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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 September 30, 2016 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
|
|
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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September 30, 2016
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December 31, 2015
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||||
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(In thousands, except share data)
|
||||||
Assets
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
364,276
|
|
|
$
|
112,974
|
|
Accounts receivable—oil and gas
|
127,788
|
|
|
71,872
|
|
||
Accounts receivable—related parties
|
96
|
|
|
16
|
|
||
Prepaid expenses and other current assets
|
10,740
|
|
|
3,905
|
|
||
Short-term derivative instruments
|
39,363
|
|
|
142,794
|
|
||
Deferred tax asset
|
38
|
|
|
—
|
|
||
Total current assets
|
542,301
|
|
|
331,561
|
|
||
Property and equipment:
|
|
|
|
||||
Oil and natural gas properties, full-cost accounting, $1,723,821 and $1,817,701 excluded from amortization in 2016 and 2015, respectively
|
5,816,458
|
|
|
5,424,342
|
|
||
Other property and equipment
|
54,460
|
|
|
33,171
|
|
||
Accumulated depletion, depreciation, amortization and impairment
|
(3,613,662
|
)
|
|
(2,829,110
|
)
|
||
Property and equipment, net
|
2,257,256
|
|
|
2,628,403
|
|
||
Other assets:
|
|
|
|
||||
Equity investments
|
251,309
|
|
|
242,393
|
|
||
Long-term derivative instruments
|
15,262
|
|
|
51,088
|
|
||
Deferred tax asset
|
4,203
|
|
|
74,925
|
|
||
Other assets
|
5,512
|
|
|
6,364
|
|
||
Total other assets
|
276,286
|
|
|
374,770
|
|
||
Total assets
|
$
|
3,075,843
|
|
|
$
|
3,334,734
|
|
Liabilities and Stockholders’ Equity
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable and accrued liabilities
|
$
|
304,341
|
|
|
$
|
265,128
|
|
Asset retirement obligation—current
|
75
|
|
|
75
|
|
||
Short-term derivative instruments
|
37,220
|
|
|
437
|
|
||
Deferred tax liability
|
—
|
|
|
50,697
|
|
||
Current maturities of long-term debt
|
220
|
|
|
179
|
|
||
Total current liabilities
|
341,856
|
|
|
316,516
|
|
||
Long-term derivative instrument
|
14,907
|
|
|
6,935
|
|
||
Asset retirement obligation—long-term
|
32,910
|
|
|
26,362
|
|
||
Long-term debt, net of current maturities
|
961,050
|
|
|
946,084
|
|
||
Total liabilities
|
1,350,723
|
|
|
1,295,897
|
|
||
Commitments and contingencies (Note 10)
|
|
|
|
||||
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, 125,453,533 issued and outstanding at September 30, 2016 and 108,322,250 at December 31, 2015
|
1,253
|
|
|
1,082
|
|
||
Paid-in capital
|
3,245,393
|
|
|
2,824,303
|
|
||
Accumulated other comprehensive loss
|
(50,816
|
)
|
|
(55,177
|
)
|
||
Retained deficit
|
(1,470,710
|
)
|
|
(731,371
|
)
|
||
Total stockholders’ equity
|
1,725,120
|
|
|
2,038,837
|
|
||
Total liabilities and stockholders’ equity
|
$
|
3,075,843
|
|
|
$
|
3,334,734
|
|
|
Three months ended September 30,
|
|
Nine months ended September 30,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
|
(In thousands, except share data)
|
||||||||||||||
Revenues:
|
|
|
|
|
|
|
|
||||||||
Gas sales
|
$
|
155,185
|
|
|
$
|
179,215
|
|
|
$
|
228,419
|
|
|
$
|
363,656
|
|
Oil and condensate sales
|
23,507
|
|
|
41,747
|
|
|
61,161
|
|
|
111,712
|
|
||||
Natural gas liquid sales
|
15,000
|
|
|
9,431
|
|
|
32,914
|
|
|
43,396
|
|
||||
Other (expense) income
|
(6
|
)
|
|
176
|
|
|
3
|
|
|
392
|
|
||||
|
193,686
|
|
|
230,569
|
|
|
322,497
|
|
|
519,156
|
|
||||
Costs and expenses:
|
|
|
|
|
|
|
|
||||||||
Lease operating expenses
|
17,471
|
|
|
17,568
|
|
|
48,789
|
|
|
51,411
|
|
||||
Production taxes
|
3,525
|
|
|
3,593
|
|
|
9,492
|
|
|
11,163
|
|
||||
Midstream gathering and processing
|
45,475
|
|
|
42,166
|
|
|
122,476
|
|
|
100,451
|
|
||||
Depreciation, depletion and amortization
|
62,285
|
|
|
90,329
|
|
|
183,414
|
|
|
251,393
|
|
||||
Impairment of oil and gas properties
|
212,194
|
|
|
594,776
|
|
|
601,806
|
|
|
594,776
|
|
||||
General and administrative
|
10,467
|
|
|
11,001
|
|
|
32,941
|
|
|
31,315
|
|
||||
Accretion expense
|
269
|
|
|
212
|
|
|
777
|
|
|
594
|
|
||||
|
351,686
|
|
|
759,645
|
|
|
999,695
|
|
|
1,041,103
|
|
||||
LOSS FROM OPERATIONS
|
(158,000
|
)
|
|
(529,076
|
)
|
|
(677,198
|
)
|
|
(521,947
|
)
|
||||
OTHER (INCOME) EXPENSE:
|
|
|
|
|
|
|
|
||||||||
Interest expense
|
12,787
|
|
|
14,124
|
|
|
44,892
|
|
|
34,906
|
|
||||
Interest income
|
(337
|
)
|
|
(279
|
)
|
|
(822
|
)
|
|
(536
|
)
|
||||
Insurance proceeds
|
(3,750
|
)
|
|
—
|
|
|
(3,750
|
)
|
|
—
|
|
||||
(Income) loss from equity method investments
|
(5,997
|
)
|
|
61,891
|
|
|
25,576
|
|
|
57,036
|
|
||||
|
2,703
|
|
|
75,736
|
|
|
65,896
|
|
|
91,406
|
|
||||
LOSS BEFORE INCOME TAXES
|
(160,703
|
)
|
|
(604,812
|
)
|
|
(743,094
|
)
|
|
(613,353
|
)
|
||||
INCOME TAX BENEFIT
|
(3,407
|
)
|
|
(216,603
|
)
|
|
(3,755
|
)
|
|
(219,338
|
)
|
||||
NET LOSS
|
$
|
(157,296
|
)
|
|
$
|
(388,209
|
)
|
|
$
|
(739,339
|
)
|
|
$
|
(394,015
|
)
|
NET LOSS PER COMMON SHARE:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
(1.25
|
)
|
|
$
|
(3.59
|
)
|
|
$
|
(6.12
|
)
|
|
$
|
(4.06
|
)
|
Diluted
|
$
|
(1.25
|
)
|
|
$
|
(3.59
|
)
|
|
$
|
(6.12
|
)
|
|
$
|
(4.06
|
)
|
Weighted average common shares outstanding—Basic
|
125,408,866
|
|
|
108,217,062
|
|
|
120,771,046
|
|
|
96,935,897
|
|
||||
Weighted average common shares outstanding—Diluted
|
125,408,866
|
|
|
108,217,062
|
|
|
120,771,046
|
|
|
96,935,897
|
|
|
Three months ended September 30,
|
|
Nine months ended September 30,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
|
(In thousands)
|
||||||||||||||
Net loss
|
$
|
(157,296
|
)
|
|
$
|
(388,209
|
)
|
|
$
|
(739,339
|
)
|
|
$
|
(394,015
|
)
|
Foreign currency translation adjustment (1)
|
(4,013
|
)
|
|
(11,538
|
)
|
|
4,361
|
|
|
(23,275
|
)
|
||||
Other comprehensive (loss) income
|
(4,013
|
)
|
|
(11,538
|
)
|
|
4,361
|
|
|
(23,275
|
)
|
||||
Comprehensive loss
|
$
|
(161,309
|
)
|
|
$
|
(399,747
|
)
|
|
$
|
(734,978
|
)
|
|
$
|
(417,290
|
)
|
|
|
|
|
|
Paid-in
Capital
|
|
Accumulated
Other
Comprehensive
(Loss) Income
|
|
Retained
Earnings
|
|
Total
Stockholders’
Equity
|
|||||||||||
|
Common Stock
|
|
|
|
|
|||||||||||||||||
|
Shares
|
|
Amount
|
|
|
|
|
|||||||||||||||
|
(In thousands, except share data)
|
|||||||||||||||||||||
Balance at January 1, 2016
|
108,322,250
|
|
|
$
|
1,082
|
|
|
$
|
2,824,303
|
|
|
$
|
(55,177
|
)
|
|
$
|
(731,371
|
)
|
|
$
|
2,038,837
|
|
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(739,339
|
)
|
|
(739,339
|
)
|
|||||
Other Comprehensive Income
|
—
|
|
|
—
|
|
|
—
|
|
|
4,361
|
|
|
—
|
|
|
4,361
|
|
|||||
Stock Compensation
|
—
|
|
|
—
|
|
|
9,550
|
|
|
—
|
|
|
—
|
|
|
9,550
|
|
|||||
Issuance of Common Stock in public offerings, net of related expenses
|
16,905,000
|
|
|
169
|
|
|
411,542
|
|
|
—
|
|
|
—
|
|
|
411,711
|
|
|||||
Issuance of Restricted Stock
|
226,283
|
|
|
2
|
|
|
(2
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Balance at September 30, 2016
|
125,453,533
|
|
|
$
|
1,253
|
|
|
$
|
3,245,393
|
|
|
$
|
(50,816
|
)
|
|
$
|
(1,470,710
|
)
|
|
$
|
1,725,120
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Balance at January 1, 2015
|
85,655,438
|
|
|
$
|
856
|
|
|
$
|
1,828,602
|
|
|
$
|
(26,675
|
)
|
|
$
|
493,513
|
|
|
$
|
2,296,296
|
|
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(394,015
|
)
|
|
(394,015
|
)
|
|||||
Other Comprehensive Loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(23,275
|
)
|
|
—
|
|
|
(23,275
|
)
|
|||||
Stock Compensation
|
—
|
|
|
—
|
|
|
10,556
|
|
|
—
|
|
|
—
|
|
|
10,556
|
|
|||||
Issuance of Common Stock in public offerings, net of related expenses
|
22,425,000
|
|
|
224
|
|
|
981,299
|
|
|
|
|
|
|
|
|
981,523
|
|
|||||
Issuance of Restricted Stock
|
156,393
|
|
|
2
|
|
|
(2
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Issuance of Common Stock through exercise of options
|
5,000
|
|
|
—
|
|
|
45
|
|
|
—
|
|
|
—
|
|
|
45
|
|
|||||
Balance at September 30, 2015
|
108,241,831
|
|
|
$
|
1,082
|
|
|
$
|
2,820,500
|
|
|
$
|
(49,950
|
)
|
|
$
|
99,498
|
|
|
$
|
2,871,130
|
|
|
Nine months ended September 30,
|
||||||
|
2016
|
|
2015
|
||||
|
(In thousands)
|
||||||
Cash flows from operating activities:
|
|
|
|
||||
Net loss
|
$
|
(739,339
|
)
|
|
$
|
(394,015
|
)
|
Adjustments to reconcile net loss to net cash provided by operating activities:
|
|
|
|
||||
Accretion of discount—Asset Retirement Obligation
|
777
|
|
|
594
|
|
||
Depletion, depreciation and amortization
|
183,414
|
|
|
251,393
|
|
||
Impairment of oil and gas properties
|
601,806
|
|
|
594,776
|
|
||
Stock-based compensation expense
|
5,730
|
|
|
6,334
|
|
||
Loss from equity investments
|
25,988
|
|
|
64,062
|
|
||
Loss (gain) on derivative instruments
|
184,013
|
|
|
(58,873
|
)
|
||
Deferred income tax expense (benefit)
|
17,211
|
|
|
(219,338
|
)
|
||
Amortization of loan commitment fees
|
2,912
|
|
|
2,287
|
|
||
Amortization of note discount and premium
|
(1,716
|
)
|
|
(1,611
|
)
|
||
Changes in operating assets and liabilities:
|
|
|
|
||||
(Increase) decrease in accounts receivable
|
(55,916
|
)
|
|
37,587
|
|
||
Increase in accounts receivable—related party
|
(80
|
)
|
|
(103
|
)
|
||
Increase in prepaid expenses
|
(6,835
|
)
|
|
(12,442
|
)
|
||
Increase (decrease) in accounts payable, accrued liabilities and other
|
28,265
|
|
|
(34,440
|
)
|
||
Settlement of asset retirement obligation
|
(955
|
)
|
|
(1,120
|
)
|
||
Net cash provided by operating activities
|
245,275
|
|
|
235,091
|
|
||
Cash flows from investing activities:
|
|
|
|
||||
Deductions to cash held in escrow
|
8
|
|
|
8
|
|
||
Additions to other property and equipment
|
(20,131
|
)
|
|
(8,209
|
)
|
||
Additions to oil and gas properties
|
(441,128
|
)
|
|
(1,373,292
|
)
|
||
Proceeds from sale of oil and gas properties
|
41,534
|
|
|
18,192
|
|
||
Contributions to equity method investments
|
(18,510
|
)
|
|
(13,837
|
)
|
||
Distributions from equity method investments
|
14,220
|
|
|
4,761
|
|
||
Insurance proceeds
|
3,750
|
|
|
—
|
|
||
Net cash used in investing activities
|
(420,257
|
)
|
|
(1,372,377
|
)
|
||
Cash flows from financing activities:
|
|
|
|
||||
Principal payments on borrowings
|
(1,685
|
)
|
|
(350,130
|
)
|
||
Borrowings on line of credit
|
—
|
|
|
250,000
|
|
||
Proceeds from bond issuance
|
—
|
|
|
350,000
|
|
||
Borrowings on term loan
|
16,499
|
|
|
—
|
|
||
Debt issuance costs and loan commitment fees
|
(241
|
)
|
|
(8,381
|
)
|
||
Proceeds from issuance of common stock, net of offering costs
|
411,711
|
|
|
981,568
|
|
||
Net cash provided by financing activities
|
426,284
|
|
|
1,223,057
|
|
||
Net increase in cash and cash equivalents
|
251,302
|
|
|
85,771
|
|
||
Cash and cash equivalents at beginning of period
|
112,974
|
|
|
142,340
|
|
||
Cash and cash equivalents at end of period
|
$
|
364,276
|
|
|
$
|
228,111
|
|
Supplemental disclosure of cash flow information:
|
|
|
|
||||
Interest payments
|
$
|
35,193
|
|
|
$
|
24,195
|
|
Income tax payments
|
$
|
—
|
|
|
$
|
29,753
|
|
Supplemental disclosure of non-cash transactions:
|
|
|
|
||||
Capitalized stock based compensation
|
$
|
3,820
|
|
|
$
|
4,222
|
|
Asset retirement obligation capitalized
|
$
|
6,726
|
|
|
$
|
5,736
|
|
Interest capitalized
|
$
|
8,920
|
|
|
$
|
12,041
|
|
Foreign currency translation gain (loss) on equity method investments
|
$
|
7,137
|
|
|
$
|
(23,275
|
)
|
1.
|
ACQUISITIONS
|
|
|
(In thousands)
|
||
Consideration paid
|
|
|
||
Cash, net of purchase price adjustments
|
|
$
|
405,029
|
|
Fair value of identifiable assets acquired
|
|
|
||
Oil and natural gas properties
|
|
|
||
Proved
|
|
$
|
70,804
|
|
Unevaluated
|
|
334,225
|
|
|
Fair value of net identifiable assets acquired
|
|
$
|
405,029
|
|
2.
|
PROPERTY AND EQUIPMENT
|
|
September 30, 2016
|
|
December 31, 2015
|
||||
|
(In thousands)
|
||||||
Oil and natural gas properties
|
$
|
5,816,458
|
|
|
$
|
5,424,342
|
|
Office furniture and fixtures
|
13,862
|
|
|
12,589
|
|
||
Building
|
36,931
|
|
|
16,915
|
|
||
Land
|
3,667
|
|
|
3,667
|
|
||
Total property and equipment
|
5,870,918
|
|
|
5,457,513
|
|
||
Accumulated depletion, depreciation, amortization and impairment
|
(3,613,662
|
)
|
|
(2,829,110
|
)
|
||
Property and equipment, net
|
$
|
2,257,256
|
|
|
$
|
2,628,403
|
|
|
September 30, 2016
|
||
|
(In thousands)
|
||
Utica
|
$
|
1,718,379
|
|
Niobrara
|
4,857
|
|
|
Southern Louisiana
|
443
|
|
|
Bakken
|
97
|
|
|
Other
|
45
|
|
|
|
$
|
1,723,821
|
|
|
September 30, 2016
|
|
September 30, 2015
|
||||
|
(In thousands)
|
||||||
Asset retirement obligation, beginning of period
|
$
|
26,437
|
|
|
$
|
17,938
|
|
Liabilities incurred
|
6,726
|
|
|
5,736
|
|
||
Liabilities settled
|
(955
|
)
|
|
(1,120
|
)
|
||
Accretion expense
|
777
|
|
|
594
|
|
||
Asset retirement obligation as of end of period
|
32,985
|
|
|
23,148
|
|
||
Less current portion
|
75
|
|
|
75
|
|
||
Asset retirement obligation, long-term
|
$
|
32,910
|
|
|
$
|
23,073
|
|
3.
|
EQUITY INVESTMENTS
|
|
|
|
Carrying value
|
|
(Income) loss from equity method investments
|
|||||||||||||||||||||
|
Approximate ownership %
|
|
September 30, 2016
|
|
December 31, 2015
|
|
Three months ended September 30,
|
|
Nine months ended September 30,
|
|||||||||||||||||
|
|
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||||||||||
|
|
|
(In thousands)
|
|||||||||||||||||||||||
Investment in Tatex Thailand II, LLC
|
23.5
|
%
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(253
|
)
|
|
$
|
—
|
|
|
$
|
(412
|
)
|
|
$
|
189
|
|
Investment in Tatex Thailand III, LLC
|
17.9
|
%
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Investment in Grizzly Oil Sands ULC
|
24.9999
|
%
|
|
48,595
|
|
|
50,645
|
|
|
363
|
|
|
58,653
|
|
|
24,811
|
|
|
71,289
|
|
||||||
Investment in Timber Wolf Terminals LLC
|
50.0
|
%
|
|
993
|
|
|
999
|
|
|
3
|
|
|
—
|
|
|
7
|
|
|
13
|
|
||||||
Investment in Windsor Midstream LLC
|
22.5
|
%
|
|
25,797
|
|
|
27,955
|
|
|
(9,014
|
)
|
|
(323
|
)
|
|
(12,062
|
)
|
|
(18,229
|
)
|
||||||
Investment in Stingray Cementing LLC
|
50.0
|
%
|
|
2,084
|
|
|
2,487
|
|
|
79
|
|
|
(12
|
)
|
|
187
|
|
|
160
|
|
||||||
Investment in Blackhawk Midstream LLC
|
48.5
|
%
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(7,217
|
)
|
||||||
Investment in Stingray Energy Services LLC
|
50.0
|
%
|
|
4,382
|
|
|
5,908
|
|
|
294
|
|
|
218
|
|
|
935
|
|
|
539
|
|
||||||
Investment in Sturgeon Acquisitions LLC
|
25.0
|
%
|
|
22,146
|
|
|
22,769
|
|
|
112
|
|
|
(257
|
)
|
|
623
|
|
|
(1,316
|
)
|
||||||
Investment in Mammoth Energy Partners LP
|
30.5
|
%
|
|
120,773
|
|
|
131,630
|
|
|
2,518
|
|
|
3,612
|
|
|
11,527
|
|
|
11,608
|
|
||||||
Investment in Strike Force Midstream LLC
|
25.0
|
%
|
|
26,539
|
|
|
—
|
|
|
(99
|
)
|
|
—
|
|
|
(40
|
)
|
|
—
|
|
||||||
|
|
|
$
|
251,309
|
|
|
$
|
242,393
|
|
|
$
|
(5,997
|
)
|
|
$
|
61,891
|
|
|
$
|
25,576
|
|
|
$
|
57,036
|
|
|
September 30, 2016
|
|
December 31, 2015
|
||||
|
|
||||||
|
(In thousands)
|
||||||
Current assets
|
$
|
129,401
|
|
|
$
|
105,537
|
|
Noncurrent assets
|
$
|
1,389,258
|
|
|
$
|
1,293,925
|
|
Current liabilities
|
$
|
62,882
|
|
|
$
|
56,559
|
|
Noncurrent liabilities
|
$
|
91,928
|
|
|
$
|
155,995
|
|
|
Three months ended September 30,
|
|
Nine months ended September 30,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
|
(In thousands)
|
||||||||||||||
Gross revenue
|
$
|
76,627
|
|
|
$
|
100,979
|
|
|
$
|
206,666
|
|
|
$
|
364,669
|
|
Net (income) loss
|
$
|
(35,212
|
)
|
|
$
|
10,063
|
|
|
$
|
(9,344
|
)
|
|
$
|
(35,359
|
)
|
4.
|
VARIABLE INTEREST ENTITIES
|
5.
|
OTHER ASSETS
|
|
September 30, 2016
|
|
December 31, 2015
|
||||
|
(In thousands)
|
||||||
Plugging and abandonment escrow account on the WCBB properties (Note 10)
|
$
|
3,081
|
|
|
$
|
3,089
|
|
Certificates of Deposit securing letter of credit
|
276
|
|
|
276
|
|
||
Prepaid drilling costs
|
—
|
|
|
58
|
|
||
Loan commitment fees
|
2,070
|
|
|
2,870
|
|
||
Deposits
|
34
|
|
|
34
|
|
||
Other
|
51
|
|
|
37
|
|
||
|
$
|
5,512
|
|
|
$
|
6,364
|
|
6.
|
LONG-TERM DEBT
|
|
September 30, 2016
|
|
December 31, 2015
|
||||
|
(In thousands)
|
||||||
Revolving credit agreement (1)
|
$
|
—
|
|
|
$
|
—
|
|
Building loan (2)
|
—
|
|
|
1,653
|
|
||
7.75% senior unsecured notes due 2020 (3)
|
600,000
|
|
|
600,000
|
|
||
6.625% senior unsecured notes due 2023 (4)
|
350,000
|
|
|
350,000
|
|
||
Net unamortized original issue premium, net (5)
|
10,777
|
|
|
12,493
|
|
||
Net unamortized debt issuance costs (6)
|
(16,006
|
)
|
|
(17,883
|
)
|
||
Construction loan (7)
|
16,499
|
|
|
—
|
|
||
Less: current maturities of long term debt
|
(220
|
)
|
|
(179
|
)
|
||
Debt reflected as long term
|
$
|
961,050
|
|
|
$
|
946,084
|
|
7.
|
COMMON STOCK AND CHANGES IN CAPITALIZATION
|
8.
|
STOCK-BASED COMPENSATION
|
|
Number of
Unvested
Restricted Shares
|
|
Weighted
Average
Grant Date
Fair Value
|
|||
Unvested shares as of January 1, 2016
|
484,239
|
|
|
$
|
43.51
|
|
Granted
|
446,291
|
|
|
27.80
|
|
|
Vested
|
(226,283
|
)
|
|
43.26
|
|
|
Forfeited
|
(8,998
|
)
|
|
34.59
|
|
|
Unvested shares as of September 30, 2016
|
695,249
|
|
|
$
|
33.62
|
|
9.
|
EARNINGS PER SHARE
|
|
Three months ended September 30,
|
||||||||||||||||||||
|
2016
|
|
2015
|
||||||||||||||||||
|
Loss
|
|
Shares
|
|
Per
Share
|
|
Loss
|
|
Shares
|
|
Per
Share
|
||||||||||
|
(In thousands, except share data)
|
||||||||||||||||||||
Basic:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net loss
|
$
|
(157,296
|
)
|
|
125,408,866
|
|
|
$
|
(1.25
|
)
|
|
$
|
(388,209
|
)
|
|
108,217,062
|
|
|
$
|
(3.59
|
)
|
Effect of dilutive securities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Stock options and awards
|
—
|
|
|
—
|
|
|
|
|
—
|
|
|
—
|
|
|
|
||||||
Diluted:
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|||||||||
Net loss
|
$
|
(157,296
|
)
|
|
125,408,866
|
|
|
$
|
(1.25
|
)
|
|
$
|
(388,209
|
)
|
|
108,217,062
|
|
|
$
|
(3.59
|
)
|
|
Nine months ended September 30,
|
||||||||||||||||||||
|
2016
|
|
2015
|
||||||||||||||||||
|
Loss
|
|
Shares
|
|
Per
Share |
|
Loss
|
|
Shares
|
|
Per
Share |
||||||||||
|
(In thousands, except share data)
|
||||||||||||||||||||
Basic:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net loss
|
$
|
(739,339
|
)
|
|
120,771,046
|
|
|
$
|
(6.12
|
)
|
|
$
|
(394,015
|
)
|
|
96,935,897
|
|
|
$
|
(4.06
|
)
|
Effect of dilutive securities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Stock options and awards
|
—
|
|
|
—
|
|
|
|
|
—
|
|
|
—
|
|
|
|
||||||
Diluted:
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|||||||||
Net loss
|
$
|
(739,339
|
)
|
|
120,771,046
|
|
|
$
|
(6.12
|
)
|
|
$
|
(394,015
|
)
|
|
96,935,897
|
|
|
$
|
(4.06
|
)
|
10.
|
COMMITMENTS AND CONTINGENCIES
|
11.
|
DERIVATIVE INSTRUMENTS
|
|
Location
|
Daily Volume
(Bbls/day) |
|
Weighted
Average Price |
|||
October 2016 - June 2017
|
ARGUS LLS
|
2,000
|
|
|
$
|
51.10
|
|
|
Location
|
Daily Volume (MMBtu/day)
|
|
Weighted
Average Price |
|||
October 2016
|
NYMEX Henry Hub
|
570,000
|
|
|
$
|
3.05
|
|
November 2016 - December 2016
|
NYMEX Henry Hub
|
525,000
|
|
|
$
|
3.18
|
|
January 2017 - February 2017
|
NYMEX Henry Hub
|
442,500
|
|
|
$
|
3.14
|
|
March 2017
|
NYMEX Henry Hub
|
422,500
|
|
|
$
|
3.13
|
|
April 2017 - June 2017
|
NYMEX Henry Hub
|
367,500
|
|
|
$
|
3.15
|
|
July 2017 - October 2017
|
NYMEX Henry Hub
|
305,000
|
|
|
$
|
2.99
|
|
November 2017 - December 2017
|
NYMEX Henry Hub
|
435,000
|
|
|
$
|
3.06
|
|
January 2018 - March 2018
|
NYMEX Henry Hub
|
290,000
|
|
|
$
|
3.10
|
|
April 2018 - December 2018
|
NYMEX Henry Hub
|
160,000
|
|
|
$
|
3.01
|
|
January 2019 - March 2019
|
NYMEX Henry Hub
|
20,000
|
|
|
$
|
3.37
|
|
|
Location
|
Daily Volume
(Bbls/day) |
|
Weighted
Average Price |
|||
October 2016 - December 2016
|
Mont Belvieu
|
1,500
|
|
|
$
|
19.95
|
|
|
Location
|
Daily Volume (MMBtu/day)
|
|
Weighted Average Price
|
|||
January 2017 - March 2017
|
NYMEX Henry Hub
|
105,000
|
|
|
$
|
3.27
|
|
April 2017 - December 2017
|
NYMEX Henry Hub
|
125,000
|
|
|
$
|
3.21
|
|
January 2018 - March 2018
|
NYMEX Henry Hub
|
20,000
|
|
|
$
|
2.91
|
|
|
Location
|
Daily Volume (MMBtu/day)
|
|
Hedged Differential
|
|||
October 2016 - December 2016
|
MichCon
|
40,000
|
|
|
$
|
0.02
|
|
November 2016 - March 2017
|
Tetco M2
|
50,000
|
|
|
$
|
(0.59
|
)
|
|
Net gain (loss) on derivative instruments
|
||||||||||||||
|
Three months ended September 30,
|
|
Nine months ended September 30,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
|
(In thousands)
|
||||||||||||||
Gas sales
|
$
|
33,167
|
|
|
$
|
79,684
|
|
|
$
|
(43,454
|
)
|
|
$
|
118,137
|
|
Oil and condensate sales
|
1,708
|
|
|
12,072
|
|
|
362
|
|
|
13,641
|
|
||||
Natural gas liquids sales
|
406
|
|
|
—
|
|
|
(1,284
|
)
|
|
—
|
|
||||
Total net gain (loss)
|
$
|
35,281
|
|
|
$
|
91,756
|
|
|
$
|
(44,376
|
)
|
|
$
|
131,778
|
|
12.
|
FAIR VALUE MEASUREMENTS
|
|
September 30, 2016
|
||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||
|
(In thousands)
|
||||||||||
Assets:
|
|
|
|
|
|
||||||
Derivative Instruments
|
$
|
—
|
|
|
$
|
54,625
|
|
|
$
|
—
|
|
Liabilities:
|
|
|
|
|
|
||||||
Derivative Instruments
|
$
|
—
|
|
|
$
|
52,127
|
|
|
$
|
—
|
|
13.
|
FAIR VALUE OF FINANCIAL INSTRUMENTS
|
14.
|
CONDENSED CONSOLIDATING FINANCIAL INFORMATION
|
|
September 30, 2016
|
||||||||||||||||||
|
Parent
|
|
Guarantors
|
|
Non-Guarantor
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
||||||||||
Current assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
363,279
|
|
|
$
|
996
|
|
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
364,276
|
|
Accounts receivable - oil and gas
|
133,159
|
|
|
16,283
|
|
|
—
|
|
|
(21,654
|
)
|
|
127,788
|
|
|||||
Accounts receivable - related parties
|
96
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
96
|
|
|||||
Accounts receivable - intercompany
|
384,280
|
|
|
5,970
|
|
|
—
|
|
|
(390,250
|
)
|
|
—
|
|
|||||
Prepaid expenses and other current assets
|
10,270
|
|
|
470
|
|
|
—
|
|
|
—
|
|
|
10,740
|
|
|||||
Short-term derivative instruments
|
39,363
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
39,363
|
|
|||||
Deferred tax asset
|
38
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
38
|
|
|||||
Total current assets
|
930,485
|
|
|
23,719
|
|
|
1
|
|
|
(411,904
|
)
|
|
542,301
|
|
|||||
Property and equipment:
|
|
|
|
|
|
|
|
|
|
||||||||||
Oil and natural gas properties, full-cost accounting
|
5,425,128
|
|
|
392,059
|
|
|
—
|
|
|
(729
|
)
|
|
5,816,458
|
|
|||||
Other property and equipment
|
54,417
|
|
|
43
|
|
|
—
|
|
|
—
|
|
|
54,460
|
|
|||||
Accumulated depletion, depreciation, amortization and impairment
|
(3,613,630
|
)
|
|
(32
|
)
|
|
—
|
|
|
—
|
|
|
(3,613,662
|
)
|
|||||
Property and equipment, net
|
1,865,915
|
|
|
392,070
|
|
|
—
|
|
|
(729
|
)
|
|
2,257,256
|
|
|||||
Other assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Equity investments
|
241,342
|
|
|
26,540
|
|
|
48,596
|
|
|
(65,169
|
)
|
|
251,309
|
|
|||||
Long-term derivative instruments
|
15,262
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
15,262
|
|
|||||
Deferred tax asset
|
4,203
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,203
|
|
|||||
Other assets
|
5,512
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5,512
|
|
|||||
Total other assets
|
266,319
|
|
|
26,540
|
|
|
48,596
|
|
|
(65,169
|
)
|
|
276,286
|
|
|||||
Total assets
|
$
|
3,062,719
|
|
|
$
|
442,329
|
|
|
$
|
48,597
|
|
|
$
|
(477,802
|
)
|
|
$
|
3,075,843
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Liabilities and Stockholders' Equity
|
|
|
|
|
|
|
|
|
|
||||||||||
Current liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Accounts payable and accrued liabilities
|
$
|
291,217
|
|
|
$
|
40,557
|
|
|
$
|
1
|
|
|
$
|
(27,434
|
)
|
|
$
|
304,341
|
|
Accounts payable - intercompany
|
—
|
|
|
384,346
|
|
|
125
|
|
|
(384,471
|
)
|
|
—
|
|
|||||
Asset retirement obligation - current
|
75
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
75
|
|
|||||
Short-term derivative instruments
|
37,220
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
37,220
|
|
|||||
Current maturities of long-term debt
|
220
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
220
|
|
|||||
Total current liabilities
|
328,732
|
|
|
424,903
|
|
|
126
|
|
|
(411,905
|
)
|
|
341,856
|
|
|||||
Long-term derivative instrument
|
14,907
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
14,907
|
|
|||||
Asset retirement obligation - long-term
|
32,910
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
32,910
|
|
|||||
Long-term debt
|
961,050
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
961,050
|
|
|||||
Total liabilities
|
1,337,599
|
|
|
424,903
|
|
|
126
|
|
|
(411,905
|
)
|
|
1,350,723
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Stockholders' equity:
|
|
|
|
|
|
|
|
|
|
||||||||||
Common stock
|
1,253
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,253
|
|
|||||
Paid-in capital
|
3,245,393
|
|
|
26,822
|
|
|
256,065
|
|
|
(282,887
|
)
|
|
3,245,393
|
|
|||||
Accumulated other comprehensive (loss) income
|
(50,816
|
)
|
|
—
|
|
|
(46,925
|
)
|
|
46,925
|
|
|
(50,816
|
)
|
|||||
Retained (deficit) earnings
|
(1,470,710
|
)
|
|
(9,396
|
)
|
|
(160,669
|
)
|
|
170,065
|
|
|
(1,470,710
|
)
|
|||||
Total stockholders' equity
|
1,725,120
|
|
|
17,426
|
|
|
48,471
|
|
|
(65,897
|
)
|
|
1,725,120
|
|
|||||
Total liabilities and stockholders' equity
|
$
|
3,062,719
|
|
|
$
|
442,329
|
|
|
$
|
48,597
|
|
|
$
|
(477,802
|
)
|
|
$
|
3,075,843
|
|
|
December 31, 2015
|
|||||||||||||||||||
|
Parent
|
|
Guarantors
|
|
Non-Guarantor
|
|
Eliminations
|
|
Consolidated
|
|||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|||||||||||
Current assets:
|
|
|
|
|
|
|
|
|
|
|||||||||||
Cash and cash equivalents
|
$
|
112,494
|
|
|
$
|
479
|
|
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
112,974
|
|
|
Accounts receivable - oil and gas
|
72,241
|
|
|
54
|
|
|
—
|
|
|
(423
|
)
|
|
71,872
|
|
||||||
Accounts receivable - related parties
|
16
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
16
|
|
||||||
Accounts receivable - intercompany
|
326,475
|
|
|
60
|
|
|
—
|
|
|
(326,535
|
)
|
|
—
|
|
||||||
Prepaid expenses and other current assets
|
3,905
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,905
|
|
||||||
Short-term derivative instruments
|
142,794
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
142,794
|
|
||||||
Total current assets
|
657,925
|
|
|
593
|
|
|
1
|
|
|
(326,958
|
)
|
|
331,561
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Property and equipment:
|
|
|
|
|
|
|
|
|
|
|||||||||||
Oil and natural gas properties, full-cost accounting,
|
5,108,258
|
|
|
316,813
|
|
|
—
|
|
|
(729
|
)
|
|
5,424,342
|
|
||||||
Other property and equipment
|
33,128
|
|
|
43
|
|
|
—
|
|
|
—
|
|
|
33,171
|
|
||||||
Accumulated depletion, depreciation, amortization and impairment
|
(2,829,081
|
)
|
|
(29
|
)
|
|
—
|
|
|
—
|
|
|
(2,829,110
|
)
|
||||||
Property and equipment, net
|
2,312,305
|
|
|
316,827
|
|
|
—
|
|
|
(729
|
)
|
|
2,628,403
|
|
||||||
Other assets:
|
|
|
|
|
|
|
|
|
|
|||||||||||
Equity investments
|
231,892
|
|
|
—
|
|
|
50,644
|
|
|
(40,143
|
)
|
|
242,393
|
|
||||||
Long-term derivative instruments
|
51,088
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
51,088
|
|
||||||
Deferred tax assets
|
74,925
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
74,925
|
|
||||||
Other assets
|
6,364
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6,364
|
|
||||||
Total other assets
|
364,269
|
|
|
—
|
|
|
50,644
|
|
|
(40,143
|
)
|
|
374,770
|
|
||||||
Total assets
|
$
|
3,334,499
|
|
|
$
|
317,420
|
|
|
$
|
50,645
|
|
|
$
|
(367,830
|
)
|
|
$
|
3,334,734
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Liabilities and Stockholders' Equity
|
|
|
|
|
|
|
|
|
|
|||||||||||
Current liabilities:
|
|
|
|
|
|
|
|
|
|
|||||||||||
Accounts payable and accrued liabilities
|
$
|
264,893
|
|
|
$
|
527
|
|
|
$
|
—
|
|
|
$
|
(292
|
)
|
|
$
|
265,128
|
|
|
Accounts payable - intercompany
|
—
|
|
|
326,541
|
|
|
124
|
|
|
(326,665
|
)
|
|
—
|
|
||||||
Asset retirement obligation - current
|
75
|
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
|
75
|
|
|||||
Short-term derivative instruments
|
437
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
437
|
|
||||||
Deferred tax liability
|
50,697
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
50,697
|
|
||||||
Current maturities of long-term debt
|
179
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
179
|
|
||||||
Total current liabilities
|
316,281
|
|
|
327,068
|
|
|
124
|
|
|
(326,957
|
)
|
|
316,516
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Long-term derivative instrument
|
6,935
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6,935
|
|
||||||
Asset retirement obligation - long-term
|
26,362
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
26,362
|
|
||||||
Long-term debt, net of current maturities
|
946,084
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
946,084
|
|
||||||
Total liabilities
|
1,295,662
|
|
|
327,068
|
|
|
124
|
|
|
(326,957
|
)
|
|
1,295,897
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Stockholders' equity:
|
|
|
|
|
|
|
|
|
|
|||||||||||
Common stock
|
1,082
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,082
|
|
||||||
Paid-in capital
|
2,824,303
|
|
|
322
|
|
|
241,553
|
|
|
(241,875
|
)
|
|
2,824,303
|
|
||||||
Accumulated other comprehensive (loss) income
|
(55,177
|
)
|
|
—
|
|
|
(55,177
|
)
|
|
55,177
|
|
|
(55,177
|
)
|
||||||
Retained (deficit) earnings
|
(731,371
|
)
|
|
(9,970
|
)
|
|
(135,855
|
)
|
|
145,825
|
|
|
(731,371
|
)
|
||||||
Total stockholders' equity
|
2,038,837
|
|
|
(9,648
|
)
|
|
50,521
|
|
|
(40,873
|
)
|
|
2,038,837
|
|
||||||
Total liabilities and stockholders' equity
|
$
|
3,334,499
|
|
|
$
|
317,420
|
|
|
$
|
50,645
|
|
|
$
|
(367,830
|
)
|
|
$
|
3,334,734
|
|
|
Three months ended September 30, 2016
|
||||||||||||||||||
|
Parent
|
|
Guarantors
|
|
Non-Guarantor
|
|
Eliminations
|
|
Consolidated
|
||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Total revenues
|
$
|
193,222
|
|
|
$
|
464
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
193,686
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Costs and expenses:
|
|
|
|
|
|
|
|
|
|
||||||||||
Lease operating expenses
|
17,283
|
|
|
188
|
|
|
—
|
|
|
—
|
|
|
17,471
|
|
|||||
Production taxes
|
3,495
|
|
|
30
|
|
|
—
|
|
|
—
|
|
|
3,525
|
|
|||||
Midstream gathering and processing
|
45,385
|
|
|
90
|
|
|
—
|
|
|
—
|
|
|
45,475
|
|
|||||
Depreciation, depletion, and amortization
|
62,284
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
62,285
|
|
|||||
Impairment of oil and gas properties
|
212,194
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
212,194
|
|
|||||
General and administrative
|
10,772
|
|
|
(305
|
)
|
|
—
|
|
|
—
|
|
|
10,467
|
|
|||||
Accretion expense
|
269
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
269
|
|
|||||
|
351,682
|
|
|
4
|
|
|
—
|
|
|
—
|
|
|
351,686
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
(LOSS) INCOME FROM OPERATIONS
|
(158,460
|
)
|
|
460
|
|
|
—
|
|
|
—
|
|
|
(158,000
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
OTHER (INCOME) EXPENSE:
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest expense
|
12,787
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
12,787
|
|
|||||
Interest income
|
(337
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(337
|
)
|
|||||
Insurance proceeds
|
(3,750
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,750
|
)
|
|||||
(Income) loss from equity method investments and investments in subsidiaries
|
(6,457
|
)
|
|
(99
|
)
|
|
364
|
|
|
195
|
|
|
(5,997
|
)
|
|||||
|
2,243
|
|
|
(99
|
)
|
|
364
|
|
|
195
|
|
|
2,703
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
(LOSS) INCOME BEFORE INCOME TAXES
|
(160,703
|
)
|
|
559
|
|
|
(364
|
)
|
|
(195
|
)
|
|
(160,703
|
)
|
|||||
INCOME TAX BENEFIT
|
(3,407
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,407
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
NET (LOSS) INCOME
|
$
|
(157,296
|
)
|
|
$
|
559
|
|
|
$
|
(364
|
)
|
|
$
|
(195
|
)
|
|
$
|
(157,296
|
)
|
|
Three months ended September 30, 2015
|
||||||||||||||||||
|
Parent
|
|
Guarantors
|
|
Non-Guarantor
|
|
Eliminations
|
|
Consolidated
|
||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Total revenues
|
$
|
230,282
|
|
|
$
|
287
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
230,569
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Costs and expenses:
|
|
|
|
|
|
|
|
|
|
||||||||||
Lease operating expenses
|
17,358
|
|
|
210
|
|
|
—
|
|
|
—
|
|
|
17,568
|
|
|||||
Production taxes
|
3,570
|
|
|
23
|
|
|
—
|
|
|
—
|
|
|
3,593
|
|
|||||
Midstream gathering and processing
|
42,139
|
|
|
27
|
|
|
—
|
|
|
—
|
|
|
42,166
|
|
|||||
Depreciation, depletion, and amortization
|
90,327
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|
90,329
|
|
|||||
Impairment of oil and gas properties
|
594,776
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
594,776
|
|
|||||
General and administrative
|
10,999
|
|
|
6
|
|
|
(4
|
)
|
|
—
|
|
|
11,001
|
|
|||||
Accretion expense
|
212
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
212
|
|
|||||
|
759,381
|
|
|
268
|
|
|
(4
|
)
|
|
—
|
|
|
759,645
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
(LOSS) INCOME FROM OPERATIONS
|
(529,099
|
)
|
|
19
|
|
|
4
|
|
|
—
|
|
|
(529,076
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
OTHER (INCOME) EXPENSE:
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest expense
|
14,124
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
14,124
|
|
|||||
Interest income
|
(279
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(279
|
)
|
|||||
Loss (income) from equity method investments and investments in subsidiaries
|
61,868
|
|
|
—
|
|
|
58,653
|
|
|
(58,630
|
)
|
|
61,891
|
|
|||||
|
75,713
|
|
|
—
|
|
|
58,653
|
|
|
(58,630
|
)
|
|
75,736
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
(LOSS) INCOME BEFORE INCOME TAXES
|
(604,812
|
)
|
|
19
|
|
|
(58,649
|
)
|
|
58,630
|
|
|
(604,812
|
)
|
|||||
INCOME TAX BENEFIT
|
(216,603
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(216,603
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
NET (LOSS) INCOME
|
$
|
(388,209
|
)
|
|
$
|
19
|
|
|
$
|
(58,649
|
)
|
|
$
|
58,630
|
|
|
$
|
(388,209
|
)
|
|
Nine months ended September 30, 2016
|
||||||||||||||||||
|
Parent
|
|
Guarantors
|
|
Non-Guarantor
|
|
Eliminations
|
|
Consolidated
|
||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Total revenues
|
$
|
321,399
|
|
|
$
|
1,098
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
322,497
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Costs and expenses:
|
|
|
|
|
|
|
|
|
|
||||||||||
Lease operating expenses
|
48,246
|
|
|
543
|
|
|
—
|
|
|
—
|
|
|
48,789
|
|
|||||
Production taxes
|
9,410
|
|
|
82
|
|
|
—
|
|
|
—
|
|
|
9,492
|
|
|||||
Midstream gathering and processing
|
122,250
|
|
|
226
|
|
|
—
|
|
|
—
|
|
|
122,476
|
|
|||||
Depreciation, depletion, and amortization
|
183,411
|
|
|
3
|
|
|
|
|
|
|
|
|
183,414
|
|
|||||
Impairment of oil and gas properties
|
601,806
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
601,806
|
|
|||||
General and administrative
|
33,230
|
|
|
(291
|
)
|
|
2
|
|
|
—
|
|
|
32,941
|
|
|||||
Accretion expense
|
777
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
777
|
|
|||||
|
999,130
|
|
|
563
|
|
|
2
|
|
|
—
|
|
|
999,695
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
(LOSS) INCOME FROM OPERATIONS
|
(677,731
|
)
|
|
535
|
|
|
(2
|
)
|
|
—
|
|
|
(677,198
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
OTHER (INCOME) EXPENSE:
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest expense
|
44,891
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
44,892
|
|
|||||
Interest income
|
(822
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(822
|
)
|
|||||
Insurance proceeds
|
(3,750
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,750
|
)
|
|||||
Loss (income) from equity method investments and investments in subsidiaries
|
25,044
|
|
|
(40
|
)
|
|
24,812
|
|
|
(24,240
|
)
|
|
25,576
|
|
|||||
|
65,363
|
|
|
(39
|
)
|
|
24,812
|
|
|
(24,240
|
)
|
|
65,896
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
(LOSS) INCOME BEFORE INCOME TAXES
|
(743,094
|
)
|
|
574
|
|
|
(24,814
|
)
|
|
24,240
|
|
|
(743,094
|
)
|
|||||
INCOME TAX BENEFIT
|
(3,755
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,755
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
NET (LOSS) INCOME
|
$
|
(739,339
|
)
|
|
$
|
574
|
|
|
$
|
(24,814
|
)
|
|
$
|
24,240
|
|
|
$
|
(739,339
|
)
|
|
Nine months ended September 30, 2015
|
||||||||||||||||||
|
Parent
|
|
Guarantors
|
|
Non-Guarantor
|
|
Eliminations
|
|
Consolidated
|
||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Total revenues
|
$
|
518,141
|
|
|
$
|
1,015
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
519,156
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Costs and expenses:
|
|
|
|
|
|
|
|
|
|
||||||||||
Lease operating expenses
|
50,830
|
|
|
581
|
|
|
—
|
|
|
—
|
|
|
51,411
|
|
|||||
Production taxes
|
11,083
|
|
|
80
|
|
|
—
|
|
|
—
|
|
|
11,163
|
|
|||||
Midstream gathering and processing
|
100,405
|
|
|
46
|
|
|
—
|
|
|
—
|
|
|
100,451
|
|
|||||
Depreciation, depletion, and amortization
|
251,389
|
|
|
4
|
|
|
—
|
|
|
—
|
|
|
251,393
|
|
|||||
Impairment of oil and gas properties
|
594,776
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
594,776
|
|
|||||
General and administrative
|
31,248
|
|
|
47
|
|
|
20
|
|
|
—
|
|
|
31,315
|
|
|||||
Accretion expense
|
594
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
594
|
|
|||||
|
1,040,325
|
|
|
758
|
|
|
20
|
|
|
—
|
|
|
1,041,103
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
(LOSS) INCOME FROM OPERATIONS
|
(522,184
|
)
|
|
257
|
|
|
(20
|
)
|
|
—
|
|
|
(521,947
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
OTHER (INCOME) EXPENSE:
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest expense
|
34,906
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
34,906
|
|
|||||
Interest income
|
(536
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(536
|
)
|
|||||
Loss (income) from equity method investments and investments in subsidiaries
|
56,799
|
|
|
—
|
|
|
71,289
|
|
|
(71,052
|
)
|
|
57,036
|
|
|||||
|
91,169
|
|
|
—
|
|
|
71,289
|
|
|
(71,052
|
)
|
|
91,406
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
(LOSS) INCOME BEFORE INCOME TAXES
|
(613,353
|
)
|
|
257
|
|
|
(71,309
|
)
|
|
71,052
|
|
|
(613,353
|
)
|
|||||
INCOME TAX BENEFIT
|
(219,338
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(219,338
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
NET (LOSS) INCOME
|
$
|
(394,015
|
)
|
|
$
|
257
|
|
|
$
|
(71,309
|
)
|
|
$
|
71,052
|
|
|
$
|
(394,015
|
)
|
|
Three months ended September 30, 2016
|
||||||||||||||||||
|
Parent
|
|
Guarantors
|
|
Non-Guarantor
|
|
Eliminations
|
|
Consolidated
|
||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Net (loss) income
|
$
|
(157,296
|
)
|
|
$
|
559
|
|
|
$
|
(364
|
)
|
|
$
|
(195
|
)
|
|
$
|
(157,296
|
)
|
Foreign currency translation adjustment, net of taxes
|
(4,013
|
)
|
|
—
|
|
|
(1,417
|
)
|
|
1,417
|
|
|
(4,013
|
)
|
|||||
Other comprehensive (loss) income
|
(4,013
|
)
|
|
—
|
|
|
(1,417
|
)
|
|
1,417
|
|
|
(4,013
|
)
|
|||||
Comprehensive (loss) income
|
$
|
(161,309
|
)
|
|
$
|
559
|
|
|
$
|
(1,781
|
)
|
|
$
|
1,222
|
|
|
$
|
(161,309
|
)
|
|
Three months ended September 30, 2015
|
||||||||||||||||||
|
Parent
|
|
Guarantors
|
|
Non-Guarantor
|
|
Eliminations
|
|
Consolidated
|
||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Net (loss) income
|
$
|
(388,209
|
)
|
|
$
|
19
|
|
|
$
|
(58,649
|
)
|
|
$
|
58,630
|
|
|
$
|
(388,209
|
)
|
Foreign currency translation adjustment
|
(11,538
|
)
|
|
—
|
|
|
(11,538
|
)
|
|
11,538
|
|
|
(11,538
|
)
|
|||||
Other comprehensive (loss) income
|
(11,538
|
)
|
|
—
|
|
|
(11,538
|
)
|
|
11,538
|
|
|
(11,538
|
)
|
|||||
Comprehensive (loss) income
|
$
|
(399,747
|
)
|
|
$
|
19
|
|
|
$
|
(70,187
|
)
|
|
$
|
70,168
|
|
|
$
|
(399,747
|
)
|
|
Nine months ended September 30, 2016
|
||||||||||||||||||
|
Parent
|
|
Guarantors
|
|
Non-Guarantor
|
|
Eliminations
|
|
Consolidated
|
||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Net (loss) income
|
$
|
(739,339
|
)
|
|
$
|
574
|
|
|
$
|
(24,814
|
)
|
|
$
|
24,240
|
|
|
$
|
(739,339
|
)
|
Foreign currency translation adjustment, net of taxes
|
4,361
|
|
|
—
|
|
|
8,252
|
|
|
(8,252
|
)
|
|
4,361
|
|
|||||
Other comprehensive income (loss)
|
4,361
|
|
|
—
|
|
|
8,252
|
|
|
(8,252
|
)
|
|
4,361
|
|
|||||
Comprehensive (loss) income
|
$
|
(734,978
|
)
|
|
$
|
574
|
|
|
$
|
(16,562
|
)
|
|
$
|
15,988
|
|
|
$
|
(734,978
|
)
|
|
Nine months ended September 30, 2015
|
||||||||||||||||||
|
Parent
|
|
Guarantors
|
|
Non-Guarantor
|
|
Eliminations
|
|
Consolidated
|
||||||||||
|
|
||||||||||||||||||
Net (loss) income
|
$
|
(394,015
|
)
|
|
$
|
257
|
|
|
$
|
(71,309
|
)
|
|
$
|
71,052
|
|
|
$
|
(394,015
|
)
|
Foreign currency translation adjustment
|
(23,275
|
)
|
|
—
|
|
|
(23,275
|
)
|
|
23,275
|
|
|
(23,275
|
)
|
|||||
Other comprehensive (loss) income
|
(23,275
|
)
|
|
—
|
|
|
(23,275
|
)
|
|
23,275
|
|
|
(23,275
|
)
|
|||||
Comprehensive (loss) income
|
$
|
(417,290
|
)
|
|
$
|
257
|
|
|
$
|
(94,584
|
)
|
|
$
|
94,327
|
|
|
$
|
(417,290
|
)
|
|
Nine months ended September 30, 2016
|
||||||||||||||||||
|
Parent
|
|
Guarantors
|
|
Non-Guarantor
|
|
Eliminations
|
|
Consolidated
|
||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Net cash provided by (used in) operating activities
|
$
|
244,758
|
|
|
$
|
517
|
|
|
$
|
3,998
|
|
|
$
|
(3,998
|
)
|
|
$
|
245,275
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net cash (used in) provided by investing activities
|
(420,257
|
)
|
|
(26,500
|
)
|
|
(18,510
|
)
|
|
45,010
|
|
|
(420,257
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Net cash provided by (used in) financing activities
|
426,284
|
|
|
26,500
|
|
|
14,512
|
|
|
(41,012
|
)
|
|
426,284
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Net increase in cash and cash equivalents
|
250,785
|
|
|
517
|
|
|
—
|
|
|
—
|
|
|
251,302
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents at beginning of period
|
112,494
|
|
|
479
|
|
|
1
|
|
|
—
|
|
|
112,974
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents at end of period
|
$
|
363,279
|
|
|
$
|
996
|
|
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
364,276
|
|
|
Nine months ended September 30, 2015
|
||||||||||||||||||
|
Parent
|
|
Guarantors
|
|
Non-Guarantor
|
|
Eliminations
|
|
Consolidated
|
||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Net cash provided by (used in) operating activities
|
$
|
247,447
|
|
|
$
|
(12,356
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
235,091
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net cash (used in) provided by investing activities
|
(1,385,878
|
)
|
|
13,501
|
|
|
(13,837
|
)
|
|
13,837
|
|
|
(1,372,377
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Net cash provided by (used in) financing activities
|
1,223,057
|
|
|
—
|
|
|
13,837
|
|
|
(13,837
|
)
|
|
1,223,057
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Net increase in cash and cash equivalents
|
84,626
|
|
|
1,145
|
|
|
—
|
|
|
—
|
|
|
85,771
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents at beginning of period
|
141,535
|
|
|
804
|
|
|
1
|
|
|
—
|
|
|
142,340
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents at end of period
|
$
|
226,161
|
|
|
$
|
1,949
|
|
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
228,111
|
|
15.
|
RECENT ACCOUNTING PRONOUNCEMENTS
|
16.
|
SUBSEQUENT EVENTS
|
ITEM 2.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
•
|
Production
increase
d
13%
to
67,541
net million cubic feet of natural gas equivalent, or MMcfe, for the three months ended
September 30, 2016
from
59,530
MMcfe for the three months ended
September 30, 2015
. Our net daily production mix was comprised of approximately 86% of natural gas, 9% of natural gas liquids, or NGLs, and 5% of oil.
|
•
|
During the three months ended
September 30, 2016
, we spud
nine
gross (
8.8
net) wells in the Utica Shale, participated in an additional
eight
gross (
1.7
net) wells that were drilled by other operators on our Utica Shale acreage and recompleted 24 gross and net wells on our Louisiana acreage. Of our
nine
new wells spud at
September 30, 2016
, six were in various stages of completion, and three were being drilled. In addition, we turned-to-sales 21 gross (15.8 net) operated wells and 13 gross (3.9 net) non-operated wells during the three months ended
September 30, 2016
.
|
•
|
During the nine months ended
September 30, 2016
, we reduced our unit lease operating expense by
30%
to
$0.26
per Mcfe from
$0.36
per Mcfe during the nine months ended
September 30, 2015
.
|
•
|
During the nine months ended
September 30, 2016
, we reduced our unit midstream gathering and processing expense by
10%
to
$0.64
per Mcfe from
$0.71
per Mcfe during the nine months ended
September 30, 2015
.
|
•
|
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.
|
•
|
A $56.5 million decrease in oil and natural gas sales due to an unfavorable change in gains and losses from derivative instruments. Of the total change, $16.7 million was due to an unfavorable change in settlements related to our derivative positions. In addition, $39.8 million was due to unfavorable changes in the fair value of our open derivative positions in each period.
|
•
|
A $22.5 million increase in gas sales without the impact of derivatives due to a
21%
increase in gas sales volumes and a 1% increase in natural gas market prices.
|
•
|
A $7.9 million decrease in oil and condensate sales without the impact of derivatives due to a
29%
decrease in oil and condensate sales volumes, partially offset by a 3% increase in oil and condensate market prices.
|
•
|
A $5.2 million increase in natural gas liquids sales without the impact of derivatives due to a 73% increase in natural gas liquids market prices, partially offset by an
11%
decrease in natural gas liquids sales volumes.
|
|
Three months ended September 30,
|
||||||
|
2016
|
|
2015
|
||||
|
($ In thousands)
|
||||||
Gas sales
|
|
|
|
||||
Gas production volumes (MMcf)
|
58,151
|
|
|
48,124
|
|
||
|
|
|
|
||||
Gas sales without the impact of derivatives
|
$
|
122,018
|
|
|
$
|
99,531
|
|
Net gain on derivatives included in gas sales
|
33,167
|
|
|
79,684
|
|
||
Total Gas sales
|
$
|
155,185
|
|
|
$
|
179,215
|
|
|
|
|
|
||||
Gas sales without the impact of derivatives ($/Mcf)
|
$
|
2.10
|
|
|
$
|
2.07
|
|
Impact from settled derivatives ($/Mcf)
|
$
|
0.21
|
|
|
$
|
0.55
|
|
Average Gas sales price, including settled derivatives ($/Mcf)
|
$
|
2.31
|
|
|
$
|
2.62
|
|
|
|
|
|
||||
Oil and condensate sales
|
|
|
|
||||
Oil and condensate production volumes (MBbls)
|
521
|
|
|
732
|
|
||
|
|
|
|
||||
Oil and condensate sales without the impact of derivatives
|
$
|
21,799
|
|
|
$
|
29,675
|
|
Net gain on derivatives included in oil and condensate sales
|
1,708
|
|
|
12,072
|
|
||
Total Oil and condensate sales
|
$
|
23,507
|
|
|
$
|
41,747
|
|
|
|
|
|
||||
Oil and condensate sales without the impact of derivatives ($/Bbl)
|
$
|
41.81
|
|
|
$
|
40.53
|
|
Impact from settled derivatives ($/Bbl)
|
$
|
1.62
|
|
|
$
|
4.31
|
|
Average Oil and condensate sales price, including settled derivatives ($/Bbl)
|
$
|
43.43
|
|
|
$
|
44.84
|
|
|
|
|
|
||||
Natural gas liquids sales
|
|
|
|
||||
Natural gas liquids production volumes (MGal)
|
43,837
|
|
|
49,094
|
|
||
|
|
|
|
||||
Natural gas liquids sales without the impact of derivatives
|
$
|
14,594
|
|
|
$
|
9,431
|
|
Net gain on derivatives included in natural gas liquid sales
|
406
|
|
|
—
|
|
||
Total Natural gas liquids sales
|
$
|
15,000
|
|
|
$
|
9,431
|
|
|
|
|
|
||||
Natural gas liquids sales without the impact of derivatives ($/Gal)
|
$
|
0.33
|
|
|
$
|
0.19
|
|
Impact from settled derivatives ($/Gal)
|
$
|
—
|
|
|
$
|
—
|
|
Average Natural gas liquids sales price, including settled derivatives ($/Gal)
|
$
|
0.33
|
|
|
$
|
0.19
|
|
•
|
A $176.2 million decrease in oil and natural gas revenues due to an unfavorable change in gains and losses from derivative instruments. Of the total change, $242.9 million was due to an unfavorable change in the fair value of our open derivative positions in each period. This amount was offset by a favorable change of $66.7 million due to a favorable change in settlements related to our derivative positions.
|
•
|
A $26.4 million increase in gas sales without the impact of derivatives due to a
53%
increase in gas sales volumes largely offset by a 28% decrease in natural gas market prices.
|
•
|
A $37.3 million decrease in oil and condensate sales without the impact of derivatives due to a
25%
decrease in oil and condensate sales volumes and an 18% decrease in oil and condensate market prices.
|
•
|
A $9.2 million decrease in natural gas liquid sales without the impact of derivatives due to an
18%
decrease in natural gas liquids sales volumes and a 5% decrease in natural gas liquid market prices.
|
|
Nine months ended September 30,
|
||||||
|
2016
|
|
2015
|
||||
|
($ In thousands)
|
||||||
Gas sales
|
|
|
|
||||
Gas production volumes (MMcf)
|
164,233
|
|
|
107,208
|
|
||
|
|
|
|
||||
Gas sales without the impact of derivatives
|
$
|
271,873
|
|
|
$
|
245,519
|
|
Net (loss) gain on derivatives included in gas sales
|
(43,454
|
)
|
|
118,137
|
|
||
Total Gas sales
|
$
|
228,419
|
|
|
$
|
363,656
|
|
|
|
|
|
||||
Gas sales without the impact of derivatives ($/Mcf)
|
$
|
1.66
|
|
|
$
|
2.29
|
|
Impact from settled derivatives ($/Mcf)
|
$
|
0.78
|
|
|
$
|
0.64
|
|
Average Gas sales price, including settled derivatives ($/Mcf)
|
$
|
2.44
|
|
|
$
|
2.93
|
|
|
|
|
|
||||
Oil and condensate sales
|
|
|
|
||||
Oil and condensate production volumes (MBbls)
|
1,675
|
|
|
2,225
|
|
||
|
|
|
|
||||
Oil and condensate sales without the impact of derivatives
|
$
|
60,799
|
|
|
$
|
98,071
|
|
Net gain on derivatives included in oil and condensate sales
|
362
|
|
|
13,641
|
|
||
Total Oil and condensate sales
|
$
|
61,161
|
|
|
$
|
111,712
|
|
|
|
|
|
||||
Oil and condensate sales without the impact of derivatives ($/Bbl)
|
$
|
36.31
|
|
|
$
|
44.08
|
|
Impact from settled derivatives ($/Bbl)
|
$
|
6.42
|
|
|
$
|
2.06
|
|
Average Oil and condensate sales price, including settled derivatives ($/Bbl)
|
$
|
42.73
|
|
|
$
|
46.14
|
|
|
|
|
|
||||
Natural gas liquids sales
|
|
|
|
||||
Natural gas liquids production volumes (MGal)
|
117,217
|
|
|
142,093
|
|
||
|
|
|
|
||||
Natural gas liquids sales without the impact of derivatives
|
$
|
34,198
|
|
|
$
|
43,396
|
|
Net loss on derivatives included in natural gas liquids sales
|
(1,284
|
)
|
|
—
|
|
||
Total Natural gas liquids sales
|
$
|
32,914
|
|
|
$
|
43,396
|
|
|
|
|
|
||||
Natural gas liquids sales without the impact of derivatives ($/Gal)
|
$
|
0.29
|
|
|
$
|
0.31
|
|
Impact from settled derivatives ($/Gal)
|
$
|
—
|
|
|
$
|
—
|
|
Average Natural gas liquids sales price, including settled derivatives ($/Gal)
|
$
|
0.29
|
|
|
$
|
0.31
|
|
ITEM 3.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
|
Location
|
Daily Volume
(Bbls/day) |
|
Weighted
Average Price |
|||
October 2016 - June 2017
|
ARGUS LLS
|
2,000
|
|
|
$
|
51.10
|
|
|
Location
|
Daily Volume (MMBtu/day)
|
|
Weighted
Average Price |
|||
October 2016
|
NYMEX Henry Hub
|
570,000
|
|
|
$
|
3.05
|
|
November 2016 - December 2016
|
NYMEX Henry Hub
|
525,000
|
|
|
$
|
3.18
|
|
January 2017 - February 2017
|
NYMEX Henry Hub
|
442,500
|
|
|
$
|
3.14
|
|
March 2017
|
NYMEX Henry Hub
|
422,500
|
|
|
$
|
3.13
|
|
April 2017 - June 2017
|
NYMEX Henry Hub
|
367,500
|
|
|
$
|
3.15
|
|
July 2017 - October 2017
|
NYMEX Henry Hub
|
305,000
|
|
|
$
|
2.99
|
|
November 2017 - December 2017
|
NYMEX Henry Hub
|
435,000
|
|
|
$
|
3.06
|
|
January 2018 - March 2018
|
NYMEX Henry Hub
|
290,000
|
|
|
$
|
3.10
|
|
April 2018 - December 2018
|
NYMEX Henry Hub
|
160,000
|
|
|
$
|
3.01
|
|
January 2019 - March 2019
|
NYMEX Henry Hub
|
20,000
|
|
|
$
|
3.37
|
|
|
Location
|
Daily Volume
(Bbls/day) |
|
Weighted
Average Price |
|||
October 2016 - December 2016
|
Mont Belvieu
|
1,500
|
|
|
$
|
19.95
|
|
|
Location
|
Daily Volume (MMBtu/day)
|
|
Weighted Average Price
|
|||
January 2017 - March 2017
|
NYMEX Henry Hub
|
105,000
|
|
|
$
|
3.27
|
|
April 2017 - December 2017
|
NYMEX Henry Hub
|
125,000
|
|
|
$
|
3.21
|
|
January 2018 - March 2018
|
NYMEX Henry Hub
|
20,000
|
|
|
$
|
2.91
|
|
|
Location
|
Daily Volume (MMBtu/day)
|
|
Hedged Differential
|
|||
October 2016 - December 2016
|
MichCon
|
40,000
|
|
|
$
|
0.02
|
|
November 2016 - March 2017
|
Tetco M2
|
50,000
|
|
|
$
|
(0.59
|
)
|
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 nine months ended
September 30, 2016
, 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
|
|
|
|
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).
|
|
|
|
4.5
|
|
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
|
|
Indenture, dated as of October 14, 2016, among Gulfport Energy Corporation, the subsidiary guarantors party thereto and Wells Fargo Bank, N.A., as trustee (including the form of Gulfport Energy Corporation’s 6.000% Senior Notes due 2024) (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 19, 2016).
|
|
|
|
4.7
|
|
Registration Rights Agreement, dated as of October 14, 2016, among Gulfport Energy Corporation, 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 October 19, 2016).
|
|
|
|
10.1*
|
|
Separation and Release Agreement by and between Gulfport Energy Corporation and Ross Kirtley entered into November 2, 2016.
|
|
|
|
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.
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101.LAB*
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XBRL Taxonomy Extension Labels Linkbase Document.
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101.PRE*
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XBRL Taxonomy Extension Presentation Linkbase Document.
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*
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Filed herewith.
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GULFPORT ENERGY CORPORATION
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By:
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/s/ Keri Crowell
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Keri Crowell
Chief Accounting Officer
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THE
COMPANY:
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Gulfport Energy Corporation
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Date: November 2, 2016
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/s/ Michael G. Moore
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Michael G. Moore
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Chief Executive Officer and President
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EMPLOYEE:
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Date: November 2, 2016
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/s/ J. Ross Kirtley
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Ross Kirtley, in his individual capacity
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(a)
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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;
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(b)
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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;
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(c)
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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
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(d)
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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
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(a)
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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
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(b)
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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.
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/s/ Michael G. Moore
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Michael G. Moore
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Chief Executive Officer and President
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(a)
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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;
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(b)
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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;
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(c)
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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
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(d)
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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
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(a)
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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
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(b)
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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.
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/s/ Aaron Gaydosik
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Aaron Gaydosik
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Chief Financial Officer
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(1)
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the
Quarterly Report
on Form
10-Q
of the Company for the
quarterly period
ended
September 30, 2016
(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
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(2)
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the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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/s/ Michael G. Moore
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Michael G. Moore
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Chief Executive Officer and President
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(1)
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the
Quarterly Report
on Form
10-Q
of the Company for the
quarterly period
ended
September 30, 2016
(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
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(2)
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the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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/s/ Aaron Gaydosik
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Aaron Gaydosik
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Chief Financial Officer
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