|
|
|
|
Delaware
|
|
46-3472728
|
(State or Other Jurisdiction of
Incorporation or Organization)
|
|
(I.R.S. Employer
Identification No.)
|
|
|
|
1001 Louisiana Street
Houston, Texas
|
|
77002
|
(Address of Principal Executive Offices)
|
|
(Zip Code)
|
|
Title of each class
|
|
Trading Symbol(s)
|
|
Name of each exchange on which registered
|
Class A Common Stock,
par value $0.01 per share
|
|
EPEG
|
|
N/A
|
Large accelerated filer
o
|
|
Non-accelerated filer
o
|
|
Emerging Growth Company
o
|
Accelerated filer
x
|
|
Smaller reporting company
x
|
|
|
|
Caption
|
Page
|
|
|
||
|
|
|
|
|
|
|
||
|
|
|
|
/d
|
=
|
per day
|
Bbl
|
=
|
barrel
|
Boe
|
=
|
barrel of oil equivalent
|
LLS
|
=
|
light Louisiana sweet crude oil
|
MBoe
|
=
|
thousand barrels of oil equivalent
|
MBbls
|
=
|
thousand barrels
|
Mcf
|
=
|
thousand cubic feet
|
MMBtu
|
=
|
million British thermal units
|
MMBbls
|
=
|
million barrels
|
MMcf
|
=
|
million cubic feet
|
MMGal
|
=
|
million gallons
|
Mt. Belvieu
|
=
|
Mont Belvieu natural gas liquids pricing index
|
NGLs
|
=
|
natural gas liquids
|
NYMEX
|
=
|
New York Mercantile Exchange
|
TBtu
|
=
|
trillion British thermal units
|
WTI
|
=
|
West Texas intermediate
|
|
Quarter ended
June 30, |
|
Six months ended
June 30, |
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Operating revenues
|
|
|
|
|
|
|
|
|
|
|
|
||||
Oil
|
$
|
204
|
|
|
$
|
281
|
|
|
$
|
397
|
|
|
$
|
533
|
|
Natural gas
|
8
|
|
|
18
|
|
|
26
|
|
|
40
|
|
||||
NGLs
|
15
|
|
|
30
|
|
|
33
|
|
|
56
|
|
||||
Financial derivatives
|
29
|
|
|
(64
|
)
|
|
(66
|
)
|
|
(78
|
)
|
||||
Total operating revenues
|
256
|
|
|
265
|
|
|
390
|
|
|
551
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Operating expenses
|
|
|
|
|
|
|
|
|
|
|
|
||||
Transportation costs
|
23
|
|
|
26
|
|
|
48
|
|
|
51
|
|
||||
Lease operating expense
|
30
|
|
|
38
|
|
|
67
|
|
|
77
|
|
||||
General and administrative
|
43
|
|
|
28
|
|
|
64
|
|
|
47
|
|
||||
Depreciation, depletion and amortization
|
94
|
|
|
129
|
|
|
188
|
|
|
249
|
|
||||
Exploration and other expense
|
1
|
|
|
—
|
|
|
2
|
|
|
1
|
|
||||
Taxes, other than income taxes
|
20
|
|
|
21
|
|
|
31
|
|
|
41
|
|
||||
Total operating expenses
|
211
|
|
|
242
|
|
|
400
|
|
|
466
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Operating income (loss)
|
45
|
|
|
23
|
|
|
(10
|
)
|
|
85
|
|
||||
Gain on extinguishment/modification of debt
|
—
|
|
|
7
|
|
|
10
|
|
|
48
|
|
||||
Interest expense
|
(95
|
)
|
|
(88
|
)
|
|
(190
|
)
|
|
(173
|
)
|
||||
Loss before income taxes
|
(50
|
)
|
|
(58
|
)
|
|
(190
|
)
|
|
(40
|
)
|
||||
Income tax expense
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Net loss
|
$
|
(50
|
)
|
|
$
|
(58
|
)
|
|
$
|
(190
|
)
|
|
$
|
(40
|
)
|
|
|
|
|
|
|
|
|
||||||||
Basic and diluted net income (loss) per common share
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net loss
|
$
|
(0.20
|
)
|
|
$
|
(0.23
|
)
|
|
$
|
(0.76
|
)
|
|
$
|
(0.16
|
)
|
Basic and diluted weighted average common shares outstanding
|
250
|
|
|
248
|
|
|
249
|
|
|
247
|
|
|
June 30, 2019
|
|
December 31, 2018
|
||||
ASSETS
|
|
|
|
|
|
||
Current assets
|
|
|
|
|
|
||
Cash and cash equivalents
|
$
|
52
|
|
|
$
|
27
|
|
Accounts receivable
|
|
|
|
|
|
||
Customer, net of allowance of less than $1 in 2019 and 2018
|
115
|
|
|
164
|
|
||
Other, net of allowance of $1 in 2019 and 2018
|
11
|
|
|
66
|
|
||
Materials and supplies
|
28
|
|
|
22
|
|
||
Derivative instruments
|
24
|
|
|
101
|
|
||
Other
|
31
|
|
|
5
|
|
||
Total current assets
|
261
|
|
|
385
|
|
||
Property, plant and equipment, at cost
|
|
|
|
|
|
||
Oil and natural gas properties
|
7,625
|
|
|
7,344
|
|
||
Other property, plant and equipment
|
76
|
|
|
81
|
|
||
|
7,701
|
|
|
7,425
|
|
||
Less accumulated depreciation, depletion and amortization
|
3,813
|
|
|
3,651
|
|
||
Total property, plant and equipment, net
|
3,888
|
|
|
3,774
|
|
||
Other assets
|
|
|
|
|
|
||
Derivative instruments
|
10
|
|
|
13
|
|
||
Unamortized debt issue costs - revolving credit facility
|
6
|
|
|
8
|
|
||
Operating lease assets and other
|
25
|
|
|
1
|
|
||
|
41
|
|
|
22
|
|
||
Total assets
|
$
|
4,190
|
|
|
$
|
4,181
|
|
|
June 30, 2019
|
|
December 31, 2018
|
||||
LIABILITIES AND EQUITY
|
|
|
|
|
|
||
Current liabilities
|
|
|
|
|
|
||
Current maturities of long-term debt, net of debt issue costs
|
$
|
182
|
|
|
$
|
58
|
|
Owner and royalties payable
|
75
|
|
|
144
|
|
||
Accounts payable and accrued expenses
|
154
|
|
|
105
|
|
||
Accrued interest
|
69
|
|
|
70
|
|
||
Accrued legal and other reserves
|
44
|
|
|
47
|
|
||
Other accrued liabilities
|
21
|
|
|
16
|
|
||
Total current liabilities
|
545
|
|
|
440
|
|
||
|
|
|
|
||||
Long-term debt, net of debt issue costs
|
4,365
|
|
|
4,285
|
|
||
Other long-term liabilities
|
|
|
|
|
|
||
Asset retirement obligations
|
41
|
|
|
39
|
|
||
Lease obligations and other
|
24
|
|
|
16
|
|
||
Total non-current liabilities
|
4,430
|
|
|
4,340
|
|
||
|
|
|
|
||||
Commitments and contingencies (Note 7)
|
|
|
|
|
|
||
|
|
|
|
||||
Stockholders’ equity
|
|
|
|
|
|
||
Class A shares, $0.01 par value; 550 million shares authorized; 256 million shares issued and 255 million outstanding at June 30, 2019; 256 million shares issued and outstanding at December 31, 2018
|
3
|
|
|
3
|
|
||
Class B shares, $0.01 par value; less than one million shares authorized, issued and outstanding at June 30, 2019 and December 31, 2018
|
—
|
|
|
—
|
|
||
Preferred stock, $0.01 par value; 50 million shares authorized; no shares issued or outstanding
|
—
|
|
|
—
|
|
||
Treasury stock (at cost), one million and less than one million shares at June 30, 2019 and December 31, 2018, respectively
|
(1
|
)
|
|
(1
|
)
|
||
Additional paid-in capital
|
3,540
|
|
|
3,536
|
|
||
Accumulated deficit
|
(4,327
|
)
|
|
(4,137
|
)
|
||
Total stockholders’ equity
|
(785
|
)
|
|
(599
|
)
|
||
Total liabilities and equity
|
$
|
4,190
|
|
|
$
|
4,181
|
|
|
Six months ended
June 30, |
||||||
|
2019
|
|
2018
|
||||
Cash flows from operating activities
|
|
|
|
|
|
||
Net loss
|
$
|
(190
|
)
|
|
$
|
(40
|
)
|
Adjustments to reconcile net loss to net cash provided by operating activities
|
|
|
|
|
|
||
Depreciation, depletion and amortization
|
188
|
|
|
249
|
|
||
Gain on extinguishment/modification of debt
|
(10
|
)
|
|
(48
|
)
|
||
Other non-cash income items
|
14
|
|
|
13
|
|
||
Asset and liability changes
|
|
|
|
|
|
||
Accounts receivable
|
103
|
|
|
(28
|
)
|
||
Owner and royalties payable
|
(68
|
)
|
|
5
|
|
||
Accounts payable and accrued expenses
|
12
|
|
|
(22
|
)
|
||
Derivative instruments
|
80
|
|
|
57
|
|
||
Accrued interest
|
(1
|
)
|
|
7
|
|
||
Other asset changes
|
(32
|
)
|
|
11
|
|
||
Other liability changes
|
(12
|
)
|
|
13
|
|
||
Net cash provided by operating activities
|
84
|
|
|
217
|
|
||
|
|
|
|
||||
Cash flows from investing activities
|
|
|
|
|
|
||
Cash paid for capital expenditures
|
(249
|
)
|
|
(384
|
)
|
||
Proceeds from the sale of assets
|
—
|
|
|
169
|
|
||
Cash paid for acquisitions
|
(15
|
)
|
|
(239
|
)
|
||
Net cash used in investing activities
|
(264
|
)
|
|
(454
|
)
|
||
|
|
|
|
||||
Cash flows from financing activities
|
|
|
|
|
|
||
Proceeds from issuance of long-term debt
|
615
|
|
|
1,665
|
|
||
Repayments and repurchases of long-term debt
|
(408
|
)
|
|
(1,291
|
)
|
||
Fees/costs on debt exchange
|
—
|
|
|
(62
|
)
|
||
Debt issue costs
|
—
|
|
|
(20
|
)
|
||
Other
|
(2
|
)
|
|
(1
|
)
|
||
Net cash provided by financing activities
|
205
|
|
|
291
|
|
||
|
|
|
|
||||
Change in cash, cash equivalents and restricted cash
|
25
|
|
|
54
|
|
||
|
|
|
|
|
|
||
Cash, cash equivalents and restricted cash - beginning of period
|
27
|
|
|
45
|
|
||
Cash, cash equivalents and restricted cash - end of period
|
$
|
52
|
|
|
$
|
99
|
|
|
Class A Stock
|
|
Class B Stock
|
|
Treasury Stock
|
|
Additional
Paid-in Capital
|
|
Retained Earnings (Accumulated Deficit)
|
|
|
||||||||||||||||||
|
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
|
|
|
|
Total
|
|||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Balance at December 31, 2017
|
252
|
|
|
$
|
3
|
|
|
0.3
|
|
|
$
|
—
|
|
|
$
|
(3
|
)
|
|
$
|
3,526
|
|
|
$
|
(3,134
|
)
|
|
$
|
392
|
|
Share-based compensation
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
1
|
|
|
—
|
|
|
—
|
|
||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
18
|
|
|
18
|
|
||||||
Balance at March 31, 2018
|
251
|
|
|
$
|
3
|
|
|
0.3
|
|
|
$
|
—
|
|
|
$
|
(4
|
)
|
|
$
|
3,527
|
|
|
$
|
(3,116
|
)
|
|
$
|
410
|
|
Share-based compensation
|
6
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4
|
|
|
(1
|
)
|
|
—
|
|
|
3
|
|
||||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(58
|
)
|
|
(58
|
)
|
||||||
Balance at June 30, 2018
|
257
|
|
|
$
|
3
|
|
|
0.3
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3,526
|
|
|
$
|
(3,174
|
)
|
|
$
|
355
|
|
Share-based compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6
|
|
|
—
|
|
|
6
|
|
||||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(44
|
)
|
|
(44
|
)
|
||||||
Balance at September 30, 2018
|
257
|
|
|
$
|
3
|
|
|
0.3
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3,532
|
|
|
$
|
(3,218
|
)
|
|
$
|
317
|
|
Share-based compensation
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
4
|
|
|
—
|
|
|
3
|
|
||||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
—
|
|
|
(919
|
)
|
|
(919
|
)
|
|||||||
Balance at December 31, 2018
|
256
|
|
|
$
|
3
|
|
|
0.3
|
|
|
$
|
—
|
|
|
$
|
(1
|
)
|
|
$
|
3,536
|
|
|
$
|
(4,137
|
)
|
|
$
|
(599
|
)
|
Share-based compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3
|
|
|
—
|
|
|
3
|
|
||||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(140
|
)
|
|
(140
|
)
|
||||||
Balance at March 31, 2019
|
256
|
|
|
$
|
3
|
|
|
0.3
|
|
|
$
|
—
|
|
|
$
|
(1
|
)
|
|
$
|
3,539
|
|
|
$
|
(4,277
|
)
|
|
$
|
(736
|
)
|
Share-based compensation
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
||||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(50
|
)
|
|
(50
|
)
|
||||||
Balance at June 30, 2019
|
255
|
|
|
$
|
3
|
|
|
0.3
|
|
|
$
|
—
|
|
|
$
|
(1
|
)
|
|
$
|
3,540
|
|
|
$
|
(4,327
|
)
|
|
$
|
(785
|
)
|
|
June 30, 2019
|
|
December 31, 2018
|
||||||||||||
|
Carrying
Amount
|
|
Fair
Value
|
|
Carrying
Amount
|
|
Fair
Value
|
||||||||
|
(in millions)
|
||||||||||||||
Current maturities of long-term debt
|
$
|
182
|
|
|
$
|
7
|
|
|
$
|
58
|
|
|
$
|
44
|
|
|
|
|
|
|
|
|
|
||||||||
Long-term debt (see Note 6)
|
$
|
4,453
|
|
|
$
|
2,051
|
|
|
$
|
4,380
|
|
|
$
|
2,532
|
|
|
|
|
|
|
|
|
|
||||||||
Derivative instruments
|
$
|
34
|
|
|
$
|
34
|
|
|
$
|
114
|
|
|
$
|
114
|
|
|
Level 2
|
||||||||||||||||||||||||||||||
|
Derivative Assets
|
|
Derivative Liabilities
|
||||||||||||||||||||||||||||
|
Gross
Fair Value
|
|
|
|
Balance Sheet Location
|
|
Gross
Fair Value
|
|
|
|
Balance Sheet Location
|
||||||||||||||||||||
|
|
Impact of
Netting
|
|
Current
|
|
Non-
current
|
|
|
Impact of
Netting
|
|
Current
|
|
Non-
current
|
||||||||||||||||||
|
(in millions)
|
|
(in millions)
|
||||||||||||||||||||||||||||
June 30, 2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Derivative instruments
|
$
|
38
|
|
|
$
|
(4
|
)
|
|
$
|
24
|
|
|
$
|
10
|
|
|
$
|
(4
|
)
|
|
$
|
4
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
December 31, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Derivative instruments
|
$
|
116
|
|
|
$
|
(2
|
)
|
|
$
|
101
|
|
|
$
|
13
|
|
|
$
|
(2
|
)
|
|
$
|
2
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
June 30, 2019
|
|
December 31, 2018
|
|||||
|
(in millions)
|
|||||||
Proved
|
|
|
|
|||||
Eagle Ford
|
$
|
4,132
|
|
|
$
|
3,898
|
|
|
Permian
|
1,789
|
|
|
1,787
|
|
|||
Northeastern Utah
|
1,704
|
|
|
1,659
|
|
|||
Total Proved
|
7,625
|
|
|
7,344
|
|
|||
Less accumulated depletion
|
(3,772
|
)
|
|
(3,607
|
)
|
|||
Net capitalized costs for oil and natural gas properties
|
$
|
3,853
|
|
|
$
|
3,737
|
|
|
2019
|
||
|
(in millions)
|
||
Net asset retirement liability at January 1
|
$
|
42
|
|
Accretion expense
|
2
|
|
|
Net asset retirement liability at June 30
|
$
|
44
|
|
|
Interest Rate
|
|
June 30, 2019
|
|
December 31, 2018
|
||||
|
|
|
(in millions)
|
||||||
RBL credit facility - due November 23, 2021
(1)
|
Variable
|
|
$
|
355
|
|
|
$
|
100
|
|
Senior secured term loans:
|
|
|
|
|
|
||||
2.0 Lien due April 30, 2019
(2)
|
Variable
|
|
—
|
|
|
8
|
|
||
Senior secured notes:
|
|
|
|
|
|
||||
1.5 Lien due May 1, 2024
|
9.375%
|
|
1,092
|
|
|
1,092
|
|
||
1.25 Lien due November 29, 2024
|
8.000%
|
|
500
|
|
|
500
|
|
||
1.5 Lien due February 15, 2025
|
8.000%
|
|
1,000
|
|
|
1,000
|
|
||
1.125 Lien due May 15, 2026
|
7.750%
|
|
1,000
|
|
|
1,000
|
|
||
Senior unsecured notes:
|
|
|
|
|
|
||||
Due May 1, 2020
|
9.375%
|
|
182
|
|
|
232
|
|
||
Due September 1, 2022
|
7.75%
|
|
182
|
|
|
182
|
|
||
Due June 15, 2023
|
6.375%
|
|
324
|
|
|
324
|
|
||
Total debt
|
|
|
4,635
|
|
|
4,438
|
|
||
Current maturities of long-term debt, net of debt issue costs of less than $1 million
|
|
|
(182
|
)
|
|
(58
|
)
|
||
Total long-term debt
|
|
|
4,453
|
|
|
4,380
|
|
||
Less debt discount and non-current portion of unamortized debt issue costs
(3)
|
|
|
(88
|
)
|
|
(95
|
)
|
||
Total long-term debt, net
|
|
|
$
|
4,365
|
|
|
$
|
4,285
|
|
|
(1)
|
Carries interest at a specified margin over
LIBOR
of
2.50%
to
3.50%
, based on borrowing utilization.
|
(3)
|
Includes debt discount of
$39 million
and
$42 million
as of
June 30, 2019
and
December 31, 2018
, respectively, associated with our 1.5 Lien Notes maturing in 2024 and unamortized debt issue costs of
$49 million
and
$53 million
as of
June 30, 2019
and
December 31, 2018
, respectively.
|
|
|
Quarter ended June 30,
|
|
Six months ended June 30,
|
||||||||
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||
|
|
(in millions)
|
||||||||||
Debt repurchased- face value
(1)
|
|
—
|
|
|
19
|
|
|
50
|
|
|
19
|
|
Cash paid
|
|
—
|
|
|
10
|
|
|
40
|
|
|
10
|
|
Gain on extinguishment of debt
|
|
—
|
|
|
9
|
|
|
10
|
|
|
9
|
|
Other losses on extinguishment of debt
(2)
|
|
—
|
|
|
(2
|
)
|
|
—
|
|
|
(2
|
)
|
|
|
|
June 30, 2019
|
||
|
|
(in millions)
|
||
Operating lease assets
(1)(4)
|
|
$
|
23
|
|
Finance lease assets
(2)
|
|
11
|
|
|
Total lease assets
|
|
$
|
34
|
|
|
|
|
||
Operating leases
(3)(4)
|
|
|
||
Current liability
|
|
$
|
10
|
|
Noncurrent liability
|
|
13
|
|
|
Total operating lease liability
|
|
$
|
23
|
|
Finance leases
(3)
|
|
|
||
Current liability
|
|
$
|
2
|
|
Noncurrent liability
|
|
9
|
|
|
Total finance lease liability
|
|
$
|
11
|
|
|
|
|
||
Weighted average remaining lease term
|
|
|
||
Operating leases
|
|
4 years
|
|
|
Finance leases
|
|
4 years
|
|
|
Weighted average discount rate
|
|
|
||
Operating leases
|
|
9.37
|
%
|
|
Finance leases
|
|
26.52
|
%
|
|
(1)
|
Operating lease assets are reflected in
Operating lease assets and other
in our consolidated balance sheet as of
June 30, 2019
.
|
(2)
|
Finance lease assets are reflected in
Other property, plant and equipment
in our consolidated balance sheet as of
June 30, 2019
.
|
(3)
|
Current and noncurrent operating and finance lease liabilities are reflected in
Other accrued liabilities
and
Lease obligations and other,
respectively, in our consolidated balance sheet as of
June 30, 2019
.
|
(4)
|
Upon adoption of ASU 2016-02 effective January 1, 2019, we recognized operating leases of approximately $10 million. For the six months ended
June 30, 2019
, we also recorded an additional $16 million of operating leases.
|
|
|
Operating Leases
|
|
Finance Leases
|
||||
|
|
(in millions)
|
||||||
2019
|
|
$
|
6
|
|
|
$
|
2
|
|
2020
|
|
10
|
|
|
5
|
|
||
2021
|
|
3
|
|
|
5
|
|
||
2022
|
|
2
|
|
|
5
|
|
||
Thereafter
|
|
6
|
|
|
2
|
|
||
Total
|
|
$
|
27
|
|
|
$
|
19
|
|
Less: imputed interest
|
|
(4
|
)
|
|
(8
|
)
|
||
Present value of operating and finance lease obligations
|
|
$
|
23
|
|
|
$
|
11
|
|
|
|
Number of Shares
|
|
Weighted Average
Grant Date Fair Value
per Share
|
|||
Non-vested at December 31, 2018
|
|
7,060,334
|
|
|
$
|
2.69
|
|
Granted
|
|
103,000
|
|
|
$
|
0.70
|
|
Vested
|
|
(1,112,910
|
)
|
|
$
|
4.93
|
|
Forfeited
|
|
(754,623
|
)
|
|
$
|
2.60
|
|
Non-vested at June 30, 2019
|
|
5,295,801
|
|
|
$
|
2.24
|
|
|
|
2019
|
|
2020
|
||||||||||
|
|
Volumes
(1)
|
|
Average
Price
(1)
|
|
Volumes
(1)
|
|
Average
Price
(1)
|
||||||
Oil
|
|
|
|
|
|
|
|
|
|
|
||||
Collars
|
|
|
|
|
|
|
|
|
||||||
Ceiling - WTI
|
|
736
|
|
|
$
|
69.78
|
|
|
—
|
|
|
$
|
—
|
|
Floors - WTI
|
|
736
|
|
|
$
|
57.50
|
|
|
—
|
|
|
$
|
—
|
|
Three Way Collars
|
|
|
|
|
|
|
|
|
||||||
Ceiling - WTI
|
|
6,072
|
|
|
$
|
66.01
|
|
|
11,712
|
|
|
$
|
65.11
|
|
Floors - WTI
|
|
6,072
|
|
|
$
|
55.76
|
|
|
11,712
|
|
|
$
|
55.90
|
|
Sub-Floor - WTI
|
|
6,072
|
|
|
$
|
45.00
|
|
|
11,712
|
|
|
$
|
45.00
|
|
Basis Swaps
|
|
|
|
|
|
|
|
|
||||||
Midland vs. Cushing
(2)
|
|
736
|
|
|
$
|
(5.23
|
)
|
|
1,464
|
|
|
$
|
0.46
|
|
NYMEX Roll
(3)
|
|
244
|
|
|
$
|
0.25
|
|
|
—
|
|
|
$
|
—
|
|
Natural Gas
|
|
|
|
|
|
|
|
|
||||||
Fixed Price Swaps
|
|
6
|
|
|
$
|
3.01
|
|
|
—
|
|
|
$
|
—
|
|
Collars
|
|
|
|
|
|
|
|
|
||||||
Ceiling
|
|
7
|
|
|
$
|
4.26
|
|
|
—
|
|
|
$
|
—
|
|
Floors
|
|
7
|
|
|
$
|
2.75
|
|
|
—
|
|
|
$
|
—
|
|
Basis Swaps
|
|
|
|
|
|
|
|
|
||||||
WAHA vs. Henry Hub
(4)
|
|
4
|
|
|
$
|
(0.39
|
)
|
|
—
|
|
|
$
|
—
|
|
|
(1)
|
Volumes presented are MBbls for oil and TBtu for natural gas. Prices presented are per Bbl of oil and MMBtu of natural gas.
|
(2)
|
EP Energy receives Cushing plus the basis spread listed and pays Midland.
|
(3)
|
These positions hedge the timing risk associated with our physical sales. We generally sell oil for the delivery month at a sales price based on the average NYMEX WTI price during that month, plus an adjustment calculated as a spread between the weighted average prices of the delivery month, the next month and the following month during the period when the delivery month is prompt (the “trade month roll”).
|
(4)
|
EP Energy receives Henry Hub plus the basis spread listed and pays WAHA.
|
|
Capital
Expenditures
(1)
(in millions)
|
|
Average Drilling
Rigs
|
|||
Eagle Ford Shale
|
$
|
226
|
|
|
2.8
|
|
Northeastern Utah
|
60
|
|
|
1.3
|
|
|
Permian
|
2
|
|
|
—
|
|
|
Total
|
$
|
288
|
|
|
4.1
|
|
Acquisition capital
|
$
|
15
|
|
|
|
|
Total Capital Expenditures
|
$
|
303
|
|
|
|
|
(1)
|
Represents accrual-based capital expenditures.
|
|
Six months ended
June 30, |
||||||
|
2019
|
|
2018
|
||||
Cash Inflows
|
|
|
|
|
|
||
Operating activities
|
|
|
|
|
|
||
Net loss
|
$
|
(190
|
)
|
|
$
|
(40
|
)
|
Gain on extinguishment/modification of debt
|
(10
|
)
|
|
(48
|
)
|
||
Other income adjustments
|
202
|
|
|
262
|
|
||
Changes in assets and liabilities
|
82
|
|
|
43
|
|
||
Total cash flow from operations
|
84
|
|
|
217
|
|
||
|
|
|
|
||||
Investing activities
|
|
|
|
|
|
||
Proceeds from the sale of assets
|
—
|
|
|
169
|
|
||
Cash inflows from investing activities
|
—
|
|
|
169
|
|
||
|
|
|
|
|
|
||
Financing activities
|
|
|
|
|
|
||
Proceeds from issuance of long-term debt
|
615
|
|
|
1,665
|
|
||
Cash inflows from financing activities
|
615
|
|
|
1,665
|
|
||
|
|
|
|
||||
Total cash inflows
|
$
|
699
|
|
|
$
|
2,051
|
|
|
|
|
|
||||
Cash Outflows
|
|
|
|
|
|
||
Investing activities
|
|
|
|
|
|
||
Capital expenditures
|
$
|
249
|
|
|
$
|
384
|
|
Cash paid for acquisitions
|
15
|
|
|
239
|
|
||
Cash outflows from investing activities
|
264
|
|
|
623
|
|
||
|
|
|
|
|
|
||
Financing activities
|
|
|
|
|
|
||
Repayments and repurchases of long-term debt
|
408
|
|
|
1,291
|
|
||
Fees/costs on debt exchange
|
—
|
|
|
62
|
|
||
Debt issue costs
|
—
|
|
|
20
|
|
||
Other
|
2
|
|
|
1
|
|
||
Cash outflows from financing activities
|
410
|
|
|
1,374
|
|
||
|
|
|
|
||||
Total cash outflows
|
$
|
674
|
|
|
$
|
1,997
|
|
|
|
|
|
||||
Net change in cash, cash equivalents and restricted cash
|
$
|
25
|
|
|
$
|
54
|
|
|
2019
|
|
2018
|
||
Equivalent Volumes (MBoe/d)
|
|
|
|
|
|
Eagle Ford
|
32.8
|
|
|
37.6
|
|
Northeastern Utah
|
15.6
|
|
|
17.0
|
|
Permian
|
23.2
|
|
|
26.7
|
|
Total
|
71.6
|
|
|
81.3
|
|
|
|
|
|
||
Oil (MBbls/d)
|
|
|
|
||
Eagle Ford
|
21.6
|
|
|
24.9
|
|
Northeastern Utah
|
10.1
|
|
|
11.7
|
|
Permian
|
6.8
|
|
|
9.7
|
|
Total
|
38.5
|
|
|
46.3
|
|
|
|
|
|
||
Natural Gas (MMcf/d)
|
|
|
|
||
Eagle Ford
(1)
|
33
|
|
|
38
|
|
Northeastern Utah
|
33
|
|
|
32
|
|
Permian
|
52
|
|
|
55
|
|
Total
|
118
|
|
|
125
|
|
|
|
|
|
||
NGLs (MBbls/d)
|
|
|
|
||
Eagle Ford
|
5.7
|
|
|
6.4
|
|
Northeastern Utah
|
—
|
|
|
—
|
|
Permian
|
7.7
|
|
|
7.8
|
|
Total
|
13.4
|
|
|
14.2
|
|
|
(1)
|
Production volume excludes 7 MMcf/d of reinjected gas volumes used in operations during the
six
months ended
June 30, 2019
.
|
|
Quarter ended
June 30, |
|
Six months ended
June 30, |
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
|
(in millions)
|
||||||||||||||
Operating revenues
|
|
|
|
|
|
|
|
|
|
|
|
||||
Oil
|
$
|
204
|
|
|
$
|
281
|
|
|
$
|
397
|
|
|
$
|
533
|
|
Natural gas
|
8
|
|
|
18
|
|
|
26
|
|
|
40
|
|
||||
NGLs
|
15
|
|
|
30
|
|
|
33
|
|
|
56
|
|
||||
Total physical sales
|
227
|
|
|
329
|
|
|
456
|
|
|
629
|
|
||||
Financial derivatives
|
29
|
|
|
(64
|
)
|
|
(66
|
)
|
|
(78
|
)
|
||||
Total operating revenues
|
256
|
|
|
265
|
|
|
390
|
|
|
551
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Operating expenses
|
|
|
|
|
|
|
|
|
|
|
|
||||
Transportation costs
|
23
|
|
|
26
|
|
|
48
|
|
|
51
|
|
||||
Lease operating expense
|
30
|
|
|
38
|
|
|
67
|
|
|
77
|
|
||||
General and administrative
|
43
|
|
|
28
|
|
|
64
|
|
|
47
|
|
||||
Depreciation, depletion and amortization
|
94
|
|
|
129
|
|
|
188
|
|
|
249
|
|
||||
Exploration and other expense
|
1
|
|
|
—
|
|
|
2
|
|
|
1
|
|
||||
Taxes, other than income taxes
|
20
|
|
|
21
|
|
|
31
|
|
|
41
|
|
||||
Total operating expenses
|
211
|
|
|
242
|
|
|
400
|
|
|
466
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Operating income (loss)
|
45
|
|
|
23
|
|
|
(10
|
)
|
|
85
|
|
||||
Gain on extinguishment/modification of debt
|
—
|
|
|
7
|
|
|
10
|
|
|
48
|
|
||||
Interest expense
|
(95
|
)
|
|
(88
|
)
|
|
(190
|
)
|
|
(173
|
)
|
||||
Loss before income taxes
|
(50
|
)
|
|
(58
|
)
|
|
(190
|
)
|
|
(40
|
)
|
||||
Income tax expense
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Net loss
|
$
|
(50
|
)
|
|
$
|
(58
|
)
|
|
$
|
(190
|
)
|
|
$
|
(40
|
)
|
|
Quarter ended
June 30, |
|
Six months ended
June 30, |
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
|
(in millions)
|
||||||||||||||
Operating revenues:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Oil
|
$
|
204
|
|
|
$
|
281
|
|
|
$
|
397
|
|
|
$
|
533
|
|
Natural gas
|
8
|
|
|
18
|
|
|
26
|
|
|
40
|
|
||||
NGLs
|
15
|
|
|
30
|
|
|
33
|
|
|
56
|
|
||||
Total physical sales
|
227
|
|
|
329
|
|
|
456
|
|
|
629
|
|
||||
Financial derivatives
|
29
|
|
|
(64
|
)
|
|
(66
|
)
|
|
(78
|
)
|
||||
Total operating revenues
|
$
|
256
|
|
|
$
|
265
|
|
|
$
|
390
|
|
|
$
|
551
|
|
|
|
|
|
|
|
|
|
||||||||
Volumes:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Oil (MBbls)
|
3,424
|
|
|
4,299
|
|
|
6,970
|
|
|
8,386
|
|
||||
Natural gas (MMcf)
|
10,121
|
|
|
11,274
|
|
|
21,277
|
|
|
22,609
|
|
||||
NGLs (MBbls)
|
1,245
|
|
|
1,334
|
|
|
2,428
|
|
|
2,566
|
|
||||
Equivalent volumes (MBoe)
|
6,356
|
|
|
7,512
|
|
|
12,944
|
|
|
14,720
|
|
||||
Total MBoe/d
|
69.8
|
|
|
82.5
|
|
|
71.6
|
|
|
81.3
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Prices per unit
(1)
:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Oil
|
|
|
|
|
|
|
|
|
|
|
|
||||
Average realized price on physical sales ($/Bbl)
(2)
|
$
|
59.72
|
|
|
$
|
65.53
|
|
|
$
|
56.97
|
|
|
$
|
63.60
|
|
Average realized price, including financial derivatives ($/Bbl)
(2)(3)
|
$
|
59.84
|
|
|
$
|
62.30
|
|
|
$
|
57.89
|
|
|
$
|
60.62
|
|
Natural gas
|
|
|
|
|
|
|
|
||||||||
Average realized price on physical sales ($/Mcf)
(2)
|
$
|
0.80
|
|
|
$
|
1.58
|
|
|
$
|
1.21
|
|
|
$
|
1.76
|
|
Average realized price, including financial derivatives ($/Mcf)
(2)(3)
|
$
|
1.36
|
|
|
$
|
1.96
|
|
|
$
|
1.57
|
|
|
$
|
2.00
|
|
NGLs
|
|
|
|
|
|
|
|
||||||||
Average realized price on physical sales ($/Bbl)
|
$
|
12.06
|
|
|
$
|
22.65
|
|
|
$
|
13.81
|
|
|
$
|
21.82
|
|
Average realized price, including financial derivatives ($/Bbl)
(3)
|
$
|
12.06
|
|
|
$
|
22.07
|
|
|
$
|
13.81
|
|
|
$
|
21.51
|
|
|
(1)
|
For both of the quarters and six months ended
June 30, 2019
and
2018
, there were no oil purchases associated with managing our physical oil sales. Natural gas prices for both of the quarters and six months ended
June 30, 2019
and
2018
reflect operating revenues for natural gas reduced by less than $1 million for natural gas purchases associated with managing our physical sales.
|
(2)
|
Changes in realized oil and natural gas prices reflect the effects of unhedged locational or basis differentials, unhedged volumes and contractual deductions between the commodity price index and the actual price at which we sold our oil and natural gas.
|
(3)
|
The quarters ended
June 30, 2019
and
2018
, include cash received of less than $1 million and cash paid of approximately $14 million, respectively, for the settlement of crude oil derivative contracts and approximately $6 million and $4 million of cash received, respectively, for the settlement of natural gas financial derivatives. The six months ended
June 30, 2019
and
2018
, include cash received of approximately $6 million and cash paid of approximately $25 million, respectively, for the settlement of crude oil derivative contracts and approximately $8 million and $5 million of cash received, respectively, for the settlement of natural gas financial derivatives. Both the quarter and six months ended
June 30, 2018
also include $1 million of cash paid for the settlement of NGLs derivative contracts.
|
|
Quarter ended
|
||||||||||||||
|
Oil
|
|
Natural gas
|
|
NGLs
|
|
Total
|
||||||||
|
(in millions)
|
||||||||||||||
June 30, 2018 sales
|
$
|
281
|
|
|
$
|
18
|
|
|
$
|
30
|
|
|
$
|
329
|
|
Change due to prices
|
(20
|
)
|
|
(8
|
)
|
|
(13
|
)
|
|
(41
|
)
|
||||
Change due to volumes
|
(57
|
)
|
|
(2
|
)
|
|
(2
|
)
|
|
(61
|
)
|
||||
June 30, 2019 sales
|
$
|
204
|
|
|
$
|
8
|
|
|
$
|
15
|
|
|
$
|
227
|
|
|
Six months ended
|
||||||||||||||
|
Oil
|
|
Natural gas
|
|
NGLs
|
|
Total
|
||||||||
|
(in millions)
|
||||||||||||||
June 30, 2018 sales
|
$
|
533
|
|
|
$
|
40
|
|
|
$
|
56
|
|
|
$
|
629
|
|
Change due to prices
|
(46
|
)
|
|
(12
|
)
|
|
(20
|
)
|
|
(78
|
)
|
||||
Change due to volumes
|
(90
|
)
|
|
(2
|
)
|
|
(3
|
)
|
|
(95
|
)
|
||||
June 30, 2019 sales
|
$
|
397
|
|
|
$
|
26
|
|
|
$
|
33
|
|
|
$
|
456
|
|
|
Quarter ended June 30,
|
||||||||||||||
|
2019
|
|
2018
|
||||||||||||
|
Oil
(Bbl)
|
|
Natural gas
(MMBtu)
|
|
Oil
(Bbl)
|
|
Natural gas
(MMBtu)
|
||||||||
Differentials and deducts
|
$
|
(0.15
|
)
|
|
$
|
(1.77
|
)
|
|
$
|
(2.27
|
)
|
|
$
|
(1.10
|
)
|
NYMEX
|
$
|
59.82
|
|
|
$
|
2.64
|
|
|
$
|
67.88
|
|
|
$
|
2.80
|
|
Net back realization %
|
99.7
|
%
|
|
33.0
|
%
|
|
96.7
|
%
|
|
60.7
|
%
|
|
Six months ended June 30,
|
||||||||||||||
|
2019
|
|
2018
|
||||||||||||
|
Oil
(Bbl)
|
|
Natural gas
(MMBtu)
|
|
Oil
(Bbl)
|
|
Natural gas
(MMBtu)
|
||||||||
Differentials and deducts
|
$
|
(0.67
|
)
|
|
$
|
(1.63
|
)
|
|
$
|
(1.67
|
)
|
|
$
|
(1.07
|
)
|
NYMEX
|
$
|
57.36
|
|
|
$
|
2.89
|
|
|
$
|
65.37
|
|
|
$
|
2.90
|
|
Net back realization %
|
98.8
|
%
|
|
43.6
|
%
|
|
97.4
|
%
|
|
63.1
|
%
|
|
Quarter ended June 30,
|
||||||||||||||
|
2019
|
|
2018
|
||||||||||||
|
Total
|
|
Per Unit
(1)
|
|
Total
|
|
Per Unit
(1)
|
||||||||
|
(in millions, except per unit costs)
|
||||||||||||||
Operating expenses
|
|
|
|
|
|
|
|
||||||||
Transportation costs
|
$
|
23
|
|
|
$
|
3.67
|
|
|
$
|
26
|
|
|
$
|
3.49
|
|
Lease operating expense
|
30
|
|
|
4.84
|
|
|
38
|
|
|
4.95
|
|
||||
General and administrative
(2)
|
43
|
|
|
6.77
|
|
|
28
|
|
|
3.74
|
|
||||
Depreciation, depletion and amortization
|
94
|
|
|
14.83
|
|
|
129
|
|
|
17.20
|
|
||||
Exploration and other expense
|
1
|
|
|
0.10
|
|
|
—
|
|
|
—
|
|
||||
Taxes, other than income taxes
|
20
|
|
|
3.04
|
|
|
21
|
|
|
2.82
|
|
||||
Total operating expenses
|
$
|
211
|
|
|
$
|
33.25
|
|
|
$
|
242
|
|
|
$
|
32.20
|
|
|
|
|
|
|
|
|
|
||||||||
Total equivalent volumes (MBoe)
|
6,356
|
|
|
|
|
|
7,512
|
|
|
|
|
|
Six months ended June 30,
|
||||||||||||||
|
2019
|
|
2018
|
||||||||||||
|
Total
|
|
Per Unit
(1)
|
|
Total
|
|
Per Unit
(1)
|
||||||||
|
(in millions, except per unit costs)
|
||||||||||||||
Operating expenses
|
|
|
|
|
|
|
|
||||||||
Transportation costs
|
$
|
48
|
|
|
$
|
3.70
|
|
|
$
|
51
|
|
|
$
|
3.46
|
|
Lease operating expense
|
67
|
|
|
5.20
|
|
|
77
|
|
|
5.21
|
|
||||
General and administrative
(2)
|
64
|
|
|
4.93
|
|
|
47
|
|
|
3.17
|
|
||||
Depreciation, depletion and amortization
|
188
|
|
|
14.58
|
|
|
249
|
|
|
16.95
|
|
||||
Exploration and other expense
|
2
|
|
|
0.10
|
|
|
1
|
|
|
0.09
|
|
||||
Taxes, other than income taxes
|
31
|
|
|
2.38
|
|
|
41
|
|
|
2.78
|
|
||||
Total operating expenses
|
$
|
400
|
|
|
$
|
30.89
|
|
|
$
|
466
|
|
|
$
|
31.66
|
|
|
|
|
|
|
|
|
|
||||||||
Total equivalent volumes (MBoe)
|
12,944
|
|
|
|
|
|
14,720
|
|
|
|
|
|
(1)
|
Per unit costs are based on actual amounts rather than the rounded totals presented.
|
(2)
|
For the
quarter and six
months ended
June 30, 2019
, amount includes approximately
$3 million
or
$0.45
per Boe and
$7 million
or
$0.51
per Boe, respectively, of non-cash compensation expense,
$3 million
or
$0.46
per Boe and
$4 million
or
$0.27
per Boe, respectively, of transition, severance and other costs,
$1 million
or
$0.06
per Boe and
$1 million
or
$0.05
per Boe, respectively, of fees paid to Sponsors, and
$24 million
or
$3.78
per Boe and
$24 million
or
$1.85
per Boe, respectively, of legacy litigation accruals and settlements. For the
quarter and six
months ended
June 30, 2018
, amount includes approximately
$2 million
or
$0.38
per Boe and
$4 million
or
$0.30
per Boe, respectively, of non-cash compensation expense and approximately
$6 million
or
$0.77
per Boe and
$6 million
or
$0.40
per Boe, respectively, of transition, severance and other costs.
|
|
Quarter ended
June 30, |
|
Six months ended
June 30, |
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Depreciation, depletion and amortization ($/Boe)
|
$
|
14.83
|
|
|
$
|
17.20
|
|
|
$
|
14.58
|
|
|
$
|
16.95
|
|
|
Quarter ended
June 30, |
|
Six months ended
June 30, |
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
|
(in millions)
|
||||||||||||||
Net loss
|
$
|
(50
|
)
|
|
$
|
(58
|
)
|
|
$
|
(190
|
)
|
|
$
|
(40
|
)
|
Income tax expense
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Interest expense, net of capitalized interest
|
95
|
|
|
88
|
|
|
190
|
|
|
173
|
|
||||
Depreciation, depletion and amortization
|
94
|
|
|
129
|
|
|
188
|
|
|
249
|
|
||||
Exploration expense
|
1
|
|
|
1
|
|
|
2
|
|
|
2
|
|
||||
EBITDAX
|
140
|
|
|
160
|
|
|
190
|
|
|
384
|
|
||||
Mark-to-market on financial derivatives
(1)
|
(29
|
)
|
|
64
|
|
|
66
|
|
|
78
|
|
||||
Cash settlements and cash premiums on financial derivatives
(2)
|
6
|
|
|
(10
|
)
|
|
14
|
|
|
(20
|
)
|
||||
Non-cash portion of compensation expense
(3)
|
3
|
|
|
2
|
|
|
7
|
|
|
4
|
|
||||
Transition, severance and other costs
|
3
|
|
|
6
|
|
|
4
|
|
|
6
|
|
||||
Fees paid to Sponsors
|
1
|
|
|
—
|
|
|
1
|
|
|
—
|
|
||||
Legacy litigation settlements
(
4)
|
24
|
|
|
—
|
|
|
24
|
|
|
—
|
|
||||
Gain on extinguishment/modification of debt
|
—
|
|
|
(7
|
)
|
|
(10
|
)
|
|
(48
|
)
|
||||
Adjusted EBITDAX
|
$
|
148
|
|
|
$
|
215
|
|
|
$
|
296
|
|
|
$
|
404
|
|
|
(1)
|
Represents the income statement impact of financial derivatives.
|
(2)
|
Represents actual cash settlements related to financial derivatives. No cash premiums were received or paid for the quarters and six months ended
June 30, 2019
and 2018.
|
(3)
|
For the quarter and
six
months ended
June 30, 2019
, non-cash compensation expense includes less than $1 million in amounts under the Key Employee Retention Program, "KERP", in lieu of long-term incentive compensation. For additional details on the KERP, see Part I, Item 1, Financial Statements, Note 8.
|
(4)
|
Reflects amounts accrued related to Fairfield and Weyerhaeuser legal cases. For additional details on our legacy legal matters, see Part I, Item 1, Financial Statements, Note 7.
|
|
|
|
Oil, Natural Gas and NGLs Derivatives
|
||||||||||||||||
|
|
|
10 Percent Increase
|
|
10 Percent Decrease
|
||||||||||||||
|
Fair Value
|
|
Fair Value
|
|
Change
|
|
Fair Value
|
|
Change
|
||||||||||
|
(in millions)
|
||||||||||||||||||
Price impact
(1)
|
$
|
34
|
|
|
$
|
(26
|
)
|
|
$
|
(60
|
)
|
|
$
|
88
|
|
|
$
|
54
|
|
|
|
|
Oil, Natural Gas and NGLs Derivatives
|
||||||||||||||||
|
|
|
1 Percent Increase
|
|
1 Percent Decrease
|
||||||||||||||
|
Fair Value
|
|
Fair Value
|
|
Change
|
|
Fair
Value
|
|
Change
|
||||||||||
|
(in millions)
|
||||||||||||||||||
Discount rate
(2)
|
$
|
34
|
|
|
$
|
34
|
|
|
$
|
—
|
|
|
$
|
34
|
|
|
$
|
—
|
|
Credit rate
(3)
|
$
|
34
|
|
|
$
|
34
|
|
|
$
|
—
|
|
|
$
|
34
|
|
|
$
|
—
|
|
|
(1)
|
Presents the hypothetical sensitivity of our commodity-based derivatives to changes in fair values arising from changes in oil, natural gas and NGLs prices.
|
(2)
|
Presents the hypothetical sensitivity of our commodity-based derivatives to changes in the discount rates we used to determine the fair value of our derivatives.
|
(3)
|
Presents the hypothetical sensitivity of our commodity-based derivatives to changes in credit risk of our counterparties.
|
•
|
should not in all instances be treated as categorical statements of fact, but rather as a way of allocating the risk to one of the parties if those statements prove to be inaccurate;
|
•
|
may have been qualified by disclosures that were made to the other party in connection with the negotiation of the applicable agreement, which disclosures are not necessarily reflected in the agreement;
|
•
|
may apply standards of materiality in a way that is different from what may be viewed as material to certain investors; and
|
•
|
were made only as of the date of the applicable agreement or such other date or dates as may be specified in the agreement and are subject to more recent developments.
|
Exhibit
Number
|
|
Description
|
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
*101.INS
|
|
XBRL Instance Document.
|
|
|
|
*101.SCH
|
|
XBRL Schema Document.
|
|
|
|
*101.CAL
|
|
XBRL Calculation Linkbase Document.
|
|
|
|
*101.DEF
|
|
XBRL Definition Linkbase Document.
|
|
|
|
*101.LAB
|
|
XBRL Labels Linkbase Document.
|
|
|
|
*101.PRE
|
|
XBRL Presentation Linkbase Document.
|
|
EP ENERGY CORPORATION
|
|
|
|
|
Date: August 9, 2019
|
/s/ Kyle A. McCuen
|
|
Kyle A. McCuen
|
|
Senior Vice President, Chief Financial Officer and Treasurer
|
|
(Principal Financial and Accounting Officer)
|
1.
|
Retention Bonus
. You shall receive a retention bonus of $______ (the “
Retention Bonus
”), payable on July 5, 2019, subject to the terms and conditions of this Agreement.
|
2.
|
Retention Period; Clawback
. Subject to the terms and conditions of this Agreement, your right to retain the Retention Bonus will be subject to your continued employment through June 30, 2020 (the “
Retention Period
”). If you voluntarily terminate your employment with the Company without Good Reason (other than as a result of your death or Disability) or if your employment is terminated by the Company for Cause, prior to the end of the Retention Period, you hereby agree that you will re-pay to the Company the entire Retention Bonus, payable within 30 days following receipt of written notice from the Company.
|
3.
|
Effect on Other Compensation
. By acceptance of this Agreement, you agree that the Retention Bonus is in lieu of any annual cash incentive bonus that otherwise may be payable to you in respect of the 2019 calendar year, and you hereby waive any right to receive such bonus. You also understand and agree that by executing this Agreement any rights that you may have with respect to any severance payments as a result of a termination of your employment during the Retention Period shall be reduced, but not below zero, by an amount equal to the product of (i) your Retention Bonus and (ii) a fraction, the numerator of which is the number of days remaining in the Retention Period following the date of termination of your employment and the denominator of which is 365. To the extent any severance payments are made in installments, such reduction shall be applied to the last payment(s) of the applicable severance period.
|
4.
|
409A
. The payments and benefits under this Agreement are intended to be exempt from Section 409A of the Internal Revenue Code of 1986, as amended, and the regulations and guidance promulgated thereunder (collectively “
Section 409A
”) and, accordingly, to the
|
5.
|
Assignment
. You may not assign your rights under this Agreement except upon your death. The Company may assign its obligations hereunder to any successor, including any acquirer of substantially all of the assets of the Company.
|
6.
|
Entire Agreement; Other Agreements
. This Agreement sets forth the entire understanding of the Company and you regarding the subject matter hereof, and supersedes all prior agreements, understandings and inducements, whether express or implied, oral or written. Except provided in Section 3 hereof, this Agreement does not modify, amend or supersede any of the rights or obligations of either party under any the terms of any employment contract, offer letter or employment or compensation plan, policy or arrangement of the Company, including, without limitation, any noncompetition, nonsolicitation or other restrictive covenant under any employment or other agreement between you and the Company, which are hereby reaffirmed by you in consideration of your eligibility for the Retention Bonus. No modification or amendment of this Agreement shall be effective without a prior written agreement signed by you and the Company.
|
7.
|
Non-Solicitation
. You acknowledge that, in the course of employment with the Company, the Company will provide you with confidential information. You further acknowledge that the Company’s issuance of the Retention Bonus further aligns your interests with the long-term business interests of the Company, and that the restrictions set forth herein are reasonable in all respects and necessary to protect the Company’s legitimate business interests, including the protection of the confidential information and its goodwill. You further acknowledge that your commitment to abide by the terms of this
Section 7
is a material inducement for the Company to enter into this Agreement and issue the Retention Bonus hereunder. During the period of your employment and for one (1) year following your termination of employment with the Company, you shall not (i) solicit or encourage any customer or supplier of the Company to cease or lessen such customer’s or supplier’s business with the Company; or (ii) solicit or encourage any employee or contractor of the Company to terminate his, her or its employment or engagement with the Company.
|
8.
|
Governing Law;
WAIVER OF JURY TRIAL
. To the maximum extent permitted by law, this Agreement is governed by and to be construed in accordance with the laws of the State of Texas, without regard to conflicts of laws principles thereof. The parties to this Agreement each hereby irrevocably submits to the non-exclusive jurisdiction of Texas or federal court sitting in Houston in any action or proceeding arising out of or relating to this Agreement, and all such parties hereby irrevocably agree that all claims in respect of such action or proceeding may be heard and determined in Texas or federal court and hereby irrevocably waive, to the fullest extent that they may legally do so, the defense of an inconvenient forum to the maintenance of such action or proceeding.
EACH OF THE PARTIES HERETO
|
9.
|
Tax
. Amounts payable under this Agreement shall be subject to withholding for all federal, state and local income and employment taxes as shall be required to be withheld pursuant to any applicable law or regulation.
|
10.
|
Waiver
. Failure by either party to exercise, or any delay in exercising, any right or remedy provided under this Agreement or by law shall not constitute a waiver of that or any other right or remedy, nor shall it prevent or restrict any further exercise of that or any other right or remedy.
|
11.
|
Severability
. In case any provision in this Agreement shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.
|
12.
|
Counterpart Originals
. This Agreement may be executed in two or more counterparts, and by the different parties in separate counterparts, each of which when executed shall be deemed to be an original but all of which taken together shall constitute one and the same agreement. Delivery of an executed counterpart of a signature page to this Agreement electronically (including portable document format (pdf.)) or by facsimile shall be as effective as delivery of a manually executed counterpart of this Agreement.
|
|
|
|
Sincerely
|
|
|
|
|
|
|
|
|
|
|
|
EP ENERGY CORPORATION
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
By: [●]
|
|
|
|
|
|
Title: [●]
|
|
|
|
|
|
|
|
|
ACCEPTED AND AGREED AS OF THE
|
|
|
|
|
|
DATE FIRST SET FORTH BELOW:
|
|
|
|
|
|
|
|
|
|
|
|
Signature:
|
|
|
|
|
|
Date:
|
|
|
|
|
|
|
/s/ Russell E. Parker
|
|
Russell E. Parker
|
|
President and Chief Executive Officer
|
|
EP Energy Corporation
|
|
/s/ Kyle A. McCuen
|
|
Kyle A. McCuen
|
|
Senior Vice President, Chief Financial Officer and Treasurer
|
|
EP Energy Corporation
|
|
/s/ Russell E. Parker
|
|
Russell E. Parker
|
|
President and Chief Executive Officer
|
|
EP Energy Corporation
|
|
|
|
Date: August 9, 2019
|
|
/s/ Kyle A. McCuen
|
|
Kyle A. McCuen
|
|
Senior Vice President, Chief Financial
|
|
Officer and Treasurer
|
|
EP Energy Corporation
|
|
|
|
Date: August 9, 2019
|