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ý
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QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the quarterly period ended March 31, 2015 OR
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¨
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TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF SECURITIES EXCHANGE ACT OF 1934
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For the transition period from to
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Delaware
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73-1521290
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(State or Other Jurisdiction of
Incorporation or Organization)
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(IRS Employer
Identification Number)
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14313 North May Avenue, Suite 100
Oklahoma City, Oklahoma
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73134
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(Address of Principal Executive Offices)
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(Zip Code)
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Title of Each Class
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Name of Each Exchange on Which Registered
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Common Stock, par value $0.01 per share
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The NASDAQ Stock Market LLC
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Page
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Item 1.
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Item 2.
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Item 3.
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Item 4.
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Item 1.
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Item 1A.
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Item 2.
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Item 3.
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Item 4.
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Item 5.
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Item 6.
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March 31, 2015
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December 31, 2014
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||||
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(In thousands, except share data)
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||||||
Assets
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
74,740
|
|
|
$
|
142,340
|
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Accounts receivable—oil and gas
|
79,680
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|
|
103,858
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||
Accounts receivable—related parties
|
33
|
|
|
46
|
|
||
Prepaid expenses and other current assets
|
15,777
|
|
|
3,714
|
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||
Short-term derivative instruments
|
93,030
|
|
|
78,391
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|
||
Total current assets
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263,260
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|
328,349
|
|
||
Property and equipment:
|
|
|
|
||||
Oil and natural gas properties, full-cost accounting, $1,546,804 and $1,465,538 excluded from amortization in 2015 and 2014, respectively
|
4,177,962
|
|
|
3,923,154
|
|
||
Other property and equipment
|
19,051
|
|
|
18,344
|
|
||
Accumulated depletion, depreciation, amortization and impairment
|
(1,140,168
|
)
|
|
(1,050,879
|
)
|
||
Property and equipment, net
|
3,056,845
|
|
|
2,890,619
|
|
||
Other assets:
|
|
|
|
||||
Equity investments
|
374,971
|
|
|
369,581
|
|
||
Derivative instruments
|
41,956
|
|
|
24,448
|
|
||
Other assets
|
18,566
|
|
|
19,396
|
|
||
Total other assets
|
435,493
|
|
|
413,425
|
|
||
Total assets
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$
|
3,755,598
|
|
|
$
|
3,632,393
|
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Liabilities and Stockholders’ Equity
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable and accrued liabilities
|
$
|
400,096
|
|
|
$
|
371,410
|
|
Asset retirement obligation—current
|
75
|
|
|
75
|
|
||
Deferred tax liability
|
29,622
|
|
|
27,070
|
|
||
Short-term derivative instruments
|
823
|
|
|
—
|
|
||
Current maturities of long-term debt
|
1,781
|
|
|
168
|
|
||
Total current liabilities
|
432,397
|
|
|
398,723
|
|
||
Asset retirement obligation—long-term
|
18,656
|
|
|
17,863
|
|
||
Deferred tax liability
|
215,122
|
|
|
203,195
|
|
||
Long-term debt, net of current maturities
|
779,130
|
|
|
716,316
|
|
||
Total liabilities
|
1,445,305
|
|
|
1,336,097
|
|
||
Commitments and contingencies (Note 8)
|
|
|
|
||||
Preferred stock, $.01 par value; 5,000,000 authorized, 30,000 authorized as redeemable 12% cumulative preferred stock, Series A; 0 issued and outstanding
|
—
|
|
|
—
|
|
||
Stockholders’ equity:
|
|
|
|
||||
Common stock - $.01 par value, 200,000,000 authorized, 85,715,819 issued and outstanding in 2015 and 85,655,438 in 2014
|
857
|
|
|
856
|
|
||
Paid-in capital
|
1,832,063
|
|
|
1,828,602
|
|
||
Accumulated other comprehensive loss
|
(41,659
|
)
|
|
(26,675
|
)
|
||
Retained earnings
|
519,032
|
|
|
493,513
|
|
||
Total stockholders’ equity
|
2,310,293
|
|
|
2,296,296
|
|
||
Total liabilities and stockholders’ equity
|
$
|
3,755,598
|
|
|
$
|
3,632,393
|
|
|
Three months ended March 31,
|
||||||
|
2015
|
|
2014
|
||||
|
(In thousands, except share data)
|
||||||
Revenues:
|
|
|
|
||||
Gas sales
|
$
|
118,570
|
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|
$
|
18,349
|
|
Oil and condensate sales
|
35,500
|
|
|
73,377
|
|
||
Natural gas liquid sales
|
22,007
|
|
|
26,136
|
|
||
Other income
|
240
|
|
|
167
|
|
||
|
176,317
|
|
|
118,029
|
|
||
Costs and expenses:
|
|
|
|
||||
Lease operating expenses
|
16,980
|
|
|
11,629
|
|
||
Production taxes
|
4,285
|
|
|
6,957
|
|
||
Midstream gathering and processing
|
25,381
|
|
|
7,769
|
|
||
Depreciation, depletion and amortization
|
89,909
|
|
|
56,877
|
|
||
General and administrative
|
10,799
|
|
|
9,511
|
|
||
Accretion expense
|
190
|
|
|
188
|
|
||
Gain on sale of assets
|
—
|
|
|
(11
|
)
|
||
|
147,544
|
|
|
92,920
|
|
||
INCOME FROM OPERATIONS
|
28,773
|
|
|
25,109
|
|
||
OTHER (INCOME) EXPENSE:
|
|
|
|
||||
Interest expense
|
8,759
|
|
|
3,885
|
|
||
Interest income
|
(9
|
)
|
|
(106
|
)
|
||
Litigation settlement
|
—
|
|
|
18,000
|
|
||
Income from equity method investments
|
(19,975
|
)
|
|
(128,475
|
)
|
||
|
(11,225
|
)
|
|
(106,696
|
)
|
||
INCOME BEFORE INCOME TAXES
|
39,998
|
|
|
131,805
|
|
||
INCOME TAX EXPENSE
|
14,479
|
|
|
49,247
|
|
||
NET INCOME
|
$
|
25,519
|
|
|
$
|
82,558
|
|
NET INCOME PER COMMON SHARE:
|
|
|
|
||||
Basic
|
$
|
0.30
|
|
|
$
|
0.97
|
|
Diluted
|
$
|
0.30
|
|
|
$
|
0.96
|
|
Weighted average common shares outstanding—Basic
|
85,679,606
|
|
|
85,259,407
|
|
||
Weighted average common shares outstanding—Diluted
|
86,120,030
|
|
|
85,738,626
|
|
|
Three months ended March 31,
|
||||||
|
2015
|
|
2014
|
||||
|
(In thousands)
|
||||||
Net income
|
$
|
25,519
|
|
|
$
|
82,558
|
|
Foreign currency translation adjustment
|
(14,984
|
)
|
|
(7,278
|
)
|
||
Other comprehensive loss
|
(14,984
|
)
|
|
(7,278
|
)
|
||
Comprehensive income
|
$
|
10,535
|
|
|
$
|
75,280
|
|
|
|
|
|
|
Paid-in
Capital
|
|
Accumulated
Other
Comprehensive
Loss
|
|
Retained
Earnings
|
|
Total
Stockholders’
Equity
|
|||||||||||
|
Common Stock
|
|
|
|
|
|||||||||||||||||
|
Shares
|
|
Amount
|
|
|
|
|
|||||||||||||||
|
(In thousands, except share data)
|
|||||||||||||||||||||
Balance at January 1, 2015
|
85,655,438
|
|
|
$
|
856
|
|
|
$
|
1,828,602
|
|
|
$
|
(26,675
|
)
|
|
$
|
493,513
|
|
|
$
|
2,296,296
|
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
25,519
|
|
|
25,519
|
|
|||||
Other Comprehensive Loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(14,984
|
)
|
|
—
|
|
|
(14,984
|
)
|
|||||
Stock Compensation
|
—
|
|
|
—
|
|
|
3,462
|
|
|
—
|
|
|
—
|
|
|
3,462
|
|
|||||
Issuance of Restricted Stock
|
60,381
|
|
|
1
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Issuance of Common Stock through exercise of options
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Balance at March 31, 2015
|
85,715,819
|
|
|
$
|
857
|
|
|
$
|
1,832,063
|
|
|
$
|
(41,659
|
)
|
|
$
|
519,032
|
|
|
$
|
2,310,293
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Balance at January 1, 2014
|
85,177,532
|
|
|
$
|
851
|
|
|
$
|
1,813,058
|
|
|
$
|
(9,781
|
)
|
|
$
|
246,110
|
|
|
$
|
2,050,238
|
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
82,558
|
|
|
82,558
|
|
|||||
Other Comprehensive Loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(7,278
|
)
|
|
—
|
|
|
(7,278
|
)
|
|||||
Stock Compensation
|
—
|
|
|
—
|
|
|
4,307
|
|
|
—
|
|
|
—
|
|
|
4,307
|
|
|||||
Issuance of Restricted Stock
|
63,951
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Issuance of Common Stock through exercise of options
|
182,908
|
|
|
2
|
|
|
613
|
|
|
—
|
|
|
—
|
|
|
615
|
|
|||||
Balance at March 31, 2014
|
85,424,391
|
|
|
$
|
853
|
|
|
$
|
1,817,978
|
|
|
$
|
(17,059
|
)
|
|
$
|
328,668
|
|
|
$
|
2,130,440
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended March 31,
|
||||||
|
2015
|
|
2014
|
||||
|
(In thousands)
|
||||||
Cash flows from operating activities:
|
|
|
|
||||
Net income
|
$
|
25,519
|
|
|
$
|
82,558
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
||||
Accretion of discount—Asset Retirement Obligation
|
190
|
|
|
188
|
|
||
Depletion, depreciation and amortization
|
89,909
|
|
|
56,877
|
|
||
Stock-based compensation expense
|
2,077
|
|
|
2,584
|
|
||
Gain from equity investments
|
(12,759
|
)
|
|
(43,688
|
)
|
||
Interest income - note receivable
|
—
|
|
|
(13
|
)
|
||
Unrealized (gain) loss on derivative instruments
|
(31,324
|
)
|
|
8,665
|
|
||
Deferred income tax expense
|
14,479
|
|
|
33,564
|
|
||
Amortization of loan commitment fees
|
617
|
|
|
294
|
|
||
Amortization of note discount and premium
|
(528
|
)
|
|
78
|
|
||
Changes in operating assets and liabilities:
|
|
|
|
||||
Decrease (increase) in accounts receivable
|
24,178
|
|
|
(27,944
|
)
|
||
Decrease in accounts receivable—related party
|
13
|
|
|
2,047
|
|
||
Increase in prepaid expenses
|
(12,063
|
)
|
|
(771
|
)
|
||
(Decrease) increase in accounts payable and accrued liabilities
|
(290
|
)
|
|
43,406
|
|
||
Settlement of asset retirement obligation
|
(981
|
)
|
|
(1,695
|
)
|
||
Net cash provided by operating activities
|
99,037
|
|
|
156,150
|
|
||
Cash flows from investing activities:
|
|
|
|
||||
Deductions to cash held in escrow
|
8
|
|
|
8
|
|
||
Additions to other property and equipment
|
(632
|
)
|
|
(1,002
|
)
|
||
Additions to oil and gas properties
|
(226,905
|
)
|
|
(420,431
|
)
|
||
Proceeds from sale of oil and gas properties
|
1,314
|
|
|
—
|
|
||
Contributions to equity method investments
|
(6,093
|
)
|
|
(23,687
|
)
|
||
Distributions from equity method investments
|
817
|
|
|
—
|
|
||
Net cash used in investing activities
|
(231,491
|
)
|
|
(445,112
|
)
|
||
Cash flows from financing activities:
|
|
|
|
||||
Principal payments on borrowings
|
(50,045
|
)
|
|
(42
|
)
|
||
Borrowings on line of credit
|
115,000
|
|
|
—
|
|
||
Debt issuance costs and loan commitment fees
|
(101
|
)
|
|
(185
|
)
|
||
Proceeds from issuance of common stock, net of offering costs and exercise of stock options
|
—
|
|
|
615
|
|
||
Net cash provided by financing activities
|
64,854
|
|
|
388
|
|
||
Net decrease in cash and cash equivalents
|
(67,600
|
)
|
|
(288,574
|
)
|
||
Cash and cash equivalents at beginning of period
|
142,340
|
|
|
458,956
|
|
||
Cash and cash equivalents at end of period
|
$
|
74,740
|
|
|
$
|
170,382
|
|
Supplemental disclosure of cash flow information:
|
|
|
|
||||
Interest payments
|
$
|
240
|
|
|
$
|
18
|
|
Income tax payments
|
$
|
29,750
|
|
|
$
|
13,000
|
|
Supplemental disclosure of non-cash transactions:
|
|
|
|
||||
Capitalized stock based compensation
|
$
|
1,385
|
|
|
$
|
1,723
|
|
Asset retirement obligation capitalized
|
$
|
1,584
|
|
|
$
|
1,869
|
|
Interest capitalized
|
$
|
3,694
|
|
|
$
|
2,318
|
|
Foreign currency translation loss on investment in Grizzly Oil Sands ULC
|
$
|
(14,984
|
)
|
|
$
|
(7,278
|
)
|
1.
|
ACQUISITIONS
|
2.
|
PROPERTY AND EQUIPMENT
|
|
March 31, 2015
|
|
December 31, 2014
|
||||
|
(In thousands)
|
||||||
Oil and natural gas properties
|
$
|
4,177,962
|
|
|
$
|
3,923,154
|
|
Office furniture and fixtures
|
11,133
|
|
|
10,752
|
|
||
Building
|
5,724
|
|
|
5,398
|
|
||
Land
|
2,194
|
|
|
2,194
|
|
||
Total property and equipment
|
4,197,013
|
|
|
3,941,498
|
|
||
Accumulated depletion, depreciation, amortization and impairment
|
(1,140,168
|
)
|
|
(1,050,879
|
)
|
||
Property and equipment, net
|
$
|
3,056,845
|
|
|
$
|
2,890,619
|
|
|
March 31, 2015
|
||
|
(In thousands)
|
||
Colorado
|
$
|
5,088
|
|
Bakken
|
96
|
|
|
Southern Louisiana
|
283
|
|
|
Ohio
|
1,541,292
|
|
|
Other
|
45
|
|
|
|
$
|
1,546,804
|
|
|
|
||||||
|
March 31, 2015
|
|
March 31, 2014
|
||||
|
(In thousands)
|
||||||
Asset retirement obligation, beginning of period
|
$
|
17,938
|
|
|
$
|
15,083
|
|
Liabilities incurred
|
1,584
|
|
|
1,869
|
|
||
Liabilities settled
|
(981
|
)
|
|
(1,695
|
)
|
||
Accretion expense
|
190
|
|
|
188
|
|
||
Asset retirement obligation as of end of period
|
18,731
|
|
|
15,445
|
|
||
Less current portion
|
75
|
|
|
795
|
|
||
Asset retirement obligation, long-term
|
$
|
18,656
|
|
|
$
|
14,650
|
|
3.
|
EQUITY INVESTMENTS
|
|
|
|
Carrying Value
|
|
(Income) loss from equity method investments
|
||||||||||||
|
Approximate Ownership %
|
|
March 31, 2015
|
|
December 31, 2014
|
|
Three months ended March 31,
|
||||||||||
|
|
|
|
2015
|
2014
|
||||||||||||
|
|
|
(In thousands)
|
||||||||||||||
Investment in Tatex Thailand II, LLC
|
23.5
|
%
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
$
|
—
|
|
Investment in Tatex Thailand III, LLC
|
17.9
|
%
|
|
—
|
|
|
—
|
|
|
—
|
|
49
|
|
||||
Investment in Grizzly Oil Sands ULC
|
24.9999
|
%
|
|
167,186
|
|
|
180,218
|
|
|
4,142
|
|
2,001
|
|
||||
Investment in Bison Drilling and Field Services LLC
|
—
|
%
|
|
—
|
|
|
—
|
|
|
—
|
|
1,933
|
|
||||
Investment in Muskie Proppant LLC
|
—
|
%
|
|
—
|
|
|
—
|
|
|
—
|
|
534
|
|
||||
Investment in Timber Wolf Terminals LLC
|
50.0
|
%
|
|
1,007
|
|
|
1,013
|
|
|
6
|
|
—
|
|
||||
Investment in Windsor Midstream LLC
|
22.5
|
%
|
|
32,292
|
|
|
13,505
|
|
|
(18,787
|
)
|
(168
|
)
|
||||
Investment in Stingray Pressure Pumping LLC
|
—
|
%
|
|
—
|
|
|
—
|
|
|
—
|
|
513
|
|
||||
Investment in Stingray Cementing LLC
|
50.0
|
%
|
|
2,254
|
|
|
2,647
|
|
|
67
|
|
95
|
|
||||
Investment in Blackhawk Midstream LLC
|
48.5
|
%
|
|
—
|
|
|
—
|
|
|
(7,217
|
)
|
(84,787
|
)
|
||||
Investment in Stingray Logistics LLC
|
—
|
%
|
|
—
|
|
|
—
|
|
|
—
|
|
81
|
|
||||
Investment in Diamondback Energy, Inc.
|
—
|
%
|
|
—
|
|
|
—
|
|
|
—
|
|
(48,767
|
)
|
||||
Investment in Stingray Energy Services LLC
|
50.0
|
%
|
|
6,167
|
|
|
5,718
|
|
|
10
|
|
41
|
|
||||
Investment in Sturgeon Acquisitions LLC
|
25.0
|
%
|
|
22,258
|
|
|
22,507
|
|
|
(568
|
)
|
—
|
|
||||
Investment in Mammoth Energy Partners LP
|
30.5
|
%
|
|
143,807
|
|
|
143,973
|
|
|
2,372
|
|
—
|
|
||||
|
|
|
$
|
374,971
|
|
|
$
|
369,581
|
|
|
$
|
(19,975
|
)
|
$
|
(128,475
|
)
|
|
March 31, 2015
|
|
December 31, 2014
|
||||
|
|
||||||
|
(In thousands)
|
||||||
Current assets
|
$
|
151,752
|
|
|
$
|
181,060
|
|
Noncurrent assets
|
$
|
1,419,656
|
|
|
$
|
1,306,891
|
|
Current liabilities
|
$
|
55,369
|
|
|
$
|
114,506
|
|
Noncurrent liabilities
|
$
|
213,050
|
|
|
$
|
230,062
|
|
4.
|
OTHER ASSETS
|
|
|
||||||
|
March 31, 2015
|
|
December 31, 2014
|
||||
|
(In thousands)
|
||||||
Plugging and abandonment escrow account on the WCBB properties (Note 8)
|
$
|
3,089
|
|
|
$
|
3,097
|
|
Certificates of Deposit securing letter of credit
|
275
|
|
|
275
|
|
||
Prepaid drilling costs
|
269
|
|
|
483
|
|
||
Loan commitment fees
|
14,771
|
|
|
15,390
|
|
||
Deposits
|
34
|
|
|
34
|
|
||
Other
|
128
|
|
|
117
|
|
||
|
$
|
18,566
|
|
|
$
|
19,396
|
|
5.
|
LONG-TERM DEBT
|
|
|
||||||
|
March 31, 2015
|
|
December 31, 2014
|
||||
|
(In thousands)
|
||||||
Revolving credit agreement (1)
|
$
|
165,000
|
|
|
$
|
100,000
|
|
Building loans (2)
|
1,781
|
|
|
1,826
|
|
||
7.75% senior unsecured notes due 2020 (3)
|
600,000
|
|
|
600,000
|
|
||
Unamortized original issue (discount) premium, net (4)
|
14,130
|
|
|
14,658
|
|
||
Less: current maturities of long term debt
|
(1,781
|
)
|
|
(168
|
)
|
||
Debt reflected as long term (5)
|
$
|
779,130
|
|
|
$
|
716,316
|
|
6.
|
STOCK-BASED COMPENSATION
|
|
Shares
|
|
Weighted
Average
Exercise Price
per Share
|
|
Weighted
Average
Remaining
Contractual Term
|
|
Aggregate
Intrinsic
Value (In thousands)
|
|||||
Options outstanding at December 31, 2014
|
5,000
|
|
|
$
|
9.07
|
|
|
0.69
|
|
$
|
163
|
|
Granted
|
—
|
|
|
—
|
|
|
|
|
|
|||
Exercised
|
—
|
|
|
—
|
|
|
|
|
—
|
|
||
Forfeited/expired
|
—
|
|
|
—
|
|
|
|
|
|
|||
Options outstanding at March 31, 2015
|
5,000
|
|
|
$
|
9.07
|
|
|
0.44
|
|
$
|
184
|
|
Options exercisable at March 31, 2015
|
5,000
|
|
|
$
|
9.07
|
|
|
0.44
|
|
$
|
184
|
|
Exercise
Price
|
|
Number
Outstanding
|
|
Weighted Average
Remaining Life
(in years)
|
|
Number
Exercisable
|
||||
$
|
9.07
|
|
|
5,000
|
|
|
0.44
|
|
5,000
|
|
|
|
5,000
|
|
|
|
|
5,000
|
|
|
Number of
Unvested
Restricted Shares
|
|
Weighted
Average
Grant Date
Fair Value
|
|||
Unvested shares as of December 31, 2014
|
387,245
|
|
|
$
|
55.87
|
|
Granted
|
100,226
|
|
|
44.04
|
|
|
Vested
|
(60,381
|
)
|
|
52.94
|
|
|
Forfeited
|
—
|
|
|
—
|
|
|
Unvested shares as of March 31, 2015
|
427,090
|
|
|
$
|
53.51
|
|
7.
|
EARNINGS PER SHARE
|
|
Three months ended March 31,
|
||||||||||||||||||||
|
2015
|
|
2014
|
||||||||||||||||||
|
Income
|
|
Shares
|
|
Per
Share
|
|
Income
|
|
Shares
|
|
Per
Share
|
||||||||||
|
(In thousands, except share data)
|
||||||||||||||||||||
Basic:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income
|
$
|
25,519
|
|
|
85,679,606
|
|
|
$
|
0.30
|
|
|
$
|
82,558
|
|
|
85,259,407
|
|
|
$
|
0.97
|
|
Effect of dilutive securities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Stock options and awards
|
—
|
|
|
440,424
|
|
|
|
|
—
|
|
|
479,219
|
|
|
|
||||||
Diluted:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income
|
$
|
25,519
|
|
|
86,120,030
|
|
|
$
|
0.30
|
|
|
$
|
82,558
|
|
|
85,738,626
|
|
|
$
|
0.96
|
|
8.
|
COMMITMENTS AND CONTINGENCIES
|
|
(In thousands)
|
||
Remaining 2015
|
$
|
450
|
|
2016
|
524
|
|
|
2017
|
451
|
|
|
2018
|
20
|
|
|
2019
|
—
|
|
|
Total
|
$
|
1,445
|
|
9.
|
HEDGING ACTIVITIES
|
|
Daily Volume
(Bbls/day)
|
|
Weighted
Average Price
|
|||
April 2015 - June 2016
|
1,000
|
|
|
$
|
62.25
|
|
|
Daily Volume (MMBtu/day)
|
|
Weighted
Average Price
|
|||
April 2015
|
191,250
|
|
|
$
|
4.05
|
|
May 2015 - June 2015
|
201,250
|
|
|
$
|
4.05
|
|
July 2015 - August 2015
|
216,875
|
|
|
$
|
4.04
|
|
September 2015
|
246,875
|
|
|
$
|
3.97
|
|
October 2015 - December 2015
|
262,500
|
|
|
$
|
3.96
|
|
January 2016 - March 2016
|
252,500
|
|
|
$
|
3.82
|
|
April 2016
|
242,500
|
|
|
$
|
3.81
|
|
May 2016 - December 2016
|
172,500
|
|
|
$
|
3.73
|
|
January 2017 - June 2017
|
142,500
|
|
|
$
|
3.67
|
|
July 2017 - December 2017
|
80,000
|
|
|
$
|
3.45
|
|
January 2018 - December 2018
|
30,000
|
|
|
$
|
3.40
|
|
|
Daily Volume (MMBtu/day)
|
|
Hedged Differential
|
|||
April 2015 - December 2016
|
30,000
|
|
|
$
|
0.02
|
|
April 2015 - December 2016
|
10,000
|
|
|
$
|
0.01
|
|
|
(In thousands)
|
||
Short-term derivative instruments - asset
|
$
|
93,030
|
|
Long-term derivative instruments - asset
|
$
|
41,956
|
|
Short-term derivative instruments - liability
|
$
|
823
|
|
10.
|
FAIR VALUE MEASUREMENTS
|
|
March 31, 2015
|
||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||
|
(In thousands)
|
||||||||||
Assets:
|
|
|
|
|
|
||||||
Fixed price swaps
|
$
|
134,986
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Liabilities:
|
|
|
|
|
|
||||||
Fixed price swaps
|
$
|
823
|
|
|
$
|
—
|
|
|
$
|
—
|
|
11.
|
FAIR VALUE OF FINANCIAL INSTRUMENTS
|
12.
|
CONDENSED CONSOLIDATING FINANCIAL INFORMATION
|
|
March 31, 2015
|
||||||||||||||||||
|
Parent
|
|
Guarantors
|
|
Non-Guarantor
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
||||||||||
Current assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
73,667
|
|
|
$
|
1,072
|
|
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
74,740
|
|
Accounts receivable - oil and gas
|
79,621
|
|
|
59
|
|
|
—
|
|
|
—
|
|
|
79,680
|
|
|||||
Accounts receivable - related parties
|
33
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
33
|
|
|||||
Accounts receivable - intercompany
|
48,154
|
|
|
26
|
|
|
—
|
|
|
(48,180
|
)
|
|
—
|
|
|||||
Prepaid expenses and other current assets
|
15,777
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
15,777
|
|
|||||
Short-term derivative instruments
|
93,030
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
93,030
|
|
|||||
Total current assets
|
310,282
|
|
|
1,157
|
|
|
1
|
|
|
(48,180
|
)
|
|
263,260
|
|
|||||
Property and equipment:
|
|
|
|
|
|
|
|
|
|
||||||||||
Oil and natural gas properties, full-cost accounting
|
4,139,903
|
|
|
38,769
|
|
|
—
|
|
|
(710
|
)
|
|
4,177,962
|
|
|||||
Other property and equipment
|
19,008
|
|
|
43
|
|
|
—
|
|
|
—
|
|
|
19,051
|
|
|||||
Accumulated depletion, depreciation, amortization and impairment
|
(1,140,142
|
)
|
|
(26
|
)
|
|
—
|
|
|
—
|
|
|
(1,140,168
|
)
|
|||||
Property and equipment, net
|
3,018,769
|
|
|
38,786
|
|
|
—
|
|
|
(710
|
)
|
|
3,056,845
|
|
|||||
Other assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Equity investments and investments in subsidiaries
|
365,840
|
|
|
—
|
|
|
167,186
|
|
|
(158,055
|
)
|
|
374,971
|
|
|||||
Derivative instruments
|
41,956
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
41,956
|
|
|||||
Other assets
|
18,566
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
18,566
|
|
|||||
Total other assets
|
426,362
|
|
|
—
|
|
|
167,186
|
|
|
(158,055
|
)
|
|
435,493
|
|
|||||
Total assets
|
$
|
3,755,413
|
|
|
$
|
39,943
|
|
|
$
|
167,187
|
|
|
$
|
(206,945
|
)
|
|
$
|
3,755,598
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Liabilities and Stockholders' Equity
|
|
|
|
|
|
|
|
|
|
||||||||||
Current liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Accounts payable and accrued liabilities
|
$
|
399,912
|
|
|
$
|
184
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
400,096
|
|
Accounts payable - intercompany
|
—
|
|
|
48,072
|
|
|
108
|
|
|
(48,180
|
)
|
|
—
|
|
|||||
Asset retirement obligation - current
|
75
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
75
|
|
|||||
Short-term derivative instruments
|
823
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
823
|
|
|||||
Deferred tax liability - current
|
29,622
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
29,622
|
|
|||||
Current maturities of long-term debt
|
1,781
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,781
|
|
|||||
Total current liabilities
|
432,213
|
|
|
48,256
|
|
|
108
|
|
|
(48,180
|
)
|
|
432,397
|
|
|||||
Long-term derivative instrument
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Asset retirement obligation - long-term
|
18,656
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
18,656
|
|
|||||
Deferred tax liability
|
215,122
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
215,122
|
|
|||||
Long-term debt, net of current maturities
|
779,130
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
779,130
|
|
|||||
Total liabilities
|
1,445,121
|
|
|
48,256
|
|
|
108
|
|
|
(48,180
|
)
|
|
1,445,305
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Stockholders' equity:
|
|
|
|
|
|
|
|
|
|
||||||||||
Common stock
|
857
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
857
|
|
|||||
Paid-in capital
|
1,832,062
|
|
|
321
|
|
|
233,174
|
|
|
(233,494
|
)
|
|
1,832,063
|
|
|||||
Accumulated other comprehensive income (loss)
|
(41,659
|
)
|
|
—
|
|
|
(41,659
|
)
|
|
41,659
|
|
|
(41,659
|
)
|
|||||
Retained earnings (accumulated deficit)
|
519,032
|
|
|
(8,634
|
)
|
|
(24,436
|
)
|
|
33,070
|
|
|
519,032
|
|
|||||
Total stockholders' equity
|
2,310,292
|
|
|
(8,313
|
)
|
|
167,079
|
|
|
(158,765
|
)
|
|
2,310,293
|
|
|||||
Total liabilities and stockholders' equity
|
$
|
3,755,413
|
|
|
$
|
39,943
|
|
|
$
|
167,187
|
|
|
$
|
(206,945
|
)
|
|
$
|
3,755,598
|
|
|
December 31, 2014
|
||||||||||||||||||
|
Parent
|
|
Guarantors
|
|
Non-Guarantor
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
||||||||||
Current assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
141,535
|
|
|
$
|
804
|
|
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
142,340
|
|
Accounts receivable - oil and gas
|
103,762
|
|
|
96
|
|
|
—
|
|
|
—
|
|
|
103,858
|
|
|||||
Accounts receivable - related parties
|
46
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
46
|
|
|||||
Accounts receivable - intercompany
|
45,222
|
|
|
27
|
|
|
—
|
|
|
(45,249
|
)
|
|
—
|
|
|||||
Prepaid expenses and other current assets
|
3,714
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,714
|
|
|||||
Short-term derivative instruments
|
78,391
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
78,391
|
|
|||||
Total current assets
|
372,670
|
|
|
927
|
|
|
1
|
|
|
(45,249
|
)
|
|
328,349
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Property and equipment:
|
|
|
|
|
|
|
|
|
|
||||||||||
Oil and natural gas properties, full-cost accounting,
|
3,887,874
|
|
|
35,990
|
|
|
—
|
|
|
(710
|
)
|
|
3,923,154
|
|
|||||
Other property and equipment
|
18,301
|
|
|
43
|
|
|
—
|
|
|
—
|
|
|
18,344
|
|
|||||
Accumulated depletion, depreciation, amortization and impairment
|
(1,050,855
|
)
|
|
(24
|
)
|
|
—
|
|
|
—
|
|
|
(1,050,879
|
)
|
|||||
Property and equipment, net
|
2,855,320
|
|
|
36,009
|
|
|
—
|
|
|
(710
|
)
|
|
2,890,619
|
|
|||||
Other assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Equity investments and investments in subsidiaries
|
360,238
|
|
|
—
|
|
|
180,217
|
|
|
(170,874
|
)
|
|
369,581
|
|
|||||
Derivative instruments
|
24,448
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
24,448
|
|
|||||
Other assets
|
19,396
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
19,396
|
|
|||||
Total other assets
|
404,082
|
|
|
—
|
|
|
180,217
|
|
|
(170,874
|
)
|
|
413,425
|
|
|||||
Total assets
|
$
|
3,632,072
|
|
|
$
|
36,936
|
|
|
$
|
180,218
|
|
|
$
|
(216,833
|
)
|
|
$
|
3,632,393
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Liabilities and Stockholders' Equity
|
|
|
|
|
|
|
|
|
|
||||||||||
Current liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Accounts payable and accrued liabilities
|
$
|
371,089
|
|
|
$
|
321
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
371,410
|
|
Accounts payable - intercompany
|
—
|
|
|
45,143
|
|
|
106
|
|
|
(45,249
|
)
|
|
—
|
|
|||||
Asset retirement obligation - current
|
75
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
75
|
|
|||||
Deferred tax liability
|
27,070
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
27,070
|
|
|||||
Current maturities of long-term debt
|
168
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
168
|
|
|||||
Total current liabilities
|
398,402
|
|
|
45,464
|
|
|
106
|
|
|
(45,249
|
)
|
|
398,723
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Asset retirement obligation - long-term
|
17,863
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
17,863
|
|
|||||
Deferred tax liability
|
203,195
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
203,195
|
|
|||||
Long-term debt, net of current maturities
|
716,316
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
716,316
|
|
|||||
Total liabilities
|
1,335,776
|
|
|
45,464
|
|
|
106
|
|
|
(45,249
|
)
|
|
1,336,097
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Stockholders' equity:
|
|
|
|
|
|
|
|
|
|
||||||||||
Common stock
|
856
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
856
|
|
|||||
Paid-in capital
|
1,828,602
|
|
|
322
|
|
|
227,079
|
|
|
(227,401
|
)
|
|
1,828,602
|
|
|||||
Accumulated other comprehensive income (loss)
|
(26,675
|
)
|
|
—
|
|
|
(26,675
|
)
|
|
26,675
|
|
|
(26,675
|
)
|
|||||
Retained earnings (accumulated deficit)
|
493,513
|
|
|
(8,850
|
)
|
|
(20,292
|
)
|
|
29,142
|
|
|
493,513
|
|
|||||
Total stockholders' equity
|
2,296,296
|
|
|
(8,528
|
)
|
|
180,112
|
|
|
(171,584
|
)
|
|
2,296,296
|
|
|||||
Total liabilities and stockholders' equity
|
$
|
3,632,072
|
|
|
$
|
36,936
|
|
|
$
|
180,218
|
|
|
$
|
(216,833
|
)
|
|
$
|
3,632,393
|
|
|
Three months ended March 31, 2015
|
||||||||||||||||||
|
Parent
|
|
Guarantors
|
|
Non-Guarantor
|
|
Eliminations
|
|
Consolidated
|
||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Total revenues
|
$
|
175,832
|
|
|
$
|
485
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
176,317
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Costs and expenses:
|
|
|
|
|
|
|
|
|
|
||||||||||
Lease operating expenses
|
16,787
|
|
|
193
|
|
|
—
|
|
|
—
|
|
|
16,980
|
|
|||||
Production taxes
|
4,253
|
|
|
32
|
|
|
—
|
|
|
—
|
|
|
4,285
|
|
|||||
Midstream gathering and processing
|
25,374
|
|
|
7
|
|
|
—
|
|
|
—
|
|
|
25,381
|
|
|||||
Depreciation, depletion, and amortization
|
89,908
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
89,909
|
|
|||||
General and administrative
|
10,761
|
|
|
36
|
|
|
2
|
|
|
—
|
|
|
10,799
|
|
|||||
Accretion expense
|
190
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
190
|
|
|||||
|
147,273
|
|
|
269
|
|
|
2
|
|
|
—
|
|
|
147,544
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
INCOME FROM OPERATIONS
|
28,559
|
|
|
216
|
|
|
(2
|
)
|
|
—
|
|
|
28,773
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
OTHER (INCOME) EXPENSE:
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest expense
|
8,759
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8,759
|
|
|||||
Interest income
|
(9
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(9
|
)
|
|||||
(Income) loss from equity method investments and investments in subsidiaries
|
(20,189
|
)
|
|
—
|
|
|
4,142
|
|
|
(3,928
|
)
|
|
(19,975
|
)
|
|||||
|
(11,439
|
)
|
|
—
|
|
|
4,142
|
|
|
(3,928
|
)
|
|
(11,225
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
INCOME (LOSS) BEFORE INCOME TAXES
|
39,998
|
|
|
216
|
|
|
(4,144
|
)
|
|
3,928
|
|
|
39,998
|
|
|||||
INCOME TAX EXPENSE
|
14,479
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
14,479
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
NET INCOME (LOSS)
|
$
|
25,519
|
|
|
$
|
216
|
|
|
$
|
(4,144
|
)
|
|
$
|
3,928
|
|
|
$
|
25,519
|
|
|
Three months ended March 31, 2014
|
||||||||||||||||||
|
Parent
|
|
Guarantors
|
|
Non-Guarantor
|
|
Eliminations
|
|
Consolidated
|
||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Total revenues
|
$
|
117,850
|
|
|
$
|
179
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
118,029
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Costs and expenses:
|
|
|
|
|
|
|
|
|
|
||||||||||
Lease operating expenses
|
11,381
|
|
|
248
|
|
|
—
|
|
|
—
|
|
|
11,629
|
|
|||||
Production taxes
|
6,937
|
|
|
20
|
|
|
—
|
|
|
—
|
|
|
6,957
|
|
|||||
Midstream gathering and processing
|
7,757
|
|
|
12
|
|
|
—
|
|
|
—
|
|
|
7,769
|
|
|||||
Depreciation, depletion, and amortization
|
56,877
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
56,877
|
|
|||||
General and administrative
|
9,488
|
|
|
27
|
|
|
(4
|
)
|
|
—
|
|
|
9,511
|
|
|||||
Accretion expense
|
188
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
188
|
|
|||||
Gain on sale of assets
|
(11
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(11
|
)
|
|||||
|
92,617
|
|
|
307
|
|
|
(4
|
)
|
|
—
|
|
|
92,920
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
INCOME (LOSS) FROM OPERATIONS
|
25,233
|
|
|
(128
|
)
|
|
4
|
|
|
—
|
|
|
25,109
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
OTHER (INCOME) EXPENSE:
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest expense
|
3,885
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,885
|
|
|||||
Interest income
|
(106
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(106
|
)
|
|||||
Litigation settlement
|
18,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
18,000
|
|
|||||
(Income) loss from equity method investments and investments in subsidiaries
|
(128,351
|
)
|
|
—
|
|
|
2,001
|
|
|
(2,125
|
)
|
|
(128,475
|
)
|
|||||
|
(106,572
|
)
|
|
—
|
|
|
2,001
|
|
|
(2,125
|
)
|
|
(106,696
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
INCOME (LOSS) BEFORE INCOME TAXES
|
131,805
|
|
|
(128
|
)
|
|
(1,997
|
)
|
|
2,125
|
|
|
131,805
|
|
|||||
INCOME TAX EXPENSE
|
49,247
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
49,247
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
NET INCOME (LOSS)
|
$
|
82,558
|
|
|
$
|
(128
|
)
|
|
$
|
(1,997
|
)
|
|
$
|
2,125
|
|
|
$
|
82,558
|
|
|
Three months ended March 31, 2015
|
||||||||||||||||||
|
Parent
|
|
Guarantors
|
|
Non-Guarantor
|
|
Eliminations
|
|
Consolidated
|
||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income (loss)
|
$
|
25,519
|
|
|
$
|
216
|
|
|
$
|
(4,144
|
)
|
|
$
|
3,928
|
|
|
$
|
25,519
|
|
Foreign currency translation adjustment
|
(14,984
|
)
|
|
—
|
|
|
(14,984
|
)
|
|
14,984
|
|
|
(14,984
|
)
|
|||||
Other comprehensive income (loss)
|
(14,984
|
)
|
|
—
|
|
|
(14,984
|
)
|
|
14,984
|
|
|
(14,984
|
)
|
|||||
Comprehensive income (loss)
|
$
|
10,535
|
|
|
$
|
216
|
|
|
$
|
(19,128
|
)
|
|
$
|
18,912
|
|
|
$
|
10,535
|
|
|
Three months ended March 31, 2014
|
||||||||||||||||||
|
Parent
|
|
Guarantors
|
|
Non-Guarantor
|
|
Eliminations
|
|
Consolidated
|
||||||||||
|
|
||||||||||||||||||
Net income (loss)
|
$
|
82,558
|
|
|
$
|
(128
|
)
|
|
$
|
(1,997
|
)
|
|
$
|
2,125
|
|
|
$
|
82,558
|
|
Foreign currency translation adjustment
|
(7,278
|
)
|
|
—
|
|
|
(7,278
|
)
|
|
7,278
|
|
|
(7,278
|
)
|
|||||
Other comprehensive income (loss)
|
(7,278
|
)
|
|
—
|
|
|
(7,278
|
)
|
|
7,278
|
|
|
(7,278
|
)
|
|||||
Comprehensive income (loss)
|
$
|
75,280
|
|
|
$
|
(128
|
)
|
|
$
|
(9,275
|
)
|
|
$
|
9,403
|
|
|
$
|
75,280
|
|
|
Three months ended March 31, 2015
|
||||||||||||||||||
|
Parent
|
|
Guarantors
|
|
Non-Guarantor
|
|
Eliminations
|
|
Consolidated
|
||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Net cash provided by operating activities
|
$
|
95,879
|
|
|
$
|
3,158
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
99,037
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net cash provided by (used in) investing activities
|
(228,601
|
)
|
|
(2,890
|
)
|
|
(6,093
|
)
|
|
6,093
|
|
|
(231,491
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Net cash provided by (used in) financing activities
|
64,854
|
|
|
—
|
|
|
6,093
|
|
|
(6,093
|
)
|
|
64,854
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Net (decrease) increase in cash and cash equivalents
|
(67,868
|
)
|
|
268
|
|
|
—
|
|
|
—
|
|
|
(67,600
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents at beginning of period
|
141,535
|
|
|
804
|
|
|
1
|
|
|
—
|
|
|
142,340
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents at end of period
|
$
|
73,667
|
|
|
$
|
1,072
|
|
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
74,740
|
|
|
Three months ended March 31, 2014
|
||||||||||||||||||
|
Parent
|
|
Guarantors
|
|
Non-Guarantor
|
|
Eliminations
|
|
Consolidated
|
||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Net cash provided by (used in) operating activities
|
$
|
159,736
|
|
|
$
|
(3,585
|
)
|
|
$
|
(1
|
)
|
|
$
|
—
|
|
|
$
|
156,150
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net cash provided by (used in) investing activities
|
(443,079
|
)
|
|
(2,034
|
)
|
|
(8,069
|
)
|
|
8,070
|
|
|
(445,112
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Net cash provided by (used in) financing activities
|
388
|
|
|
—
|
|
|
8,070
|
|
|
(8,070
|
)
|
|
388
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Net decrease in cash and cash equivalents
|
(282,955
|
)
|
|
(5,619
|
)
|
|
—
|
|
|
—
|
|
|
(288,574
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents at beginning of period
|
451,431
|
|
|
7,525
|
|
|
—
|
|
|
—
|
|
|
458,956
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents at end of period
|
$
|
168,476
|
|
|
$
|
1,906
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
170,382
|
|
13.
|
RECENT ACCOUNTING PRONOUNCEMENTS
|
14.
|
SUBSEQUENT EVENTS
|
ITEM 2.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
•
|
Oil and natural gas revenues increased
49%
to
$176.1 million
for the three months ended
March 31, 2015
from
$117.9 million
for the three months ended
March 31, 2014
.
|
•
|
Production increased
161%
to
38,198
net million cubic feet of natural gas equivalent, or MMcfe, for the three months ended
March 31, 2015
from
14,627
MMcfe for the three months ended
March 31, 2014
.
|
•
|
During the three months ended
March 31, 2015
, we spud 12 gross (9.7 net) wells, participated in an additional six
gross (1.1 net) wells that were drilled by other operators on our Utica Shale acreage and recompleted 23 gross and net wells. Of our 12 new wells spud at
March 31, 2015
, nine were in various stages of completion and three were being drilled.
|
•
|
On April 15, 2015, we entered into an agreement to acquire Paloma Partners III, LLC, or Paloma, for a total purchase price of approximately $301.3 million, subject to closing adjustments. Paloma holds approximately 24,000 net nonproducing acres in the Utica Shale of Ohio. This transaction is expected to close during the third quarter of 2015, subject to the satisfaction of certain closing conditions.
|
•
|
On April 21, 2015, we issued 10,925,000 shares of our common stock in an underwritten public offering (which included 1,425,000 shares sold pursuant to an option to purchase additional shares of our common stock granted to and exercised by the underwriters in full. The net proceeds from the equity offering (including the net proceeds from the sale of the shares of common stock to the underwriters under their option to purchase additional shares) were approximately $501.9 million. We used a portion of these net proceeds, together with a portion of the net proceeds from our concurrent senior notes offering described below, to repay all borrowings outstanding at that time under our senior secured revolving credit facility and intend to use the remaining net proceeds from these offerings to fund the pending acquisition of Paloma and for general corporate purposes, including the funding of a portion of our 2015 capital development plans.
|
•
|
On April 21 2015, we issued $350.0 million in aggregate principal amount of our 6.625% senior unsecured notes due 2023, resulting in net proceeds to us of $343.6 million.
|
•
|
We continue to see improvement in our service costs and expect that our operational efficiencies, combined with our service costs reductions, will lower our overall well costs by approximately 15% during 2015 as compared to peak 2014 pricing.
|
•
|
the quality and quantity of available data;
|
•
|
the interpretation of that data;
|
•
|
the accuracy of various mandated economic assumptions; and
|
•
|
the judgments of the individuals preparing the estimates.
|
|
Three months ended March 31,
|
||||||
|
2015
|
|
2014
|
||||
Oil production volumes (MBbls)
|
766
|
|
|
727
|
|
||
Gas production volumes (MMcf)
|
25,965
|
|
|
7,662
|
|
||
Natural gas liquids production volumes (MGal)
|
53,478
|
|
|
18,235
|
|
||
Gas equivalents (MMcfe)
|
38,198
|
|
|
14,627
|
|
||
Average oil price (per Bbl)
|
$
|
46.37
|
|
|
$
|
100.97
|
|
Average gas price (per Mcf)
|
$
|
4.57
|
|
|
$
|
2.39
|
|
Average natural gas liquids (per Gal)
|
$
|
0.41
|
|
|
$
|
1.43
|
|
Gas equivalents (per Mcfe)
|
$
|
4.61
|
|
|
$
|
8.06
|
|
ITEM 3.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
|
Daily Volume (Bbls/day)
|
|
Weighted Average Price
|
|||
Fixed Price Swaps:
|
|
|
|
|||
April 2015 - June 2016
|
1,000
|
|
|
$
|
62.25
|
|
|
Daily Volume (MMBtu/day)
|
|
Weighted Average Price
|
|||
Fixed Price Swaps:
|
|
|
|
|||
April 2015
|
191,250
|
|
|
$
|
4.05
|
|
May 2015 - June 2015
|
201,250
|
|
|
$
|
4.05
|
|
July 2015 - August 2015
|
216,875
|
|
|
$
|
4.04
|
|
September 2015
|
246,875
|
|
|
$
|
3.97
|
|
October 2015 - December 2015
|
262,500
|
|
|
$
|
3.96
|
|
January 2016 - March 2016
|
252,500
|
|
|
$
|
3.82
|
|
April 2016
|
242,500
|
|
|
$
|
3.81
|
|
May 2016 - December 2016
|
172,500
|
|
|
$
|
3.73
|
|
January 2017 - June 2017
|
142,500
|
|
|
$
|
3.67
|
|
July 2017 - December 2017
|
80,000
|
|
|
$
|
3.45
|
|
January 2018 - December 2018
|
30,000
|
|
|
$
|
3.40
|
|
|
Daily Volume (MMBtu/day)
|
|
Hedged Differential
|
|||
Basis Swaps:
|
|
|
|
|||
April 2015 - December 2016
|
30,000
|
|
|
$
|
0.02
|
|
April 2015 - December 2016
|
10,000
|
|
|
$
|
0.01
|
|
ITEM 4.
|
CONTROLS AND PROCEDURES
|
ITEM 1.
|
LEGAL PROCEEDINGS
|
ITEM 1A.
|
RISK FACTORS
|
ITEM 2.
|
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
|
(a)
|
None.
|
(b)
|
Not Applicable.
|
(c)
|
We do not have a share repurchase program, and during the three months ended
March 31, 2015
, we did not purchase any shares of our common stock.
|
ITEM 3.
|
DEFAULTS UPON SENIOR SECURITIES
|
ITEM 4.
|
MINE SAFETY DISCLOSURES
|
ITEM 5.
|
OTHER INFORMATION
|
ITEM 6.
|
EXHIBITS
|
Exhibit
Number
|
|
Description
|
|
|
|
2.1
|
|
Contribution Agreement, dated May 7, 2012, by and between the Company and Diamondback Energy, Inc. (incorporated by reference to Exhibit 10.1 to the Form 8-K, File No. 000-19514, filed by the Company with the SEC on May 8, 2012).
|
|
|
|
2.2
|
|
Purchase and Sale Agreement, dated December 17, 2012, by and between Windsor Ohio LLC, as seller, and Gulfport Energy Corporation, as purchaser (incorporated by reference to Exhibit 2.1 to the Form 8-K, File No. 000-19514, filed by the Company with the SEC on December 18, 2012).
|
|
|
|
2.3
|
|
Amendment, dated December 19, 2012, to the Purchase and Sale Agreement, dated December 17, 2012, by and between Windsor Ohio LLC, as seller, and Gulfport Energy Corporation, as purchaser (incorporated by reference to Exhibit 2.1 to the Form 8-K, File No. 000-19514, filed by the Company with the SEC on December 20, 2012).
|
|
|
|
2.4
|
|
Purchase and Sale Agreement, dated February 11, 2013, by and between Windsor Ohio, LLC, as seller, and Gulfport Energy Corporation, as purchaser (incorporated by reference to Exhibit 2.1 to the Form 8-K, File No. 000-19514, filed by the Company with the SEC on February 15, 2013).
|
|
|
|
3.1
|
|
Restated Certificate of Incorporation (incorporated by reference to Exhibit 3.1 to the Form 8-K, File No. 000-19514, filed by the Company with the SEC on April 26, 2006).
|
|
|
|
3.2
|
|
Certificate of Amendment No. 1 to Restated Certificate of Incorporation (incorporated by reference to Exhibit 3.2 to Form 10-Q, File No. 000-19514, filed by the Company with the SEC on November 6, 2009).
|
|
|
|
3.3
|
|
Certificate of Amendment No. 2 to Restated Certificate of Incorporation (incorporated by reference to Exhibit 3.1 to the Form 8-K, File No. 000-19514, filed by the Company with the SEC on July 23, 2013).
|
|
|
|
3.4
|
|
Amended and Restated Bylaws (incorporated by reference to Exhibit 3.2 to the Form 8-K, File No. 000-19514, filed by the Company with the SEC on July 12, 2006).
|
|
|
|
3.5
|
|
First Amendment to the Amended and Restated Bylaws (incorporated by reference to Exhibit 3.2 to the Form 8-K, File No. 000-19514, filed by the Company with the SEC on July 23, 2013).
|
|
|
|
3.6
|
|
Second Amendment to the Amended and Restated Bylaws (incorporated by reference to Exhibit 3.1 to the Form 8-K, File No. 000-19514, filed by the Company on May 2, 2014).
|
|
|
|
4.1
|
|
Form of Common Stock certificate (incorporated by reference to Exhibit 4.1 to Amendment No. 2 to the Registration Statement on Form SB-2, File No. 333-115396, filed by the Company with the SEC on July 22, 2004).
|
|
|
|
4.2
|
|
Indenture, dated as of October 17, 2012, among Gulfport Energy Corporation, subsidiary guarantors party thereto and Wells Fargo Bank, National Association, as trustee (including the form of Gulfport Energy Corporation's 7.750% Senior Note Due November 1, 2020) (incorporated by reference to Exhibit 4.1 to the Form 8-K, File No. 000-19514, filed by the Company with the SEC on October 23, 2012).
|
|
|
|
4.3
|
|
First Supplemental Indenture, dated December 21, 2012, among Gulfport Energy Corporation, subsidiary guarantors party thereto and Wells Fargo Bank, National Association, as trustee (incorporated by reference to Exhibit 4.2 to the Form 8-K, File No. 000-19514, filed by the Company with the SEC on December 26, 2012).
|
|
|
|
4.4
|
|
Second Supplemental Indenture, dated as of August 18, 2014, among Gulfport Energy Corporation, subsidiary guarantors party thereto and Wells Fargo Bank, National Association, as trustee (incorporated by reference to Exhibit 4.3 to the Form 8-K, File No. 000-19514, filed by the Company with the SEC on August 19, 2014).
|
|
|
|
4.5
|
|
Indenture, dated as of April 21, 2015, among the Company, the subsidiary guarantors party thereto and Wells Fargo Bank, N.A., as trustee (including the form of the Company’s 6.625% Senior Notes due 2023) (incorporated by reference to Exhibit 4.1 to the Form 8-K, File No. 000-19514, filed by the Company with the SEC on April 21, 2015).
|
|
|
|
4.6
|
|
Registration Rights Agreement, dated as of April 21, 2015, among the Company, the subsidiary guarantors party thereto and Credit Suisse Securities (USA) LLC and Scotia Capital (USA) Inc., as representatives of the several initial purchasers (incorporated by reference to Exhibit 4.2 to the Form 8-K, File No. 000-19514, filed by the Company with the SEC on April 21, 2015).
|
|
|
|
10.1
|
|
Third Amendment to Amended and Restated Credit Agreement, dated as of April 10, 2015, among the Company, as borrower, The Bank of Nova Scotia, as administrative agent, and the lenders party thereto (incorporated by reference to Exhibit 10.1 to the Form 8-K, File No. 000-19514, filed by the Company with the SEC on April 15, 2015).
|
|
|
|
10.1+
|
|
Employment Agreement, effective as of August 11, 2014, by and between the Company and Aaron Gaydosik (incorporated by reference to Exhibit 10.1 to the Form 8-K, File No. 000-19514, filed by the Company with the SEC on March 19, 2015).
|
|
|
|
10.2+
|
|
Employment Agreement, effective as of April 22, 2014, by and between the Company and Ross Kirtley (incorporated by reference to Exhibit 10.2 to the Form 8-K, File No. 000-19514, filed by the Company with the SEC on March 19, 2015).
|
|
|
|
10.3+*
|
|
Amended and Restated Employment Agreement, dated as of April 29, 2015, by and between the Company and Michael G. Moore.
|
|
|
|
10.4
|
|
Investor Rights Agreement, dated as of October 11, 2012, between Gulfport Energy Corporation and Diamondback Energy, Inc. (incorporated by reference to Exhibit 10.1 to the Form 8-K, File No. 000-19514, filed by the Company with the SEC on October 17, 2012).
|
|
|
|
31.1*
|
|
Certification of Chief Executive Officer of the Registrant pursuant to Rule 13a-14(a) promulgated under the Securities Exchange Act of 1934, as amended.
|
|
|
|
31.2*
|
|
Certification of Chief Financial Officer of the Registrant pursuant to Rule 13a-14(a) promulgated under the Securities Exchange Act of 1934, as amended.
|
|
|
|
32.1*
|
|
Certification of Chief Executive Officer of the Registrant pursuant to Rule 13a-14(b) promulgated under the Securities Exchange Act of 1934, as amended, and Section 1350 of Chapter 63 of Title 18 of the United States Code.
|
|
|
|
32.2*
|
|
Certification of Chief Financial Officer of the Registrant pursuant to Rule 13a-14(b) promulgated under the Securities Exchange Act of 1934, as amended, and Section 1350 of Chapter 63 of Title 18 of the United States Code.
|
|
|
|
101.INS*
|
|
XBRL Instance Document.
|
|
|
|
101.SCH*
|
|
XBRL Taxonomy Extension Schema Document.
|
|
|
|
101.CAL*
|
|
XBRL Taxonomy Extension Calculation Linkbase Document.
|
|
|
|
101.DEF*
|
|
XBRL Taxonomy Extension Definition Linkbase Document.
|
|
|
|
101.LAB*
|
|
XBRL Taxonomy Extension Labels Linkbase Document.
|
|
|
|
101.PRE*
|
|
XBRL Taxonomy Extension Presentation Linkbase Document.
|
*
|
Filed herewith.
|
+
|
Management contract, compensatory plan or arrangement.
|
GULFPORT ENERGY CORPORATION
|
||
|
|
|
By:
|
|
/s/ Aaron Gaydosik
|
|
|
Aaron Gaydosik
Chief Financial Officer
|
Date: April 30, 2015
|
THE “COMPANY”
GULFPORT ENERGY CORPORATION
By: /s/ David L. Houston
Name: David L. Houston, Chairman of the Board
|
Date: April 30, 2015
|
THE “EXECUTIVE”
/s/ Michael G. Moore
Michael G. Moore, in his individual capacity
|
|
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls over financial reporting.
|
|
/s/ Michael G. Moore
|
|
Michael G. Moore
|
|
Chief Executive Officer and President
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls over financial reporting.
|
|
/s/ Aaron Gaydosik
|
|
Aaron Gaydosik
|
|
Chief Financial Officer
|
(1)
|
the
Quarterly Report
on Form
10-Q
of the Company for the
quarterly period
ended
March 31, 2015
(the “Report”) fully complies with the requirements of Section 13 (a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m(a) or 78o(d)); and
|
(2)
|
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
|
/s/ Michael G. Moore
|
|
Michael G. Moore
|
|
Chief Executive Officer and President
|
(1)
|
the
Quarterly Report
on Form
10-Q
of the Company for the
quarterly period
ended
March 31, 2015
(the “Report”) fully complies with the requirements of Section 13 (a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m(a) or 78o(d)); and
|
(2)
|
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
|
/s/ Aaron Gaydosik
|
|
Aaron Gaydosik
|
|
Chief Financial Officer
|