x
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
¨
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Texas
|
27-4662601
|
(State or other jurisdiction of
incorporation or organization)
|
(I.R.S. Employer
Identification No.)
|
|
|
5400 LBJ Freeway, Suite 1500
Dallas, Texas
|
75240
|
(Address of principal executive offices)
|
(Zip Code)
|
Large accelerated filer
|
|
¨
|
|
Accelerated filer
|
|
x
|
|
|
|
|
|||
Non-accelerated filer
|
|
¨
(Do not check if a smaller reporting company)
|
|
Smaller reporting company
|
|
¨
|
|
Page
|
|
June 30,
2013 |
|
December 31,
2012 |
||||
ASSETS
|
|
|
|
||||
Current assets
|
|
|
|
||||
Cash
|
$
|
5,105
|
|
|
$
|
2,095
|
|
Certificates of deposit
|
61
|
|
|
230
|
|
||
Accounts receivable
|
|
|
|
||||
Oil and natural gas revenues
|
25,193
|
|
|
24,422
|
|
||
Joint interest billings
|
1,792
|
|
|
4,118
|
|
||
Other
|
766
|
|
|
974
|
|
||
Derivative instruments
|
3,978
|
|
|
4,378
|
|
||
Lease and well equipment inventory
|
597
|
|
|
877
|
|
||
Prepaid expenses
|
1,318
|
|
|
1,103
|
|
||
Total current assets
|
38,810
|
|
|
38,197
|
|
||
Property and equipment, at cost
|
|
|
|
||||
Oil and natural gas properties, full-cost method
|
|
|
|
||||
Evaluated
|
912,618
|
|
|
763,527
|
|
||
Unproved and unevaluated
|
168,275
|
|
|
149,675
|
|
||
Other property and equipment
|
28,428
|
|
|
27,258
|
|
||
Less accumulated depletion, depreciation and amortization
|
(419,066
|
)
|
|
(349,370
|
)
|
||
Net property and equipment
|
690,255
|
|
|
591,090
|
|
||
Other assets
|
|
|
|
||||
Derivative instruments
|
3,459
|
|
|
771
|
|
||
Deferred income taxes
|
510
|
|
|
411
|
|
||
Other assets
|
1,677
|
|
|
1,560
|
|
||
Total other assets
|
5,646
|
|
|
2,742
|
|
||
Total assets
|
$
|
734,711
|
|
|
$
|
632,029
|
|
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
|
|
|
||||
Current liabilities
|
|
|
|
||||
Accounts payable
|
$
|
35,959
|
|
|
$
|
28,120
|
|
Accrued liabilities
|
48,512
|
|
|
59,179
|
|
||
Royalties payable
|
6,335
|
|
|
6,541
|
|
||
Derivative instruments
|
257
|
|
|
670
|
|
||
Advances from joint interest owners
|
—
|
|
|
1,515
|
|
||
Income taxes payable
|
78
|
|
|
—
|
|
||
Deferred income taxes
|
510
|
|
|
411
|
|
||
Other current liabilities
|
87
|
|
|
56
|
|
||
Total current liabilities
|
91,738
|
|
|
96,492
|
|
||
Long-term liabilities
|
|
|
|
||||
Borrowings under Credit Agreement
|
245,000
|
|
|
150,000
|
|
||
Asset retirement obligations
|
5,881
|
|
|
5,109
|
|
||
Other long-term liabilities
|
2,067
|
|
|
1,324
|
|
||
Total long-term liabilities
|
252,948
|
|
|
156,433
|
|
||
Commitments and contingencies (Note 9)
|
|
|
|
|
|
||
Shareholders’ equity
|
|
|
|
||||
Common stock - $0.01 par value, 80,000,000 shares authorized; 57,139,755 and 56,778,718 shares issued; and 55,837,912 and 55,577,667 shares outstanding, respectively
|
571
|
|
|
568
|
|
||
Additional paid-in capital
|
405,614
|
|
|
404,311
|
|
||
Retained deficit
|
(5,395
|
)
|
|
(15,010
|
)
|
||
Treasury stock, at cost, 1,301,843 and 1,201,051 shares, respectively
|
(10,765
|
)
|
|
(10,765
|
)
|
||
Total shareholders’ equity
|
390,025
|
|
|
379,104
|
|
||
Total liabilities and shareholders’ equity
|
$
|
734,711
|
|
|
$
|
632,029
|
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
Revenues
|
|
|
|
|
|
|
|
||||||||
Oil and natural gas revenues
|
$
|
58,179
|
|
|
$
|
36,078
|
|
|
$
|
117,498
|
|
|
$
|
65,242
|
|
Realized gain on derivatives
|
254
|
|
|
4,713
|
|
|
646
|
|
|
7,776
|
|
||||
Unrealized gain on derivatives
|
7,526
|
|
|
15,114
|
|
|
2,701
|
|
|
11,844
|
|
||||
Total revenues
|
65,959
|
|
|
55,905
|
|
|
120,845
|
|
|
84,862
|
|
||||
Expenses
|
|
|
|
|
|
|
|
||||||||
Production taxes and marketing
|
4,451
|
|
|
2,619
|
|
|
8,548
|
|
|
4,783
|
|
||||
Lease operating
|
10,140
|
|
|
6,375
|
|
|
21,040
|
|
|
11,020
|
|
||||
Depletion, depreciation and amortization
|
20,234
|
|
|
19,913
|
|
|
48,466
|
|
|
31,119
|
|
||||
Accretion of asset retirement obligations
|
80
|
|
|
58
|
|
|
161
|
|
|
111
|
|
||||
Full-cost ceiling impairment
|
—
|
|
|
33,205
|
|
|
21,229
|
|
|
33,205
|
|
||||
General and administrative
|
4,149
|
|
|
4,093
|
|
|
8,751
|
|
|
7,882
|
|
||||
Total expenses
|
39,054
|
|
|
66,263
|
|
|
108,195
|
|
|
88,120
|
|
||||
Operating income (loss)
|
26,905
|
|
|
(10,358
|
)
|
|
12,650
|
|
|
(3,258
|
)
|
||||
Other income (expense)
|
|
|
|
|
|
|
|
||||||||
Net loss on asset sales and inventory impairment
|
(192
|
)
|
|
(60
|
)
|
|
(192
|
)
|
|
(60
|
)
|
||||
Interest expense
|
(1,609
|
)
|
|
(1
|
)
|
|
(2,880
|
)
|
|
(309
|
)
|
||||
Interest and other income
|
47
|
|
|
30
|
|
|
115
|
|
|
103
|
|
||||
Total other expense
|
(1,754
|
)
|
|
(31
|
)
|
|
(2,957
|
)
|
|
(266
|
)
|
||||
Income (loss) before income taxes
|
25,151
|
|
|
(10,389
|
)
|
|
9,693
|
|
|
(3,524
|
)
|
||||
Income tax provision (benefit)
|
|
|
|
|
|
|
|
||||||||
Current
|
32
|
|
|
—
|
|
|
78
|
|
|
—
|
|
||||
Deferred
|
—
|
|
|
(3,713
|
)
|
|
—
|
|
|
(649
|
)
|
||||
Total income tax provision (benefit)
|
32
|
|
|
(3,713
|
)
|
|
78
|
|
|
(649
|
)
|
||||
Net income (loss)
|
$
|
25,119
|
|
|
$
|
(6,676
|
)
|
|
$
|
9,615
|
|
|
$
|
(2,875
|
)
|
Earnings (loss) per common share
|
|
|
|
|
|
|
|
||||||||
Basic
|
|
|
|
|
|
|
|
||||||||
Class A
|
$
|
0.45
|
|
|
$
|
(0.12
|
)
|
|
$
|
0.17
|
|
|
$
|
(0.06
|
)
|
Class B
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
0.07
|
|
Diluted
|
|
|
|
|
|
|
|
||||||||
Class A
|
$
|
0.45
|
|
|
$
|
(0.12
|
)
|
|
$
|
0.17
|
|
|
$
|
(0.06
|
)
|
Class B
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
0.07
|
|
Weighted average common shares outstanding
|
|
|
|
|
|
|
|
||||||||
Basic
|
|
|
|
|
|
|
|
||||||||
Class A
|
55,839
|
|
|
55,271
|
|
|
55,729
|
|
|
52,434
|
|
||||
Class B
|
—
|
|
|
—
|
|
|
—
|
|
|
210
|
|
||||
Total
|
55,839
|
|
|
55,271
|
|
|
55,729
|
|
|
52,644
|
|
||||
Diluted
|
|
|
|
|
|
|
|
||||||||
Class A
|
55,937
|
|
|
55,271
|
|
|
55,819
|
|
|
52,434
|
|
||||
Class B
|
—
|
|
|
—
|
|
|
—
|
|
|
210
|
|
||||
Total
|
55,937
|
|
|
55,271
|
|
|
55,819
|
|
|
52,644
|
|
|
Common Stock
|
|
Additional
Paid-In Capital
|
|
Retained Deficit
|
|
Treasury Stock
|
|
|
||||||||||||||||
|
Shares
|
|
Amount
|
|
|
|
Shares
|
|
Amount
|
|
Total
|
||||||||||||||
Balance at January 1, 2013
|
56,779
|
|
|
$
|
568
|
|
|
$
|
404,311
|
|
|
$
|
(15,010
|
)
|
|
1,201
|
|
|
$
|
(10,765
|
)
|
|
$
|
379,104
|
|
Common stock issued to Board advisors
|
3
|
|
|
—
|
|
|
25
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
25
|
|
|||||
Stock options expense related to equity based awards
|
—
|
|
|
—
|
|
|
537
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
537
|
|
|||||
Liability based stock option awards settled
|
—
|
|
|
—
|
|
|
64
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
64
|
|
|||||
Changes in fair value for liability based awards for which grant date fair value is in excess of fair value
|
—
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|||||
Restricted stock issued
|
358
|
|
|
3
|
|
|
(3
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Restricted stock forfeited
|
—
|
|
|
—
|
|
|
(22
|
)
|
|
—
|
|
|
101
|
|
|
—
|
|
|
(22
|
)
|
|||||
Restricted stock and restricted stock units expense
|
—
|
|
|
—
|
|
|
700
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
700
|
|
|||||
Current period net income
|
—
|
|
|
—
|
|
|
—
|
|
|
9,615
|
|
|
—
|
|
|
—
|
|
|
9,615
|
|
|||||
Balance at June 30, 2013
|
57,140
|
|
|
$
|
571
|
|
|
$
|
405,614
|
|
|
$
|
(5,395
|
)
|
|
1,302
|
|
|
$
|
(10,765
|
)
|
|
$
|
390,025
|
|
|
Six Months Ended
June 30, |
||||||
|
2013
|
|
2012
|
||||
Operating activities
|
|
|
|
||||
Net income (loss)
|
$
|
9,615
|
|
|
$
|
(2,875
|
)
|
Adjustments to reconcile net income (loss) to net cash provided by operating activities
|
|
|
|
||||
Unrealized gain on derivatives
|
(2,701
|
)
|
|
(11,844
|
)
|
||
Depletion, depreciation and amortization
|
48,466
|
|
|
31,119
|
|
||
Accretion of asset retirement obligations
|
161
|
|
|
111
|
|
||
Full-cost ceiling impairment
|
21,229
|
|
|
33,205
|
|
||
Stock-based compensation expense
|
1,524
|
|
|
(172
|
)
|
||
Deferred income tax provision
|
—
|
|
|
(649
|
)
|
||
Net loss on asset sales and inventory impairment
|
192
|
|
|
60
|
|
||
Changes in operating assets and liabilities
|
|
|
|
||||
Accounts receivable
|
1,763
|
|
|
(2,761
|
)
|
||
Lease and well equipment inventory
|
280
|
|
|
(98
|
)
|
||
Prepaid expenses
|
(215
|
)
|
|
(385
|
)
|
||
Other assets
|
(117
|
)
|
|
59
|
|
||
Accounts payable, accrued liabilities and other current liabilities
|
4,615
|
|
|
1,687
|
|
||
Royalties payable
|
(206
|
)
|
|
3,642
|
|
||
Advances from joint interest owners
|
(1,515
|
)
|
|
—
|
|
||
Income taxes payable
|
78
|
|
|
—
|
|
||
Other long-term liabilities
|
743
|
|
|
427
|
|
||
Net cash provided by operating activities
|
83,912
|
|
|
51,526
|
|
||
Investing activities
|
|
|
|
||||
Oil and natural gas properties capital expenditures
|
(173,989
|
)
|
|
(134,425
|
)
|
||
Expenditures for other property and equipment
|
(2,081
|
)
|
|
(3,521
|
)
|
||
Purchases of certificates of deposit
|
(61
|
)
|
|
(266
|
)
|
||
Maturities of certificates of deposit
|
230
|
|
|
1,335
|
|
||
Net cash used in investing activities
|
(175,901
|
)
|
|
(136,877
|
)
|
||
Financing activities
|
|
|
|
||||
Repayments of borrowings under Credit Agreement
|
—
|
|
|
(123,000
|
)
|
||
Borrowings under Credit Agreement
|
95,000
|
|
|
70,000
|
|
||
Proceeds from issuance of common stock
|
—
|
|
|
146,510
|
|
||
Swing sale profit contribution
|
—
|
|
|
24
|
|
||
Cost to issue equity
|
—
|
|
|
(11,599
|
)
|
||
Proceeds from stock options exercised
|
—
|
|
|
2,660
|
|
||
Taxes paid related to net share settlement of stock-based compensation
|
(1
|
)
|
|
—
|
|
||
Payment of dividends - Class B
|
—
|
|
|
(96
|
)
|
||
Net cash provided by financing activities
|
94,999
|
|
|
84,499
|
|
||
Increase (decrease) in cash
|
3,010
|
|
|
(852
|
)
|
||
Cash at beginning of period
|
2,095
|
|
|
10,284
|
|
||
Cash at end of period
|
$
|
5,105
|
|
|
$
|
9,432
|
|
Supplemental disclosures of cash flow information (Note 10)
|
|
|
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
2013
|
|
2012
|
|
2013
|
|
2012
|
|||||||||
Net income (loss) — numerator
|
|
|
|
|
|
|
|
||||||||
Net income (loss)
|
$
|
25,119
|
|
|
$
|
(6,676
|
)
|
|
$
|
9,615
|
|
|
$
|
(2,875
|
)
|
Less dividends to Class B shareholders — distributed earnings
|
—
|
|
|
—
|
|
|
—
|
|
|
(28
|
)
|
||||
Undistributed earnings (loss)
|
$
|
25,119
|
|
|
$
|
(6,676
|
)
|
|
$
|
9,615
|
|
|
$
|
(2,903
|
)
|
Weighted average common shares outstanding — denominator
|
|
|
|
|
|
|
|
||||||||
Basic
|
|
|
|
|
|
|
|
||||||||
Class A
|
55,839
|
|
|
55,271
|
|
|
55,729
|
|
|
52,434
|
|
||||
Class B
|
—
|
|
|
—
|
|
|
—
|
|
|
210
|
|
||||
Total
|
55,839
|
|
|
55,271
|
|
|
55,729
|
|
|
52,644
|
|
||||
Diluted
|
|
|
|
|
|
|
|
||||||||
Class A
|
|
|
|
|
|
|
|
||||||||
Weighted average common shares outstanding for basic earnings
|
|
|
|
|
|
|
|
|
|
||||||
(loss) per share
|
55,839
|
|
|
55,271
|
|
|
55,729
|
|
|
52,434
|
|
||||
Dilutive effect of options and restricted stock units
|
98
|
|
|
—
|
|
|
90
|
|
|
—
|
|
||||
Class A weighted average common shares outstanding - diluted
|
55,937
|
|
|
55,271
|
|
|
55,819
|
|
|
52,434
|
|
||||
Class B
|
|
|
|
|
|
|
|
||||||||
Weighted average common shares outstanding – no associated
|
|
|
|
|
|
|
|
|
|||||||
dilutive shares
|
—
|
|
|
—
|
|
|
—
|
|
|
210
|
|
||||
Total diluted weighted average common shares outstanding
|
55,937
|
|
|
55,271
|
|
|
55,819
|
|
|
52,644
|
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
2013
|
|
2012
|
|
2013
|
|
2012
|
|||||||||
Earnings (loss) per common share
|
|
|
|
|
|
|
|
||||||||
Basic
|
|
|
|
|
|
|
|
||||||||
Class A
|
|
|
|
|
|
|
|
||||||||
Distributed earnings
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Undistributed earnings (loss)
|
$
|
0.45
|
|
|
$
|
(0.12
|
)
|
|
$
|
0.17
|
|
|
$
|
(0.06
|
)
|
Total
|
$
|
0.45
|
|
|
$
|
(0.12
|
)
|
|
$
|
0.17
|
|
|
$
|
(0.06
|
)
|
Class B
|
|
|
|
|
|
|
|
||||||||
Distributed earnings
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
0.13
|
|
Undistributed earnings
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(0.06
|
)
|
Total
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
0.07
|
|
Diluted
|
|
|
|
|
|
|
|
||||||||
Class A
|
|
|
|
|
|
|
|
||||||||
Distributed earnings
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Undistributed earnings (loss)
|
$
|
0.45
|
|
|
$
|
(0.12
|
)
|
|
$
|
0.17
|
|
|
$
|
(0.06
|
)
|
Total
|
$
|
0.45
|
|
|
$
|
(0.12
|
)
|
|
$
|
0.17
|
|
|
$
|
(0.06
|
)
|
Class B
|
|
|
|
|
|
|
|
||||||||
Distributed earnings
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
0.13
|
|
Undistributed earnings
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(0.06
|
)
|
Total
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
0.07
|
|
|
|
||
Beginning asset retirement obligations
|
$
|
5,769
|
|
Liabilities incurred during period
|
214
|
|
|
Liabilities settled during period
|
(1
|
)
|
|
Revisions in estimated cash flows
|
542
|
|
|
Accretion expense
|
161
|
|
|
Ending asset retirement obligations
|
6,685
|
|
|
Less: current asset retirement obligations
(1)
|
(804
|
)
|
|
Long-term asset retirement obligations
|
$
|
5,881
|
|
(1)
|
Included in accrued liabilities in the Company’s unaudited condensed consolidated balance sheet at
June 30, 2013
.
|
•
|
incur indebtedness or grant liens on any of its assets;
|
•
|
enter into commodity hedging agreements;
|
•
|
declare or pay dividends, distributions or redemptions;
|
•
|
merge or consolidate;
|
•
|
make any loans or investments;
|
•
|
engage in transactions with affiliates; and
|
•
|
engage in certain asset dispositions, including a sale of all or substantially all of its assets.
|
•
|
failure to pay any principal or interest on the notes or any reimbursement obligation under any letter of credit when due or any fees or other amounts within certain grace periods;
|
•
|
failure to perform or otherwise comply with the covenants and obligations in the Credit Agreement or other loan documents, subject, in certain instances, to certain grace periods;
|
•
|
bankruptcy or insolvency events involving the Company or its subsidiaries; and
|
•
|
a change of control, as defined in the Credit Agreement.
|
Commodity
|
Calculation Period
|
|
Notional
Quantity
(Bbl/month)
|
|
Price Floor
($/Bbl)
|
|
Price
Ceiling
($/Bbl)
|
|
Fair Value of
Asset
(Liability)
(thousands)
|
|||||
Oil
|
07/01/2013 - 12/31/2013
|
|
20,000
|
|
|
85.00
|
|
|
102.25
|
|
|
$
|
(9
|
)
|
Oil
|
07/01/2013 - 12/31/2013
|
|
20,000
|
|
|
85.00
|
|
|
108.80
|
|
|
84
|
|
|
Oil
|
07/01/2013 - 12/31/2013
|
|
20,000
|
|
|
85.00
|
|
|
110.40
|
|
|
94
|
|
|
Oil
|
07/01/2013 - 12/31/2013
|
|
20,000
|
|
|
90.00
|
|
|
102.80
|
|
|
126
|
|
|
Oil
|
07/01/2013 - 12/31/2013
|
|
20,000
|
|
|
90.00
|
|
|
115.00
|
|
|
224
|
|
|
Oil
|
07/01/2013 - 06/30/2014
|
|
8,000
|
|
|
90.00
|
|
|
114.00
|
|
|
336
|
|
|
Oil
|
07/01/2013 - 06/30/2014
|
|
12,000
|
|
|
90.00
|
|
|
115.50
|
|
|
513
|
|
|
Oil
|
01/01/2014 - 12/31/2014
|
|
15,000
|
|
|
85.00
|
|
|
97.50
|
|
|
248
|
|
|
Oil
|
01/01/2014 - 12/31/2014
|
|
30,000
|
|
|
85.00
|
|
|
98.00
|
|
|
546
|
|
|
Oil
|
01/01/2014 - 12/31/2014
|
|
15,000
|
|
|
87.00
|
|
|
97.00
|
|
|
349
|
|
|
Oil
|
01/01/2014 - 12/31/2014
|
|
20,000
|
|
|
88.00
|
|
|
95.60
|
|
|
444
|
|
|
Oil
|
01/01/2014 - 12/31/2014
|
|
20,000
|
|
|
90.00
|
|
|
97.00
|
|
|
763
|
|
|
Oil
|
01/01/2014 - 12/31/2014
|
|
15,000
|
|
|
90.00
|
|
|
97.90
|
|
|
642
|
|
|
Oil
|
01/01/2014 - 12/31/2014
|
|
15,000
|
|
|
90.00
|
|
|
98.00
|
|
|
637
|
|
|
Total open oil costless collar contracts
|
|
|
|
|
|
|
|
4,997
|
|
Commodity
|
Calculation Period
|
|
Notional
Quantity
(MMBtu/month)
|
|
Price Floor
($/MMBtu)
|
|
Price
Ceiling
($/MMBtu)
|
|
Fair Value of
Asset
(Liability)
(thousands)
|
||||
Natural Gas
|
07/01/2013 - 07/31/2013
|
|
150,000
|
|
|
4.50
|
|
|
5.75
|
|
|
119
|
|
Natural Gas
|
07/01/2013 - 12/31/2013
|
|
100,000
|
|
|
3.00
|
|
|
3.83
|
|
|
(57
|
)
|
Natural Gas
|
07/01/2013 - 12/31/2013
|
|
100,000
|
|
|
3.00
|
|
|
4.95
|
|
|
9
|
|
Natural Gas
|
07/01/2013 - 12/31/2013
|
|
100,000
|
|
|
3.00
|
|
|
4.96
|
|
|
10
|
|
Natural Gas
|
07/01/2013 - 12/31/2013
|
|
150,000
|
|
|
3.00
|
|
|
4.24
|
|
|
(25
|
)
|
Natural Gas
|
07/01/2013 - 12/31/2013
|
|
100,000
|
|
|
3.25
|
|
|
4.41
|
|
|
14
|
|
Natural Gas
|
07/01/2013 - 12/31/2013
|
|
100,000
|
|
|
3.25
|
|
|
4.44
|
|
|
16
|
|
Natural Gas
|
07/01/2013 - 12/31/2013
|
|
100,000
|
|
|
3.50
|
|
|
4.37
|
|
|
55
|
|
Natural Gas
|
08/01/2013 - 12/31/2013
|
|
80,000
|
|
|
3.75
|
|
|
4.57
|
|
|
104
|
|
Natural Gas
|
01/01/2014 - 12/31/2014
|
|
100,000
|
|
|
3.00
|
|
|
5.15
|
|
|
(26
|
)
|
Natural Gas
|
01/01/2014 - 12/31/2014
|
|
100,000
|
|
|
3.25
|
|
|
5.21
|
|
|
45
|
|
Natural Gas
|
01/01/2014 - 12/31/2014
|
|
100,000
|
|
|
3.25
|
|
|
5.22
|
|
|
45
|
|
Natural Gas
|
01/01/2014 - 12/31/2014
|
|
100,000
|
|
|
3.25
|
|
|
5.37
|
|
|
64
|
|
Natural Gas
|
01/01/2014 - 12/31/2014
|
|
100,000
|
|
|
3.25
|
|
|
5.42
|
|
|
68
|
|
Natural Gas
|
01/01/2014 - 12/31/2014
|
|
100,000
|
|
|
3.50
|
|
|
4.90
|
|
|
98
|
|
Natural Gas
|
01/01/2014 - 12/31/2014
|
|
100,000
|
|
|
3.75
|
|
|
4.77
|
|
|
200
|
|
Natural Gas
|
01/01/2015 - 12/31/2015
|
|
200,000
|
|
|
3.75
|
|
|
5.04
|
|
|
207
|
|
Total open natural gas costless collar contracts
|
|
|
|
|
|
|
|
946
|
|
Commodity
|
Calculation Period
|
|
Notional Quantity
(Bbl/month)
|
|
Fixed Price
($/Bbl)
|
|
Fair Value of
Liability
(thousands)
|
|||
Oil
|
07/01/2013 - 12/31/2013
|
|
10,000
|
|
|
90.20
|
|
|
(295
|
)
|
Oil
|
07/01/2013 - 12/31/2013
|
|
10,000
|
|
|
90.65
|
|
|
(269
|
)
|
Total open oil swap contracts
|
|
|
|
|
|
|
(564
|
)
|
Commodity
|
Calculation Period
|
|
Notional Quantity
(Gal/month)
|
|
Fixed Price
($/Gal)
|
|
Fair Value of Asset
(thousands)
|
||||
Purity Ethane
|
07/01/2013 - 12/31/2013
|
|
110,000
|
|
|
0.335
|
|
|
57
|
|
|
Purity Ethane
|
07/01/2013 - 12/31/2013
|
|
110,000
|
|
|
0.355
|
|
|
71
|
|
|
Propane
|
07/01/2013 - 12/31/2013
|
|
53,000
|
|
|
0.953
|
|
|
30
|
|
|
Propane
|
07/01/2013 - 12/31/2013
|
|
106,000
|
|
|
0.960
|
|
|
65
|
|
|
Propane
|
07/01/2013 - 12/31/2013
|
|
53,000
|
|
|
1.001
|
|
|
45
|
|
|
Propane
|
01/01/2014 - 12/31/2014
|
|
116,000
|
|
|
0.950
|
|
|
141
|
|
|
Normal Butane
|
07/01/2013 - 12/31/2013
|
|
14,700
|
|
|
1.455
|
|
|
22
|
|
|
Normal Butane
|
07/01/2013 - 12/31/2013
|
|
14,700
|
|
|
1.560
|
|
|
32
|
|
|
Normal Butane
|
07/01/2013 - 12/31/2013
|
|
21,000
|
|
|
1.575
|
|
|
47
|
|
|
Normal Butane
|
07/01/2013 - 12/31/2013
|
|
117,000
|
|
|
1.575
|
|
|
268
|
|
|
Normal Butane
|
01/01/2014 - 12/31/2014
|
|
17,500
|
|
|
1.540
|
|
|
75
|
|
|
Normal Butane
|
01/01/2014 - 12/31/2014
|
|
45,500
|
|
|
1.550
|
|
|
211
|
|
|
Isobutane
|
07/01/2013 - 12/31/2013
|
|
7,000
|
|
|
1.515
|
|
|
11
|
|
|
Isobutane
|
07/01/2013 - 12/31/2013
|
|
7,000
|
|
|
1.625
|
|
|
16
|
|
|
Isobutane
|
07/01/2013 - 12/31/2013
|
|
43,500
|
|
|
1.675
|
|
|
110
|
|
|
Isobutane
|
07/01/2013 - 12/31/2013
|
|
23,000
|
|
|
1.675
|
|
|
62
|
|
|
Isobutane
|
01/01/2014 - 12/31/2014
|
|
22,000
|
|
|
1.640
|
|
|
114
|
|
|
Isobutane
|
01/01/2014 - 12/31/2014
|
|
37,000
|
|
|
1.640
|
|
|
184
|
|
|
Natural Gasoline
|
07/01/2013 - 12/31/2013
|
|
12,000
|
|
|
2.025
|
|
|
4
|
|
|
Natural Gasoline
|
07/01/2013 - 12/31/2013
|
|
12,000
|
|
|
2.085
|
|
|
8
|
|
|
Natural Gasoline
|
07/01/2013 - 12/31/2013
|
|
12,000
|
|
|
2.102
|
|
|
9
|
|
|
Natural Gasoline
|
07/01/2013 - 12/31/2013
|
|
36,000
|
|
|
2.105
|
|
|
29
|
|
|
Natural Gasoline
|
07/01/2013 - 12/31/2013
|
|
90,500
|
|
|
2.148
|
|
|
98
|
|
|
Natural Gasoline
|
01/01/2014 - 12/31/2014
|
|
30,000
|
|
|
1.970
|
|
|
32
|
|
|
Natural Gasoline
|
01/01/2014 - 12/31/2014
|
|
41,000
|
|
|
2.000
|
|
|
60
|
|
|
Total open NGL swap contracts
|
|
|
|
|
|
1,801
|
|
||||
Total open derivative financial instruments
|
|
|
|
|
|
$
|
7,180
|
|
Derivative Instruments
|
Gross
amounts of
recognized
assets
|
|
Gross amounts
netted in the
consolidated
balance sheet
|
|
Net amounts of
assets
presented in the
consolidated
balance sheet
|
|
Amounts subject to master netting arrangements presented on a gross basis
|
||||||||
Counterparty A
|
|
|
|
|
|
|
|
||||||||
Current assets
|
$
|
3,682
|
|
|
$
|
(1,823
|
)
|
|
$
|
1,859
|
|
|
$
|
—
|
|
Other assets
|
2,858
|
|
|
(1,467
|
)
|
|
1,391
|
|
|
—
|
|
||||
Counterparty B
|
|
|
|
|
|
|
|
||||||||
Current assets
|
2,239
|
|
|
(1,264
|
)
|
|
975
|
|
|
257
|
|
||||
Other assets
|
2,859
|
|
|
(1,510
|
)
|
|
1,349
|
|
|
—
|
|
||||
Counterparty C
|
|
|
|
|
|
|
|
||||||||
Current assets
|
2,231
|
|
|
(1,087
|
)
|
|
1,144
|
|
|
—
|
|
||||
Other assets
|
1,699
|
|
|
(980
|
)
|
|
719
|
|
|
—
|
|
||||
Total
|
$
|
15,568
|
|
|
$
|
(8,131
|
)
|
|
$
|
7,437
|
|
|
$
|
257
|
|
Derivative Instruments
|
Gross
amounts of
recognized
liabilities
|
|
Gross amounts
netted in the
consolidated
balance sheet
|
|
Net amounts of
liabilities
presented in the
consolidated
balance sheet
|
|
Amounts subject to master netting arrangements presented on a gross basis
|
||||||||
Counterparty A
|
|
|
|
|
|
|
|
||||||||
Current liabilities
|
$
|
1,823
|
|
|
$
|
(1,823
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
Long-term liabilities
|
1,467
|
|
|
(1,467
|
)
|
|
—
|
|
|
—
|
|
||||
Counterparty B
|
|
|
|
|
|
|
|
||||||||
Current liabilities
|
1,521
|
|
|
(1,264
|
)
|
|
257
|
|
|
257
|
|
||||
Long-term liabilities
|
1,510
|
|
|
(1,510
|
)
|
|
—
|
|
|
—
|
|
||||
Counterparty C
|
|
|
|
|
|
|
|
||||||||
Current liabilities
|
1,087
|
|
|
(1,087
|
)
|
|
—
|
|
|
—
|
|
||||
Long-term liabilities
|
980
|
|
|
(980
|
)
|
|
—
|
|
|
—
|
|
||||
Total
|
$
|
8,388
|
|
|
$
|
(8,131
|
)
|
|
$
|
257
|
|
|
$
|
257
|
|
Derivative Instruments
|
Gross
amounts of
recognized
assets
|
|
Gross amounts
netted in the
condensed
consolidated
balance sheet
|
|
Net amounts of
assets
presented in the
consolidated
balance sheet
|
|
Amounts subject to master netting arrangements presented on a gross basis
|
||||||||
Counterparty A
|
|
|
|
|
|
|
|
||||||||
Current assets
|
$
|
6,445
|
|
|
$
|
(2,373
|
)
|
|
$
|
4,072
|
|
|
$
|
—
|
|
Other assets
|
1,096
|
|
|
(370
|
)
|
|
726
|
|
|
—
|
|
||||
Counterparty B
|
|
|
|
|
|
|
|
||||||||
Current assets
|
530
|
|
|
(224
|
)
|
|
306
|
|
|
82
|
|
||||
Other assets
|
384
|
|
|
(339
|
)
|
|
45
|
|
|
—
|
|
||||
Total
|
$
|
8,455
|
|
|
$
|
(3,306
|
)
|
|
$
|
5,149
|
|
|
$
|
82
|
|
Derivative Instruments
|
Gross
amounts of
recognized
liabilities
|
|
Gross amounts
netted in the
condensed
consolidated
balance sheet
|
|
Net amounts of
liabilities
presented in the
condensed
consolidated
balance sheet
|
|
Amounts subject to master netting arrangements presented on a gross basis
|
||||||||
Counterparty A
|
|
|
|
|
|
|
|
||||||||
Current liabilities
|
$
|
2,373
|
|
|
$
|
(2,373
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
Long-term liabilities
|
370
|
|
|
(370
|
)
|
|
—
|
|
|
—
|
|
||||
Counterparty B
|
|
|
|
|
|
|
|
||||||||
Current liabilities
|
894
|
|
|
(224
|
)
|
|
670
|
|
|
82
|
|
||||
Long-term liabilities
|
339
|
|
|
(339
|
)
|
|
—
|
|
|
—
|
|
||||
Total
|
$
|
3,976
|
|
|
$
|
(3,306
|
)
|
|
$
|
670
|
|
|
$
|
82
|
|
|
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
Type of Instrument
|
Location in Condensed Consolidated Statement of Operations
|
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
Derivative Instrument
|
|
|
|
|
|
|
|
|
|
||||||||
Oil
|
Revenues: Realized (loss) gain on derivatives
|
|
$
|
(228
|
)
|
|
$
|
719
|
|
|
$
|
(465
|
)
|
|
$
|
719
|
|
Natural Gas
|
Revenues: Realized gain on derivatives
|
|
105
|
|
|
3,994
|
|
|
629
|
|
|
7,057
|
|
||||
NGL’s
|
Revenues: Realized gain on derivatives
|
|
377
|
|
|
—
|
|
|
482
|
|
|
—
|
|
||||
Realized gain on derivatives
|
|
254
|
|
|
4,713
|
|
|
646
|
|
|
7,776
|
|
|||||
Oil
|
Revenues: Unrealized gain on derivatives
|
|
4,042
|
|
|
20,483
|
|
|
1,314
|
|
|
15,223
|
|
||||
Natural Gas
|
Revenues: Unrealized gain (loss) on derivatives
|
|
2,323
|
|
|
(5,369
|
)
|
|
(189
|
)
|
|
(3,379
|
)
|
||||
NGL’s
|
Revenues: Unrealized gain on derivatives
|
|
1,161
|
|
|
—
|
|
|
1,576
|
|
|
—
|
|
||||
Unrealized gain on derivatives
|
|
7,526
|
|
|
15,114
|
|
|
2,701
|
|
|
11,844
|
|
|||||
Total
|
|
|
$
|
7,780
|
|
|
$
|
19,827
|
|
|
$
|
3,347
|
|
|
$
|
19,620
|
|
Level 1
|
Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. Active markets are considered to be those in which transactions for the assets or liabilities occur in sufficient frequency and volume to provide pricing information on an ongoing basis.
|
Level 2
|
Quoted prices in markets that are not active, or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability. This category includes those derivative instruments that are valued using observable market data. Substantially all of these inputs are observable in the marketplace throughout the full term of the derivative instrument, can be derived from observable data or supported by observable levels at which transactions are executed in the marketplace.
|
Level 3
|
Unobservable inputs that are not corroborated by market data. This category is comprised of financial and non-financial assets and liabilities whose fair value is estimated based on internally developed models or methodologies using significant inputs that are generally less readily observable from objective sources.
|
|
Fair Value Measurements at
June 30, 2013 using
|
||||||||||||||
Description
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Assets (Liabilities)
|
|
|
|
|
|
|
|
||||||||
Certificates of deposit
|
$
|
—
|
|
|
$
|
61
|
|
|
$
|
—
|
|
|
$
|
61
|
|
Oil, natural gas and NGL derivatives
|
—
|
|
|
7,437
|
|
|
—
|
|
|
7,437
|
|
||||
Oil, natural gas and NGL derivatives
|
—
|
|
|
(257
|
)
|
|
—
|
|
|
(257
|
)
|
||||
Total
|
$
|
—
|
|
|
$
|
7,241
|
|
|
$
|
—
|
|
|
$
|
7,241
|
|
|
Fair Value Measurements at
December 31, 2012 using
|
||||||||||||||
Description
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Assets (Liabilities)
|
|
|
|
|
|
|
|
||||||||
Certificates of deposit
|
$
|
—
|
|
|
$
|
230
|
|
|
$
|
—
|
|
|
$
|
230
|
|
Oil, natural gas and NGL derivatives
|
—
|
|
|
5,149
|
|
|
—
|
|
|
5,149
|
|
||||
Oil, natural gas and NGL derivatives
|
—
|
|
|
(670
|
)
|
|
—
|
|
|
(670
|
)
|
||||
Total
|
$
|
—
|
|
|
$
|
4,709
|
|
|
$
|
—
|
|
|
$
|
4,709
|
|
|
Fair Value Measurements at
June 30, 2013 using
|
||||||||||||||
Description
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Assets (Liabilities)
|
|
|
|
|
|
|
|
||||||||
Asset retirement obligations
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(756
|
)
|
|
$
|
(756
|
)
|
Lease and well equipment inventory
|
—
|
|
|
—
|
|
|
21
|
|
|
21
|
|
||||
Total
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(735
|
)
|
|
$
|
(735
|
)
|
|
Fair Value Measurements at
December 31, 2012 using
|
||||||||||||||
Description
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Assets (Liabilities)
|
|
|
|
|
|
|
|
||||||||
Asset retirement obligations
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(1,243
|
)
|
|
$
|
(1,243
|
)
|
Lease and well equipment inventory
|
—
|
|
|
—
|
|
|
34
|
|
|
34
|
|
||||
Total
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(1,209
|
)
|
|
$
|
(1,209
|
)
|
|
June 30,
2013 |
|
December 31,
2012
|
||||
Accrued evaluated and unproved and unevaluated property costs
|
$
|
38,297
|
|
|
$
|
45,592
|
|
Accrued support equipment and facilities costs
|
467
|
|
|
1,382
|
|
||
Accrued stock-based compensation
|
—
|
|
|
65
|
|
||
Accrued lease operating expenses
|
5,823
|
|
|
5,218
|
|
||
Accrued interest on borrowings under Credit Agreement
|
186
|
|
|
255
|
|
||
Accrued asset retirement obligations
|
804
|
|
|
660
|
|
||
Accrued partners’ share of joint interest charges
|
131
|
|
|
3,597
|
|
||
Other
|
2,804
|
|
|
2,410
|
|
||
Total accrued liabilities
|
$
|
48,512
|
|
|
$
|
59,179
|
|
|
Six Months Ended
June 30, |
||||||
|
2013
|
|
2012
|
||||
Cash paid for interest expense, net of amounts capitalized
|
$
|
1,817
|
|
|
$
|
226
|
|
Asset retirement obligations related to mineral properties
|
751
|
|
|
293
|
|
||
Asset retirement obligations related to support equipment and facilities
|
4
|
|
|
33
|
|
||
(Decrease) increase in liabilities for oil and natural gas properties capital expenditures
|
(6,859
|
)
|
|
8,995
|
|
||
(Decrease) increase in liabilities for support equipment and facilities
|
(914
|
)
|
|
(215
|
)
|
||
(Decrease) increase in liabilities for accrued cost to issue equity
|
—
|
|
|
(331
|
)
|
||
Issuance of restricted stock units for Board and advisor services
|
87
|
|
|
10
|
|
||
Issuance of common stock for advisor services
|
17
|
|
|
61
|
|
||
Stock-based compensation expense recognized as liability
|
284
|
|
|
(491
|
)
|
||
Transfer of inventory from oil and natural gas properties
|
191
|
|
|
—
|
|
•
|
our business strategy;
|
•
|
our reserves;
|
•
|
our technology;
|
•
|
our cash flows and liquidity;
|
•
|
our financial strategy, budget, projections and operating results;
|
•
|
our oil and natural gas realized prices;
|
•
|
the timing and amount of future production of oil and natural gas;
|
•
|
the availability of drilling and production equipment;
|
•
|
the availability of oil field labor;
|
•
|
the amount, nature and timing of capital expenditures, including future exploration and development costs;
|
•
|
the availability and terms of capital;
|
•
|
our drilling of wells;
|
•
|
government regulation and taxation of the oil and natural gas industry;
|
•
|
our marketing of oil and natural gas;
|
•
|
our exploitation projects or property acquisitions;
|
•
|
our costs of exploiting and developing our properties and conducting other operations;
|
•
|
general economic conditions;
|
•
|
competition in the oil and natural gas industry;
|
•
|
the effectiveness of our risk management and hedging activities;
|
•
|
environmental liabilities;
|
•
|
counterparty credit risk;
|
•
|
developments in oil-producing and natural gas-producing countries;
|
•
|
our future operating results;
|
•
|
estimated future reserves and the present value thereof;
|
•
|
our plans, objectives, expectations and intentions contained in this report that are not historical; and
|
•
|
other factors discussed in the Annual Report.
|
|
June 30,
(1)
2013
|
|
December 31,
(1)
2012
|
|
June 30,
(1)
2012
|
|
|
||||||
Estimated Proved Reserves Data:
(2)
|
|
|
|
|
|
|
|
||||||
Estimated proved reserves:
|
|
|
|
|
|
|
|
||||||
Oil (MBbl)
(3)
|
12,128
|
|
|
10,485
|
|
|
6,728
|
|
|
|
|||
Natural Gas (Bcf)
(4)
|
160.8
|
|
|
80.0
|
|
|
73.9
|
|
|
|
|||
Total (MBOE)
(5)
|
38,931
|
|
|
23,819
|
|
|
19,052
|
|
|
|
|||
Estimated proved developed reserves:
|
|
|
|
|
|
|
|
||||||
Oil (MBbl)
(3)
|
6,591
|
|
|
4,764
|
|
|
3,133
|
|
|
|
|||
Natural Gas (Bcf)
(4)
|
57.8
|
|
|
54.0
|
|
|
54.0
|
|
|
|
|||
Total (MBOE)
(5)
|
16,221
|
|
|
13,771
|
|
|
12,130
|
|
|
|
|||
Percent developed
|
41.7
|
%
|
|
57.8
|
%
|
|
63.7
|
%
|
|
|
|||
Estimated proved undeveloped reserves:
|
|
|
|
|
|
|
|
||||||
Oil (MBbl)
(3)
|
5,537
|
|
|
5,721
|
|
|
3,595
|
|
|
|
|||
Natural Gas (Bcf)
(4)
|
103.0
|
|
|
26.0
|
|
|
20.0
|
|
|
|
|||
Total (MBOE)
(5)
|
22,710
|
|
|
10,048
|
|
|
6,922
|
|
|
|
|||
PV-10
(6)
(in millions)
|
$
|
522.3
|
|
|
$
|
423.2
|
|
|
$
|
303.4
|
|
|
|
Standardized Measure
(7)
(in millions)
|
$
|
477.6
|
|
|
$
|
394.6
|
|
|
$
|
281.5
|
|
|
|
(1)
|
Numbers in table may not total due to rounding.
|
(2)
|
Our estimated proved reserves, PV-10 and Standardized Measure were determined using index prices for oil and natural gas, without giving effect to derivative transactions, and were held constant throughout the life of the properties. The unweighted arithmetic averages of the first-day-of-the-month prices for the period July 2012 through June 2013 were
$88.13
per Bbl for oil and
$3.444
per MMBtu for natural gas, for the period January 2012 through December 2012 were
$91.21
per Bbl for oil and
$2.757
per MMBtu for natural gas and for the period July 2011 through June 2012 were
$92.17
per Bbl for oil and
$3.146
per MMBtu for natural gas. These prices were adjusted by property for quality, energy content, regional price differentials, transportation fees, marketing deductions and other factors affecting the price received at the wellhead. We report our proved reserves in two streams, oil and natural gas, and the economic value of the natural gas liquids associated with the natural gas is included in the estimated wellhead natural gas price on those properties where the natural gas liquids are extracted and sold.
|
(3)
|
One thousand barrels of oil.
|
(4)
|
As a result of substantially lower natural gas prices in 2012, at June 30, 2012, we removed 97.8 Bcf (16.3 million BOE) of previously classified proved undeveloped natural gas reserves in the Haynesville shale in Northwest Louisiana from our total proved reserves, most of which were attributable to non-operated properties. At June 30, 2013, as a result of improved natural gas prices in the period from July 2012 through June 2013, we added 80.1 Bcf (13.3 million BOE) of proved undeveloped natural gas reserves in the Haynesville shale in Northwest Louisiana to our total proved reserves, the majority of which are attributable to non-operated properties.
|
(5)
|
One thousand barrels of oil equivalent, estimated using a conversion ratio of one Bbl of oil per six Mcf of natural gas.
|
(6)
|
PV-10 is a non-GAAP financial measure and generally differs from Standardized Measure, the most directly comparable GAAP financial measure, because it does not include the effects of income taxes on future net revenues. PV-10 is not an estimate of the fair market value of our properties. We and others in the industry use PV-10 as a measure to compare the relative size and value of proved reserves held by companies and of the potential return on investment related to the companies’ properties without regard to the specific tax characteristics of such entities. Our PV-10 at
June 30, 2013
, December 31, 2012 and
June 30, 2012
may be reconciled to the Standardized Measure of discounted future net cash flows at such dates by reducing our PV-10 by the discounted future income taxes associated with such reserves. The discounted future income taxes at
June 30, 2013
,
December 31, 2012
and
June 30, 2012
were, in millions,
$44.7
,
$28.6
and
$21.9
, respectively.
|
(7)
|
Standardized Measure represents the present value of estimated future net cash flows from proved reserves, less estimated future development, production, plugging and abandonment costs and income tax expenses, discounted at 10% per annum
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
(Unaudited)
|
|
(Unaudited)
|
|
(Unaudited)
|
|
(Unaudited)
|
|||||||||
Operating Data:
|
|
|
|
|
|
|
|
||||||||
Revenues (in thousands):
(1)
|
|
|
|
|
|
|
|
||||||||
Oil
|
$
|
44,632
|
|
|
$
|
29,426
|
|
|
$
|
93,302
|
|
|
$
|
50,973
|
|
Natural gas
|
13,547
|
|
|
6,652
|
|
|
24,196
|
|
|
14,269
|
|
||||
Total oil and natural gas revenues
|
58,179
|
|
|
36,078
|
|
|
117,498
|
|
|
65,242
|
|
||||
Realized gain on derivatives
|
254
|
|
|
4,713
|
|
|
646
|
|
|
7,776
|
|
||||
Unrealized gain on derivatives
|
7,526
|
|
|
15,114
|
|
|
2,701
|
|
|
11,844
|
|
||||
Total revenues
|
$
|
65,959
|
|
|
$
|
55,905
|
|
|
$
|
120,845
|
|
|
$
|
84,862
|
|
Net Production Volumes:
(1)
|
|
|
|
|
|
|
|
||||||||
Oil (MBbl)
(2)
|
447
|
|
|
285
|
|
|
908
|
|
|
485
|
|
||||
Natural gas (Bcf)
|
3.1
|
|
|
3.1
|
|
|
6.2
|
|
|
6.2
|
|
||||
Total oil equivalent (MBOE)
(3)
|
963
|
|
|
795
|
|
|
1,944
|
|
|
1,525
|
|
||||
Average daily production (BOE/d)
(3)
|
10,582
|
|
|
8,738
|
|
|
10,739
|
|
|
8,380
|
|
||||
Average Sales Prices:
|
|
|
|
|
|
|
|
||||||||
Oil, with realized derivatives (per Bbl)
|
$
|
99.26
|
|
|
$
|
105.82
|
|
|
$
|
102.27
|
|
|
$
|
106.54
|
|
Oil, without realized derivatives (per Bbl)
|
$
|
99.77
|
|
|
$
|
103.29
|
|
|
$
|
102.78
|
|
|
$
|
105.06
|
|
Natural gas, with realized derivatives (per Mcf)
|
$
|
4.53
|
|
|
$
|
3.48
|
|
|
$
|
4.07
|
|
|
$
|
3.42
|
|
Natural gas, without realized derivatives (per Mcf)
|
$
|
4.38
|
|
|
$
|
2.17
|
|
|
$
|
3.89
|
|
|
$
|
2.29
|
|
(1)
|
We report our production volumes in two streams: oil and natural gas, including both dry and liquids-rich natural gas. Revenues associated with extracted natural gas liquids are included with our natural gas revenues.
|
(2)
|
One thousand barrels of oil.
|
(3)
|
One thousand barrels of oil equivalent, estimated using a conversion ratio of one Bbl of oil per six Mcf of natural gas.
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
(In thousands, except expenses per BOE)
|
(Unaudited)
|
|
(Unaudited)
|
|
(Unaudited)
|
|
(Unaudited)
|
||||||||
Expenses:
|
|
|
|
|
|
|
|
||||||||
Production taxes and marketing
|
$
|
4,451
|
|
|
$
|
2,619
|
|
|
$
|
8,548
|
|
|
$
|
4,783
|
|
Lease operating
|
10,140
|
|
|
6,375
|
|
|
21,040
|
|
|
11,020
|
|
||||
Depletion, depreciation and amortization
|
20,234
|
|
|
19,913
|
|
|
48,466
|
|
|
31,119
|
|
||||
Accretion of asset retirement obligations
|
80
|
|
|
58
|
|
|
161
|
|
|
111
|
|
||||
Full-cost ceiling impairment
|
—
|
|
|
33,205
|
|
|
21,229
|
|
|
33,205
|
|
||||
General and administrative
|
4,149
|
|
|
4,093
|
|
|
8,751
|
|
|
7,882
|
|
||||
Total expenses
|
39,054
|
|
|
66,263
|
|
|
108,195
|
|
|
88,120
|
|
||||
Operating income (loss)
|
26,905
|
|
|
(10,358
|
)
|
|
12,650
|
|
|
(3,258
|
)
|
||||
Other income (expense):
|
|
|
|
|
|
|
|
||||||||
Net loss on asset sales and inventory impairment
|
(192
|
)
|
|
(60
|
)
|
|
(192
|
)
|
|
(60
|
)
|
||||
Interest expense
|
(1,609
|
)
|
|
(1
|
)
|
|
(2,880
|
)
|
|
(309
|
)
|
||||
Interest and other income
|
47
|
|
|
30
|
|
|
115
|
|
|
103
|
|
||||
Total other expense
|
(1,754
|
)
|
|
(31
|
)
|
|
(2,957
|
)
|
|
(266
|
)
|
||||
Income (loss) before income taxes
|
25,151
|
|
|
(10,389
|
)
|
|
9,693
|
|
|
(3,524
|
)
|
||||
Total income tax provision (benefit)
|
32
|
|
|
(3,713
|
)
|
|
78
|
|
|
(649
|
)
|
||||
Net income (loss)
|
$
|
25,119
|
|
|
$
|
(6,676
|
)
|
|
9,615
|
|
|
$
|
(2,875
|
)
|
|
Expenses per BOE:
|
|
|
|
|
|
|
|
||||||||
Production taxes and marketing
|
$
|
4.62
|
|
|
$
|
3.29
|
|
|
$
|
4.40
|
|
|
$
|
3.14
|
|
Lease operating
|
$
|
10.53
|
|
|
$
|
8.02
|
|
|
$
|
10.82
|
|
|
$
|
7.23
|
|
Depletion, depreciation and amortization
|
$
|
21.01
|
|
|
$
|
25.04
|
|
|
$
|
24.93
|
|
|
$
|
20.40
|
|
General and administrative
|
$
|
4.31
|
|
|
$
|
5.15
|
|
|
$
|
4.50
|
|
|
$
|
5.17
|
|
|
Six Months Ended
June 30, |
||||||
|
2013
|
|
2012
|
||||
(In thousands)
|
(Unaudited)
|
|
(Unaudited)
|
||||
Net cash provided by operating activities
|
$
|
83,912
|
|
|
$
|
51,526
|
|
Net cash used in investing activities
|
(175,901
|
)
|
|
(136,877
|
)
|
||
Net cash provided by financing activities
|
94,999
|
|
|
84,499
|
|
||
Net change in cash
|
$
|
3,010
|
|
|
$
|
(852
|
)
|
Adjusted EBITDA
(1)
|
$
|
81,444
|
|
|
$
|
49,264
|
|
(1)
|
Adjusted EBITDA is a non-GAAP financial measure. For a definition of Adjusted EBITDA and a reconciliation of Adjusted EBITDA to our net income (loss) and net cash provided by operating activities, see “Non-GAAP Financial Measures” below.
|
|
Amount
(in millions)
|
||
Exploration, development drilling and completion costs
|
$
|
260.0
|
|
Pipeline and infrastructure expenditures
|
25.0
|
|
|
Leasehold acquisition and 2-D and 3-D seismic data
|
40.0
|
|
|
Total
|
$
|
325.0
|
|
|
Six Months Ended
June 30, |
||||||
(In thousands)
|
2013
|
|
2012
|
||||
Unaudited Adjusted EBITDA Reconciliation to Net Income (Loss):
|
|
|
|
||||
Net income (loss)
|
$
|
9,615
|
|
|
$
|
(2,875
|
)
|
Interest expense
|
2,880
|
|
|
309
|
|
||
Total income tax provision (benefit)
|
78
|
|
|
(649
|
)
|
||
Depletion, depreciation and amortization
|
48,466
|
|
|
31,119
|
|
||
Accretion of asset retirement obligations
|
161
|
|
|
111
|
|
||
Full-cost ceiling impairment
|
21,229
|
|
|
33,205
|
|
||
Unrealized gain on derivatives
|
(2,701
|
)
|
|
(11,844
|
)
|
||
Stock-based compensation expense
|
1,524
|
|
|
(172
|
)
|
||
Net loss on asset sales and inventory impairment
|
192
|
|
|
60
|
|
||
Adjusted EBITDA
|
$
|
81,444
|
|
|
$
|
49,264
|
|
|
Six Months Ended
June 30, |
||||||
(In thousands)
|
2013
|
|
2012
|
||||
Unaudited Adjusted EBITDA Reconciliation to Net Cash Provided by Operating Activities:
|
|
|
|
||||
Net cash provided by operating activities
|
$
|
83,912
|
|
|
$
|
51,526
|
|
Net change in operating assets and liabilities
|
(5,426
|
)
|
|
(2,571
|
)
|
||
Interest expense
|
2,880
|
|
|
309
|
|
||
Current income tax provision
|
78
|
|
|
—
|
|
||
Adjusted EBITDA
|
$
|
81,444
|
|
|
$
|
49,264
|
|
•
|
incur indebtedness or grant liens on any of our assets;
|
•
|
enter into commodity hedging agreements;
|
•
|
declare or pay dividends, distributions or redemptions;
|
•
|
merge or consolidate;
|
•
|
make any loans or investments;
|
•
|
engage in transactions with affiliates; and
|
•
|
engage in certain asset dispositions, including a sale of all or substantially all of our assets.
|
•
|
failure to pay any principal or interest on the notes or any reimbursement obligation under any letter of credit when due or any fees or other amounts within certain grace periods;
|
•
|
failure to perform or otherwise comply with the covenants and obligations in the Credit Agreement or other loan documents, subject, in certain instances, to certain grace periods;
|
•
|
bankruptcy or insolvency events involving us or our subsidiaries; and
|
•
|
a change of control, as defined in the Credit Agreement.
|
|
Payments Due by Period
|
||||||||||||||||||
(In thousands)
|
Total
|
|
Less
Than
1 Year
|
|
1 -3
Years
|
|
3 -5
Years
|
|
More
Than
5 Years
|
||||||||||
Contractual Obligations:
|
|
|
|
|
|
|
|
|
|
||||||||||
Revolving credit borrowings, including letters of credit
(1)
|
$
|
246,195
|
|
|
$
|
1,195
|
|
|
$
|
—
|
|
|
$
|
245,000
|
|
|
$
|
—
|
|
Office lease
|
7,956
|
|
|
773
|
|
|
1,664
|
|
|
1,744
|
|
|
3,775
|
|
|||||
Non-operated drilling commitments
(2)
|
6,598
|
|
|
6,598
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Drilling rig contracts
(3)
|
2,012
|
|
|
2,012
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Asset retirement obligations
|
6,685
|
|
|
804
|
|
|
382
|
|
|
606
|
|
|
4,893
|
|
|||||
Gas processing agreement
(4)
|
13,735
|
|
|
5,735
|
|
|
5,900
|
|
|
2,100
|
|
|
—
|
|
|||||
Total contractual cash obligations
|
$
|
283,181
|
|
|
$
|
17,117
|
|
|
$
|
7,946
|
|
|
$
|
249,450
|
|
|
$
|
8,668
|
|
(1)
|
At
June 30, 2013
, we had
$245.0 million
in revolving borrowings outstanding under our Credit Agreement and approximately
$1.2 million
in outstanding letters of credit issued pursuant to the Credit Agreement. The revolving borrowings are scheduled to mature in December 2016. These amounts do not include estimated interest on the obligations because our revolving borrowings have short-term interest periods, and we are unable to determine what our borrowing costs may be in future periods.
|
(2)
|
At
June 30, 2013
, we had outstanding commitments to participate in the drilling and completion of various non-operated wells. Our working interests in these wells are typically small, and most of these wells were in progress at
June 30, 2013
. If all of these wells are drilled and completed, we will have minimum outstanding aggregate commitments for our participation in these wells of approximately
$6.6 million
at
June 30, 2013
, which we expect to incur within the next few months.
|
(3)
|
From time to time, we enter into contracts with third parties for drilling rigs. These contracts establish daily rates for the drilling rigs and the term of our commitments for the drilling services to be provided, which are typically for one year or less. Should we elect to terminate a contract and if the drilling contractor were unable to secure work for the contracted drilling rigs or if the drilling contractor were unable to secure work for the contracted drilling rigs at the same daily rates being charged to us prior to the end of their respective contract terms, we would incur termination obligations. Our maximum outstanding aggregate termination obligations under our drilling rig contracts were approximately
$2.0 million
at
June 30, 2013
. In July 2013, we entered into a contract for an additional drilling rig to continue to explore and develop our acreage in the Eagle Ford shale in South Texas. Drilling operations under this contract are scheduled to commence in late August 2013 and the term of the contract is 180 days from the commencement date. Should we elect to terminate this contract and if the drilling contractor were unable to secure work for the rig or if the drilling contractor were unable to secure work for the rig at the same daily rate being charged to us, we would incur termination obligations. Our maximum termination obligation under this contract was approximately
$2.7 million
at August 8, 2013.
|
(4)
|
Effective September 1, 2012, we entered into a firm five-year natural gas processing and transportation agreement for a significant portion of our operated natural gas production in South Texas. The undiscounted minimum commitments under this agreement total approximately
$13.7 million
at
June 30, 2013
.
|
Commodity
|
Calculation Period
|
|
Notional
Quantity
(Bbl/month)
|
|
Price Floor
($/Bbl)
|
|
Price
Ceiling
($/Bbl)
|
|
Fair Value of
Asset
(Liability)
(thousands)
|
|||||
Oil
|
07/01/2013 - 12/31/2013
|
|
20,000
|
|
|
85.00
|
|
|
102.25
|
|
|
$
|
(9
|
)
|
Oil
|
07/01/2013 - 12/31/2013
|
|
20,000
|
|
|
85.00
|
|
|
108.80
|
|
|
84
|
|
|
Oil
|
07/01/2013 - 12/31/2013
|
|
20,000
|
|
|
85.00
|
|
|
110.40
|
|
|
94
|
|
|
Oil
|
07/01/2013 - 12/31/2013
|
|
20,000
|
|
|
90.00
|
|
|
102.80
|
|
|
126
|
|
|
Oil
|
07/01/2013 - 12/31/2013
|
|
20,000
|
|
|
90.00
|
|
|
115.00
|
|
|
224
|
|
|
Oil
|
07/01/2013 - 06/30/2014
|
|
8,000
|
|
|
90.00
|
|
|
114.00
|
|
|
336
|
|
|
Oil
|
07/01/2013 - 06/30/2014
|
|
12,000
|
|
|
90.00
|
|
|
115.50
|
|
|
513
|
|
|
Oil
|
01/01/2014 - 12/31/2014
|
|
15,000
|
|
|
85.00
|
|
|
97.50
|
|
|
248
|
|
|
Oil
|
01/01/2014 - 12/31/2014
|
|
30,000
|
|
|
85.00
|
|
|
98.00
|
|
|
546
|
|
|
Oil
|
01/01/2014 - 12/31/2014
|
|
15,000
|
|
|
87.00
|
|
|
97.00
|
|
|
349
|
|
|
Oil
|
01/01/2014 - 12/31/2014
|
|
20,000
|
|
|
88.00
|
|
|
95.60
|
|
|
444
|
|
|
Oil
|
01/01/2014 - 12/31/2014
|
|
20,000
|
|
|
90.00
|
|
|
97.00
|
|
|
763
|
|
|
Oil
|
01/01/2014 - 12/31/2014
|
|
15,000
|
|
|
90.00
|
|
|
97.90
|
|
|
642
|
|
|
Oil
|
01/01/2014 - 12/31/2014
|
|
15,000
|
|
|
90.00
|
|
|
98.00
|
|
|
637
|
|
|
Total open oil costless collar contracts
|
|
|
|
|
|
|
|
4,997
|
|
Commodity
|
Calculation Period
|
|
Notional
Quantity
(MMBtu/month)
|
|
Price Floor
($/MMBtu)
|
|
Price
Ceiling
($/MMBtu)
|
|
Fair Value
of Asset
(Liability)
(thousands)
|
||||
Natural Gas
|
07/01/2013 - 07/31/2013
|
|
150,000
|
|
|
4.50
|
|
|
5.75
|
|
|
119
|
|
Natural Gas
|
07/01/2013 - 12/31/2013
|
|
100,000
|
|
|
3.00
|
|
|
3.83
|
|
|
(57
|
)
|
Natural Gas
|
07/01/2013 - 12/31/2013
|
|
100,000
|
|
|
3.00
|
|
|
4.95
|
|
|
9
|
|
Natural Gas
|
07/01/2013 - 12/31/2013
|
|
100,000
|
|
|
3.00
|
|
|
4.96
|
|
|
10
|
|
Natural Gas
|
07/01/2013 - 12/31/2013
|
|
150,000
|
|
|
3.00
|
|
|
4.24
|
|
|
(25
|
)
|
Natural Gas
|
07/01/2013 - 12/31/2013
|
|
100,000
|
|
|
3.25
|
|
|
4.41
|
|
|
14
|
|
Natural Gas
|
07/01/2013 - 12/31/2013
|
|
100,000
|
|
|
3.25
|
|
|
4.44
|
|
|
16
|
|
Natural Gas
|
07/01/2013 - 12/31/2013
|
|
100,000
|
|
|
3.50
|
|
|
4.37
|
|
|
55
|
|
Natural Gas
|
08/01/2013 - 12/31/2013
|
|
80,000
|
|
|
3.75
|
|
|
4.57
|
|
|
104
|
|
Natural Gas
|
01/01/2014 - 12/31/2014
|
|
100,000
|
|
|
3.00
|
|
|
5.15
|
|
|
(26
|
)
|
Natural Gas
|
01/01/2014 - 12/31/2014
|
|
100,000
|
|
|
3.25
|
|
|
5.21
|
|
|
45
|
|
Natural Gas
|
01/01/2014 - 12/31/2014
|
|
100,000
|
|
|
3.25
|
|
|
5.22
|
|
|
45
|
|
Natural Gas
|
01/01/2014 - 12/31/2014
|
|
100,000
|
|
|
3.25
|
|
|
5.37
|
|
|
64
|
|
Natural Gas
|
01/01/2014 - 12/31/2014
|
|
100,000
|
|
|
3.25
|
|
|
5.42
|
|
|
68
|
|
Natural Gas
|
01/01/2014 - 12/31/2014
|
|
100,000
|
|
|
3.50
|
|
|
4.90
|
|
|
98
|
|
Natural Gas
|
01/01/2014 - 12/31/2014
|
|
100,000
|
|
|
3.75
|
|
|
4.77
|
|
|
200
|
|
Natural Gas
|
01/01/2015 - 12/31/2015
|
|
200,000
|
|
|
3.75
|
|
|
5.04
|
|
|
207
|
|
Total open natural gas costless collar contracts
|
|
|
|
|
|
|
|
946
|
|
Commodity
|
Calculation Period
|
|
Notional Quantity
(Bbl/month)
|
|
Fixed Price
($/Bbl)
|
|
Fair Value of
Liability
(thousands)
|
|||
Oil
|
07/01/2013 - 12/31/2013
|
|
10,000
|
|
|
90.20
|
|
|
(295
|
)
|
Oil
|
07/01/2013 - 12/31/2013
|
|
10,000
|
|
|
90.65
|
|
|
(269
|
)
|
Total open oil swap contracts
|
|
|
|
|
|
|
(564
|
)
|
Commodity
|
Calculation Period
|
|
Notional Quantity
(Gal/month)
|
|
Fixed Price
($/Gal)
|
|
Fair Value of Asset
(thousands)
|
||||
Purity Ethane
|
07/01/2013 - 12/31/2013
|
|
110,000
|
|
|
0.335
|
|
|
57
|
|
|
Purity Ethane
|
07/01/2013 - 12/31/2013
|
|
110,000
|
|
|
0.355
|
|
|
71
|
|
|
Propane
|
07/01/2013 - 12/31/2013
|
|
53,000
|
|
|
0.953
|
|
|
30
|
|
|
Propane
|
07/01/2013 - 12/31/2013
|
|
106,000
|
|
|
0.960
|
|
|
65
|
|
|
Propane
|
07/01/2013 - 12/31/2013
|
|
53,000
|
|
|
1.001
|
|
|
45
|
|
|
Propane
|
01/01/2014 - 12/31/2014
|
|
116,000
|
|
|
0.950
|
|
|
141
|
|
|
Normal Butane
|
07/01/2013 - 12/31/2013
|
|
14,700
|
|
|
1.455
|
|
|
22
|
|
|
Normal Butane
|
07/01/2013 - 12/31/2013
|
|
14,700
|
|
|
1.560
|
|
|
32
|
|
|
Normal Butane
|
07/01/2013 - 12/31/2013
|
|
21,000
|
|
|
1.575
|
|
|
47
|
|
|
Normal Butane
|
07/01/2013 - 12/31/2013
|
|
117,000
|
|
|
1.575
|
|
|
268
|
|
|
Normal Butane
|
01/01/2014 - 12/31/2014
|
|
17,500
|
|
|
1.540
|
|
|
75
|
|
|
Normal Butane
|
01/01/2014 - 12/31/2014
|
|
45,500
|
|
|
1.550
|
|
|
211
|
|
|
Isobutane
|
07/01/2013 - 12/31/2013
|
|
7,000
|
|
|
1.515
|
|
|
11
|
|
|
Isobutane
|
07/01/2013 - 12/31/2013
|
|
7,000
|
|
|
1.625
|
|
|
16
|
|
|
Isobutane
|
07/01/2013 - 12/31/2013
|
|
43,500
|
|
|
1.675
|
|
|
110
|
|
|
Isobutane
|
07/01/2013 - 12/31/2013
|
|
23,000
|
|
|
1.675
|
|
|
62
|
|
|
Isobutane
|
01/01/2014 - 12/31/2014
|
|
22,000
|
|
|
1.640
|
|
|
114
|
|
|
Isobutane
|
01/01/2014 - 12/31/2014
|
|
37,000
|
|
|
1.640
|
|
|
184
|
|
|
Natural Gasoline
|
07/01/2013 - 12/31/2013
|
|
12,000
|
|
|
2.025
|
|
|
4
|
|
|
Natural Gasoline
|
07/01/2013 - 12/31/2013
|
|
12,000
|
|
|
2.085
|
|
|
8
|
|
|
Natural Gasoline
|
07/01/2013 - 12/31/2013
|
|
12,000
|
|
|
2.102
|
|
|
9
|
|
|
Natural Gasoline
|
07/01/2013 - 12/31/2013
|
|
36,000
|
|
|
2.105
|
|
|
29
|
|
|
Natural Gasoline
|
07/01/2013 - 12/31/2013
|
|
90,500
|
|
|
2.148
|
|
|
98
|
|
|
Natural Gasoline
|
01/01/2014 - 12/31/2014
|
|
30,000
|
|
|
1.970
|
|
|
32
|
|
|
Natural Gasoline
|
01/01/2014 - 12/31/2014
|
|
41,000
|
|
|
2.000
|
|
|
60
|
|
|
Total open NGL swap contracts
|
|
|
|
|
|
1,801
|
|
||||
Total open derivative financial instruments
|
|
|
|
|
|
$
|
7,180
|
|
|
|
|
MATADOR RESOURCES COMPANY
|
|
|
|
|
Date: August 9, 2013
|
By:
|
|
/s/ Joseph Wm. Foran
|
|
|
|
Joseph Wm. Foran
|
|
|
|
Chairman, President and Chief Executive Officer
|
Date: August 9, 2013
|
By:
|
|
/s/ David E. Lancaster
|
|
|
|
David E. Lancaster
|
|
|
|
Executive Vice President, Chief Operating Officer and
Chief Financial Officer
|
Exhibit
Number
|
|
Description
|
|
|
|
||
10.1
|
|
|
Second Amendment to Third Amended and Restated Credit Agreement, dated as of June 4, 2013, by and among MRC Energy Company, as Borrower, the Lenders party thereto and Royal Bank of Canada, as Administrative Agent (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed June 6, 2013).
|
|
|
||
10.2
|
|
|
Third Amendment to Third Amended and Restated Credit Agreement, dated as of August 7, 2013, by and among MRC Energy Company, as Borrower, the Lenders party thereto and Royal Bank of Canada, as Administrative Agent (filed herewith).
|
|
|
|
|
10.3**
|
|
|
First Amendment to Purchase Sale and Participation Agreement, dated as of June 12, 2013, by and between MRC Energy Company and Orca/ICI Development (filed herewith).
|
|
|
||
23.1
|
|
Consent of Netherland, Sewell & Associates, Inc. (filed herewith).
|
|
|
|
||
31.1
|
|
Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).
|
|
|
|
||
31.2
|
|
Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).
|
|
|
|
||
32.1
|
|
Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (filed herewith).
|
|
|
|
||
32.2
|
|
Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (filed herewith).
|
|
|
|
||
99.1
|
|
Audit report of Netherland, Sewell & Associates, Inc. (filed herewith).
|
|
|
|
||
101*
|
|
The following financial information from Matador Resources Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2013, formatted in XBRL (eXtensible Business Reporting Language): (i) the Condensed Consolidated Balance Sheets - Unaudited, (ii) the Condensed Consolidated Statements of Operations - Unaudited, (iii) the Condensed Consolidated Statement of Changes in Shareholders’ Equity - Unaudited, (iv) the Condensed Consolidated Statements of Cash Flows - Unaudited and (v) the Notes to Condensed Consolidated Financial Statements - Unaudited (submitted electronically herewith).
|
*
|
In accordance with Rule 406T of Regulation S-T, the XBRL information in Exhibit 101 to this quarterly report on Form 10-Q shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (“Exchange Act”), or otherwise subject to the liability of that section, and shall not be incorporated by reference into any registration statement or other document filed under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.
|
|
|
**
|
Portions of this exhibit have been omitted pursuant to a request for confidential treatment. The omitted portions have been filed separately with the SEC.
|
BORROWER:
|
|
||
|
|
|
|
MRC ENERGY COMPANY,
|
|
||
as Borrower
|
|
||
|
|
|
|
By:
|
|
/s/ David E. Lancaster
|
|
Name:
|
|
David E. Lancaster
|
|
Title:
|
|
Executive Vice President
|
|
ROYAL BANK OF CANADA,
|
|
||
as Administrative Agent
|
|
||
|
|
|
|
By:
|
|
/s/ Rodica Dutka
|
|
Name:
|
|
Rodica Dutka
|
|
Title:
|
|
Manager, Agency
|
|
ROYAL BANK OF CANADA,
|
|
||
as a Lender and as an Issuing Lender
|
|
||
|
|
|
|
By:
|
|
/s/ Don J. McKinnerney
|
|
Name:
|
|
Don J. McKinnerney
|
|
Title:
|
|
Authorized Signatory
|
|
CITIBANK, N.A.,
|
|
||
as a Lender
|
|
||
|
|
|
|
By:
|
|
/s/ Ryan Watson
|
|
Name:
|
|
Ryan Watson
|
|
Title:
|
|
Senior Vice President
|
|
COMERICA BANK,
|
|
||
as a Lender and as an Issuing Lender
|
|
||
|
|
|
|
By:
|
|
/s/ Brandon M. White
|
|
Name:
|
|
Brandon M. White
|
|
Title:
|
|
Assistant Vice President
|
|
SUNTRUST BANK,
|
|
||
as a Lender
|
|
||
|
|
|
|
By:
|
|
/s/ Shannon Juhan
|
|
Name:
|
|
Shannon Juhan
|
|
Title:
|
|
Vice President
|
|
THE BANK OF NOVA SCOTIA,
|
|
||
as a Lender
|
|
||
|
|
|
|
By:
|
|
/s/ Terry Donovan
|
|
Name:
|
|
Terry Donovan
|
|
Title:
|
|
Managing Director
|
|
BMO Harris Financing, Inc.,
|
|
||
as a Lender
|
|
||
|
|
|
|
By:
|
|
/s/ James V. Ducote
|
|
Name:
|
|
James V. Ducote
|
|
Title:
|
|
Director
|
|
CAPITAL ONE, N.A.,
|
|
||
as a Lender
|
|
||
|
|
|
|
By:
|
|
/s/ Matthew Molero
|
|
Name:
|
|
Matthew Molero
|
|
Title:
|
|
Vice President
|
|
IBERIABANK,
|
|
||
as a Lender
|
|
||
|
|
|
|
By:
|
|
/s/ W. Bryan Chapman
|
|
Name:
|
|
W. Bryan Chapman
|
|
Title:
|
|
EVP & Energy Lending Manager
|
|
Basis for Pricing
|
Level I
|
Level II
|
Level III
|
Level IV
|
Level V
|
Level VI
|
Level VII
|
Borrowing Base Utilization*
|
< 25%
|
≥ 25% but
< 50%
|
≥ 50% but
< 75%
|
≥ 75% but
< 90%
|
≥ 90% but
< 100%
|
>
100% but < 110%
|
>
110%
|
Revolving Credit Eurodollar Margin
|
175
|
200
|
225
|
250
|
275
|
325
|
400
|
Revolving Credit Base Rate Margin
|
75
|
100
|
125
|
150
|
175
|
225
|
300
|
Commitment Fees
|
37.5
|
37.5
|
50
|
50
|
50
|
50
|
50
|
Letter of Credit Fees (exclusive of fronting fees)
|
175
|
200
|
225
|
250
|
275
|
325
|
400
|
*
|
Definitions as set forth in the Credit Agreement.
|
LENDERS
|
REVOLVING CREDIT
ALLOCATIONS
|
REVOLVING CREDIT
PERCENTAGE
|
Royal Bank of Canada
|
$60,882,353.19
|
17.3949580500%
|
Comerica Bank
|
$50,000,000.00
|
14.2857142900%
|
SunTrust Bank
|
$50,000,000.00
|
14.2857142900%
|
Citibank, N.A.
|
$50,000,000.00
|
14.2857142900%
|
The Bank of Nova Scotia
|
$50,000,000.00
|
14.2857142900%
|
BMO Harris Financing, Inc.
|
$50,000,000.00
|
14.2857142900%
|
Capital One, N.A.
|
$21,960,784.31
|
6.2745098000%
|
IBERIABANK
|
$17,156,862.50
|
4.9019607100%
|
TOTALS
|
$350,000,000.00
|
100.00%
|
GUARANTORS
:
|
|
||
|
|
|
|
MRC PERMIAN COMPANY
|
|
||
|
|
||
|
|
|
|
By:
|
|
|
|
Name:
|
|
David E. Lancaster
|
|
Title:
|
|
Executive Vice President
|
|
MRC ROCKIES COMPANY
|
|
||
|
|
||
|
|
|
|
By:
|
|
|
|
Name:
|
|
David E. Lancaster
|
|
Title:
|
|
Executive Vice President
|
|
MATADOR PRODUCTION COMPANY
|
|
||
|
|
||
|
|
|
|
By:
|
|
|
|
Name:
|
|
David E. Lancaster
|
|
Title:
|
|
Executive Vice President
|
|
LONGWOOD GATHERING AND
|
|
||
DISPOSAL SYSTEMS GP, INC.
|
|
||
|
|
|
|
By:
|
|
|
|
Name:
|
|
David E. Lancaster
|
|
Title:
|
|
Executive Vice President
|
|
LONGWOOD GATHERING AND
|
|
||
DISPOSAL SYSTEMS, LP
|
|
||
|
|
|
|
By:
|
|
Longwood Gathering and Disposal
|
|
|
|
Systems GP, Inc., its General Partner
|
|
|
|
|
|
By:
|
|
|
|
Name:
|
|
David E. Lancaster
|
|
Title:
|
|
Executive Vice President
|
|
MATADOR RESOURCES COMPANY
|
|
||
|
|
||
|
|
|
|
By:
|
|
|
|
Name:
|
|
David E. Lancaster
|
|
Title:
|
|
Executive Vice President
|
|
|
|
Exhibit 23.1
|
|
|
|
NETHERLAND, SEWELL & ASSOCIATES, INC.
|
||
|
|
|
By:
|
|
/s/ C.H. (Scott) Rees III
|
|
|
C.H. (Scott) Rees III, P.E.
|
|
|
Chairman and Chief Executive Officer
|
August 9, 2013
|
/s/ Joseph Wm. Foran
|
|
|
Joseph Wm. Foran
|
|
|
Chairman, President and Chief Executive Officer
(Principal Executive Officer)
|
|
August 9, 2013
|
/s/ David E. Lancaster
|
|
|
David E. Lancaster
Executive Vice President, Chief Operating Officer and Chief
Financial Officer
(Principal Financial Officer)
|
|
August 9, 2013
|
/s/ Joseph Wm. Foran
|
|
|
Joseph Wm. Foran
|
|
|
Chairman, President and Chief Executive Officer
(Principal Executive Officer)
|
|
August 9, 2013
|
/s/ David E. Lancaster
|
|
|
David E. Lancaster
|
|
|
Executive Vice President, Chief Operating Officer and Chief Financial Officer
(Principal Financial Officer)
|
|
|
|
Net Reserves
|
|
Future Net Revenue (M$)
|
||||
|
|
Oil
|
|
Gas
|
|
|
|
Present Worth
|
Category
|
|
(MBBL)
|
|
(MMCF)
|
|
Total
|
|
at 10%
|
|
|
|
|
|
|
|
|
|
Proved Developed Producing
|
|
6,585
|
|
57,017
|
|
601,213
|
|
395,293
|
Proved Developed Non-Producing
|
|
6
|
|
763
|
|
1,324
|
|
790
|
Proved Undeveloped
|
|
5,537
|
|
103,040
|
|
316,570
|
|
126,212
|
|
|
|
|
|
|
|
|
|
Total Proved
|
|
12,128
|
|
160,820
|
|
919,107
|
|
522,295
|