
|
|
7
|
|
|
39
|
|
|
35
|
|
Wells completed
|
(30
|
)
|
|
(27
|
)
|
|
(2
|
)
|
|
(2
|
)
|
|
(32
|
)
|
|
(29
|
)
|
Other (1)
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
Wells drilled but not completed at March 31, 2019
|
62
|
|
|
56
|
|
|
34
|
|
|
28
|
|
|
96
|
|
|
84
|
|
Wells drilled
|
26
|
|
|
25
|
|
|
7
|
|
|
3
|
|
|
33
|
|
|
28
|
|
Wells completed
|
(36
|
)
|
|
(32
|
)
|
|
(11
|
)
|
|
(11
|
)
|
|
(47
|
)
|
|
(43
|
)
|
Wells drilled but not completed at June 30, 2019
|
52
|
|
|
49
|
|
|
30
|
|
|
20
|
|
|
82
|
|
|
69
|
|
(1)
|
Includes adjustments related to normal business activities, including previously drilled wells that we no longer intend to complete and working interest changes for existing drilled but not completed wells.
|
|
Midland Basin
|
|
South Texas
|
|
Rocky Mountain (1)
|
|
Total
|
||||||||||||||||
|
Three Months Ended June 30,
|
|
Three Months Ended June 30,
|
|
Three Months Ended June 30,
|
|
Three Months Ended June 30,
|
||||||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Production:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Oil (MMBbl)
|
5.1
|
|
|
3.7
|
|
|
0.3
|
|
|
0.3
|
|
|
—
|
|
|
0.3
|
|
|
5.4
|
|
|
4.4
|
|
Gas (Bcf)
|
8.5
|
|
|
6.2
|
|
|
19.8
|
|
|
18.8
|
|
|
—
|
|
|
0.3
|
|
|
28.3
|
|
|
25.3
|
|
NGLs (MMBbl)
|
—
|
|
|
—
|
|
|
2.3
|
|
|
1.9
|
|
|
—
|
|
|
—
|
|
|
2.3
|
|
|
1.9
|
|
Equivalent (MMBOE)
|
6.5
|
|
|
4.8
|
|
|
5.9
|
|
|
5.4
|
|
|
—
|
|
|
0.4
|
|
|
12.4
|
|
|
10.5
|
|
Avg. daily equivalents (MBOE/d)
|
72.0
|
|
|
52.4
|
|
|
64.6
|
|
|
58.9
|
|
|
—
|
|
|
3.9
|
|
|
136.5
|
|
|
115.2
|
|
Relative percentage
|
53
|
%
|
|
46
|
%
|
|
47
|
%
|
|
51
|
%
|
|
—
|
%
|
|
3
|
%
|
|
100
|
%
|
|
100
|
%
|
(1)
|
We divested all remaining producing assets in the Rocky Mountain region in the first half of 2018. As a result, there have been no production volumes from this region after the second quarter of 2018.
|
|
Midland Basin
|
|
South Texas
|
|
Rocky Mountain (1)
|
|
Total
|
||||||||||||||||
|
Six Months Ended June 30,
|
|
Six Months Ended June 30,
|
|
Six Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Production:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Oil (MMBbl)
|
9.7
|
|
|
7.0
|
|
|
0.6
|
|
|
0.7
|
|
|
—
|
|
|
0.9
|
|
|
10.3
|
|
|
8.6
|
|
Gas (Bcf)
|
15.4
|
|
|
11.8
|
|
|
36.8
|
|
|
37.5
|
|
|
—
|
|
|
1.2
|
|
|
52.2
|
|
|
50.5
|
|
NGLs (MMBbl)
|
—
|
|
|
—
|
|
|
4.2
|
|
|
3.5
|
|
|
—
|
|
|
—
|
|
|
4.2
|
|
|
3.6
|
|
Equivalent (MMBOE)
|
12.2
|
|
|
9.0
|
|
|
10.9
|
|
|
10.5
|
|
|
—
|
|
|
1.1
|
|
|
23.1
|
|
|
20.6
|
|
Avg. daily equivalents (MBOE/d)
|
67.6
|
|
|
49.9
|
|
|
60.0
|
|
|
57.9
|
|
|
—
|
|
|
6.2
|
|
|
127.7
|
|
|
113.9
|
|
Relative percentage
|
53
|
%
|
|
44
|
%
|
|
47
|
%
|
|
51
|
%
|
|
—
|
%
|
|
5
|
%
|
|
100
|
%
|
|
100
|
%
|
(1)
|
We divested all remaining producing assets in the Rocky Mountain region in the first half of 2018. As a result, there have been no production volumes from this region after the second quarter of 2018.
|
|
For the Three Months Ended
|
||||||||||
|
June 30, 2019
|
|
March 31, 2019
|
|
June 30, 2018
|
||||||
Oil (per Bbl):
|
|
|
|
|
|
||||||
Average NYMEX contract monthly price
|
$
|
59.81
|
|
|
$
|
54.90
|
|
|
$
|
67.88
|
|
Realized price, before the effect of derivative settlements
|
$
|
56.04
|
|
|
$
|
49.47
|
|
|
$
|
61.02
|
|
Effect of oil derivative settlements
|
$
|
(1.97
|
)
|
|
$
|
(0.28
|
)
|
|
$
|
(5.60
|
)
|
Gas:
|
|
|
|
|
|
||||||
Average NYMEX monthly settle price (per MMBtu)
|
$
|
2.64
|
|
|
$
|
3.15
|
|
|
$
|
2.80
|
|
Realized price, before the effect of derivative settlements (per Mcf)
|
$
|
2.31
|
|
|
$
|
2.73
|
|
|
$
|
3.32
|
|
Effect of gas derivative settlements (per Mcf)
|
$
|
0.20
|
|
|
$
|
(0.18
|
)
|
|
$
|
(0.03
|
)
|
NGLs (per Bbl):
|
|
|
|
|
|
||||||
Average OPIS price (1)
|
$
|
22.23
|
|
|
$
|
26.28
|
|
|
$
|
33.10
|
|
Realized price, before the effect of derivative settlements
|
$
|
16.42
|
|
|
$
|
19.39
|
|
|
$
|
27.55
|
|
Effect of NGL derivative settlements
|
$
|
4.00
|
|
|
$
|
0.28
|
|
|
$
|
(6.04
|
)
|
(1)
|
Average OPIS price per barrel of NGL, historical or strip, assumes a composite barrel product mix of 37% Ethane, 32% Propane, 6% Isobutane, 11% Normal Butane, and 14% Natural Gasoline for all periods presented. This product mix represents the industry standard composite barrel and does not necessarily represent our product mix for NGL production. Realized prices reflect our actual product mix.
|
|
As of July 23, 2019
|
|
As of June 30, 2019
|
||||
NYMEX WTI oil (per Bbl)
|
$
|
56.36
|
|
|
$
|
57.66
|
|
NYMEX Henry Hub gas (per MMBtu)
|
$
|
2.45
|
|
|
$
|
2.45
|
|
OPIS NGLs (per Bbl)
|
$
|
21.55
|
|
|
$
|
22.14
|
|
|
For the Three Months Ended
|
||||||||||||||
|
June 30,
|
|
March 31,
|
|
December 31,
|
|
September 30,
|
||||||||
|
2019
|
|
2019
|
|
2018
|
|
2018
|
||||||||
|
(in millions)
|
||||||||||||||
Production (MMBOE)
|
12.4
|
|
|
10.7
|
|
|
11.3
|
|
|
12.0
|
|
||||
Oil, gas, and NGL production revenue
|
$
|
406.9
|
|
|
$
|
340.5
|
|
|
$
|
392.5
|
|
|
$
|
458.4
|
|
Oil, gas, and NGL production expense
|
$
|
123.1
|
|
|
$
|
121.3
|
|
|
$
|
121.5
|
|
|
$
|
127.6
|
|
Depletion, depreciation, amortization, and asset retirement obligation liability accretion
|
$
|
206.3
|
|
|
$
|
177.7
|
|
|
$
|
182.0
|
|
|
$
|
201.1
|
|
Exploration
|
$
|
10.9
|
|
|
$
|
11.3
|
|
|
$
|
14.3
|
|
|
$
|
13.1
|
|
General and administrative
|
$
|
30.9
|
|
|
$
|
32.1
|
|
|
$
|
30.4
|
|
|
$
|
29.5
|
|
Net income (loss)
|
$
|
50.4
|
|
|
$
|
(177.6
|
)
|
|
$
|
309.7
|
|
|
$
|
(135.9
|
)
|
|
For the Three Months Ended
|
||||||||||||||
|
June 30,
|
|
March 31,
|
|
December 31,
|
|
September 30,
|
||||||||
|
2019
|
|
2019
|
|
2018
|
|
2018
|
||||||||
Average net daily production equivalent (MBOE per day)
|
136.5
|
|
|
118.7
|
|
|
122.8
|
|
|
130.2
|
|
||||
Lease operating expense (per BOE)
|
$
|
4.16
|
|
|
$
|
5.20
|
|
|
$
|
4.98
|
|
|
$
|
4.41
|
|
Transportation costs (per BOE)
|
$
|
4.00
|
|
|
$
|
4.08
|
|
|
$
|
4.19
|
|
|
$
|
4.20
|
|
Production taxes as a percent of oil, gas, and NGL production revenue
|
4.0
|
%
|
|
4.1
|
%
|
|
3.4
|
%
|
|
4.1
|
%
|
||||
Ad valorem tax expense (per BOE)
|
$
|
0.44
|
|
|
$
|
0.76
|
|
|
$
|
0.39
|
|
|
$
|
0.45
|
|
Depletion, depreciation, amortization, and asset retirement obligation liability accretion (per BOE)
|
$
|
16.61
|
|
|
$
|
16.63
|
|
|
$
|
16.10
|
|
|
$
|
16.78
|
|
General and administrative (per BOE)
|
$
|
2.49
|
|
|
$
|
3.00
|
|
|
$
|
2.69
|
|
|
$
|
2.46
|
|
|
For the Three Months Ended June 30,
|
|
Amount Change Between Periods
|
|
Percent Change Between Periods
|
|
For the Six Months Ended June 30,
|
|
Amount Change Between Periods
|
|
Percent Change Between Periods
|
||||||||||||||||||
|
2019
|
|
2018
|
|
|
2019
|
|
2018
|
|
||||||||||||||||||||
Net production volumes: (1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Oil (MMBbl)
|
5.4
|
|
|
4.4
|
|
|
1.1
|
|
|
24
|
%
|
|
10.3
|
|
|
8.6
|
|
|
1.6
|
|
|
19
|
%
|
||||||
Gas (Bcf)
|
28.3
|
|
|
25.3
|
|
|
3.0
|
|
|
12
|
%
|
|
52.2
|
|
|
50.5
|
|
|
1.6
|
|
|
3
|
%
|
||||||
NGLs (MMBbl)
|
2.3
|
|
|
1.9
|
|
|
0.4
|
|
|
20
|
%
|
|
4.2
|
|
|
3.6
|
|
|
0.6
|
|
|
16
|
%
|
||||||
Equivalent (MMBOE)
|
12.4
|
|
|
10.5
|
|
|
1.9
|
|
|
19
|
%
|
|
23.1
|
|
|
20.6
|
|
|
2.5
|
|
|
12
|
%
|
||||||
Average net daily production: (1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Oil (MBbl per day)
|
59.6
|
|
|
47.9
|
|
|
11.7
|
|
|
24
|
%
|
|
56.7
|
|
|
47.6
|
|
|
9.0
|
|
|
19
|
%
|
||||||
Gas (MMcf per day)
|
310.9
|
|
|
278.3
|
|
|
32.6
|
|
|
12
|
%
|
|
288.3
|
|
|
279.3
|
|
|
9.1
|
|
|
3
|
%
|
||||||
NGLs (MBbl per day)
|
25.1
|
|
|
20.9
|
|
|
4.2
|
|
|
20
|
%
|
|
23.0
|
|
|
19.7
|
|
|
3.2
|
|
|
16
|
%
|
||||||
Equivalent (MBOE per day)
|
136.5
|
|
|
115.2
|
|
|
21.3
|
|
|
19
|
%
|
|
127.7
|
|
|
113.9
|
|
|
13.8
|
|
|
12
|
%
|
||||||
Oil, gas, and NGL production revenue (in millions): (1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Oil production revenue
|
$
|
304.1
|
|
|
$
|
266.2
|
|
|
$
|
38.0
|
|
|
14
|
%
|
|
$
|
543.2
|
|
|
$
|
527.2
|
|
|
$
|
16.0
|
|
|
3
|
%
|
Gas production revenue
|
65.2
|
|
|
84.1
|
|
|
(18.8
|
)
|
|
(22
|
)%
|
|
130.3
|
|
|
163.2
|
|
|
(32.8
|
)
|
|
(20
|
)%
|
||||||
NGL production revenue
|
37.5
|
|
|
52.3
|
|
|
(14.9
|
)
|
|
(28
|
)%
|
|
73.8
|
|
|
95.1
|
|
|
(21.3
|
)
|
|
(22
|
)%
|
||||||
Total oil, gas, and NGL production revenue
|
$
|
406.9
|
|
|
$
|
402.6
|
|
|
$
|
4.3
|
|
|
1
|
%
|
|
$
|
747.3
|
|
|
$
|
785.4
|
|
|
$
|
(38.1
|
)
|
|
(5
|
)%
|
Oil, gas, and NGL production expense (in millions): (1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Lease operating expense
|
$
|
51.7
|
|
|
$
|
48.8
|
|
|
$
|
2.9
|
|
|
6
|
%
|
|
$
|
107.3
|
|
|
$
|
99.0
|
|
|
$
|
8.3
|
|
|
8
|
%
|
Transportation costs
|
49.7
|
|
|
46.9
|
|
|
2.9
|
|
|
6
|
%
|
|
93.3
|
|
|
93.8
|
|
|
(0.4
|
)
|
|
—
|
%
|
||||||
Production taxes
|
16.1
|
|
|
17.4
|
|
|
(1.3
|
)
|
|
(7
|
)%
|
|
30.1
|
|
|
34.4
|
|
|
(4.3
|
)
|
|
(12
|
)%
|
||||||
Ad valorem tax expense
|
5.5
|
|
|
4.3
|
|
|
1.2
|
|
|
27
|
%
|
|
13.6
|
|
|
11.1
|
|
|
2.5
|
|
|
23
|
%
|
||||||
Total oil, gas, and NGL production expense
|
$
|
123.1
|
|
|
$
|
117.4
|
|
|
$
|
5.7
|
|
|
5
|
%
|
|
$
|
244.4
|
|
|
$
|
238.3
|
|
|
$
|
6.1
|
|
|
3
|
%
|
Realized price (before the effect of derivative settlements):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Oil (per Bbl)
|
$
|
56.04
|
|
|
$
|
61.02
|
|
|
$
|
(4.98
|
)
|
|
(8
|
)%
|
|
$
|
52.95
|
|
|
$
|
61.14
|
|
|
$
|
(8.19
|
)
|
|
(13
|
)%
|
Gas (per Mcf)
|
$
|
2.31
|
|
|
$
|
3.32
|
|
|
$
|
(1.01
|
)
|
|
(30
|
)%
|
|
$
|
2.50
|
|
|
$
|
3.23
|
|
|
$
|
(0.73
|
)
|
|
(23
|
)%
|
NGLs (per Bbl)
|
$
|
16.42
|
|
|
$
|
27.55
|
|
|
$
|
(11.13
|
)
|
|
(40
|
)%
|
|
$
|
17.76
|
|
|
$
|
26.60
|
|
|
$
|
(8.84
|
)
|
|
(33
|
)%
|
Per BOE
|
$
|
32.75
|
|
|
$
|
38.40
|
|
|
$
|
(5.65
|
)
|
|
(15
|
)%
|
|
$
|
32.34
|
|
|
$
|
38.09
|
|
|
$
|
(5.75
|
)
|
|
(15
|
)%
|
Per BOE data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Production costs:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Lease operating expense
|
$
|
4.16
|
|
|
$
|
4.66
|
|
|
$
|
(0.50
|
)
|
|
(11
|
)%
|
|
$
|
4.64
|
|
|
$
|
4.80
|
|
|
$
|
(0.16
|
)
|
|
(3
|
)%
|
Transportation costs
|
$
|
4.00
|
|
|
$
|
4.47
|
|
|
$
|
(0.47
|
)
|
|
(11
|
)%
|
|
$
|
4.04
|
|
|
$
|
4.55
|
|
|
$
|
(0.51
|
)
|
|
(11
|
)%
|
Production taxes
|
$
|
1.30
|
|
|
$
|
1.66
|
|
|
$
|
(0.36
|
)
|
|
(22
|
)%
|
|
$
|
1.30
|
|
|
$
|
1.67
|
|
|
$
|
(0.37
|
)
|
|
(22
|
)%
|
Ad valorem tax expense
|
$
|
0.44
|
|
|
$
|
0.41
|
|
|
$
|
0.03
|
|
|
7
|
%
|
|
$
|
0.59
|
|
|
$
|
0.54
|
|
|
$
|
0.05
|
|
|
9
|
%
|
Depletion, depreciation, amortization, and asset retirement obligation liability accretion
|
$
|
16.61
|
|
|
$
|
14.48
|
|
|
$
|
2.13
|
|
|
15
|
%
|
|
$
|
16.62
|
|
|
$
|
13.69
|
|
|
$
|
2.93
|
|
|
21
|
%
|
General and administrative
|
$
|
2.49
|
|
|
$
|
2.76
|
|
|
$
|
(0.27
|
)
|
|
(10
|
)%
|
|
$
|
2.73
|
|
|
$
|
2.74
|
|
|
$
|
(0.01
|
)
|
|
—
|
%
|
Derivative settlement gain (loss) (2)
|
$
|
0.32
|
|
|
$
|
(3.49
|
)
|
|
$
|
3.81
|
|
|
109
|
%
|
|
$
|
(0.04
|
)
|
|
$
|
(2.97
|
)
|
|
$
|
2.93
|
|
|
99
|
%
|
Earnings per share information:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Basic weighted-average common shares outstanding (in thousands)
|
112,262
|
|
|
111,701
|
|
|
561
|
|
|
1
|
%
|
|
112,257
|
|
|
111,698
|
|
|
559
|
|
|
1
|
%
|
||||||
Diluted weighted-average common shares outstanding (in thousands)
|
112,932
|
|
|
113,630
|
|
|
(698)
|
|
|
(1
|
)%
|
|
112,257
|
|
|
113,267
|
|
|
(1,010
|
)
|
|
(1
|
)%
|
||||||
Basic net income (loss) per common share
|
$
|
0.45
|
|
|
$
|
0.15
|
|
|
$
|
0.30
|
|
|
200
|
%
|
|
$
|
(1.13
|
)
|
|
$
|
3.00
|
|
|
$
|
(4.13
|
)
|
|
(138
|
)%
|
Diluted net income (loss) per common share
|
$
|
0.45
|
|
|
$
|
0.15
|
|
|
$
|
0.30
|
|
|
200
|
%
|
|
$
|
(1.13
|
)
|
|
$
|
2.95
|
|
|
$
|
(4.08
|
)
|
|
(138
|
)%
|
(1)
|
Amount and percentage changes may not calculate due to rounding.
|
(2)
|
Derivative settlements for the three and six months ended June 30, 2019, and 2018, are included within the net derivative (gain) loss line item in the accompanying statements of operations.
|
|
Net Equivalent Production
Increase (Decrease)
|
|
Production Revenue
Increase (Decrease)
|
|
Production Expense
Increase (Decrease)
|
||||||||||||||||
|
Three Months Ended
|
|
Six Months Ended
|
|
Three Months Ended
|
|
Six Months Ended
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||
|
(MBOE per day)
|
|
(in millions)
|
|
(in millions)
|
||||||||||||||||
Midland Basin
|
19.5
|
|
|
17.8
|
|
|
$
|
45.4
|
|
|
$
|
55.4
|
|
|
$
|
6.8
|
|
|
$
|
22.5
|
|
South Texas
|
5.7
|
|
|
2.2
|
|
|
(21.8
|
)
|
|
(36.3
|
)
|
|
6.4
|
|
|
6.9
|
|
||||
Rocky Mountain (1)
|
(3.9
|
)
|
|
(6.2
|
)
|
|
(19.2
|
)
|
|
(57.2
|
)
|
|
(7.6
|
)
|
|
(23.3
|
)
|
||||
Total
|
21.3
|
|
|
13.8
|
|
|
$
|
4.3
|
|
|
$
|
(38.1
|
)
|
|
$
|
5.7
|
|
|
$
|
6.1
|
|
(1)
|
We divested our remaining producing assets in the Rocky Mountain region in the first half of 2018. As a result, there have been no production volumes from this region after the second quarter of 2018.
|
|
For the Three Months Ended
June 30, |
|
For the Six Months Ended
June 30, |
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
|
(in millions)
|
||||||||||||||
Depletion, depreciation, amortization, and asset retirement obligation liability accretion
|
$
|
206.3
|
|
|
$
|
151.8
|
|
|
$
|
384.1
|
|
|
$
|
282.2
|
|
|
For the Three Months Ended
June 30, |
|
For the Six Months Ended
June 30, |
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
|
(in millions)
|
||||||||||||||
Geological and geophysical expenses
|
$
|
0.4
|
|
|
$
|
2.5
|
|
|
$
|
0.8
|
|
|
$
|
3.9
|
|
Overhead and other expenses
|
10.5
|
|
|
11.6
|
|
|
21.4
|
|
|
23.9
|
|
||||
Total
|
$
|
10.9
|
|
|
$
|
14.1
|
|
|
$
|
22.2
|
|
|
$
|
27.8
|
|
|
For the Three Months Ended
June 30, |
|
For the Six Months Ended
June 30, |
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
|
(in millions)
|
||||||||||||||
Abandonment and impairment of unproved properties
|
$
|
12.4
|
|
|
$
|
11.9
|
|
|
$
|
18.8
|
|
|
$
|
17.6
|
|
|
|
|
|
|
For the Three Months Ended
June 30, |
|
For the Six Months Ended
June 30, |
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
|
(in millions, except tax rate)
|
||||||||||||||
Income tax (expense) benefit
|
$
|
(13.6
|
)
|
|
$
|
0.9
|
|
|
$
|
32.4
|
|
|
$
|
(98.1
|
)
|
Effective tax rate
|
21.2
|
%
|
|
(5.5
|
)%
|
|
20.3
|
%
|
|
22.7
|
%
|
|
For the Three Months Ended
June 30, |
|
For the Six Months Ended
June 30, |
||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||
Weighted-average interest rate
|
6.5
|
%
|
|
6.4
|
%
|
|
6.5
|
%
|
|
6.5
|
%
|
Weighted-average borrowing rate
|
5.7
|
%
|
|
5.8
|
%
|
|
5.8
|
%
|
|
5.8
|
%
|
|
For the Three Months Ended
June 30, |
|
For the Six Months Ended
June 30, |
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
|
(in thousands)
|
||||||||||||||
Net income (loss) (GAAP)
|
$
|
50,388
|
|
|
$
|
17,197
|
|
|
$
|
(127,180
|
)
|
|
$
|
334,598
|
|
Interest expense
|
39,627
|
|
|
41,654
|
|
|
77,607
|
|
|
84,739
|
|
||||
Income tax expense (benefit)
|
13,590
|
|
|
(901
|
)
|
|
(32,448
|
)
|
|
98,090
|
|
||||
Depletion, depreciation, amortization, and asset retirement obligation liability accretion
|
206,330
|
|
|
151,765
|
|
|
384,076
|
|
|
282,238
|
|
||||
Exploration (1)
|
9,586
|
|
|
12,867
|
|
|
19,729
|
|
|
25,278
|
|
||||
Abandonment and impairment of unproved properties
|
12,417
|
|
|
11,935
|
|
|
18,755
|
|
|
17,560
|
|
||||
Stock-based compensation expense
|
6,154
|
|
|
5,264
|
|
|
11,992
|
|
|
10,676
|
|
||||
Net derivative (gain) loss
|
(79,655
|
)
|
|
63,749
|
|
|
97,426
|
|
|
71,278
|
|
||||
Derivative settlement gain (loss)
|
4,090
|
|
|
(36,665
|
)
|
|
(879
|
)
|
|
(61,193
|
)
|
||||
Net gain on divestiture activity
|
(262
|
)
|
|
(39,501
|
)
|
|
(323
|
)
|
|
(424,870
|
)
|
||||
Other, net
|
691
|
|
|
(2,412
|
)
|
|
695
|
|
|
(3,254
|
)
|
||||
Adjusted EBITDAX (non-GAAP)
|
262,956
|
|
|
224,952
|
|
|
449,450
|
|
|
435,140
|
|
||||
Interest expense
|
(39,627
|
)
|
|
(41,654
|
)
|
|
(77,607
|
)
|
|
(84,739
|
)
|
||||
Income tax (expense) benefit
|
(13,590
|
)
|
|
901
|
|
|
32,448
|
|
|
(98,090
|
)
|
||||
Exploration (1)
|
(9,586
|
)
|
|
(12,867
|
)
|
|
(19,729
|
)
|
|
(25,278
|
)
|
||||
Amortization of debt discount and deferred financing costs
|
3,844
|
|
|
3,884
|
|
|
7,633
|
|
|
7,750
|
|
||||
Deferred income taxes
|
13,766
|
|
|
(861
|
)
|
|
(33,237
|
)
|
|
97,505
|
|
||||
Other, net
|
552
|
|
|
2,637
|
|
|
(1,982
|
)
|
|
952
|
|
||||
Net change in working capital
|
41,613
|
|
|
(5,609
|
)
|
|
21,454
|
|
|
(21,722
|
)
|
||||
Net cash provided by operating activities (GAAP)
|
$
|
259,928
|
|
|
$
|
171,383
|
|
|
$
|
378,430
|
|
|
$
|
311,518
|
|
(1)
|
Stock-based compensation expense is a component of exploration expense and general and administrative expense on the accompanying statements of operations. Therefore, the exploration line items shown in the reconciliation above will vary from the amount shown on the accompanying statements of operations for the component of stock-based compensation expense recorded to exploration expense.
|
•
|
the amount and nature of future capital expenditures and the availability of liquidity and capital resources to fund capital expenditures;
|
•
|
any changes to the borrowing base or aggregate lender commitments under our Credit Agreement;
|
•
|
our outlook on future oil, gas, and NGL prices, well costs, service costs, and general and administrative costs;
|
•
|
the drilling of wells and other exploration and development activities and plans by us, our joint development partners, and/or other third-party operators, as well as possible or expected acquisitions or divestitures;
|
•
|
the possible divestiture or farm-down of, or joint venture relating to, certain properties;
|
•
|
proved reserve estimates and the estimates of both future net revenues and the present value of future net revenues associated with those reserve estimates;
|
•
|
future oil, gas, and NGL production estimates;
|
•
|
cash flows, anticipated liquidity, interest and related debt service expenses, changes in the Company’s effective tax rate, and the future repayment of debt;
|
•
|
business strategies and other plans and objectives for future operations, including plans for expansion and growth of operations or to defer capital investment, plans with respect to future dividend payments, and our outlook on our future financial condition or results of operations; and
|
•
|
other similar matters, such as those discussed in the Management’s Discussion and Analysis of Financial Condition and Results of Operations section in Part I, Item 2 of this report.
|
•
|
domestic and foreign supply of oil, natural gas, and NGLs;
|
•
|
the volatility of oil, gas, and NGL prices, and the effect it may have on our profitability, financial condition, cash flows, access to capital, and ability to grow production volumes and/or proved reserves;
|
•
|
weakness in economic conditions, consumer demand, and uncertainty in financial markets;
|
•
|
our ability to replace reserves in order to sustain production;
|
•
|
our ability to raise the substantial amount of capital required to develop and/or replace our reserves;
|
•
|
our ability to compete against competitors that have greater financial, technical, and human resources;
|
•
|
our ability to attract and retain key personnel;
|
•
|
the imprecise estimations of our actual quantities and present value of proved oil, gas, and NGL reserves, and that development of our proved undeveloped reserves may take longer and may require greater capital expenditures than we anticipate;
|
•
|
the uncertainty in evaluating recoverable reserves and estimating expected benefits or liabilities;
|
•
|
the possibility that exploration and development drilling may not result in commercially producible reserves;
|
•
|
our limited control over activities on outside-operated properties;
|
•
|
our reliance on the skill, expertise and availability of third-party service providers and equipment for our operated activities;
|
•
|
the possibility that title to properties in which we claim an interest may be defective;
|
•
|
our planned drilling in existing or emerging resource plays using some of the latest available horizontal drilling and completion techniques is subject to drilling and completion risks and may not meet our expectations for reserves or production;
|
•
|
the uncertainties associated with acquisitions, divestitures, joint ventures, farm-downs, farm-outs and similar transactions with respect to certain assets, including our success in integrating new assets, and whether such transactions will be consummated or completed in the form or timing and for the value that we anticipate;
|
•
|
the uncertainties associated with enhanced recovery methods;
|
•
|
our commodity derivative contracts expose us to counterparty credit risk and may result in financial losses or may limit the prices we receive for oil, gas, and NGL sales;
|
•
|
the inability of one or more of our service providers, customers, or contractual counterparties to meet their obligations;
|
•
|
our ability to deliver required quantities of oil, gas, NGL, or water to contractual counterparties;
|
•
|
price declines or unsuccessful exploration efforts resulting in write-downs of our asset carrying values;
|
•
|
the impact that depressed oil, gas, or NGL prices could have on our borrowing capacity under our Credit Agreement;
|
•
|
the possibility our amount of debt may limit our ability to obtain financing for acquisitions, make us more vulnerable to adverse economic conditions, and make it more difficult for us to make payments on our debt;
|
•
|
the possibility that covenants in our Credit Agreement or the indentures governing the Senior Notes and Senior Convertible Notes may limit our discretion in the operation of our business, prohibit us from engaging in beneficial transactions or lead to the accelerated payment of our debt;
|
•
|
the possibility of security threats, including terrorist attacks and cybersecurity attacks and breaches, against, or otherwise impacting, our facilities and systems;
|
•
|
operating and environmental risks and hazards that could result in substantial losses;
|
•
|
the impact of extreme weather conditions, laws and regulations, and lease stipulations on our ability to conduct drilling activities;
|
•
|
our ability to acquire adequate supplies of water and dispose of or recycle water we use at a reasonable cost in accordance with environmental and other applicable rules;
|
•
|
complex laws and regulations, including environmental regulations, that result in substantial costs, delays, and other risks;
|
•
|
the availability and capacity of gathering, transportation, processing, and/or refining facilities;
|
•
|
our ability to sell and/or receive market prices for our oil, gas, and NGLs;
|
•
|
new technologies may cause our current exploration and drilling methods to become obsolete; and
|
•
|
litigation, environmental matters, the potential impact of legislation and government regulations, and the use of management estimates regarding such matters.
|
PURCHASES OF EQUITY SECURITIES BY ISSUER AND AFFILIATED PURCHASERS
|
|||||||||
Period
|
Total Number of Shares Purchased (1)
|
Weighted Average Price Paid per Share
|
Total Number of Shares Purchased as Part of Publicly Announced Program
|
Maximum Number of Shares that May Yet Be Purchased Under the Program (2)
|
|||||
04/01/2019 - 04/30/2019
|
—
|
|
$
|
—
|
|
—
|
|
3,072,184
|
|
05/01/2019 - 05/31/2019
|
154
|
|
$
|
14.91
|
|
—
|
|
3,072,184
|
|
06/01/2019 - 06/30/2019
|
—
|
|
$
|
—
|
|
—
|
|
3,072,184
|
|
Total:
|
154
|
|
$
|
14.91
|
|
—
|
|
3,072,184
|
|
(1)
|
All shares purchased by us in the second quarter of 2019 were to offset tax withholding obligations that occurred upon the delivery of outstanding shares underlying RSUs issued under the terms of award agreements granted under the Equity Incentive Compensation Plan.
|
(2)
|
In July 2006, our Board of Directors approved an increase in the number of shares that may be repurchased under the original August 1998 authorization to 6,000,000 as of the effective date of the resolution. Accordingly, as of the filing of this report, subject to the approval of our Board of Directors, we may repurchase up to 3,072,184 shares of common stock on a prospective basis. The shares may be repurchased from time to time in open market transactions or privately negotiated transactions, subject to market conditions and other factors, including certain provisions of our Credit Agreement, the indentures governing our Senior Notes and Senior Convertible Notes, and compliance with securities laws. Stock repurchases may be funded with existing cash balances, internal cash flows, or borrowings under our Credit Agreement. The stock repurchase program may be suspended or discontinued at any time.
|
Exhibit Number
|
|
Description
|
|
||
|
||
|
||
|
||
|
||
|
||
|
||
101.INS
|
|
Inline XBRL Instance Document - The instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
|
101.SCH*
|
|
Inline XBRL Schema Document
|
101.CAL*
|
|
Inline XBRL Calculation Linkbase Document
|
101.LAB*
|
|
Inline XBRL Label Linkbase Document
|
101.PRE*
|
|
Inline XBRL Presentation Linkbase Document
|
101.DEF*
|
|
Inline XBRL Taxonomy Extension Definition Linkbase Document
|
104
|
|
Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101.INS)
|
|
*
|
|
Filed with this report.
|
|
**
|
|
Furnished with this report.
|
|
†
|
|
Exhibit constitutes a management contract or compensatory plan or agreement.
|
|
SM ENERGY COMPANY
|
||
|
|
|
|
August 2, 2019
|
By:
|
/s/ JAVAN D. OTTOSON
|
|
|
|
Javan D. Ottoson
|
|
|
|
President and Chief Executive Officer
|
|
|
|
(Principal Executive Officer)
|
|
|
|
|
|
August 2, 2019
|
By:
|
/s/ A. WADE PURSELL
|
|
|
|
A. Wade Pursell
|
|
|
|
Executive Vice President and Chief Financial Officer
|
|
|
|
(Principal Financial Officer)
|
|
|
|
|
|
August 2, 2019
|
By:
|
/s/ PATRICK A. LYTLE
|
|
|
|
Patrick A. Lytle
|
|
|
|
Controller and Assistant Secretary
|
|
|
|
(Principal Accounting Officer)
|
|
Relative Performance Table
|
|
|
|
|||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
Peer Group Count
|
|
CRTCI and TSR Multipliers
|
||||||||||||||
Rank Best to Worst
|
|
21
|
20
|
19
|
18
|
17
|
16
|
15
|
14
|
13
|
12
|
11
|
10
|
|
Peer Group Percentile
|
Multiplier
|
|
1
|
100.00%
|
100.00%
|
100.00%
|
100.00%
|
100.00%
|
100.00%
|
100.00%
|
100.00%
|
100.00%
|
100.00%
|
100.00%
|
100.00%
|
|
0%
|
0.0
|
||
2
|
95.00%
|
94.80%
|
94.50%
|
94.20%
|
93.80%
|
93.40%
|
92.90%
|
92.40%
|
91.70%
|
91.00%
|
90.00%
|
88.90%
|
|
5%
|
0.0
|
||
3
|
90.00%
|
89.50%
|
88.90%
|
88.30%
|
87.50%
|
86.70%
|
85.80%
|
84.70%
|
83.40%
|
81.90%
|
80.00%
|
77.80%
|
|
10%
|
0.0
|
||
4
|
85.00%
|
84.30%
|
83.40%
|
82.40%
|
81.30%
|
80.00%
|
78.60%
|
77.00%
|
75.00%
|
72.80%
|
70.00%
|
66.70%
|
|
15%
|
0.0
|
||
5
|
80.00%
|
79.00%
|
77.80%
|
76.50%
|
75.00%
|
73.40%
|
71.50%
|
69.30%
|
66.70%
|
63.70%
|
60.00%
|
55.60%
|
|
20%
|
0.0
|
||
6
|
75.00%
|
73.70%
|
72.30%
|
70.60%
|
68.80%
|
66.70%
|
64.30%
|
61.60%
|
58.40%
|
54.60%
|
50.00%
|
44.50%
|
|
25%
|
0.0
|
||
7
|
70.00%
|
68.50%
|
66.70%
|
64.80%
|
62.50%
|
60.00%
|
57.20%
|
53.90%
|
50.00%
|
45.50%
|
40.00%
|
33.40%
|
|
30%
|
0.5
|
||
8
|
65.00%
|
63.20%
|
61.20%
|
58.90%
|
56.30%
|
53.40%
|
50.00%
|
46.20%
|
41.70%
|
36.40%
|
30.00%
|
22.30%
|
|
35%
|
0.6
|
||
9
|
60.00%
|
57.90%
|
55.60%
|
53.00%
|
50.00%
|
46.70%
|
42.90%
|
38.50%
|
33.40%
|
27.30%
|
20.00%
|
11.20%
|
|
40%
|
0.7
|
||
10
|
55.00%
|
52.70%
|
50.00%
|
47.10%
|
43.80%
|
40.00%
|
35.80%
|
30.80%
|
25.00%
|
18.20%
|
10.00%
|
0.00%
|
|
45%
|
0.8
|
||
11
|
50.00%
|
47.40%
|
44.50%
|
41.20%
|
37.50%
|
33.40%
|
28.60%
|
23.10%
|
16.70%
|
9.10%
|
0.00%
|
NA
|
|
50%
|
0.9
|
||
12
|
45.00%
|
42.20%
|
38.90%
|
35.30%
|
31.30%
|
26.70%
|
21.50%
|
15.40%
|
8.40%
|
0.00%
|
NA
|
NA
|
|
55%
|
1.0
|
||
13
|
40.00%
|
36.90%
|
33.40%
|
29.50%
|
25.00%
|
20.00%
|
14.30%
|
7.70%
|
0.00%
|
NA
|
NA
|
NA
|
|
60%
|
1.2
|
||
14
|
35.00%
|
31.60%
|
27.80%
|
23.60%
|
18.80%
|
13.40%
|
7.20%
|
0.00%
|
NA
|
NA
|
NA
|
NA
|
|
65%
|
1.4
|
||
15
|
30.00%
|
26.40%
|
22.30%
|
17.70%
|
12.50%
|
6.70%
|
0.00%
|
NA
|
NA
|
NA
|
NA
|
NA
|
|
70%
|
1.6
|
||
16
|
25.00%
|
21.10%
|
16.70%
|
11.80%
|
6.30%
|
0.00%
|
NA
|
NA
|
NA
|
NA
|
NA
|
NA
|
|
75%
|
1.8
|
||
17
|
20.00%
|
15.80%
|
11.20%
|
5.90%
|
0.00%
|
NA
|
NA
|
NA
|
NA
|
NA
|
NA
|
NA
|
|
80%
|
2.0
|
||
18
|
15.00%
|
10.60%
|
5.60%
|
0.00%
|
NA
|
NA
|
NA
|
NA
|
NA
|
NA
|
NA
|
NA
|
|
85%
|
2.0
|
||
19
|
10.00%
|
5.30%
|
0.00%
|
NA
|
NA
|
NA
|
NA
|
NA
|
NA
|
NA
|
NA
|
NA
|
|
90%
|
2.0
|
||
20
|
5.00%
|
0.00%
|
NA
|
NA
|
NA
|
NA
|
NA
|
NA
|
NA
|
NA
|
NA
|
NA
|
|
95%
|
2.0
|
||
21
|
0.00%
|
NA
|
NA
|
NA
|
NA
|
NA
|
NA
|
NA
|
NA
|
NA
|
NA
|
NA
|
|
100%
|
2.0
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Notes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1
|
|
Peer group count excludes SM Energy
|
|
1.
|
I have reviewed this quarterly report on Form 10-Q of SM Energy Company;
|
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 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 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.
|
1.
|
I have reviewed this quarterly report on Form 10-Q of SM Energy Company;
|
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 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 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.
|
/s/ JAVAN D. OTTOSON
|
|
Javan D. Ottoson
|
|
President and Chief Executive Officer
|
|
August 2, 2019
|
|
|
|
|
|
/s/ A. WADE PURSELL
|
|
A. Wade Pursell
|
|
Executive Vice President and Chief Financial Officer
|
|
August 2, 2019
|
|