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ý
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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COLORADO
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20-2835920
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
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1625 Broadway, Suite 300, Denver, CO
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80202
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(Address of principal executive offices)
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(Zip Code)
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Title of each class
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Name of each exchange on which registered
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Common Stock
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NYSE MKT
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Large accelerated filer
x
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Accelerated filer
o
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Non-accelerated filer
o
(Do not check if a smaller reporting company)
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Smaller reporting company
o
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Page
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PART I
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Item 1.
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Business
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Item 1A.
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Risk Factors
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Item 1B.
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Unresolved Staff Comments
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Item 2.
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Properties
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Item 3.
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Legal Proceeding
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Item 4.
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Mine Safety Disclosures
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PART II
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Item 5.
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Market for Registrant's Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities
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Item 6.
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Selected Financial Data
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Item 7.
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Management's Discussion and Analysis of Financial Condition and Result of Operations
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Item 7A.
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Quantitative and Qualitative Disclosures About Market Risks
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Item 8.
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Financial Statements and Supplementary Data
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Item 9.
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Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
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Item 9A.
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Controls and Procedures
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Item 9B.
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Other Information
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PART III
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Item 10.
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Directors, Executive Officers, and Corporate Governance
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Item 11.
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Executive Compensation
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Item 12.
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Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
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Item 13.
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Certain Relationships and Related Transactions and Director Independence
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Item 14.
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Principal Accounting Fees and Services
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PART IV
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Item 15.
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Exhibits, Financial Statement Schedules
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SIGNATURES
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||
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GLOSSARY OF UNITS OF MEASUREMENT AND INDUSTRY TERMS
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•
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declines in oil and natural
gas
prices;
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•
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operating hazards that adversely affect our ability to conduct business;
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•
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uncertainties in the estimates of proved reserves;
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•
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the effect of seasonal weather conditions and wildlife and plant species restrictions on our operations;
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•
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our ability to fund, develop, produce, and acquire additional oil and natural gas reserves that are economically recoverable;
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•
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our ability to obtain adequate financing;
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•
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the effect of local and regional factors on oil and natural gas prices;
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•
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incurrence of ceiling test write-downs;
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•
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our inability to control operations on properties that we do not operate;
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•
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the availability and capacity of gathering systems, pipelines, and other midstream infrastructure for our production;
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•
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the strength and financial resources of our competitors;
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•
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our ability to successfully identify, execute, and effectively integrate acquisitions;
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•
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the effect of federal, state, and local laws and regulations;
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•
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the effects of, including costs to comply with, environmental legislation or regulatory initiatives, including those related to hydraulic fracturing;
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•
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our ability to market our production;
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•
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the effects of local moratoria or bans on our business;
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•
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the effect of environmental liabilities;
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•
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the effect of the adoption and implementation of statutory and regulatory requirements for derivative transactions;
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•
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changes in U.S. tax laws;
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•
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our ability to satisfy our contractual obligations and commitments;
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•
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the amount of our indebtedness and our ability to maintain compliance with debt covenants;
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•
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the effectiveness of our disclosure controls and our internal controls over financial reporting;
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•
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the geographic concentration of our principal properties;
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•
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our ability to protect critical data and technology systems;
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•
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the availability of water for use in our operations; and
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•
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the risks and uncertainties described and referenced in "Risk Factors."
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ITEM 1.
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BUSINESS
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•
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Concentrate on our existing core area in the D-J Basin, where we have significant operating experience.
All of our current wells and our proved undeveloped acreage is located either in or adjacent to the Wattenberg Field. Focusing our operations in this area leverages our management, technical, and operational experience in the basin.
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•
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Develop and exploit existing oil and gas properties.
Our principal growth strategy has been to develop and exploit our properties to add reserves. In the Wattenberg Field, we target three benches of the Niobrara formation as well as the Codell formation for horizontal drilling and production. We believe horizontal drilling is the most efficient way to recover the potential hydrocarbons and consider the Wattenberg Field to be relatively low-risk because information gained from the large number of existing wells can be applied to potential future wells. There is enough similarity between wells in the Wattenberg Field that the exploitation process is generally repeatable.
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•
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Improve hydrocarbon recovery through increased well density.
We utilize what we believe to be industry best practices in our effort to determine the optimal recovery area for each well. Early horizontal well development in the Wattenberg Field generally assumed optimal recoveries would be obtained utilizing between 12 and 16 wells per 640-acre section. As horizontal well development has matured, well density assumptions have generally increased beyond 16 wells per section depending on the specific area of the field being drilled.
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•
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Complete selective acquisitions.
We seek to acquire developed and undeveloped oil and gas properties, primarily in the Wattenberg Field. We generally seek acquisitions that will provide us with opportunities for reserve additions and
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•
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Retain control over the operation of a substantial portion of our production.
As operator of a majority of our wells and undeveloped acreage, we control the timing and selection of new wells to be drilled. This allows us to modify our capital spending as our financial resources and underlying lease terms allow and market conditions permit.
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•
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Maintain financial flexibility while focusing on operational cost control.
We strive to be a cost-efficient operator and to maintain a relatively low utilization of debt, which enhances our financial flexibility. Our high degree of operational control, as well as our focus on operating efficiencies and short return on investment cycle times, is central to our operating strategy.
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•
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Use the latest technology to maximize returns.
Our development objective for individual well optimization is to drill and complete wells with lateral lengths of 7,000' to 10,000' as opposed to the 4,000' laterals that were initially drilled in the Wattenberg Field. Utilizing petrophysical and seismic data, a 3-D model is developed for each leasehold section to assist in determining optimal wellbore placement, well spacing, and stimulation design. This process is augmented with formation-specific drilling and completion execution designs and coupled with localized production results to provide a continuous improvement philosophy in optimizing the value per acre of our leasehold throughout our development program.
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•
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Core acreage position in the Wattenberg Field.
Wells in our core properties in the Wattenberg Field generally exhibit high liquids content, and those properties are generally prospective for Niobrara A, B, and C bench and Codell development. We believe that these factors will lead to attractive EURs per acres of leasehold, per unit capital and operating costs, and rates of return. Increased well density within the Codell and Niobrara formations, as well as our acquisition efforts and organic leasing efforts within the core Wattenberg Field, have added to our multi-year drilling inventory.
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•
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Financial flexibility.
Our capital structure, along with our high degree of operational control, continues to provide us with significant financial flexibility. We have historically utilized very little debt in our capital structure. Our low debt level has enabled us to make capital decisions with limited restrictions imposed by debt covenants, lender oversight, and/or mandatory repayment schedules. Additionally, as the operator of substantially all of our anticipated future drilling locations per our December 31, 2016 reserve report, we control the timing and selection of drilling locations as well as completion schedules. This allows us to modify our capital spending program depending on financial resources, leasehold requirements, and market conditions.
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•
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Management experience.
Members of our key management team possess an average of over
thirty years o
f experience in oil and gas exploration and production in multiple resource plays including the Wattenberg Field.
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•
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Balanced oil and natural gas reserves and production.
At
December 31, 2016
, approximately
73%
of total gross revenues were oil and condensate, and
27%
were natural gas. We believe that this balanced commodity mix will provide diversification of sources of cash flow.
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•
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Cost-efficient and safe operator.
We have continued to demonstrate our ability to drill wells in a cost-efficient and safe way and to successfully integrate acquired assets without incurring significant increases in overhead.
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•
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High success rate.
We have concentrated our drilling in areas that we perceive as relatively low risk and, as a result, have had a very high success rate in our drilling program throughout the Wattenberg Field.
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Twelve Months Ended December 31, 2016
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Four Months Ended December 31, 2015
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Year Ended August 31,
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||||||||||||||||||
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2015
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2014
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||||||||||||||||||
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Gross
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Net
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Gross
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Net
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Gross
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Net
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Gross
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Net
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||||||||
Development Wells:
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||||||||
Productive:
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||||||||
Oil
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18
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*
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|
17
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|
|
4
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|
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4
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|
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8
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|
|
1
|
|
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47
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|
|
22
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Gas
|
—
|
|
|
—
|
|
|
—
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|
|
—
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|
|
1
|
|
|
—
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|
|
2
|
|
|
1
|
|
Nonproductive
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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||||||||
Exploratory Wells:
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||||||||
Productive:
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|
|
|
|
|
|
|
|
|
|
|
|
|
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||||||||
Oil
|
6
|
|
|
5
|
|
|
9
|
|
|
9
|
|
|
67
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|
|
40
|
|
|
11
|
|
|
10
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|
Gas
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Nonproductive
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
Twelve months ended December 31,
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|
Years Ended August 31,
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||||||||||||
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2016
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2015
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2015
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2014
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||||||||
Production
:
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||||||||
Oil (MBbls)
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2,257
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|
2,073
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|
|
1,970
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|
|
941
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||||
Natural Gas (MMcf)
|
12,086
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|
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8,472
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|
|
7,344
|
|
|
3,747
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||||
MBOE
|
4,271
|
|
|
3,485
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|
|
3,194
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|
|
1,566
|
|
||||
BOED
|
11,670
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|
|
9,548
|
|
|
8,750
|
|
|
4,290
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||||
|
|
|
|
|
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|
|
||||||||
Average sales price:
|
|
|
|
|
|
|
|
||||||||
Oil ($/Bbl)
|
$
|
34.43
|
|
|
$
|
40.08
|
|
|
$
|
50.75
|
|
|
$
|
89.98
|
|
Natural Gas ($/Mcf)
|
$
|
2.44
|
|
|
$
|
2.71
|
|
|
$
|
3.39
|
|
|
$
|
5.21
|
|
BOE
|
$
|
25.09
|
|
|
$
|
30.43
|
|
|
$
|
39.09
|
|
|
$
|
66.56
|
|
|
|
|
|
|
|
|
|
||||||||
Average lease operating expenses ("LOE") per BOE
|
$
|
4.67
|
|
|
$
|
4.61
|
|
|
$
|
4.70
|
|
|
$
|
5.10
|
|
•
|
royalties and other burdens and obligations, expressed or implied, under oil and gas leases;
|
•
|
overriding royalties and other burdens created by us or our predecessors in title;
|
•
|
a variety of contractual obligations (including, in some cases, development obligations) arising under operating agreements, farm-out agreements, production sales contracts, and other agreements that may affect the properties or title thereto;
|
•
|
back-ins and reversionary interests existing as a result of pooling under state orders;
|
•
|
liens that arise in the normal course of operations, such as those for unpaid taxes, statutory liens securing obligations to unpaid suppliers and contractors, and contractual liens under operating agreements;
|
•
|
pooling, unitization and communitization agreements, declarations, and orders; and
|
•
|
easements, restrictions, rights-of-way, and other matters that commonly affect property.
|
|
|
Productive Wells
|
|
Developed Acreage
|
|
Undeveloped Acreage
1
|
||||||||||||
State
|
|
Gross
|
|
Net
|
|
Gross
|
|
Net
|
|
Gross
|
|
Net
|
||||||
Colorado
|
|
631
|
|
|
353
|
|
|
26,500
|
|
|
22,000
|
|
|
185,200
|
|
|
128,700
|
|
Nebraska
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
183,600
|
|
|
180,400
|
|
Wyoming
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,100
|
|
|
500
|
|
Kansas
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
800
|
|
|
800
|
|
Total
|
|
631
|
|
|
353
|
|
|
26,500
|
|
|
22,000
|
|
|
370,700
|
|
|
310,400
|
|
State
|
|
Held by Production
|
|
Not Held by Production
|
||
Colorado
|
|
62,100
|
|
|
149,600
|
|
Nebraska
|
|
—
|
|
|
183,600
|
|
Wyoming
|
|
—
|
|
|
1,100
|
|
Kansas
|
|
—
|
|
|
800
|
|
Total
|
|
62,100
|
|
|
335,100
|
|
Leased Acres
(Gross)
|
|
Expiration
of Lease
|
50,500
|
|
2017
|
66,700
|
|
2018
|
24,700
|
|
2019
|
45,300
|
|
2020
|
147,900
|
|
After 2020
|
|
Oil
(MBbls)
|
|
Gas
(MMcf)
|
|
MBOE
|
|||
Proved:
|
|
|
|
|
|
|||
Developed
|
7,435
|
|
|
62,570
|
|
|
17,863
|
|
Undeveloped
|
30,597
|
|
|
269,351
|
|
|
75,489
|
|
Total
|
38,032
|
|
|
331,921
|
|
|
93,352
|
|
|
Proved - December 31, 2016
|
||||||||||||||
|
Developed
|
|
|
|
Total
|
||||||||||
|
Producing
|
|
Non-producing
|
|
Undeveloped
|
|
Proved
|
||||||||
Future cash inflow
|
$
|
414,230
|
|
|
$
|
—
|
|
|
$
|
1,766,443
|
|
|
$
|
2,180,673
|
|
Future production costs
|
(177,138
|
)
|
|
—
|
|
|
(466,955
|
)
|
|
(644,093
|
)
|
||||
Future development costs
|
(29,634
|
)
|
|
—
|
|
|
(554,903
|
)
|
|
(584,537
|
)
|
||||
Future pre-tax net cash flows
|
$
|
207,458
|
|
|
$
|
—
|
|
|
$
|
744,585
|
|
|
$
|
952,043
|
|
PV-10 (Non-U.S. GAAP)
|
$
|
154,261
|
|
|
$
|
—
|
|
|
$
|
322,087
|
|
|
$
|
476,348
|
|
|
Proved - December 31, 2015
|
||||||||||||||
|
Developed
|
|
|
|
Total
|
||||||||||
|
Producing
|
|
Non-producing
|
|
Undeveloped
|
|
Proved
|
||||||||
Future cash inflow
|
$
|
494,858
|
|
|
$
|
—
|
|
|
$
|
1,215,752
|
|
|
$
|
1,710,610
|
|
Future production costs
|
(172,210
|
)
|
|
—
|
|
|
(289,887
|
)
|
|
(462,097
|
)
|
||||
Future development costs
|
(32,700
|
)
|
|
—
|
|
|
(307,749
|
)
|
|
(340,449
|
)
|
||||
Future pre-tax net cash flows
|
$
|
289,948
|
|
|
$
|
—
|
|
|
$
|
618,116
|
|
|
$
|
908,064
|
|
PV-10 (Non-U.S. GAAP)
|
$
|
198,056
|
|
|
$
|
—
|
|
|
$
|
240,086
|
|
|
$
|
438,142
|
|
|
Proved - August 31, 2015
|
||||||||||||||
|
Developed
|
|
|
|
Total
|
||||||||||
|
Producing
|
|
Non-producing
|
|
Undeveloped
|
|
Proved
|
||||||||
Future cash inflow
|
$
|
554,366
|
|
|
$
|
—
|
|
|
$
|
1,492,249
|
|
|
$
|
2,046,615
|
|
Future production costs
|
(211,911
|
)
|
|
—
|
|
|
(441,098
|
)
|
|
(653,009
|
)
|
||||
Future development costs
|
(30,985
|
)
|
|
—
|
|
|
(479,735
|
)
|
|
(510,720
|
)
|
||||
Future pre-tax net cash flows
|
$
|
311,470
|
|
|
$
|
—
|
|
|
$
|
571,416
|
|
|
$
|
882,886
|
|
PV-10 (Non-U.S. GAAP)
|
$
|
225,834
|
|
|
$
|
—
|
|
|
$
|
212,447
|
|
|
$
|
438,281
|
|
|
Proved - August 31, 2014
|
||||||||||||||
|
Developed
|
|
|
|
Total
|
||||||||||
|
Producing
|
|
Non-producing
|
|
Undeveloped
|
|
Proved
|
||||||||
Future cash inflow
|
$
|
511,252
|
|
|
$
|
234,452
|
|
|
$
|
1,094,283
|
|
|
$
|
1,839,987
|
|
Future production costs
|
(127,900
|
)
|
|
(48,990
|
)
|
|
(218,129
|
)
|
|
(395,019
|
)
|
||||
Future development costs
|
(13,245
|
)
|
|
(29,403
|
)
|
|
(369,869
|
)
|
|
(412,517
|
)
|
||||
Future pre-tax net cash flows
|
$
|
370,107
|
|
|
$
|
156,059
|
|
|
$
|
506,285
|
|
|
$
|
1,032,451
|
|
PV-10 (Non-U.S. GAAP)
|
250,749
|
|
|
76,593
|
|
|
206,356
|
|
|
$
|
533,698
|
|
|
Oil (Bbl)
|
|
Natural Gas (Mcf)
|
||||
December 31, 2016 (Average)
|
$
|
36.07
|
|
|
$
|
2.44
|
|
December 31, 2015 (Average)
|
$
|
41.33
|
|
|
$
|
2.60
|
|
August 31, 2015 (Average)
|
$
|
53.27
|
|
|
$
|
3.28
|
|
August 31, 2014 (Average)
|
$
|
89.48
|
|
|
$
|
5.03
|
|
Proved Undeveloped Reserves
|
Net Reserves
(MBOE)
|
|
Beginning September 1, 2013
|
4,859
|
|
Converted to proved developed
|
(587
|
)
|
Extensions
|
13,436
|
|
Acquisitions
|
1,522
|
|
Revisions
|
(19
|
)
|
Ending August 31, 2014
|
19,211
|
|
Converted to proved developed
|
(414
|
)
|
Extensions
|
17,633
|
|
Acquisitions
|
3,780
|
|
Divestitures
|
(1,278
|
)
|
Revisions
|
2,689
|
|
Ending August 31, 2015
|
41,621
|
|
Converted to proved developed
|
(1,869
|
)
|
Extensions
|
17,161
|
|
Acquisitions
|
11,960
|
|
Divestitures
|
(4,360
|
)
|
Revisions
|
(16,224
|
)
|
Ending December 31, 2015
|
48,289
|
|
Converted to proved developed
|
(806
|
)
|
Extensions
|
3,110
|
|
Acquisitions
|
50,530
|
|
Divestitures
|
(6,479
|
)
|
Revisions
|
(19,155
|
)
|
Ending December 31, 2016
|
75,489
|
|
ITEM 1A.
|
RISK FACTORS
|
•
|
worldwide and regional economic conditions impacting the global supply and demand for oil and natural gas;
|
•
|
the actions, or inaction, of OPEC;
|
•
|
the price and quantity of imports of foreign oil and natural gas;
|
•
|
political conditions or hostilities in oil-producing and natural gas-producing regions and related sanctions, including current conflicts in the Middle East and conditions in Africa, South America, and Russia;
|
•
|
the level of global oil and domestic natural gas exploration and production;
|
•
|
the level of global oil and domestic natural gas inventories;
|
•
|
prevailing prices on local oil and natural gas price indexes in the areas in which we operate;
|
•
|
localized supply and demand fundamentals and gathering, processing, and transportation availability;
|
•
|
weather conditions and natural disasters;
|
•
|
domestic and foreign governmental regulations;
|
•
|
exports from the United States of liquefied natural gas or oil;
|
•
|
speculation as to the future price of oil and natural gas and the speculative trading of oil and natural gas futures contracts;
|
•
|
price and availability of competitors’ supplies of oil and natural gas;
|
•
|
technological advances affecting energy consumption; and
|
•
|
the price and availability of alternative fuels.
|
•
|
unexpected drilling conditions including loss of well control, loss of drilling fluid circulation, cratering, and explosions;
|
•
|
uncontrollable flows of oil, natural gas, or well fluids;
|
•
|
equipment failures, fires, or accidents;
|
•
|
pollution, releases of hazardous materials, and other environmental risks; and
|
•
|
shortages in experienced labor or shortages or delays in the delivery of equipment or the performance of services.
|
•
|
historical production from the area compared with production from similar producing wells;
|
•
|
the assumed effects of regulations by governmental agencies;
|
•
|
assumptions concerning future oil and natural gas prices; and
|
•
|
assumptions concerning future operating costs, severance and excise taxes, development costs, and workover and remedial costs.
|
•
|
the quantities of oil and natural gas that are ultimately recovered;
|
•
|
the production and operating costs incurred;
|
•
|
the amount and timing of future development expenditures; and
|
•
|
future cash flows from the development of reserves.
|
•
|
borrowings from banks or other lenders;
|
•
|
the sale of non-core assets;
|
•
|
the issuance of debt securities;
|
•
|
the sale of common stock, preferred stock, or other equity securities;
|
•
|
joint venture financing; and
|
•
|
production payments.
|
•
|
timing and amount of capital expenditures;
|
•
|
expertise and diligence in adequately performing operations and complying with applicable agreements;
|
•
|
financial resources;
|
•
|
inclusion of other participants in drilling wells; and
|
•
|
use of technology.
|
•
|
the availability of funds for, and information relating to, properties;
|
•
|
the standards established by us for the minimum projected return on investment; and
|
•
|
the transportation of natural gas and oil.
|
•
|
require us to apply for and receive a permit before drilling commences or certain associated facilities are developed;
|
•
|
restrict the types, quantities, and concentrations of substances that can be released into the environment in connection with drilling, hydraulic fracturing, and production activities;
|
•
|
limit or prohibit drilling activities on certain lands lying within wilderness, wetlands and other "waters of the United States," threatened and endangered species habitat, and other protected areas;
|
•
|
require remedial measures to mitigate pollution from former operations, such as plugging abandoned wells; and
|
•
|
impose substantial liabilities for pollution resulting from our operations.
|
•
|
the covenants contained in our debt agreements limit our ability to borrow money in the future for acquisitions, capital expenditures, or to meet our operating expenses or other general corporate obligations and may limit our flexibility in operating our business;
|
•
|
the amount of our interest expense may increase because amounts borrowed under our credit facility bear interest at variable rates, payable either quarterly or at the end of a specified interest period; if interest rates increase, this could result in higher interest expense; and
|
•
|
our debt level could limit our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate.
|
•
|
pay dividends or distributions on our capital stock or issue preferred stock;
|
•
|
repurchase, redeem, or retire our capital stock or subordinated debt;
|
•
|
make certain loans and investments;
|
•
|
sell assets;
|
•
|
enter into certain transactions with affiliates;
|
•
|
create or assume certain liens on our assets;
|
•
|
enter into sale and leaseback transactions;
|
•
|
merge or enter into other business combination transactions; or
|
•
|
engage in certain other corporate activities.
|
•
|
changes in production volumes, worldwide demand and prices for oil and natural gas;
|
•
|
changes in market prices of oil and natural gas;
|
•
|
changes in securities analysts’ estimates of our financial performance;
|
•
|
fluctuations in stock market prices and volumes, particularly among securities of energy companies;
|
•
|
changes in market valuations of similar companies;
|
•
|
changes in interest rates;
|
•
|
announcements regarding adverse timing or lack of success in discovering, acquiring, developing, and producing oil and natural gas resources;
|
•
|
announcements by us or our competitors of significant contracts, new acquisitions, discoveries, commercial relationships, joint ventures, or capital commitments;
|
•
|
decreases in the amount of capital available to us;
|
•
|
operating results that fall below market expectations or variations in our quarterly operating results;
|
•
|
loss of a major customer;
|
•
|
loss of a relationship with a partner;
|
•
|
the identification of and severity of environmental events and governmental and other third-party responses to the events; or
|
•
|
additions or departures of key personnel,
|
ITEM 1B.
|
UNRESOLVED STAFF COMMENTS
|
ITEM 3.
|
LEGAL PROCEEDINGS
|
ITEM 4.
|
MINE SAFETY DISCLOSURES
|
ITEM 5.
|
MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
|
Period Ended
|
|
High
|
|
Low
|
Three Months Ended November 30, 2014
|
|
$13.75
|
|
$8.05
|
Three Months Ended February 28, 2015
|
|
$13.50
|
|
$8.14
|
Three Months Ended May 31, 2015
|
|
$12.98
|
|
$10.40
|
Three Months Ended August 31, 2015
|
|
$12.82
|
|
$9.04
|
Four Months Ended December 31, 2015
|
|
$12.12
|
|
$8.31
|
Period Ended
|
|
High
|
|
Low
|
Three Months Ended March 31, 2016
|
|
$9.09
|
|
$5.41
|
Three Months Ended June 30, 2016
|
|
$8.41
|
|
$5.60
|
Three Months Ended September 30, 2016
|
|
$7.20
|
|
$5.88
|
Three Months Ended December 31, 2016
|
|
$9.85
|
|
$6.37
|
Period
|
|
Total Number of Shares (or Units) Purchased
|
|
Average Price Paid per Share (or Unit)
|
|
Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs
|
|
Maximum Number (or Approximate Dollar Value) of Shares (or Units) that May Yet Be Purchased Under the Plans or Programs)
|
|||||
October 1, 2016 - October 31, 2016
(1)
|
|
2,160
|
|
|
$
|
7.38
|
|
|
—
|
|
|
—
|
|
November 1, 2016 - November 30, 2016
(1)
|
|
4,135
|
|
|
$
|
8.47
|
|
|
—
|
|
|
—
|
|
December 1, 2016 - December 31, 2016
(1)
|
|
22,643
|
|
|
$
|
9.13
|
|
|
—
|
|
|
—
|
|
|
|
As of August 31,
|
|
As of December 31,
|
|||||||||||||||||
|
|
2011
|
|
2012
|
|
2013
|
|
2014
|
|
2015
|
|
2015
|
|
2016
|
|||||||
Synergy Resources Corporation
|
|
100.00
|
|
|
90.03
|
|
|
300.96
|
|
|
432.80
|
|
|
345.34
|
|
|
273.95
|
|
|
286.50
|
|
S&P 500
|
|
100.00
|
|
|
118.00
|
|
|
140.07
|
|
|
175.43
|
|
|
176.27
|
|
|
184.02
|
|
|
206.02
|
|
SIC Code 1311
|
|
100.00
|
|
|
96.71
|
|
|
103.16
|
|
|
130.75
|
|
|
85.86
|
|
|
71.73
|
|
|
84.33
|
|
ITEM 6.
|
SELECTED FINANCIAL DATA
|
|
Year Ended December 31, 2016
|
|
Four Months Ended December 31, 2015
|
|
Year Ended August 31,
|
||||||||||||||||||
|
|
|
2015
|
|
2014
|
|
2013
|
|
2012
|
||||||||||||||
Results of Operations
(in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Revenues
|
$
|
107,149
|
|
|
$
|
34,138
|
|
|
$
|
124,843
|
|
|
$
|
104,219
|
|
|
$
|
46,223
|
|
|
$
|
24,969
|
|
Net income (loss)
|
(219,189
|
)
|
|
(122,932
|
)
|
|
18,042
|
|
|
28,853
|
|
|
9,581
|
|
|
12,124
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net income (loss) per common share:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Basic
|
$
|
(1.26
|
)
|
|
$
|
(1.14
|
)
|
|
$
|
0.19
|
|
|
$
|
0.38
|
|
|
$
|
0.17
|
|
|
$
|
0.26
|
|
Diluted
|
$
|
(1.26
|
)
|
|
$
|
(1.14
|
)
|
|
$
|
0.19
|
|
|
$
|
0.37
|
|
|
$
|
0.16
|
|
|
$
|
0.25
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Certain Balance Sheet Information (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Total Assets
|
$
|
1,024,113
|
|
|
$
|
672,616
|
|
|
$
|
746,449
|
|
|
$
|
448,542
|
|
|
$
|
291,236
|
|
|
$
|
120,731
|
|
Working (Deficit) Capital
|
(38,056
|
)
|
|
24,992
|
|
|
93,129
|
|
|
(35,338
|
)
|
|
50,608
|
|
|
10,875
|
|
||||||
Total Liabilities
|
183,374
|
|
|
166,106
|
|
|
174,052
|
|
|
167,052
|
|
|
88,016
|
|
|
19,619
|
|
||||||
Equity
|
840,739
|
|
|
506,510
|
|
|
572,397
|
|
|
281,490
|
|
|
203,220
|
|
|
101,112
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Certain Operating Statistics:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Production:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Oil (MBbls)
|
2,257
|
|
|
742
|
|
|
1,970
|
|
|
941
|
|
|
421
|
|
|
236
|
|
||||||
Natural Gas (MMcf)
|
12,086
|
|
|
3,468
|
|
|
7,344
|
|
|
3,747
|
|
|
2,108
|
|
|
1,109
|
|
||||||
MBOE
|
4,271
|
|
|
1,320
|
|
|
3,194
|
|
|
1,566
|
|
|
773
|
|
|
421
|
|
||||||
BOED
|
11,670
|
|
|
10,822
|
|
|
8,750
|
|
|
4,290
|
|
|
2,117
|
|
|
1,149
|
|
||||||
Average sales price per BOE
|
$
|
25.09
|
|
|
$
|
25.86
|
|
|
$
|
39.09
|
|
|
$
|
66.56
|
|
|
$
|
59.83
|
|
|
$
|
59.38
|
|
LOE per BOE
|
$
|
4.67
|
|
|
$
|
4.41
|
|
|
$
|
4.70
|
|
|
$
|
5.10
|
|
|
$
|
4.42
|
|
|
$
|
2.89
|
|
DD&A
1
per BOE
|
$
|
10.93
|
|
|
$
|
14.22
|
|
|
$
|
20.62
|
|
|
$
|
21.05
|
|
|
$
|
17.26
|
|
|
$
|
14.29
|
|
ITEM 7.
|
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
|
Years Ended December 31,
|
|
Years Ended August 31,
|
||||||||||||||||||||
|
2016
|
|
2015
|
|
2015
|
|
2014
|
|
2013
|
|
2012
|
||||||||||||
Average NYMEX prices
|
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
||||||||||||
Oil (per Bbl)
|
$
|
43.20
|
|
|
$
|
48.73
|
|
|
$
|
60.65
|
|
|
$
|
100.39
|
|
|
$
|
94.58
|
|
|
$
|
94.88
|
|
Natural gas (per Mcf)
|
$
|
2.52
|
|
|
$
|
2.58
|
|
|
$
|
3.12
|
|
|
$
|
4.38
|
|
|
$
|
3.55
|
|
|
$
|
2.82
|
|
|
Years Ended December 31,
|
|
Years Ended August 31,
|
||||||||||||
|
2016
|
|
2015
|
|
2015
|
|
2014
|
||||||||
Oil (NYMEX WTI)
|
|
|
(unaudited)
|
|
|
|
|
||||||||
Average NYMEX Price
|
$
|
43.20
|
|
|
$
|
48.73
|
|
|
$
|
60.65
|
|
|
$
|
100.39
|
|
Realized Price
|
$
|
34.43
|
|
|
$
|
40.08
|
|
|
$
|
50.75
|
|
|
$
|
89.98
|
|
Differential
|
$
|
(8.77
|
)
|
|
$
|
(8.65
|
)
|
|
$
|
(9.90
|
)
|
|
$
|
(10.41
|
)
|
|
|
|
|
|
|
|
|
||||||||
Natural Gas (NYMEX Henry Hub)
|
|
|
|
|
|
|
|
||||||||
Average NYMEX Price
|
$
|
2.52
|
|
|
$
|
2.58
|
|
|
$
|
3.12
|
|
|
$
|
4.38
|
|
Realized Price
|
$
|
2.44
|
|
|
$
|
2.71
|
|
|
$
|
3.39
|
|
|
$
|
5.21
|
|
Differential
|
$
|
(0.08
|
)
|
|
$
|
0.13
|
|
|
$
|
0.27
|
|
|
$
|
0.83
|
|
Vertical Wells
|
||||||||||||||||
Operated Wells
|
|
Non-Operated Wells
|
|
Totals
|
||||||||||||
Gross
|
|
Net
|
|
Gross
|
|
Net
|
|
Gross
|
|
Net
|
||||||
214
|
|
|
182
|
|
|
158
|
|
|
43
|
|
|
372
|
|
|
225
|
|
Horizontal Wells
|
||||||||||||||||
Operated Wells
|
|
Non-Operated Wells
|
|
Totals
|
||||||||||||
Gross
|
|
Net
|
|
Gross
|
|
Net
|
|
Gross
|
|
Net
|
||||||
110
|
|
|
106
|
|
|
149
|
|
|
22
|
|
|
259
|
|
|
128
|
|
|
Years Ended December 31,
|
|
|
|||||||
|
2016
|
|
2015
|
|
Change
|
|||||
Production:
|
|
|
|
|
|
|||||
Oil (MBbls)
|
2,257
|
|
|
2,073
|
|
|
9
|
%
|
||
Natural Gas (MMcf)
|
12,086
|
|
|
8,472
|
|
|
43
|
%
|
||
MBOE
|
4,271
|
|
|
3,485
|
|
|
23
|
%
|
||
BOED
|
11,670
|
|
|
9,548
|
|
|
22
|
%
|
||
|
|
|
|
|
|
|||||
Revenues (in thousands):
|
|
|
|
|
|
|||||
Oil
|
$
|
77,699
|
|
|
$
|
83,078
|
|
|
(6
|
)%
|
Natural Gas
|
29,450
|
|
|
22,972
|
|
|
28
|
%
|
||
|
$
|
107,149
|
|
|
$
|
106,050
|
|
|
1
|
%
|
Average sales price:
|
|
|
|
|
|
|||||
Oil
|
$
|
34.43
|
|
|
$
|
40.08
|
|
|
(14
|
)%
|
Natural Gas
|
$
|
2.44
|
|
|
$
|
2.71
|
|
|
(10
|
)%
|
BOE
|
$
|
25.09
|
|
|
$
|
30.43
|
|
|
(18
|
)%
|
|
Years Ended December 31,
|
||||||
(in thousands)
|
2016
|
|
2015
|
||||
Depletion of oil and gas properties
|
$
|
45,193
|
|
|
$
|
61,172
|
|
Depreciation and accretion
|
1,485
|
|
|
899
|
|
||
Total DD&A
|
$
|
46,678
|
|
|
$
|
62,071
|
|
|
|
|
|
||||
DD&A expense per BOE
|
$
|
10.93
|
|
|
$
|
17.81
|
|
|
Years Ended August 31,
|
|
|
|||||||
|
2015
|
|
2014
|
|
Change
|
|||||
Production:
|
|
|
|
|
|
|||||
Oil (MBbls)
|
1,970
|
|
|
941
|
|
|
109
|
%
|
||
Natural Gas (MMcf)
|
7,344
|
|
|
3,747
|
|
|
96
|
%
|
||
MBOE
|
3,194
|
|
|
1,566
|
|
|
104
|
%
|
||
BOED
|
8,750
|
|
|
4,290
|
|
|
104
|
%
|
||
|
|
|
|
|
|
|||||
Revenues (in thousands):
|
|
|
|
|
|
|||||
Oil
|
$
|
99,969
|
|
|
$
|
84,693
|
|
|
18
|
%
|
Natural Gas
|
24,874
|
|
|
19,526
|
|
|
27
|
%
|
||
|
$
|
124,843
|
|
|
$
|
104,219
|
|
|
20
|
%
|
Average sales price:
|
|
|
|
|
|
|||||
Oil
|
$
|
50.75
|
|
|
$
|
89.98
|
|
|
(44
|
)%
|
Natural Gas
|
3.39
|
|
|
5.21
|
|
|
(35
|
)%
|
||
BOE
|
$
|
39.09
|
|
|
$
|
66.56
|
|
|
(41
|
)%
|
|
Years Ended August 31,
|
||||||
(in thousands)
|
2015
|
|
2014
|
||||
Depletion of oil and gas properties
|
$
|
65,158
|
|
|
$
|
32,132
|
|
Depreciation and accretion
|
711
|
|
|
826
|
|
||
Total DD&A
|
$
|
65,869
|
|
|
$
|
32,958
|
|
|
|
|
|
||||
DD&A expense per BOE
|
$
|
20.62
|
|
|
$
|
21.05
|
|
|
Year Ended December 31,
|
|
Year Ended August 31,
|
||||||||||||
|
2016
|
|
2015
|
|
2015
|
|
2014
|
||||||||
Net cash provided by operations
|
$
|
48,688
|
|
|
$
|
103,830
|
|
|
$
|
125,087
|
|
|
$
|
74,905
|
|
Capital expenditures
|
(643,266
|
)
|
|
(202,564
|
)
|
|
(275,808
|
)
|
|
(155,602
|
)
|
||||
Short-term investments
|
—
|
|
|
—
|
|
|
—
|
|
|
60,018
|
|
||||
Net cash provided by other investing activities
|
7,131
|
|
|
6,239
|
|
|
6,239
|
|
|
704
|
|
||||
Net cash provided by equity financing activities
|
542,722
|
|
|
187,444
|
|
|
204,953
|
|
|
35,265
|
|
||||
Net cash (used in) provided by debt financing activities
|
(3,159
|
)
|
|
(68,020
|
)
|
|
38,684
|
|
|
—
|
|
||||
Net (decrease) increase in cash and equivalents
|
$
|
(47,884
|
)
|
|
$
|
26,929
|
|
|
$
|
99,155
|
|
|
$
|
15,290
|
|
•
|
In January 2016, we received cash proceeds of approximately
$89.2 million
(after underwriting discounts, commissions and expenses) from our public offering of
16,100,000
shares (including the shares sold pursuant to an over-allotment option exercised by the underwriters) at a price to us of
$5.545
per share.
|
•
|
In January 2016, the Company repaid its outstanding borrowings under the Revolver of $78 million. In addition, in June 2016, the Company borrowed approximately $55 million under the Revolver. The full amount borrowed was also repaid in June 2016.
|
•
|
In April 2016, we received cash proceeds of approximately
$164.8 million
(after underwriting discounts, commissions and expenses) from our public offering of
22,425,000
shares (including the shares sold pursuant to an over-allotment option exercised by the underwriters) at a price to us of
$7.3535
per share.
|
•
|
In April 2016, the Company agreed to divest approximately 3,700 net undeveloped acres and 107 vertical wells primarily in Adams County, Colorado for total consideration of approximately
$24.7 million
in cash and the assumption by the buyers of $0.5 million in liabilities.
|
•
|
In May and June 2016, we received cash proceeds of approximately
$289.4 million
(after underwriting discounts, commissions and expenses) from our public offering of
51,750,000
shares (including the shares sold pursuant to an over-allotment option exercised by the underwriters) at a price to us of
$5.597
per share.
|
•
|
In June 2016, the Company issued $80 million aggregate principal amount of Senior Notes in a private placement to qualified institutional buyers. See "- Senior Notes." The net proceeds from the sale of the Senior Notes were
$75.2 million
after deductions of
$4.8 million
for expenses and underwriting discounts and commissions.
|
|
Year Ended December 31,
|
|
Year Ended August 31,
|
||||||||||||
|
2016
|
|
2015
|
|
2015
|
|
2014
|
||||||||
Acquisitions of oil and gas properties and leasehold
|
$
|
517,911
|
|
|
$
|
105,670
|
|
|
$
|
145,460
|
|
|
$
|
62,774
|
|
Capital expenditures for drilling and completion activities
|
130,936
|
|
|
127,817
|
|
|
147,358
|
|
|
143,582
|
|
||||
Capitalized interest, capitalized G&A, and other
|
18,744
|
|
|
8,221
|
|
|
12,085
|
|
|
1,472
|
|
||||
Accrual basis capital expenditures*
|
$
|
667,591
|
|
|
$
|
241,708
|
|
|
$
|
304,903
|
|
|
$
|
207,828
|
|
|
Less than
One Year
|
|
One to
Three Years
|
|
Three to Five Years
|
|
More Than Five Years
|
|
Total
|
||||||||||
Rig Contract
(1)
|
$
|
5,845
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
5,845
|
|
Commitments for parts and services
|
3,500
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,500
|
|
|||||
Volume commitments
(2) (3)
|
21,868
|
|
|
47,462
|
|
|
30,882
|
|
|
—
|
|
|
100,212
|
|
|||||
Notes Payable
(4)
|
7,240
|
|
|
14,480
|
|
|
91,120
|
|
|
—
|
|
|
112,840
|
|
|||||
Operating Leases
|
398
|
|
|
1,699
|
|
|
1,753
|
|
|
477
|
|
|
4,327
|
|
|||||
Total
|
$
|
38,851
|
|
|
$
|
63,641
|
|
|
$
|
123,755
|
|
|
$
|
477
|
|
|
$
|
226,724
|
|
1
|
Represents an estimate of the commitment related to the use of one rig. Actual amounts will vary as a result of a number of variables, including target formations, measured depth, and other technical details.
|
2
|
We have entered into agreements that require us to deliver minimum amounts of oil to certain third parties through 2021. Production can be sourced via third party contract, in-kind agreements, or self-sustained production. We will incur a charge of approximately $5.62 per Bbl if a minimum quantity of oil is not delivered to the pipeline-related counterparties. Amounts reflect the estimated deficiency payments under our pipeline-related commitments assuming no deliveries are made. Potential damages and other charges related to nonperformance under these contracts are not included in the amounts above. See further discussion in Note
16
to our consolidated financial statements.
|
3
|
In collaboration with several other producers and DCP Midstream, w
e have entered into an agreement that requires us to deliver minimum amounts of natural gas under certain circumstances.
Our share of the commitment would require
|
4
|
Includes interest payments related to the issuance of the Senior Notes in June 2016. See further discussion in Note
7
to our consolidated financial statements.
|
|
Years Ended December 31,
|
|
Year Ended August 31,
|
||||||||||||
|
2016
|
|
2015
|
|
2015
|
|
2014
|
||||||||
Adjusted EBITDA:
|
|
|
|
|
|
|
|
||||||||
Net (loss) income
|
$
|
(219,189
|
)
|
|
$
|
(131,689
|
)
|
|
$
|
18,042
|
|
|
$
|
28,853
|
|
Depletion, depreciation, and accretion
|
46,678
|
|
|
62,071
|
|
|
65,869
|
|
|
32,958
|
|
||||
Full cost ceiling impairment
|
215,223
|
|
|
141,230
|
|
|
16,000
|
|
|
—
|
|
||||
Income tax expense (benefit)
|
106
|
|
|
(14,132
|
)
|
|
11,677
|
|
|
15,014
|
|
||||
Stock-based compensation
|
9,491
|
|
|
15,162
|
|
|
7,691
|
|
|
2,968
|
|
||||
Mark-to-market of commodity derivative contracts:
|
|
|
|
|
|
|
|
||||||||
Total (gain) loss on commodity derivative contracts
|
7,750
|
|
|
(11,037
|
)
|
|
(32,256
|
)
|
|
(321
|
)
|
||||
Cash settlements on commodity derivative contracts
|
5,374
|
|
|
29,992
|
|
|
31,721
|
|
|
(2,138
|
)
|
||||
Cash premiums paid for commodity derivative contracts
|
—
|
|
|
(5,073
|
)
|
|
(4,117
|
)
|
|
—
|
|
||||
Interest expense (income)
|
(242
|
)
|
|
135
|
|
|
159
|
|
|
(82
|
)
|
||||
Adjusted EBITDA
|
$
|
65,191
|
|
|
$
|
86,659
|
|
|
$
|
114,786
|
|
|
$
|
77,252
|
|
|
As of December 31,
|
|
As of August 31,
|
||||||||||||
|
2016
|
|
2015
|
|
2015
|
|
2014
|
||||||||
Standardized measure of discounted future net cash flows:
|
$
|
434,261
|
|
|
$
|
390,953
|
|
|
$
|
365,829
|
|
|
$
|
402,699
|
|
Add: 10 percent annual discount, net of income taxes
|
427,587
|
|
|
408,939
|
|
|
372,658
|
|
|
376,827
|
|
||||
Add: future undiscounted income taxes
|
90,195
|
|
|
108,172
|
|
|
144,399
|
|
|
252,925
|
|
||||
Future pre-tax net cash flows
|
$
|
952,043
|
|
|
$
|
908,064
|
|
|
$
|
882,886
|
|
|
$
|
1,032,451
|
|
Less: 10 percent annual discount, pre-tax
|
(475,695
|
)
|
|
(469,921
|
)
|
|
(444,605
|
)
|
|
(498,753
|
)
|
||||
PV-10
|
$
|
476,348
|
|
|
$
|
438,143
|
|
|
$
|
438,281
|
|
|
$
|
533,698
|
|
ITEM 7A.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISKS
|
ITEM 8.
|
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
|
ITEM 9.
|
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
|
ITEM 9A.
|
CONTROLS AND PROCEDURES
|
ITEM 9B.
|
OTHER INFORMATION
|
ITEM 10.
|
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
|
ITEM 11.
|
EXECUTIVE COMPENSATION
|
ITEM 12.
|
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
|
ITEM 13.
|
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, DIRECTOR INDEPENDENCE
|
ITEM 14.
|
PRINCIPAL ACCOUNTING FEES AND SERVICES
|
Exhibit
Number
|
Exhibit
|
3.1
|
Amended and Restated Articles of Incorporation of the Company (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K of the Company filed on December 17, 2015)
|
3.2
|
Bylaws of the Company, as amended by the First Amendment to the Bylaws dated January 21, 2016 (incorporated by reference to Exhibit 3.2 of the Annual Report on Form 10-K of the Company filed on April 22, 2016)
|
4.1
|
Indenture, dated as of June 14, 2016, among Synergy Resources Corporation and U.S. Bank National Association as Trustee (incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K of the Company filed on June 14, 2016)
|
10.1
|
Amended and Restated Credit Agreement, dated as of November 28, 2012 (the “Credit Agreement”), by and among the Company, Community Banks of Colorado, as administrative agent and the lenders party thereto as amended by the First Amendment to Credit Agreement dated as of February 12, 2013 and the Second Amendment to Credit Agreement dated June 28, 2013 (incorporated by reference to Exhibit 10.21 to the Annual Report on Form 10-K of the Company filed on October 30, 2014)
|
10.1.1
|
Third Amendment to Credit Agreement, dated as of December 20, 2013, by and among the Company, Community Banks of Colorado as administrative agent and the lenders party thereto (incorporated by reference to Exhibit 10.22 to the Current Report on Form 8-K of the Company filed on December 26, 2013)
|
10.1.2
|
Fourth Amendment to Credit Agreement, dated as of June 3, 2014, by and among the Company, Community Banks of Colorado, as administrative agent and the lenders party thereto (incorporated by reference to Exhibit 10.23 to the Current Report on Form 8-K of the Company filed on June 10, 2014)
|
10.1.3
|
Fifth Amendment to Credit Agreement, dated as of December 15, 2014, by and among the Company, SunTrust Bank as administrative agent and the lenders and other parties thereto (incorporated by reference to Exhibit 10.32 to the Quarterly Report on Form 10-Q of the Company filed on January 9, 2015)
|
10.1.4
|
Sixth Amendment to Credit Agreement, dated as of June 2, 2015, by and among the Company, SunTrust Bank, as administrative agent, and the lenders party thereto (incorporated by reference to Exhibit 10.35 to the Current Report on Form 8-K of the Company filed on June 8, 2015)
|
10.1.5
|
Seventh Amendment to Credit Agreement, dated as of January 28, 2016, by and among the Company, SunTrust Bank, as administrative agent, and the lenders party thereto (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K of the Company filed on February 2, 2016)
|
10.1.6
|
Eighth Amendment to Credit Agreement, dated as of May 3, 2016, by and among the Company, SunTrust Bank, as administrative agent, and the lenders party thereto (incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K of the Company filed on May 3, 2016)
|
10.1.7
|
Ninth Amendment to Credit Agreement, dated as of October 14, 2016, among the Company, SunTrust Bank as Administrative Agent and as an Issuing Bank, and the lenders party thereto (incorporated by reference to Exhibit 99.1 to the Quarterly Report on Form 10-Q of the Company filed on November 3, 2016)
|
10.2
|
Commitment Letter, dated as of May 3, 2016, by and among the Company, MTP Energy Master Fund Ltd., and GSO Capital Partners LP (incorporated by reference to Exhibit 10.3 to the Current Report on Form 8-K of the Company filed on May 3, 2016)
|
10.3
|
Purchase and Sale Agreement dated May 2, 2016 between Noble Energy, Inc., NBL Energy Royalties, Inc., and Noble Energy Wyco, LLC, as Sellers, and the Company, as Buyer (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K of the Company filed on May 3, 2016)
|
10.4
|
Note Purchase Agreement, dated as of June 14, 2016, among the Company, MTP Energy Master Fund Ltd., and FS Energy and Power Fund (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K of the Company filed on June 14, 2016)
|
10.5
|
Employment Agreement dated as of May 27, 2015 between the Company and Lynn A. Peterson (incorporated by reference to Exhibit 10.34 to the Current Report on Form 8-K of the Company filed on June 2, 2015)+
|
10.5.1
|
First Amendment to Employment Agreement dated as of December 22, 2016 between the Company and Lynn A. Peterson+*
|
10.6
|
Employment Agreement dated as of June 4, 2014 between the Company and Craig Rasmuson (incorporated by reference to Exhibit 10.25 to the Current Report on Form 8-K of the Company filed on June 10, 2014)+
|
10.7
|
Form of Severance Compensation Agreement (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed on June 24, 2016)+
|
10.8
|
Form of Indemnification Agreement (incorporated by reference to Exhibit 10.8 to the Annual Report on Form 10-K of the Company filed on October 16, 2015)+
|
10.9
|
2015 Equity Incentive Plan (incorporated by reference to Exhibit 10.18 to the Current Report on Form 8-K of the Company filed on December 17, 2015)+
|
10.9.1
|
Form of Performance Share Unit Agreement (incorporated by reference to Exhibit 10.1 to the Current Report on Form 10-Q of the Company filed on August 4, 2016)+
|
10.9.2
|
Form of Restricted Share Unit Agreement (incorporated by reference to Exhibit 10.2 to the Current Report on Form 10-Q of the Company filed on August 4, 2016)+
|
21.1
|
Subsidiaries of the Company - No significant subsidiaries
|
23.1
|
Consent of Deloitte & Touche LLP*
|
23.2
|
Consent of EKS&H LLLP*
|
23.3
|
Consent of Ryder Scott Company, L.P.*
|
31.1
|
Certification of the Principal Executive Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended*
|
31.2
|
Certification of the Principal Financial Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended*
|
32.1
|
Certifications of the Principal Executive Officer and Principal Financial Officer pursuant to 18 USC 1350, as adopted, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002**
|
99.1
|
Report of Ryder Scott Company, L.P.*
|
101.INS
|
XBRL
Instance Document *
|
101.SCH
|
XBRL Taxonomy Extension Schema*
|
101.CAL
|
XBRL Taxonomy Extension Calculation Linkbase*
|
101.DEF
|
XBRL Taxonomy Extension Definition Linkbase*
|
101.LAB
|
XBRL Taxonomy Extension Label Linkbase*
|
101.PRE
|
XBRL Taxonomy Extension Presentation Linkbase*
|
Index to Consolidated Financial Statements
|
|
|
|
Reports of Independent Registered Public Accounting Firms
|
|
|
|
Consolidated Balance Sheets
|
|
|
|
Consolidated Statements of Operations
|
|
|
|
Consolidated Statements of Changes in Shareholders’ Equity
|
|
|
|
Consolidated Statements of Cash Flows
|
|
|
|
Notes to Consolidated Financial Statements
|
ASSETS
|
December 31, 2016
|
|
December 31, 2015
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
18,615
|
|
|
$
|
66,499
|
|
Accounts receivable:
|
|
|
|
||||
Oil and natural gas sales
|
25,728
|
|
|
12,527
|
|
||
Trade
|
6,805
|
|
|
12,156
|
|
||
Commodity derivative assets
|
297
|
|
|
6,572
|
|
||
Other current assets
|
2,739
|
|
|
1,944
|
|
||
Total current assets
|
54,184
|
|
|
99,698
|
|
||
Property and equipment:
|
|
|
|
||||
Oil and gas properties, full cost method:
|
|
|
|
||||
Unproved properties and land, not subject to depletion
|
398,547
|
|
|
93,600
|
|
||
Proved properties, net of accumulated depletion
|
424,082
|
|
|
411,291
|
|
||
Wells in progress
|
81,780
|
|
|
21,310
|
|
||
Oil and gas properties, net
|
904,409
|
|
|
526,201
|
|
||
Other property and equipment, net
|
4,327
|
|
|
646
|
|
||
Total property and equipment, net
|
908,736
|
|
|
526,847
|
|
||
Cash held in escrow and other deposits
|
18,248
|
|
|
—
|
|
||
Commodity derivative assets
|
—
|
|
|
2,996
|
|
||
Goodwill
|
40,711
|
|
|
40,711
|
|
||
Other assets
|
2,234
|
|
|
2,364
|
|
||
Total assets
|
$
|
1,024,113
|
|
|
$
|
672,616
|
|
|
|
|
|
||||
LIABILITIES AND SHAREHOLDERS' EQUITY
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable and accrued expenses
|
$
|
52,453
|
|
|
$
|
36,573
|
|
Revenue payable
|
16,557
|
|
|
13,603
|
|
||
Production taxes payable
|
17,673
|
|
|
24,530
|
|
||
Asset retirement obligations
|
2,683
|
|
|
—
|
|
||
Commodity derivative liabilities
|
2,874
|
|
|
—
|
|
||
Total current liabilities
|
92,240
|
|
|
74,706
|
|
||
Revolving credit facility
|
—
|
|
|
78,000
|
|
||
Notes payable, net of issuance costs
|
75,614
|
|
|
—
|
|
||
Asset retirement obligations
|
13,775
|
|
|
13,400
|
|
||
Other liabilities
|
1,745
|
|
|
—
|
|
||
Total liabilities
|
183,374
|
|
|
166,106
|
|
||
|
|
|
|
||||
Commitments and contingencies (See Note 16)
|
|
|
|
|
|
||
|
|
|
|
||||
Shareholders' equity:
|
|
|
|
||||
Preferred stock - $0.01 par value, 10,000,000 shares authorized: no shares issued and outstanding
|
—
|
|
|
—
|
|
||
Common stock - $0.001 par value, 300,000,000 shares authorized: 200,647,572 and 110,033,601 shares issued and outstanding, respectively
|
201
|
|
|
110
|
|
||
Additional paid-in capital
|
1,148,998
|
|
|
595,671
|
|
||
Retained deficit
|
(308,460
|
)
|
|
(89,271
|
)
|
||
Total shareholders' equity
|
840,739
|
|
|
506,510
|
|
||
Total liabilities and shareholders' equity
|
$
|
1,024,113
|
|
|
$
|
672,616
|
|
|
Year Ended December 31, 2016
|
|
Four Months Ended December 31, 2015
|
|
Year Ended August 31,
|
||||||||||
|
|
|
2015
|
|
2014
|
||||||||||
Oil and natural gas revenues
|
$
|
107,149
|
|
|
$
|
34,138
|
|
|
$
|
124,843
|
|
|
$
|
104,219
|
|
|
|
|
|
|
|
|
|
||||||||
Expenses:
|
|
|
|
|
|
|
|
||||||||
Lease operating expenses
|
19,949
|
|
|
5,812
|
|
|
15,017
|
|
|
7,991
|
|
||||
Production taxes
|
5,732
|
|
|
3,104
|
|
|
11,340
|
|
|
9,667
|
|
||||
Depreciation, depletion, and accretion
|
46,678
|
|
|
18,776
|
|
|
65,869
|
|
|
32,958
|
|
||||
Full cost ceiling impairment
|
215,223
|
|
|
125,230
|
|
|
16,000
|
|
|
—
|
|
||||
Transportation commitment charge
|
597
|
|
|
2,802
|
|
|
—
|
|
|
—
|
|
||||
General and administrative
|
30,545
|
|
|
17,875
|
|
|
18,995
|
|
|
10,139
|
|
||||
Total expenses
|
318,724
|
|
|
173,599
|
|
|
127,221
|
|
|
60,755
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Operating (loss) income
|
(211,575
|
)
|
|
(139,461
|
)
|
|
(2,378
|
)
|
|
43,464
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Other income (expense):
|
|
|
|
|
|
|
|
||||||||
Commodity derivative gain (loss)
|
(7,750
|
)
|
|
6,482
|
|
|
32,256
|
|
|
321
|
|
||||
Interest expense, net
|
—
|
|
|
—
|
|
|
(245
|
)
|
|
—
|
|
||||
Interest income
|
242
|
|
|
40
|
|
|
86
|
|
|
82
|
|
||||
Total other income (expense)
|
(7,508
|
)
|
|
6,522
|
|
|
32,097
|
|
|
403
|
|
||||
|
|
|
|
|
|
|
|
||||||||
(Loss) Income before income taxes
|
(219,083
|
)
|
|
(132,939
|
)
|
|
29,719
|
|
|
43,867
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Income tax expense (benefit)
|
106
|
|
|
(10,007
|
)
|
|
11,677
|
|
|
15,014
|
|
||||
Net (loss) income
|
$
|
(219,189
|
)
|
|
$
|
(122,932
|
)
|
|
$
|
18,042
|
|
|
$
|
28,853
|
|
|
|
|
|
|
|
|
|
||||||||
Net (loss) income per common share:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
(1.26
|
)
|
|
$
|
(1.14
|
)
|
|
$
|
0.19
|
|
|
$
|
0.38
|
|
Diluted
|
$
|
(1.26
|
)
|
|
$
|
(1.14
|
)
|
|
$
|
0.19
|
|
|
$
|
0.37
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted-average shares outstanding:
|
|
|
|
|
|
|
|
||||||||
Basic
|
173,774,035
|
|
|
107,789,554
|
|
|
94,628,665
|
|
|
76,214,737
|
|
||||
Diluted
|
173,774,035
|
|
|
107,789,554
|
|
|
95,319,269
|
|
|
77,808,054
|
|
|
Number of Common
Shares |
|
Par Value
Common Stock |
|
Additional
Paid - In Capital |
|
Accumulated
Earnings (Deficit) |
|
Total Shareholders'
Equity |
|||||||||
Balance, August 31, 2013
|
70,587,723
|
|
|
$
|
71
|
|
|
$
|
216,383
|
|
|
$
|
(13,234
|
)
|
|
$
|
203,220
|
|
Shares issued for acquisitions
|
872,483
|
|
|
1
|
|
|
8,327
|
|
|
—
|
|
|
8,328
|
|
||||
Shares issued in exchange for mineral assets
|
357,901
|
|
|
—
|
|
|
2,856
|
|
|
—
|
|
|
2,856
|
|
||||
Shares issued for exercise of warrants
|
6,063,801
|
|
|
6
|
|
|
35,628
|
|
|
—
|
|
|
35,634
|
|
||||
Shares issued under stock bonus plan
|
89,875
|
|
|
—
|
|
|
1,201
|
|
|
—
|
|
|
1,201
|
|
||||
Shares issued for exercise of stock options
|
27,299
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Stock-based compensation for options
|
—
|
|
|
—
|
|
|
1,767
|
|
|
—
|
|
|
1,767
|
|
||||
Payment of tax withholdings using withheld shares
|
—
|
|
|
—
|
|
|
(369
|
)
|
|
—
|
|
|
(369
|
)
|
||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
28,853
|
|
|
28,853
|
|
||||
Balance, August 31, 2014
|
77,999,082
|
|
|
$
|
78
|
|
|
$
|
265,793
|
|
|
$
|
15,619
|
|
|
$
|
281,490
|
|
Shares issued in equity offering
|
18,613,952
|
|
|
19
|
|
|
190,826
|
|
|
—
|
|
|
190,845
|
|
||||
Shares issued for acquisition
|
4,648,136
|
|
|
5
|
|
|
48,429
|
|
|
—
|
|
|
48,434
|
|
||||
Shares issued in exchange for mineral assets
|
995,672
|
|
|
1
|
|
|
11,786
|
|
|
—
|
|
|
11,787
|
|
||||
Shares issued for exercise of warrants
|
2,562,473
|
|
|
2
|
|
|
15,368
|
|
|
—
|
|
|
15,370
|
|
||||
Shares issued under stock bonus plan
|
161,755
|
|
|
—
|
|
|
2,950
|
|
|
—
|
|
|
2,950
|
|
||||
Shares issued for exercise of stock options
|
118,272
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Stock-based compensation for options
|
—
|
|
|
—
|
|
|
4,741
|
|
|
—
|
|
|
4,741
|
|
||||
Payment of tax withholdings using withheld shares
|
—
|
|
|
—
|
|
|
(1,262
|
)
|
|
—
|
|
|
(1,262
|
)
|
||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
18,042
|
|
|
18,042
|
|
||||
Balance, August 31, 2015
|
105,099,342
|
|
|
$
|
105
|
|
|
$
|
538,631
|
|
|
$
|
33,661
|
|
|
$
|
572,397
|
|
Shares issued for acquisition
|
4,418,413
|
|
|
4
|
|
|
49,835
|
|
|
—
|
|
|
49,839
|
|
||||
Shares issued in exchange for mineral assets
|
37,051
|
|
|
—
|
|
|
426
|
|
|
|
|
426
|
|
|||||
Shares issued under stock bonus and equity incentive plans
|
422,035
|
|
|
1
|
|
|
7,162
|
|
|
—
|
|
|
7,163
|
|
||||
Shares issued for exercise of stock options
|
56,760
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Stock-based compensation for options
|
—
|
|
|
—
|
|
|
2,161
|
|
|
—
|
|
|
2,161
|
|
||||
Payment of tax withholdings using withheld shares
|
—
|
|
|
—
|
|
|
(2,544
|
)
|
|
—
|
|
|
(2,544
|
)
|
||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(122,932
|
)
|
|
(122,932
|
)
|
||||
Balance, December 31, 2015
|
110,033,601
|
|
|
$
|
110
|
|
|
$
|
595,671
|
|
|
$
|
(89,271
|
)
|
|
$
|
506,510
|
|
Shares issued in equity offerings
|
90,275,000
|
|
|
90
|
|
|
543,321
|
|
|
—
|
|
|
543,411
|
|
||||
Shares issued under stock bonus and equity incentive plans
|
321,101
|
|
|
1
|
|
|
4,231
|
|
|
—
|
|
|
4,232
|
|
||||
Shares issued for exercise of stock options
|
17,870
|
|
|
—
|
|
|
68
|
|
|
—
|
|
|
68
|
|
||||
Stock-based compensation for options
|
—
|
|
|
—
|
|
|
5,417
|
|
|
—
|
|
|
5,417
|
|
||||
Stock-based compensation for performance-vested stock units
|
—
|
|
|
—
|
|
|
1,047
|
|
|
—
|
|
|
1,047
|
|
||||
Payment of tax withholdings using withheld shares
|
—
|
|
|
—
|
|
|
(757
|
)
|
|
—
|
|
|
(757
|
)
|
||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(219,189
|
)
|
|
(219,189
|
)
|
||||
Balance, December 31, 2016
|
200,647,572
|
|
|
201
|
|
|
1,148,998
|
|
|
(308,460
|
)
|
|
840,739
|
|
|
Year Ended December 31, 2016
|
|
Four Months Ended December 31, 2015
|
|
Year Ended August 31,
|
||||||||||
|
|
|
2015
|
|
2014
|
||||||||||
Cash flows from operating activities:
|
|
|
|
|
|
|
|
||||||||
Net (loss) income
|
$
|
(219,189
|
)
|
|
$
|
(122,932
|
)
|
|
$
|
18,042
|
|
|
$
|
28,853
|
|
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
|
|
|
|
|
|
|
|
||||||||
Depletion, depreciation, and accretion
|
46,678
|
|
|
18,776
|
|
|
65,869
|
|
|
32,958
|
|
||||
Full cost ceiling impairment
|
215,223
|
|
|
125,230
|
|
|
16,000
|
|
|
—
|
|
||||
Provision for deferred taxes
|
—
|
|
|
(10,007
|
)
|
|
11,679
|
|
|
15,014
|
|
||||
Stock-based compensation
|
9,491
|
|
|
8,431
|
|
|
7,691
|
|
|
2,968
|
|
||||
Mark-to-market of commodity derivative contracts:
|
|
|
|
|
|
|
|
||||||||
Total (gain) loss on commodity derivative contracts
|
7,750
|
|
|
(6,482
|
)
|
|
(32,256
|
)
|
|
(321
|
)
|
||||
Cash settlements on commodity derivative contracts
|
5,374
|
|
|
1,954
|
|
|
31,721
|
|
|
(2,138
|
)
|
||||
Cash premiums paid for commodity derivative contracts
|
—
|
|
|
(956
|
)
|
|
(4,117
|
)
|
|
—
|
|
||||
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
|
||||||||
Accounts receivable
|
(13,063
|
)
|
|
5,696
|
|
|
3,446
|
|
|
(20,311
|
)
|
||||
Accounts payable and accrued expenses
|
2,283
|
|
|
3,954
|
|
|
(2,307
|
)
|
|
1,246
|
|
||||
Revenue payable
|
2,254
|
|
|
(5,441
|
)
|
|
4,557
|
|
|
8,406
|
|
||||
Production taxes payable
|
(7,095
|
)
|
|
3,631
|
|
|
5,121
|
|
|
8,099
|
|
||||
Other
|
(1,018
|
)
|
|
(1,782
|
)
|
|
(359
|
)
|
|
131
|
|
||||
Net cash provided by operating activities
|
48,688
|
|
|
20,072
|
|
|
125,087
|
|
|
74,905
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Cash flows from investing activities:
|
|
|
|
|
|
|
|
||||||||
Acquisitions of oil and gas properties and leaseholds
|
(511,173
|
)
|
|
(37,150
|
)
|
|
(82,584
|
)
|
|
(52,066
|
)
|
||||
Capital expenditures for drilling and completion activities
|
(119,571
|
)
|
|
(41,581
|
)
|
|
(186,135
|
)
|
|
(97,225
|
)
|
||||
Other capital expenditures
|
(7,044
|
)
|
|
(5,811
|
)
|
|
(6,375
|
)
|
|
(2,216
|
)
|
||||
Land and other property and equipment
|
(5,478
|
)
|
|
(395
|
)
|
|
(714
|
)
|
|
(4,095
|
)
|
||||
Short-term investments
|
—
|
|
|
—
|
|
|
—
|
|
|
60,018
|
|
||||
Cash held in escrow
|
(18,219
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Net proceeds from sales of oil and gas properties and land
|
25,350
|
|
|
—
|
|
|
6,239
|
|
|
704
|
|
||||
Net cash used in investing activities
|
(636,135
|
)
|
|
(84,937
|
)
|
|
(269,569
|
)
|
|
(94,880
|
)
|
||||
|
|
|
|
|
|
|
|
||||||||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
||||||||
Proceeds from equity offerings
|
565,398
|
|
|
—
|
|
|
200,100
|
|
|
—
|
|
||||
Offering costs
|
(21,987
|
)
|
|
—
|
|
|
(9,255
|
)
|
|
—
|
|
||||
Proceeds from exercise of warrants and employee exercise of stock options
|
68
|
|
|
—
|
|
|
15,370
|
|
|
35,634
|
|
||||
Payment of employee payroll taxes in connection with shares withheld
|
(757
|
)
|
|
(2,544
|
)
|
|
(1,262
|
)
|
|
(369
|
)
|
||||
Proceeds from revolving credit facility
|
55,000
|
|
|
—
|
|
|
186,000
|
|
|
—
|
|
||||
Principal repayments on revolving credit facility
|
(133,000
|
)
|
|
—
|
|
|
(145,000
|
)
|
|
—
|
|
||||
Proceeds from issuance of notes payable
|
80,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Financing fees on issuance of notes payable and amendments to revolving credit facility
|
(5,159
|
)
|
|
—
|
|
|
(2,316
|
)
|
|
—
|
|
||||
Net cash provided by (used in) financing activities
|
539,563
|
|
|
(2,544
|
)
|
|
243,637
|
|
|
35,265
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Net (decrease) increase in cash and equivalents
|
(47,884
|
)
|
|
(67,409
|
)
|
|
99,155
|
|
|
15,290
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Cash and equivalents at beginning of period
|
66,499
|
|
|
133,908
|
|
|
34,753
|
|
|
19,463
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Cash and equivalents at end of period
|
$
|
18,615
|
|
|
$
|
66,499
|
|
|
$
|
133,908
|
|
|
$
|
34,753
|
|
1
.
|
Organization and Summary of Significant Accounting Policies
|
|
As of December 31,
|
||||||
|
2016
|
|
2015
|
||||
Trade accounts payable
|
$
|
786
|
|
|
$
|
3,046
|
|
Accrued well costs
|
42,779
|
|
|
32,123
|
|
||
Accrued G&A
|
4,292
|
|
|
1,404
|
|
||
Accrued other
|
4,596
|
|
|
—
|
|
||
|
52,453
|
|
|
36,573
|
|
|
Year Ended December 31, 2016
|
|
Four Months Ended December 31, 2015
|
|
Year Ended August 31,
|
||
|
|
|
2015
|
|
2014
|
||
Company A
|
20%
|
|
15%
|
|
11%
|
|
13%
|
Company B
|
20%
|
|
*
|
|
*
|
|
*
|
Company C
|
16%
|
|
*
|
|
*
|
|
*
|
Company D
|
13%
|
|
*
|
|
*
|
|
*
|
Company E
|
*
|
|
57%
|
|
65%
|
|
54%
|
Company F
|
*
|
|
12%
|
|
*
|
|
*
|
2
.
|
Property and Equipment
|
|
As of December 31,
|
||||||
|
2016
|
|
2015
|
||||
Oil and gas properties, full cost method:
|
|
|
|
||||
Costs of unproved properties and land, not subject to depletion:
|
|
|
|
||||
Lease acquisition and other costs
|
$
|
392,561
|
|
|
$
|
89,122
|
|
Land
|
5,986
|
|
|
4,478
|
|
||
Subtotal, unproved properties and land
|
398,547
|
|
|
93,600
|
|
||
|
|
|
|
||||
Costs of wells in progress
|
81,780
|
|
|
21,310
|
|
||
|
|
|
|
||||
Costs of proved properties:
|
|
|
|
||||
Producing and non-producing
|
969,239
|
|
|
691,659
|
|
||
Less, accumulated depletion and full cost ceiling impairments
|
(545,157
|
)
|
|
(280,368
|
)
|
||
Subtotal, proved properties, net
|
424,082
|
|
|
411,291
|
|
||
|
|
|
|
||||
Costs of other property and equipment:
|
|
|
|
||||
Other property and equipment
|
5,063
|
|
|
1,270
|
|
||
Less, accumulated depreciation
|
(736
|
)
|
|
(624
|
)
|
||
Subtotal, other property and equipment, net
|
4,327
|
|
|
646
|
|
||
|
|
|
|
||||
Total property and equipment, net
|
$
|
908,736
|
|
|
$
|
526,847
|
|
|
Year Ended December 31, 2016
|
|
Four Months Ended December 31, 2015
|
|
Year Ended August 31,
|
||||||||||
|
|
|
2015
|
|
2014
|
||||||||||
Capitalized overhead
|
$
|
7,074
|
|
|
$
|
1,091
|
|
|
$
|
2,049
|
|
|
$
|
1,230
|
|
|
Year Ended December 31, 2016
|
|
Four Months Ended December 31, 2015
|
|
Year Ended August 31,
|
||||||||||
|
|
|
2015
|
|
2014
|
||||||||||
Acquisition of property:
|
|
|
|
|
|
|
|
||||||||
Unproved
|
$
|
365,548
|
|
|
$
|
38,779
|
|
|
$
|
32,701
|
|
|
$
|
15,002
|
|
Proved
|
152,363
|
|
|
51,085
|
|
|
51,400
|
|
|
33,795
|
|
||||
Exploration costs
|
43,154
|
|
|
23,697
|
|
|
146,892
|
|
|
43,089
|
|
||||
Development costs
|
87,782
|
|
|
17,742
|
|
|
4,957
|
|
|
111,238
|
|
||||
Other property and equipment
|
7,506
|
|
|
395
|
|
|
741
|
|
|
9,315
|
|
||||
Capitalized interest, capitalized G&A, and other
|
18,744
|
|
|
4,415
|
|
|
7,051
|
|
|
1,610
|
|
||||
Total costs incurred
|
$
|
675,097
|
|
|
$
|
136,113
|
|
|
$
|
243,742
|
|
|
$
|
214,049
|
|
|
Period Incurred
|
|
|
||||||||||||||||||||
|
Year Ended December 31, 2016
|
|
Four Months Ended December 31, 2015
|
|
Year Ended August 31,
|
|
Total as of December 31, 2016
|
||||||||||||||||
|
|
|
2015
|
|
2014
|
|
2013 and Prior
|
|
|||||||||||||||
Unproved leasehold acquisition costs
|
$
|
349,777
|
|
|
$
|
37,765
|
|
|
$
|
956
|
|
|
$
|
430
|
|
|
$
|
3,633
|
|
|
$
|
392,561
|
|
Unproved development costs
|
46,268
|
|
|
—
|
|
|
4,170
|
|
|
—
|
|
|
—
|
|
|
50,438
|
|
||||||
Total unevaluated costs
|
$
|
396,045
|
|
|
$
|
37,765
|
|
|
$
|
5,126
|
|
|
$
|
430
|
|
|
$
|
3,633
|
|
|
$
|
442,999
|
|
3
.
|
Acquisitions and Divestitures
|
Purchase Price
|
June 14, 2016
|
||
Consideration given:
|
|
||
Cash
|
$
|
485,141
|
|
Net liabilities assumed, including asset retirement obligations
|
1,273
|
|
|
Total consideration given
|
$
|
486,414
|
|
|
|
||
Allocation of Purchase Price
|
|
||
Proved oil and gas properties
(1)
|
$
|
132,903
|
|
Unproved oil and gas properties
|
353,511
|
|
|
Total fair value of assets acquired
|
$
|
486,414
|
|
(in thousands)
|
Year Ended December 31, 2016
|
|
Four Months Ended December 31, 2015
|
|
Year Ended August 31, 2015
|
||||||
Oil and natural gas revenues
|
$
|
110,635
|
|
|
$
|
37,403
|
|
|
$
|
147,643
|
|
Net loss
|
$
|
(218,578
|
)
|
|
$
|
(122,577
|
)
|
|
$
|
21,507
|
|
|
|
|
|
|
|
||||||
Net loss per common share
|
|
|
|
|
|
||||||
Basic
|
$
|
(1.10
|
)
|
|
$
|
(0.67
|
)
|
|
$
|
0.13
|
|
Diluted
|
$
|
(1.10
|
)
|
|
$
|
(0.67
|
)
|
|
$
|
0.13
|
|
Purchase Price
|
October 20, 2015
|
||
Consideration given:
|
|
||
Cash
|
$
|
35,045
|
|
Synergy Resources Corp. common stock
(1)
|
49,840
|
|
|
Net liabilities assumed, including asset retirement obligations
|
284
|
|
|
Total consideration given
|
$
|
85,169
|
|
|
|
||
Allocation of Purchase Price
|
|
||
Proved oil and gas properties
(2)
|
$
|
46,333
|
|
Unproved oil and gas properties
|
37,766
|
|
|
Other assets, including accounts receivable
|
1,070
|
|
|
Total fair value of assets acquired
|
$
|
85,169
|
|
(in thousands)
|
Four Months Ended December 31, 2015
|
|
Year Ended August 31, 2015
|
||||
Oil and natural gas revenues
|
$
|
35,389
|
|
|
$
|
138,145
|
|
Net loss
|
$
|
(122,529
|
)
|
|
$
|
21,592
|
|
|
|
|
|
||||
Net loss per common share
|
|
|
|
||||
Basic
|
$
|
(1.12
|
)
|
|
$
|
0.22
|
|
Diluted
|
$
|
(1.12
|
)
|
|
$
|
0.22
|
|
4
.
|
Depletion, depreciation, and accretion
|
|
Year Ended December 31, 2016
|
|
Four Months Ended December 31, 2015
|
|
Year Ended August 31,
|
||||||||||
|
|
|
2015
|
|
2014
|
||||||||||
|
|
|
|
|
|
|
|
||||||||
Depletion of oil and gas properties
|
$
|
45,193
|
|
|
$
|
18,371
|
|
|
$
|
65,158
|
|
|
$
|
32,132
|
|
Depreciation and accretion
|
1,485
|
|
|
405
|
|
|
711
|
|
|
826
|
|
||||
Total DD&A Expense
|
$
|
46,678
|
|
|
$
|
18,776
|
|
|
$
|
65,869
|
|
|
$
|
32,958
|
|
5
.
|
Asset Retirement Obligations
|
|
Year Ended December 31, 2016
|
|
Four Months Ended December 31, 2015
|
|
Years Ended August 31, 2015
|
||||||
Beginning asset retirement obligation
|
$
|
13,400
|
|
|
$
|
12,334
|
|
|
$
|
4,730
|
|
Obligations incurred with development activities
|
773
|
|
|
1,590
|
|
|
1,372
|
|
|||
Obligations assumed with acquisitions
|
2,230
|
|
|
229
|
|
|
1,913
|
|
|||
Accretion expense
|
1,046
|
|
|
348
|
|
|
553
|
|
|||
Obligations discharged with asset retirements and settlements
|
(4,739
|
)
|
|
(1,101
|
)
|
|
—
|
|
|||
Revisions in previous estimates
|
3,748
|
|
|
—
|
|
|
3,766
|
|
|||
Ending asset retirement obligation
|
$
|
16,458
|
|
|
$
|
13,400
|
|
|
$
|
12,334
|
|
6
.
|
Revolving Credit Facility
|
7
.
|
Notes Payable
|
8
.
|
Commodity Derivative Instruments
|
Settlement Period
|
|
Derivative
Instrument
|
|
Average Volumes
(Bbls
per month)
|
|
Floor
Price
|
|
Ceiling
Price
|
|||||
Crude Oil - NYMEX WTI
|
|
|
|
|
|
|
|
|
|||||
Jan 1, 2017 - Dec 31, 2017
|
|
Collar
|
|
30,417
|
|
|
$
|
40.00
|
|
|
60.00
|
|
|
Jan 1, 2017 - Dec 31, 2017
|
|
Collar
|
|
20,000
|
|
|
$
|
45.00
|
|
|
70.00
|
|
|
Jan 1, 2017 - Dec 31, 2017
|
|
Collar
|
|
30,417
|
|
|
$
|
40.00
|
|
|
$
|
65.00
|
|
Jan 1, 2017 - Apr 30, 2017
|
|
Put
|
|
20,000
|
|
|
$
|
50.00
|
|
|
$
|
—
|
|
May 1, 2017 - Aug 31, 2017
|
|
Put
|
|
20,000
|
|
|
$
|
55.00
|
|
|
$
|
—
|
|
Jan 1, 2017 - Dec 31, 2017
|
|
Collar
|
|
30,417
|
|
|
$
|
40.00
|
|
|
$
|
65.00
|
|
Jan 1, 2017 - Dec 31, 2017
|
|
Collar
|
|
15,208
|
|
|
$
|
45.00
|
|
|
$
|
65.00
|
|
Jan 1, 2017 - Dec 31, 2017
|
|
Collar
|
|
15,208
|
|
|
$
|
45.00
|
|
|
$
|
65.10
|
|
|
|
|
|
|
|
|
|
|
|||||
Settlement Period
|
|
Derivative
Instrument |
|
Average Volumes
(MMBtu per month) |
|
Floor
Price |
|
Ceiling
Price |
|||||
Natural Gas - NYMEX Henry Hub
|
|
|
|
|
|
|
|
|
|||||
Jan 1, 2017 - Dec 31, 2017
|
|
Collar
|
|
100,000
|
|
|
$
|
2.75
|
|
|
$
|
4.00
|
|
Jan 1, 2017 - Dec 31, 2017
|
|
Collar
|
|
152,083
|
|
|
$
|
2.75
|
|
|
$
|
3.90
|
|
Sep 1, 2017 - Dec 31, 2017
|
|
Collar
|
|
91,500
|
|
|
$
|
2.75
|
|
|
$
|
4.10
|
|
Sep 1, 2017 - Dec 31, 2017
|
|
Collar
|
|
15,250
|
|
|
$
|
3.00
|
|
|
$
|
4.31
|
|
Feb 1, 2017 - Dec 31, 2017
|
|
Collar
|
|
109,309
|
|
|
$
|
3.00
|
|
|
$
|
4.30
|
|
|
|
|
|
|
|
|
|
|
|||||
Natural Gas - CIG Rocky Mountain
|
|
|
|
|
|
|
|
|
|||||
Jan 1, 2017 - Apr 30, 2017
|
|
Collar
|
|
100,000
|
|
|
$
|
2.80
|
|
|
$
|
3.95
|
|
May 1, 2017 - Aug 31, 2017
|
|
Collar
|
|
110,000
|
|
|
$
|
2.50
|
|
|
$
|
3.06
|
|
Jan 1, 2017 - Dec 31, 2017
|
|
Collar
|
|
200,000
|
|
|
$
|
2.50
|
|
|
$
|
3.27
|
|
Jan 1, 2017 - Dec 31, 2017
|
|
Collar
|
|
100,000
|
|
|
$
|
2.60
|
|
|
$
|
3.20
|
|
|
|
|
|
As of December 31, 2016
|
||||||||||
Underlying Commodity
|
|
Balance Sheet
Location |
|
Gross Amounts of Recognized Assets and Liabilities
|
|
Gross Amounts Offset in the
Balance Sheet |
|
Net Amounts of Assets and Liabilities Presented in the
Balance Sheet |
||||||
Commodity Derivative contracts
|
|
Current assets
|
|
$
|
2,045
|
|
|
$
|
(1,748
|
)
|
|
$
|
297
|
|
Commodity Derivative contracts
|
|
Noncurrent assets
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Commodity Derivative contracts
|
|
Current liabilities
|
|
$
|
4,622
|
|
|
$
|
(1,748
|
)
|
|
$
|
2,874
|
|
Commodity Derivative contracts
|
|
Noncurrent liabilities
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
As of December 31, 2015
|
||||||||||
Underlying Commodity
|
|
Balance Sheet
Location |
|
Gross Amounts of Recognized Assets and Liabilities
|
|
Gross Amounts Offset in the
Balance Sheet |
|
Net Amounts of Assets and Liabilities Presented in the
Balance Sheet |
||||||
Commodity Derivative contracts
|
|
Current assets
|
|
$
|
6,719
|
|
|
$
|
(147
|
)
|
|
$
|
6,572
|
|
Commodity Derivative contracts
|
|
Noncurrent assets
|
|
$
|
3,354
|
|
|
$
|
(358
|
)
|
|
$
|
2,996
|
|
Commodity Derivative contracts
|
|
Current liabilities
|
|
$
|
147
|
|
|
$
|
(147
|
)
|
|
$
|
—
|
|
Commodity Derivative contracts
|
|
Noncurrent liabilities
|
|
$
|
358
|
|
|
$
|
(358
|
)
|
|
$
|
—
|
|
|
Year Ended December 31, 2016
|
|
Four Months Ended December 31, 2015
|
|
Year Ended August 31,
|
||||||||||
|
|
|
2015
|
|
2014
|
||||||||||
Realized gain (loss) on commodity derivatives
|
$
|
2,355
|
|
|
$
|
1,577
|
|
|
$
|
30,466
|
|
|
$
|
(2,138
|
)
|
Unrealized gain (loss) on commodity derivatives
|
(10,105
|
)
|
|
4,905
|
|
|
1,790
|
|
|
2,459
|
|
||||
Total gain (loss)
|
$
|
(7,750
|
)
|
|
$
|
6,482
|
|
|
$
|
32,256
|
|
|
$
|
321
|
|
|
Year Ended December 31, 2016
|
|
Four Months Ended December 31, 2015
|
|
Year Ended August 31,
|
||||||||||
|
|
|
2015
|
|
2014
|
||||||||||
Monthly settlement
|
4,396
|
|
|
2,331
|
|
|
$
|
11,212
|
|
|
$
|
(2,138
|
)
|
||
Previously incurred premiums attributable to settled commodity contracts
|
(2,041
|
)
|
|
(754
|
)
|
|
(1,255
|
)
|
|
—
|
|
||||
Early liquidation
|
—
|
|
|
—
|
|
|
20,509
|
|
|
—
|
|
||||
Total realized gain (loss)
|
$
|
2,355
|
|
|
$
|
1,577
|
|
|
$
|
30,466
|
|
|
$
|
(2,138
|
)
|
9
.
|
Fair Value Measurements
|
•
|
Level 1: Quoted prices available in active markets for identical assets or liabilities;
|
•
|
Level 2: Quoted prices in active markets for similar assets and liabilities that are observable for the asset or liability; and
|
•
|
Level 3: Unobservable pricing inputs that are generally less observable from objective sources, such as discounted cash or valuation models.
|
|
Fair Value Measurements at December 31, 2016
|
||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Financial assets and liabilities:
|
|
|
|
|
|
|
|
||||||||
Commodity derivative asset
|
$
|
—
|
|
|
$
|
297
|
|
|
$
|
—
|
|
|
$
|
297
|
|
Commodity derivative liability
|
$
|
—
|
|
|
$
|
2,874
|
|
|
$
|
—
|
|
|
$
|
2,874
|
|
|
Fair Value Measurements at December 31, 2015
|
||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Financial assets and liabilities:
|
|
|
|
|
|
|
|
||||||||
Commodity derivative asset
|
$
|
—
|
|
|
$
|
9,568
|
|
|
$
|
—
|
|
|
$
|
9,568
|
|
Commodity derivative liability
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
10
.
|
Interest Expense
|
|
Year Ended December 31, 2016
|
|
Four Months Ended December 31, 2015
|
|
Year Ended August 31,
|
||||||||||
|
|
|
2015
|
|
2014
|
||||||||||
Revolving credit facility
|
$
|
154
|
|
|
$
|
661
|
|
|
$
|
2,776
|
|
|
$
|
986
|
|
Note payable
|
3,940
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Amortization of debt issuance costs
|
1,638
|
|
|
431
|
|
|
853
|
|
|
448
|
|
||||
Less: interest capitalized
|
(5,732
|
)
|
|
(1,092
|
)
|
|
(3,384
|
)
|
|
(1,434
|
)
|
||||
Interest expense, net
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
245
|
|
|
$
|
—
|
|
11
.
|
Shareholders’ Equity
|
|
As of December 31,
|
||||||
|
2016
|
|
2015
|
||||
Preferred stock, shares authorized
|
10,000,000
|
|
|
10,000,000
|
|
||
Preferred stock, par value
|
$
|
0.01
|
|
|
$
|
0.01
|
|
Preferred stock, shares issued and outstanding
|
nil
|
|
|
nil
|
|
||
Common stock, shares authorized
|
300,000,000
|
|
|
300,000,000
|
|
||
Common stock, par value
|
$
|
0.001
|
|
|
$
|
0.001
|
|
Common stock, shares issued and outstanding
|
200,647,572
|
|
|
110,033,601
|
|
•
|
In May and June 2016, the Company completed the sale of common stock in an underwritten public offering led by Credit Suisse Securities (USA) LLC.
|
•
|
In April 2016, the Company completed the sale of common stock in an underwritten public offering led by Credit Suisse Securities (USA) LLC.
|
•
|
In January 2016, the Company completed the sale of common stock in an underwritten public offering led by Credit Suisse Securities (USA) LLC.
|
•
|
In February 2015, the Company completed the sale of common stock in an underwritten public offering led by Seaport Global Securities LLC.
|
|
Year Ended December 31, 2016
|
|
Four Months Ended December 31, 2015
|
|
Year Ended August 31,
|
||||||||||
|
|
|
2015
|
|
2014
|
||||||||||
Number of common shares sold
|
90,275,000
|
|
|
—
|
|
|
18,613,952
|
|
|
—
|
|
||||
Offering price per common share
|
$
|
6.02
|
|
|
$
|
—
|
|
|
$
|
10.75
|
|
|
$
|
—
|
|
Net proceeds (in thousands)
|
$
|
543,400
|
|
|
$
|
—
|
|
|
$
|
190,845
|
|
|
$
|
—
|
|
|
Year Ended December 31, 2016
|
|
Four Months Ended December 31, 2015
|
|
Year Ended August 31,
|
||||||||||
|
|
|
2015
|
|
2014
|
||||||||||
Number of common shares issued for mineral property leases
|
—
|
|
|
37,051
|
|
|
995,672
|
|
|
357,901
|
|
||||
Number of common shares issued for acquisitions
|
—
|
|
|
4,418,413
|
|
|
4,648,136
|
|
|
872,483
|
|
||||
Total common shares issued
|
—
|
|
|
4,455,464
|
|
|
5,643,808
|
|
|
1,230,384
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Average price per common share
|
$
|
—
|
|
|
$
|
11.28
|
|
|
$
|
10.67
|
|
|
$
|
9.09
|
|
Aggregate value of shares issues (in thousands)
|
$
|
—
|
|
|
$
|
50,265
|
|
|
$
|
60,221
|
|
|
$
|
11,184
|
|
|
Number of Shares Issuable Upon Warrant Exercise
|
|
Weighted-Average Exercise Price Per Share
|
|||
Outstanding, August 31, 2014
|
2,562,473
|
|
|
$
|
6.00
|
|
Exercised
|
(2,562,473
|
)
|
|
$
|
6.00
|
|
Forfeited / Expired
|
—
|
|
|
$
|
—
|
|
Outstanding, August 31, 2015
|
—
|
|
|
$
|
—
|
|
Exercised
|
—
|
|
|
$
|
—
|
|
Forfeited / Expired
|
—
|
|
|
$
|
—
|
|
Outstanding, December 31, 2015
|
—
|
|
|
$
|
—
|
|
Exercised
|
—
|
|
|
$
|
—
|
|
Forfeited / Expired
|
—
|
|
|
$
|
—
|
|
Outstanding, December 31, 2016
|
—
|
|
|
$
|
—
|
|
|
Year Ended December 31, 2016
|
|
Four Months Ended December 31, 2015
|
|
Year Ended August 31,
|
||||||
|
|
|
2015
|
|
2014
|
||||||
Weighted-average shares outstanding - basic
|
173,774,035
|
|
|
107,789,554
|
|
|
94,628,665
|
|
|
76,214,737
|
|
Potentially dilutive common shares from:
|
|
|
|
|
|
|
|
||||
Stock options
|
—
|
|
|
—
|
|
|
672,493
|
|
|
479,222
|
|
Restricted stock units and stock bonus shares
|
—
|
|
|
—
|
|
|
18,111
|
|
|
—
|
|
Performance-vested stock units
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Warrants
|
—
|
|
|
—
|
|
|
—
|
|
|
1,114,095
|
|
Weighted-average shares outstanding - diluted
|
173,774,035
|
|
|
107,789,554
|
|
|
95,319,269
|
|
|
77,808,054
|
|
|
Year Ended December 31, 2016
|
|
Four Months Ended December 31, 2015
|
|
Year Ended August 31,
|
||||||
|
|
|
2015
|
|
2014
|
||||||
Potentially dilutive common shares from:
|
|
|
|
|
|
|
|
||||
Stock options
|
6,001,500
|
|
|
5,056,000
|
|
|
2,785,500
|
|
|
533,000
|
|
Restricted stock units and stock bonus shares
|
890,336
|
|
|
915,867
|
|
|
145,000
|
|
|
—
|
|
Performance-vested stock units
1
|
478,510
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Warrants
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Total
|
7,370,346
|
|
|
5,971,867
|
|
|
2,930,500
|
|
|
533,000
|
|
13
.
|
Stock-Based Compensation
|
|
Year Ended December 31, 2016
|
|
Four Months Ended December 31, 2015
|
|
Year Ended August 31,
|
||||||||||
|
|
|
2015
|
|
2014
|
||||||||||
Stock options
|
$
|
5,417
|
|
|
$
|
2,161
|
|
|
$
|
4,741
|
|
|
$
|
1,767
|
|
Performance stock units
|
1,047
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Restricted stock units and stock bonus shares
|
4,232
|
|
|
7,162
|
|
|
2,950
|
|
|
1,201
|
|
||||
Total stock-based compensation
|
10,696
|
|
|
9,323
|
|
|
7,691
|
|
|
2,968
|
|
||||
Less: stock-based compensation capitalized
|
(1,205
|
)
|
|
(892
|
)
|
|
(778
|
)
|
|
(514
|
)
|
||||
Total stock-based compensation expense
|
$
|
9,491
|
|
|
$
|
8,431
|
|
|
$
|
6,913
|
|
|
$
|
2,454
|
|
|
Year Ended December 31, 2016
|
|
Four Months Ended December 31, 2015
|
|
Year Ended August 31,
|
||||||||||
|
|
|
2015
|
|
2014
|
||||||||||
Number of options to purchase common shares
|
1,067,500
|
|
|
1,142,500
|
|
|
2,377,500
|
|
|
433,000
|
|
||||
Weighted-average exercise price
|
$
|
7.19
|
|
|
$
|
10.84
|
|
|
$
|
11.55
|
|
|
$
|
10.37
|
|
Term (in years)
|
10 years
|
|
|
10 years
|
|
|
10 years
|
|
|
10 years
|
|
||||
Vesting Period (in years)
|
3 - 5 years
|
|
|
3.7-5 years
|
|
|
3-5 years
|
|
|
5 years
|
|
||||
Fair Value (in thousands)
|
$
|
3,860
|
|
|
$
|
6,591
|
|
|
$
|
13,266
|
|
|
$
|
3,009
|
|
|
Year Ended December 31, 2016
|
|
Four Months Ended December 31, 2015
|
|
Year Ended August 31,
|
||||||
|
|
|
2015
|
|
2014
|
||||||
Expected term
|
6.4 years
|
|
|
6.5 years
|
|
|
6.5 years
|
|
|
6.7 years
|
|
Expected volatility
|
55
|
%
|
|
53
|
%
|
|
47
|
%
|
|
73
|
%
|
Risk free rate
|
1.25 - 2.00%
|
|
|
1.8 - 2.0%
|
|
|
1.4 - 2.0%
|
|
|
1.8 - 2.3%
|
|
Expected dividend yield
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
Number of
Shares |
|
Weighted-Average
Exercise Price |
|
Weighted-Average
Remaining Contractual Life |
|
Aggregate Intrinsic Value
(thousands) |
|||||
Outstanding, August 31, 2013
|
1,820,000
|
|
|
$
|
4.88
|
|
|
8.7 years
|
|
$
|
8,160
|
|
Granted
|
433,000
|
|
|
10.37
|
|
|
|
|
|
|||
Exercised
|
(61,000
|
)
|
|
3.71
|
|
|
|
|
481
|
|
||
Expired
|
(25,000
|
)
|
|
10.32
|
|
|
|
|
|
|||
Outstanding, August 31, 2014
|
2,167,000
|
|
|
5.94
|
|
|
8.0 years
|
|
16,287
|
|
||
Granted
|
2,377,500
|
|
|
11.55
|
|
|
|
|
|
|||
Exercised
|
(258,000
|
)
|
|
3.81
|
|
|
|
|
2,103
|
|
||
Forfeited
|
(110,000
|
)
|
|
4.97
|
|
|
|
|
|
|||
Outstanding, August 31, 2015
|
4,176,500
|
|
|
9.29
|
|
|
8.6 years
|
|
8,187
|
|
||
Granted
|
1,142,500
|
|
|
10.84
|
|
|
|
|
|
|||
Exercised
|
(188,000
|
)
|
|
6.56
|
|
|
|
|
981
|
|
||
Expired
|
(60,000
|
)
|
|
11.74
|
|
|
|
|
|
|||
Forfeited
|
(15,000
|
)
|
|
11.68
|
|
|
|
|
|
|||
Outstanding, December 31, 2015
|
5,056,000
|
|
|
9.71
|
|
|
8.7 years
|
|
4,351
|
|
||
Granted
|
1,067,500
|
|
|
7.19
|
|
|
|
|
|
|||
Exercised
|
(20,000
|
)
|
|
3.91
|
|
|
|
|
117
|
|
||
Expired
|
—
|
|
|
—
|
|
|
|
|
|
|||
Forfeited
|
(102,000
|
)
|
|
10.40
|
|
|
|
|
|
|||
Outstanding, December 31, 2016
|
6,001,500
|
|
|
$
|
9.27
|
|
|
8.0 years
|
|
$
|
6,515
|
|
Outstanding, Exercisable at December 31, 2016
|
2,406,100
|
|
|
$
|
8.42
|
|
|
7.0 years
|
|
$
|
4,297
|
|
Outstanding, Vested and Expected to Vest at December 31, 2016
|
5,937,601
|
|
|
$
|
9.24
|
|
|
7.9 years
|
|
$
|
6,511
|
|
|
|
Outstanding Options
|
|
Exercisable Options
|
||||||||||||
Range of Exercise Prices
|
|
Options
|
|
Weighted-Average Remaining Contractual Life
|
|
Weighted-Average Exercise Price per Share
|
|
Options
|
|
Weighted-Average Exercise Price per Share
|
||||||
Under $5.00
|
|
630,000
|
|
|
4.7 years
|
|
$
|
3.50
|
|
|
589,000
|
|
|
$
|
3.48
|
|
$5.00 - $6.99
|
|
1,012,000
|
|
|
7.9 years
|
|
6.38
|
|
|
430,000
|
|
|
6.51
|
|
||
$7.00 - $10.99
|
|
1,617,500
|
|
|
8.5 years
|
|
9.34
|
|
|
383,900
|
|
|
9.72
|
|
||
$11.00 - $13.46
|
|
2,742,000
|
|
|
8.4 years
|
|
11.61
|
|
|
1,003,200
|
|
|
11.63
|
|
||
Total
|
|
6,001,500
|
|
|
8.0 years
|
|
$
|
9.27
|
|
|
2,406,100
|
|
|
$
|
8.42
|
|
Unrecognized compensation, net of estimated forfeitures (in thousands)
|
$
|
15,330
|
|
Remaining vesting phase
|
3.2 years
|
|
|
Number of
Shares |
|
Weighted-Average
Grant-Date Fair Value |
|||
Not vested, August 31, 2013
|
46,667
|
|
|
$
|
6.75
|
|
Granted
|
343,780
|
|
|
11.34
|
|
|
Vested
|
(97,114
|
)
|
|
11.38
|
|
|
Forfeited
|
—
|
|
|
—
|
|
|
Not vested, August 31, 2014
|
293,333
|
|
|
10.60
|
|
|
Granted
|
547,699
|
|
|
11.17
|
|
|
Vested
|
(208,532
|
)
|
|
11.09
|
|
|
Forfeited
|
—
|
|
|
—
|
|
|
Not vested, August 31, 2015
|
632,500
|
|
|
10.93
|
|
|
Granted
|
919,604
|
|
|
10.08
|
|
|
Vested
|
(636,237
|
)
|
|
10.13
|
|
|
Forfeited
|
—
|
|
|
—
|
|
|
Not vested, December 31, 2015
|
915,867
|
|
|
10.63
|
|
|
Granted
|
464,533
|
|
|
7.66
|
|
|
Vested
|
(424,483
|
)
|
|
9.92
|
|
|
Forfeited
|
(65,581
|
)
|
|
8.99
|
|
|
Not vested, December 31, 2016
|
890,336
|
|
|
$
|
9.55
|
|
Unrecognized compensation, net of estimated forfeitures (in thousands)
|
$
|
6,711
|
|
Remaining vesting phase
|
2.8 years
|
|
|
Year Ended December 31, 2016
|
|
Weighted-average expected term
|
2.7 years
|
|
Weighted-average expected volatility
|
58
|
%
|
Weighted-average risk free rate
|
0.87
|
%
|
14
.
|
Defined Contribution Plan
|
15
.
|
Income Taxes
|
|
Year Ended December 31, 2016
|
|
Four Months Ended December 31, 2015
|
|
Year Ended August 31,
|
||||||||||
|
|
|
2015
|
|
2014
|
||||||||||
Current:
|
|
|
|
|
|
|
|
||||||||
Federal
|
$
|
106
|
|
|
$
|
—
|
|
|
$
|
(4
|
)
|
|
$
|
4
|
|
State
|
—
|
|
|
—
|
|
|
(111
|
)
|
|
111
|
|
||||
Total current income tax expense (benefit)
|
$
|
106
|
|
|
$
|
—
|
|
|
$
|
(115
|
)
|
|
$
|
115
|
|
|
|
|
|
|
|
|
|
||||||||
Deferred:
|
|
|
|
|
|
|
|
||||||||
Federal
|
$
|
(74,099
|
)
|
|
$
|
(45,332
|
)
|
|
$
|
10,820
|
|
|
$
|
13,748
|
|
State
|
(6,651
|
)
|
|
(4,074
|
)
|
|
972
|
|
|
1,151
|
|
||||
Total deferred income tax (benefit) expense
|
$
|
(80,750
|
)
|
|
$
|
(49,406
|
)
|
|
$
|
11,792
|
|
|
$
|
14,899
|
|
|
|
|
|
|
|
|
|
||||||||
Valuation allowance
|
80,750
|
|
|
39,399
|
|
|
—
|
|
|
—
|
|
||||
Income tax expense (benefit)
|
$
|
106
|
|
|
$
|
(10,007
|
)
|
|
$
|
11,677
|
|
|
$
|
15,014
|
|
|
Year Ended December 31, 2016
|
|
Four Months Ended December 31, 2015
|
|
Year Ended August 31,
|
||||||||||
|
|
|
2015
|
|
2014
|
||||||||||
|
|
|
|
|
|
|
|
||||||||
Federal income tax at statutory rate
|
$
|
(74,489
|
)
|
|
$
|
(45,200
|
)
|
|
$
|
10,105
|
|
|
$
|
14,915
|
|
State income taxes, net of federal tax
|
(6,685
|
)
|
|
(4,062
|
)
|
|
908
|
|
|
1,341
|
|
||||
Statutory depletion
|
(287
|
)
|
|
(150
|
)
|
|
(451
|
)
|
|
(1,266
|
)
|
||||
Stock-based compensation
|
383
|
|
|
—
|
|
|
92
|
|
|
—
|
|
||||
Non-deductible compensation
|
—
|
|
|
—
|
|
|
850
|
|
|
125
|
|
||||
Valuation allowance
|
80,750
|
|
|
39,399
|
|
|
—
|
|
|
—
|
|
||||
Other
|
434
|
|
|
6
|
|
|
173
|
|
|
(101
|
)
|
||||
Income tax provision
|
$
|
106
|
|
|
$
|
(10,007
|
)
|
|
$
|
11,677
|
|
|
$
|
15,014
|
|
Effective rate expressed as a percentage
|
—
|
%
|
|
8
|
%
|
|
39
|
%
|
|
34
|
%
|
|
As of December 31,
|
||||||
|
2016
|
|
2015
|
||||
Deferred tax assets (liabilities):
|
|
|
|
||||
Net operating loss carryforward
|
$
|
47,462
|
|
|
$
|
11,855
|
|
Stock-based compensation
|
5,576
|
|
|
3,304
|
|
||
Basis of oil and gas properties
|
62,707
|
|
|
23,656
|
|
||
Statutory depletion
|
4,028
|
|
|
2,802
|
|
||
Unrealized (gain) loss on commodity derivative
|
1,334
|
|
|
(2,410
|
)
|
||
Other
|
(958
|
)
|
|
192
|
|
||
|
120,149
|
|
|
39,399
|
|
||
Valuation allowance on tax assets
|
(120,149
|
)
|
|
(39,399
|
)
|
||
Deferred tax asset (liability), net
|
$
|
—
|
|
|
$
|
—
|
|
16
.
|
Other Commitments and Contingencies
|
Year ending December 31,
|
|
Oil
|
|
|
(MBbls)
|
||
2017
|
|
3,944
|
|
2018
|
|
4,255
|
|
2019
|
|
4,255
|
|
2020
|
|
3,700
|
|
2021
|
|
1,672
|
|
Thereafter
|
|
—
|
|
Total
|
|
17,826
|
|
2017
|
|
398
|
|
2018
|
|
840
|
|
2019
|
|
859
|
|
2020
|
|
878
|
|
2021
|
|
875
|
|
Thereafter
|
|
477
|
|
Total
|
|
4,327
|
|
17
.
|
Supplemental Schedule of Information to the Consolidated Statements of Cash Flows
|
|
Year Ended December 31, 2016
|
|
Four Months Ended December 31, 2015
|
|
Year Ended August 31,
|
||||||||||
|
|
|
2015
|
|
2014
|
||||||||||
Supplemental cash flow information:
|
|
|
|
|
|
|
|
||||||||
Interest paid
|
$
|
3,779
|
|
|
$
|
683
|
|
|
$
|
2,817
|
|
|
$
|
989
|
|
Income taxes paid (refunded)
|
$
|
106
|
|
|
$
|
(150
|
)
|
|
$
|
202
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
||||||||
Non-cash investing and financing activities:
|
|
|
|
|
|
|
|
||||||||
Accrued well costs payable
|
$
|
42,779
|
|
|
$
|
31,414
|
|
|
$
|
33,071
|
|
|
$
|
71,849
|
|
Assets acquired in exchange for common stock
|
$
|
—
|
|
|
$
|
50,265
|
|
|
$
|
60,221
|
|
|
$
|
11,184
|
|
Obligations incurred with development activities
|
$
|
773
|
|
|
$
|
1,819
|
|
|
$
|
7,051
|
|
|
$
|
1,610
|
|
Obligations assumed with acquisitions
|
$
|
2,230
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Obligations discharged with asset retirements and divestitures
|
$
|
(4,739
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
18
.
|
Unaudited Oil and Natural Gas Reserves Information
|
|
Oil (MBbl)
|
|
Natural Gas (MMcf)
|
|
MBOE
|
|||
Balance, August 31, 2013
|
7,047
|
|
|
40,690
|
|
|
13,829
|
|
Revision of previous estimates
|
83
|
|
|
3,047
|
|
|
591
|
|
Purchase of reserves in place
|
1,028
|
|
|
5,956
|
|
|
2,021
|
|
Extensions, discoveries, and other additions
|
9,142
|
|
|
49,289
|
|
|
17,357
|
|
Sale of reserves in place
|
(35
|
)
|
|
(56
|
)
|
|
(44
|
)
|
Production
|
(941
|
)
|
|
(3,747
|
)
|
|
(1,566
|
)
|
Balance, August 31, 2014
|
16,324
|
|
|
95,179
|
|
|
32,188
|
|
Revision of previous estimates
|
(1,699
|
)
|
|
(4,889
|
)
|
|
(2,513
|
)
|
Purchase of reserves in place
|
4,201
|
|
|
21,957
|
|
|
7,860
|
|
Extensions, discoveries, and other additions
|
11,465
|
|
|
73,392
|
|
|
23,696
|
|
Sale of reserves in place
|
(629
|
)
|
|
(4,337
|
)
|
|
(1,352
|
)
|
Production
|
(1,970
|
)
|
|
(7,344
|
)
|
|
(3,194
|
)
|
Balance, August 31, 2015
|
27,692
|
|
|
173,958
|
|
|
56,685
|
|
Revision of previous estimates
|
(10,917
|
)
|
|
(38,931
|
)
|
|
(17,407
|
)
|
Purchase of reserves in place
|
4,380
|
|
|
58,959
|
|
|
14,207
|
|
Extensions, discoveries, and other additions
|
8,263
|
|
|
62,301
|
|
|
18,647
|
|
Sale of reserves in place
|
(2,297
|
)
|
|
(14,149
|
)
|
|
(4,655
|
)
|
Production
|
(742
|
)
|
|
(3,468
|
)
|
|
(1,320
|
)
|
Balance, December 31, 2015
|
26,379
|
|
|
238,670
|
|
|
66,157
|
|
Revision of previous estimates
|
(7,788
|
)
|
|
(80,549
|
)
|
|
(21,213
|
)
|
Purchase of reserves in place
|
23,141
|
|
|
197,103
|
|
|
55,991
|
|
Extensions, discoveries, and other additions
|
1,457
|
|
|
13,018
|
|
|
3,627
|
|
Sale of reserves in place
|
(2,900
|
)
|
|
(24,235
|
)
|
|
(6,939
|
)
|
Production
|
(2,257
|
)
|
|
(12,086
|
)
|
|
(4,271
|
)
|
Balance, December 31, 2016
|
38,032
|
|
|
331,921
|
|
|
93,352
|
|
|
|
|
|
|
|
|||
Proved developed and undeveloped reserves:
|
|
|
|
|
|
|||
Developed at August 31, 2014
|
6,616
|
|
|
38,162
|
|
|
12,977
|
|
Undeveloped at August 31, 2014
|
9,708
|
|
|
57,017
|
|
|
19,211
|
|
Balance, August 31, 2014
|
16,324
|
|
|
95,179
|
|
|
32,188
|
|
|
|
|
|
|
|
|||
Developed at August 31, 2015
|
7,393
|
|
|
46,026
|
|
|
15,064
|
|
Undeveloped at August 31, 2015
|
20,299
|
|
|
127,932
|
|
|
41,621
|
|
Balance, August 31, 2015
|
27,692
|
|
|
173,958
|
|
|
56,685
|
|
|
|
|
|
|
|
|||
Developed at December 31, 2015
|
8,410
|
|
|
56,751
|
|
|
17,868
|
|
Undeveloped at December 31, 2015
|
17,969
|
|
|
181,919
|
|
|
48,289
|
|
Balance, December 31, 2015
|
26,379
|
|
|
238,670
|
|
|
66,157
|
|
|
|
|
|
|
|
|||
Developed at December 31, 2016
|
7,435
|
|
|
62,570
|
|
|
17,863
|
|
Undeveloped at December 31, 2016
|
30,597
|
|
|
269,351
|
|
|
75,489
|
|
Balance, December 31, 2016
|
38,032
|
|
|
331,921
|
|
|
93,352
|
|
•
|
Purchases of reserves in place.
For the
year ended December 31, 2016
, purchases of reserves in place of
55,991
MBOE were primarily attributable to the acquisition of proved reserves in the GC Acquisition. Please see Note 3 for further information.
|
•
|
Revision of previous estimates.
For the
year ended December 31, 2016
, revisions to previous estimates decreased proved developed and undeveloped reserves by a net amount of
21,213
MBOE primarily
as a result of the removal of certain legacy PUD locations as they are now expected to be developed beyond the three-year drilling plan.
|
•
|
Extensions and discoveries.
For the
year ended December 31, 2016
, total extensions and discoveries of
3,627
MBOE were primarily attributable to successful drilling in the Wattenberg Field. The Company drilled
6
successful exploratory wells. In addition, successful drilling by other operators in adjacent acreage allowed us to increase our proved undeveloped locations.
|
•
|
Purchases of reserves in place.
For the four months ended December 31, 2015, purchases of reserves in place of
14,207
MBO
E were attributable to the acquisition of proved reserves. Please see Note
3 for further information.
|
•
|
Revision of previous estimates.
For the four months ended December 31, 2015, revisions to previous estimates decreased proved developed and undeveloped reserves by a net amount of
17,407
MBOE. As the Company continued to revise its drilling plans, the development plan removed undeveloped reserves that are not projected to be drilled in the next three years and reflected the lower development costs anticipated from transitioning to a monobore wellbore design and longer horizontal wells; in addition, we high-graded our inventory of wells to be drilled.
|
•
|
Extensions and discoveries.
For the four months ended December 31, 2015, total extensions and discoveries of
18,647
MBOE were primarily attributable to successful drilling in the Wattenberg Field. The Company drilled
9
successful exploratory wells. In addition, successful drilling by other operators in adjacent acreage allowed us to increase our proved undeveloped locations.
|
•
|
Purchases of reserves in place.
For the year ended August 31, 2015, purchases of reserves in place of
7,860
MBOE were attributable to the acquisition of proved reserves.
|
•
|
Revision of previous estimates.
For the year ended August 31, 2015, revisions to previous estimates decreased proved developed and undeveloped reserves by a net amount of
2,513
MBOE. As the Company continued to revise its drilling plans toward horizontal drilling, the vertical proved undeveloped and vertical developed non-producing locations were removed from its development plan.
|
•
|
Extensions and discoveries.
For the year ended August 31, 2015, total extensions and discoveries of
23,696
MBOE were primarily attributable to successful drilling in the Wattenberg Field. The Company drilled
67
successful exploratory wells. In addition, successful drilling by other operators in adjacent acreage allowed us to increase our proved undeveloped locations.
|
•
|
Purchases of reserves in place.
For the year ended August 31, 2014, purchases of reserves in place of
2,021
MBOE were attributable to the acquisition of producing oil and natural gas wells and undeveloped acreage.
|
•
|
Revision of previous estimates.
For the year ended August 31, 2014, revisions to previous estimates increased proved developed and undeveloped reserves by a net amount of
591
MBOE.
|
•
|
Extensions and discoveries.
For the year ended August 31, 2014, total extensions and discoveries of
17,357
MBOE were primarily attributable to successful drilling in the Wattenberg Field. The new producing wells in this area and their adjacent proved undeveloped locations added during the year increased the Company’s proved reserves.
|
|
As of December 31,
|
|
As of August 31,
|
||||||||||||
|
2016
|
|
2015
|
|
2015
|
|
2014
|
||||||||
Future cash inflow
|
$
|
2,180,673
|
|
|
$
|
1,710,610
|
|
|
$
|
2,046,615
|
|
|
$
|
1,839,987
|
|
Future production costs
|
(644,093
|
)
|
|
(462,097
|
)
|
|
(653,009
|
)
|
|
(395,019
|
)
|
||||
Future development costs
|
(584,537
|
)
|
|
(340,449
|
)
|
|
(510,720
|
)
|
|
(412,517
|
)
|
||||
Future income tax expense
|
(90,195
|
)
|
|
(108,172
|
)
|
|
(144,399
|
)
|
|
(252,925
|
)
|
||||
Future net cash flows
|
861,848
|
|
|
799,892
|
|
|
738,487
|
|
|
779,526
|
|
||||
10% annual discount for estimated timing of cash flows
|
(427,587
|
)
|
|
(408,939
|
)
|
|
(372,658
|
)
|
|
(376,827
|
)
|
||||
Standardized measure of discounted future net cash flows
|
$
|
434,261
|
|
|
$
|
390,953
|
|
|
$
|
365,829
|
|
|
$
|
402,699
|
|
|
Oil (Bbl)
|
|
Natural Gas (Mcf)
|
||||
December 31, 2016 (Average)
|
$
|
36.07
|
|
|
$
|
2.44
|
|
December 31, 2015 (Average)
|
$
|
41.33
|
|
|
$
|
2.60
|
|
August 31, 2015 (Average)
|
$
|
53.27
|
|
|
$
|
3.28
|
|
August 31, 2014 (Average)
|
$
|
89.48
|
|
|
$
|
5.03
|
|
|
Year Ended December 31, 2016
|
|
Four Months Ended December 31, 2015
|
|
Year Ended August 31,
|
||||||||||
|
|
|
2015
|
|
2014
|
||||||||||
Standardized measure, beginning of period
|
$
|
390,953
|
|
|
$
|
365,829
|
|
|
$
|
402,699
|
|
|
$
|
181,732
|
|
Sale and transfers, net of production costs
|
(81,468
|
)
|
|
(25,222
|
)
|
|
(98,486
|
)
|
|
(86,808
|
)
|
||||
Net changes in prices and production costs
|
(64,387
|
)
|
|
(81,968
|
)
|
|
(233,051
|
)
|
|
15,828
|
|
||||
Extensions, discoveries, and improved recovery
|
18,795
|
|
|
116,343
|
|
|
173,918
|
|
|
300,087
|
|
||||
Changes in estimated future development costs
|
(6,016
|
)
|
|
(7,195
|
)
|
|
10,002
|
|
|
(20,817
|
)
|
||||
Previously estimated development costs incurred during the period
|
62,502
|
|
|
5,923
|
|
|
4,957
|
|
|
15,000
|
|
||||
Revision of quantity estimates
|
(110,306
|
)
|
|
(36,820
|
)
|
|
(38,340
|
)
|
|
4,589
|
|
||||
Accretion of discount
|
44,703
|
|
|
14,610
|
|
|
57,629
|
|
|
23,612
|
|
||||
Net change in income taxes
|
5,104
|
|
|
25,263
|
|
|
58,547
|
|
|
(76,616
|
)
|
||||
Divestitures of reserves
|
(26,839
|
)
|
|
(43,754
|
)
|
|
(19,234
|
)
|
|
(925
|
)
|
||||
Purchase of reserves in place
|
228,855
|
|
|
77,024
|
|
|
56,795
|
|
|
47,017
|
|
||||
Changes in timing and other
|
(27,635
|
)
|
|
(19,080
|
)
|
|
(9,607
|
)
|
|
—
|
|
||||
Standardized measure, end of period
|
$
|
434,261
|
|
|
$
|
390,953
|
|
|
$
|
365,829
|
|
|
$
|
402,699
|
|
19
.
|
Unaudited Financial Data
|
|
Year Ended December 31, 2016
|
||||||||||||||
|
First
Quarter
|
|
Second
Quarter
|
|
Third
Quarter
|
|
Fourth
Quarter
|
||||||||
Revenues
|
$
|
18,273
|
|
|
$
|
23,947
|
|
|
$
|
26,234
|
|
|
$
|
38,695
|
|
Expenses
|
71,356
|
|
|
172,157
|
|
|
45,887
|
|
|
29,324
|
|
||||
Operating income (loss)
|
(53,083
|
)
|
|
(148,210
|
)
|
|
(19,653
|
)
|
|
9,371
|
|
||||
Other income (expense)
|
1,682
|
|
|
(5,537
|
)
|
|
417
|
|
|
(4,070
|
)
|
||||
Income (loss) before income taxes
|
(51,401
|
)
|
|
(153,747
|
)
|
|
(19,236
|
)
|
|
5,301
|
|
||||
Income tax provision (benefit)
|
—
|
|
|
101
|
|
|
5
|
|
|
—
|
|
||||
Net income (loss)
|
$
|
(51,401
|
)
|
|
$
|
(153,848
|
)
|
|
$
|
(19,241
|
)
|
|
$
|
5,301
|
|
Net income (loss) per common share:
(1)
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
(0.42
|
)
|
|
$
|
(0.89
|
)
|
|
$
|
(0.10
|
)
|
|
$
|
0.03
|
|
Diluted
(2)
|
$
|
(0.42
|
)
|
|
$
|
(0.89
|
)
|
|
$
|
(0.10
|
)
|
|
$
|
0.03
|
|
Weighted-average shares outstanding:
|
|
|
|
|
|
|
|
||||||||
Basic
|
121,392,736
|
|
|
172,013,551
|
|
|
200,515,555
|
|
|
200,585,800
|
|
||||
Diluted
|
121,392,736
|
|
|
172,013,551
|
|
|
200,515,555
|
|
|
201,254,678
|
|
|
Year Ended December 31, 2015
|
||||||||||||||
|
First
Quarter
(3)
|
|
Second
Quarter
(3)
|
|
Third
Quarter
(3)
|
|
Fourth
Quarter
(3)
|
||||||||
Revenues
|
$
|
18,938
|
|
|
$
|
28,286
|
|
|
$
|
33,378
|
|
|
$
|
25,448
|
|
Expenses
|
24,086
|
|
|
31,303
|
|
|
128,366
|
|
|
79,018
|
|
||||
Operating income
|
(5,148
|
)
|
|
(3,017
|
)
|
|
(94,988
|
)
|
|
(53,570
|
)
|
||||
Other income (expense)
|
3,446
|
|
|
(4,474
|
)
|
|
6,547
|
|
|
5,383
|
|
||||
Income before income taxes
|
(1,702
|
)
|
|
(7,491
|
)
|
|
(88,441
|
)
|
|
(48,187
|
)
|
||||
Income tax provision
|
(709
|
)
|
|
(2,903
|
)
|
|
(10,520
|
)
|
|
—
|
|
||||
Net income
|
$
|
(993
|
)
|
|
$
|
(4,588
|
)
|
|
$
|
(77,921
|
)
|
|
$
|
(48,187
|
)
|
Net income per common share:
(1)
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
(0.01
|
)
|
|
$
|
(0.04
|
)
|
|
$
|
(0.74
|
)
|
|
$
|
(0.44
|
)
|
Diluted
(2)
|
$
|
(0.01
|
)
|
|
$
|
(0.04
|
)
|
|
$
|
(0.74
|
)
|
|
$
|
(0.44
|
)
|
Weighted-average shares outstanding:
|
|
|
|
|
|
|
|
||||||||
Basic
|
97,241,301
|
|
|
104,562,662
|
|
|
105,100,849
|
|
|
108,664,875
|
|
||||
Diluted
|
97,241,301
|
|
|
104,562,662
|
|
|
105,100,849
|
|
|
108,664,875
|
|
|
Four Months Ended December 31, 2014
|
||
Revenues
|
$
|
52,931
|
|
Expenses
|
38,047
|
|
|
Operating income
|
14,884
|
|
|
Other income (expense)
|
27,717
|
|
|
Income before income taxes
|
42,601
|
|
|
Income tax provision
|
15,802
|
|
|
Net income
|
$
|
26,799
|
|
Net income per common share:
|
|
||
Basic
|
$
|
0.34
|
|
Diluted
(2)
|
$
|
0.33
|
|
Weighted-average shares outstanding:
|
|
||
Basic
|
79,971,698
|
|
|
Diluted
|
80,693,410
|
|
1
|
The sum of net income (loss) per common share for the four quarters may not agree with the annual amount reported because the number used as the denominator for each quarterly computation is based on the weighted-average number of shares outstanding during that quarter whereas the annual computation is based upon an average for the entire year.
|
2
|
Common share equivalents were excluded from the calculation of net income (loss) per share as the inclusion of the common share equivalents was anti-dilutive.
|
3
|
The Company has recast this quarterly financial information for the year ended December 31, 2015 to reflect the change in the Company's fiscal year.
|
20
.
|
Subsequent Events
|
|
SYNERGY RESOURCES CORPORATION
|
|
|
|
/s/ Lynn A. Peterson
|
|
Lynn A. Peterson, Principal Executive Officer
|
|
|
|
/s/ James P. Henderson
|
|
James P. Henderson, Principal Financial Officer
|
|
|
|
/s/ Jared C. Grenzenbach
|
|
Jared C. Grenzenbach, Principal Accounting Officer
|
Signature
|
|
Title
|
|
Date
|
|
|
|
|
|
/s/ Lynn A. Peterson
|
|
President, Chief Executive Officer, and Director
|
|
February 23, 2017
|
Lynn A. Peterson
|
|
(Principal Executive Officer)
|
|
|
|
|
|
|
|
/s/ Jack N. Aydin
|
|
Director
|
|
February 23, 2017
|
Jack N. Aydin
|
|
|
|
|
|
|
|
|
|
/s/ Daniel E. Kelly
|
|
Director
|
|
February 23, 2017
|
Daniel E. Kelly
|
|
|
|
|
|
|
|
|
|
/s/ Paul Korus
|
|
Director
|
|
February 23, 2017
|
Paul Korus
|
|
|
|
|
|
|
|
|
|
/s/ Raymond E. McElhaney
|
|
Director
|
|
February 23, 2017
|
Raymond E. McElhaney
|
|
|
|
|
|
|
|
|
|
/s/ Rick Wilber
|
|
Director
|
|
February 23, 2017
|
Rick Wilber
|
|
|
|
|
|
SYNERGY RESOURCES CORPORATION
|
|
|
|
/s/ James P. Henderson
|
|
James P. Henderson
|
|
Chief Financial Officer
|
|
|
|
EXECUTIVE
|
|
|
|
/s/ Lynn A. Peterson
|
|
Lynn A. Peterson
|
1.
|
I have reviewed this annual report on Form 10-K of Synergy Resources Corporation;
|
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 the 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.
|
1.
|
I have reviewed this annual report on Form 10-K of Synergy Resources Corporation;
|
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 the 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.
|
(1)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Date:
|
February 23, 2017
|
By:
|
/s/ Lynn A. Peterson
|
|
|
|
|
Lynn A. Peterson, Principal Executive Officer
|
|
Date:
|
February 23, 2017
|
By:
|
/s/ James P. Henderson
|
|
|
|
|
James P. Henderson, Principal Financial Officer
|
|
SEC PARAMETERS
|
|||||||||||||||||
Estimated Net Reserves and Income Data
|
|||||||||||||||||
Certain Leasehold and Royalty Interests of
|
|||||||||||||||||
Synergy Resources Corporation
|
|||||||||||||||||
|
As of December 31, 2016
|
|
|||||||||||||||
|
|
|
Proved
|
||||||||||||||
|
|
|
Developed
|
|
|
|
Total
|
||||||||||
|
|
|
Producing
|
|
Non-Producing
|
|
Undeveloped
|
|
Proved
|
||||||||
Net Remaining Reserves
|
|
|
|
|
|
|
|
|
|||||||||
Oil/Condensate - Mbbl
|
|
7,435
|
|
|
0
|
|
|
30,597
|
|
|
38,032
|
|
|||||
Gas - MMcf
|
|
62,570
|
|
|
0
|
|
|
269,351
|
|
|
331,921
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||
Income Data($M)
|
|
|
|
|
|
|
|
|
|||||||||
Future Gross Revenue
|
|
$
|
410,088
|
|
|
$
|
0
|
|
|
$
|
1,748,779
|
|
|
$
|
2,158,867
|
|
|
Deductions
|
|
200,310
|
|
|
2,320
|
|
|
1,004,193
|
|
|
1,206,823
|
|
|||||
Future Net Income (FNI)
|
|
$
|
209,778
|
|
|
$
|
(2,320
|
)
|
|
$
|
744,586
|
|
|
$
|
952,044
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Discounted FNI @ 10%
|
|
$
|
156,562
|
|
|
$
|
(2,301
|
)
|
|
$
|
322,086
|
|
|
$
|
476,347
|
|
|
|
Discounted Future Net Income ($M)
|
||
|
|
As of December 31, 2016
|
||
Discount Rate
|
|
Total
|
|
|
Percent
|
|
Proved
|
|
|
|
|
|
|
|
12
|
|
$422,713
|
|
|
15
|
|
$356,365
|
|
|
20
|
|
$272,997
|
|
|
25
|
|
$212,680
|
|
|
|
|
Very truly yours,
|
|
|
|
|
|
|
|
RYDER SCOTT COMPANY, L.P.
|
|
|
|
TBPE Firm Registration No. F-1580
|
|
|
|
|
|
|
|
/s/ James L. Baird, P.E.
|
|
|
|
James L. Baird, P.E.
|
|
|
|
Colorado License No. 41521
|
|
[Seal]
|
|
Managing Senior Vice President
|
|
|
|
|
|
|
|
|
|
|
|
/s/ Richard J. Marshall, P.E.
|
|
|
|
Richard J. Marshall, P.E.
|
|
|
|
Colorado License No. 23260
|
|
|
|
Vice President [Seal]
|
|
|
|
|
|
|
|
|