falsedesktopCRZO2019-09-30000104059319000117{"tbl_sim": "https://q10k.com/tbl-sim", "search": "https://q10k.com/search"}{"q10k_tbl_0": "Texas\t\t\t76-0415919\n(State or other jurisdiction of incorporation or organization)\t\t\t(IRS Employer Identification No.)\n500 Dallas Street\tSuite 2300 Houston\tTexas\t77002\n(Address of principal executive offices)\t\t\t(Zip Code)\n", "q10k_tbl_1": "Large Accelerated Filer\t☑\tAccelerated Filer\t☐\tNon-accelerated Filer\t☐\nSmaller reporting company\t☐\tEmerging growth company\t☐\t\t\n", "q10k_tbl_2": "\t\tPAGE\nPart I. Financial Information\t\t\nItem 1.\tConsolidated Financial Statements (Unaudited)\t2\n\tConsolidated Balance Sheets as of September 30 2019 and December 31 2018\t2\n\tConsolidated Statements of Income for the three and nine months ended September 30 2019 and 2018\t3\n\tConsolidated Statements of Shareholders' Equity for the three and nine months ended September 30 2019 and 2018\t4\n\tConsolidated Statements of Cash Flows for the nine months ended September 30 2019 and 2018\t5\n\tNotes to Consolidated Financial Statements\t6\nItem 2.\tManagement's Discussion and Analysis of Financial Condition and Results of Operations\t29\nItem 3.\tQuantitative and Qualitative Disclosures About Market Risk\t40\nItem 4.\tControls and Procedures\t42\nPart II. Other Information\t\t\nItem 1.\tLegal Proceedings\t43\nItem 1A.\tRisk Factors\t44\nItem 2.\tUnregistered Sales of Equity Securities and Use of Proceeds\t44\nItem 3.\tDefaults Upon Senior Securities\t44\nItem 4.\tMine Safety Disclosures\t44\nItem 5.\tOther Information\t44\nItem 6.\tExhibits\t45\nSignatures\t\t46\n", "q10k_tbl_3": "\tSeptember 30 2019\tDecember 31 2018\nAssets\t\t\nCurrent assets\t\t\nCash and cash equivalents\t2280\t2282\nAccounts receivable net\t98161\t99723\nDerivative assets\t31125\t39904\nOther current assets\t7298\t8460\nTotal current assets\t138864\t150369\nProperty and equipment\t\t\nOil and gas properties full cost method\t\t\nProved properties net\t2648601\t2333470\nUnproved properties not being amortized\t649347\t673833\nOther property and equipment net\t11022\t11221\nTotal property and equipment net\t3308970\t3018524\nDeferred income taxes\t172632\t0\nOperating lease right-of-use assets\t55873\t0\nOther long-term assets\t13885\t16207\nTotal Assets\t3690224\t3185100\nLiabilities and Shareholders' Equity\t\t\nCurrent liabilities\t\t\nAccounts payable\t79744\t98811\nRevenues and royalties payable\t59140\t49003\nAccrued capital expenditures\t33757\t60004\nAccrued interest\t23640\t18377\nDerivative liabilities\t56233\t55205\nOperating lease liabilities\t30301\t0\nOther current liabilities\t48912\t40609\nTotal current liabilities\t331727\t322009\nLong-term debt\t1755378\t1633591\nAsset retirement obligations\t22876\t18360\nOperating lease liabilities\t31723\t0\nDeferred income taxes\t8845\t8017\nOther long-term liabilities\t13946\t47797\nTotal liabilities\t2164495\t2029774\nCommitments and contingencies\t\t\nPreferred stock\t\t\nPreferred stock $0.01 par value 10000000 shares authorized; 200000 issued and outstanding as of September 30 2019 and December 31 2018\t176925\t174422\nShareholders' equity\t\t\nCommon stock $0.01 par value 180000000 shares authorized; 92610669 issued and outstanding as of September 30 2019 and 91627738 issued and outstanding as of December 31 2018\t926\t916\nAdditional paid-in capital\t2132276\t2131535\nAccumulated deficit\t(784398)\t(1151547)\nTotal shareholders' equity\t1348804\t980904\nTotal Liabilities and Shareholders' Equity\t3690224\t3185100\n", "q10k_tbl_4": "\tThree Months Ended September 30\t\tNine Months Ended September 30\t\n\t2019\t2018\t2019\t2018\nRevenues\t\t\t\t\nCrude oil\t236153\t254525\t684109\t679242\nNatural gas liquids\t12824\t33798\t43820\t71969\nNatural gas\t8017\t15052\t27072\t41417\nTotal revenues\t256994\t303375\t755001\t792628\nCosts and Expenses\t\t\t\t\nLease operating\t45213\t41022\t131758\t115446\nProduction and ad valorem taxes\t14549\t17104\t47236\t45779\nDepreciation depletion and amortization\t82195\t80108\t238283\t217005\nGeneral and administrative net\t13467\t12811\t55500\t58368\n(Gain) loss on derivatives net\t(31554)\t55388\t31281\t152698\nInterest expense net\t17721\t15406\t52196\t46522\nLoss on extinguishment of debt\t0\t0\t0\t8676\nOther (income) expense net\t1125\t(690)\t2717\t2305\nTotal costs and expenses\t142716\t221149\t558971\t646799\nIncome Before Income Taxes\t114278\t82226\t196030\t145829\nIncome tax (expense) benefit\t(5977)\t(880)\t171119\t(1682)\nNet Income\t108301\t81346\t367149\t144147\nDividends on preferred stock\t(4474)\t(4457)\t(13286)\t(13794)\nAccretion on preferred stock\t(869)\t(771)\t(2503)\t(2264)\nLoss on redemption of preferred stock\t0\t0\t0\t(7133)\nNet Income Attributable to Common Shareholders\t102958\t76118\t351360\t120956\nNet Income Attributable to Common Shareholders Per Common Share\t\t\t\t\nBasic\t1.11\t0.88\t3.81\t1.45\nDiluted\t1.11\t0.85\t3.79\t1.42\nWeighted Average Common Shares Outstanding\t\t\t\t\nBasic\t92561\t86727\t92269\t83461\nDiluted\t92762\t89039\t92625\t85221\n", "q10k_tbl_5": "\tThree Months Ended September 30 2019 and 2018\t\t\t\t\n\tCommon Stock\t\tAdditional Paid-in Capital\tAccumulated Deficit\tTotal Shareholders' Equity\n\tShares\tAmount\t\nBalance as of June 30 2019\t92552930\t926\t2132131\t($892699)\t1240358\nStock-based compensation expense\t0\t0\t5488\t0\t5488\nIssuance of common stock upon grants of restricted stock awards and vestings of restricted stock units and performance shares\t57739\t0\t0\t0\t0\nDividends on preferred stock\t0\t0\t(4474)\t0\t(4474)\nAccretion on preferred stock\t0\t0\t(869)\t0\t(869)\nNet income\t0\t0\t0\t108301\t108301\nBalance as of September 30 2019\t92610669\t926\t2132276\t($784398)\t1348804\nBalance as of June 30 2018\t82107544\t821\t1918820\t($1493173)\t426468\nStock-based compensation expense\t0\t0\t4944\t0\t4944\nIssuance of common stock upon grants of restricted stock awards and vestings of restricted stock units and performance shares\t12189\t0\t(45)\t0\t(45)\nSale of common stock net of offering costs\t9500000\t95\t213762\t0\t213857\nDividends on preferred stock\t0\t0\t(4457)\t0\t(4457)\nAccretion on preferred stock\t0\t0\t(771)\t0\t(771)\nNet income\t0\t0\t0\t81346\t81346\nBalance as of September 30 2018\t91619733\t916\t2132253\t($1411827)\t721342\n", "q10k_tbl_6": "\tNine Months Ended September 30 2019 and 2018\t\t\t\t\n\tCommon Stock\t\tAdditional Paid-in Capital\tAccumulated Deficit\tTotal Shareholders' Equity\n\tShares\tAmount\t\nBalance as of December 31 2018\t91627738\t916\t2131535\t($1151547)\t980904\nStock-based compensation expense\t0\t0\t16540\t0\t16540\nIssuance of common stock upon grants of restricted stock awards and vestings of restricted stock units and performance shares\t982931\t10\t(10)\t0\t0\nDividends on preferred stock\t0\t0\t(13286)\t0\t(13286)\nAccretion on preferred stock\t0\t0\t(2503)\t0\t(2503)\nNet income\t0\t0\t0\t367149\t367149\nBalance as of September 30 2019\t92610669\t926\t2132276\t($784398)\t1348804\nBalance as of December 31 2017\t81454621\t815\t1926056\t($1555974)\t370897\nStock-based compensation expense\t0\t0\t15701\t0\t15701\nIssuance of common stock upon grants of restricted stock awards and vestings of restricted stock units and performance shares\t665112\t6\t(75)\t0\t(69)\nSale of common stock net of offering costs\t9500000\t95\t213762\t0\t213857\nDividends on preferred stock\t0\t0\t(13794)\t0\t(13794)\nAccretion on preferred stock\t0\t0\t(2264)\t0\t(2264)\nLoss on redemption of preferred stock\t0\t0\t(7133)\t0\t(7133)\nNet income\t0\t0\t0\t144147\t144147\nBalance as of September 30 2018\t91619733\t916\t2132253\t($1411827)\t721342\n", "q10k_tbl_7": "\tNine Months Ended September 30\t\n\t2019\t2018\nCash Flows From Operating Activities\t\t\nNet income\t367149\t144147\nAdjustments to reconcile net income to net cash provided by operating activities\t\t\nDepreciation depletion and amortization\t238283\t217005\nLoss on derivatives net\t31281\t152698\nCash paid for commodity derivative settlements net\t(8939)\t(64710)\nLoss on extinguishment of debt\t0\t8676\nStock-based compensation expense net\t11692\t13786\nDeferred income tax (benefit) expense\t(171803)\t1063\nNon-cash interest expense net\t1950\t1878\nOther net\t3505\t4100\nChanges in components of working capital and other assets and liabilities-\t\t\nAccounts receivable\t(7432)\t(12763)\nAccounts payable\t(752)\t10863\nAccrued liabilities\t16310\t(9336)\nOther assets and liabilities net\t(3197)\t(2115)\nNet cash provided by operating activities\t478047\t465292\nCash Flows From Investing Activities\t\t\nCapital expenditures\t(557304)\t(662459)\nAcquisitions of oil and gas properties\t8222\t(21500)\nProceeds from divestitures of oil and gas properties\t6351\t377693\nOther net\t(284)\t(2687)\nNet cash used in investing activities\t(543015)\t(308953)\nCash Flows From Financing Activities\t\t\nRedemptions of senior notes\t0\t(330435)\nRedemption of preferred stock\t0\t(50030)\nBorrowings under credit agreement\t1280780\t2415208\nRepayments of borrowings under credit agreement\t(1160399)\t(2396671)\nPayments of credit facility amendment fees\t(613)\t(627)\nSale of common stock net of offering costs\t0\t213857\nPayments of dividends on preferred stock\t(13286)\t(13794)\nCash paid for settlements of contingent consideration arrangements net\t(40000)\t0\nOther net\t(1516)\t(972)\nNet cash provided by (used in) financing activities\t64966\t(163464)\nNet Decrease in Cash and Cash Equivalents\t(2)\t(7125)\nCash and Cash Equivalents Beginning of Period\t2282\t9540\nCash and Cash Equivalents End of Period\t2280\t2415\n", "q10k_tbl_8": "\tPurchase Price Allocation\n\t(In thousands)\nAssets\t\nOther current assets\t216\nOil and gas properties\t\nProved properties\t47118\nUnproved properties\t150253\nTotal oil and gas properties\t197371\nTotal assets acquired\t197587\nLiabilities\t\nRevenues and royalties payable\t786\nAsset retirement obligations\t170\nTotal liabilities assumed\t956\nNet Assets Acquired\t196631\n", "q10k_tbl_9": "\tThree Months Ended September 30 2019\tNine Months Ended September 30 2019\n\t(In thousands)\t\nTotal revenues\t3676\t12394\nNet Income Attributable to Common Shareholders\t1962\t6678\n", "q10k_tbl_10": "\tSeptember 30 2019\tDecember 31 2018\n\t(In thousands)\t\nOil and gas properties full cost method\t\t\nProved properties\t6827578\t6278321\nAccumulated depreciation depletion and amortization and impairments\t(4178977)\t(3944851)\nProved properties net\t2648601\t2333470\nUnproved properties not being amortized\t\t\nUnevaluated leasehold and seismic costs\t567294\t608830\nCapitalized interest\t82053\t65003\nTotal unproved properties not being amortized\t649347\t673833\nOther property and equipment\t31129\t29191\nAccumulated depreciation\t(20107)\t(17970)\nOther property and equipment net\t11022\t11221\nTotal property and equipment net\t3308970\t3018524\n", "q10k_tbl_11": "\tThree Months Ended September 30 2019\tNine Months Ended September 30 2019\n\t(In thousands)\t\nComponents of Lease Costs\t\t\nFinance lease costs\t\t\nAmortization of right-of-use assets (1)\t410\t1194\nInterest on lease liabilities (2)\t110\t386\nOperating lease costs (3)\t9406\t32186\nShort-term lease costs (4)\t363\t826\nVariable lease costs (5)\t104\t256\nTotal lease costs\t10393\t34848\n", "q10k_tbl_12": "\tSeptember 30 2019\n\t(In thousands)\nLeases\t\nOperating leases:\t\nOperating lease ROU assets\t55873\nCurrent operating lease liabilities\t30301\nLong-term operating lease liabilities\t31723\nTotal operating lease liabilities\t62024\nFinancing leases:\t\nOther property and equipment at cost\t7810\nAccumulated depreciation\t(5580)\nOther property and equipment net\t2230\nCurrent financing lease liabilities (1)\t1709\nLong-term financing lease liabilities (2)\t797\nTotal financing lease liabilities\t2506\n", "q10k_tbl_13": "\tNine Months Ended September 30 2019\n\t(In thousands)\nSupplemental Cash Flow Information\t\nCash paid for amounts included in the measurement of lease liabilities:\t\nOperating cash flows from operating leases\t7782\nInvesting cash flows from operating leases\t29460\nOperating cash flows from financing leases\t386\nFinancing cash flows from financing leases\t1324\nROU assets obtained in exchange for lease liabilities\t\nOperating leases\t17226\nFinancing leases\t1082\n", "q10k_tbl_14": "\tOperating Leases\tFinancing Leases\n\t(In thousands)\t\nOctober - December 2019\t11076\t556\n2020\t27595\t1475\n2021\t7933\t275\n2022\t3750\t234\n2023\t3680\t233\n2024 and Thereafter\t21590\t39\nTotal lease payments\t75624\t2812\nLess: Imputed interest\t(13600)\t(306)\nTotal lease liabilities\t62024\t2506\n", "q10k_tbl_15": "\tThree Months Ended September 30\t\tNine Months Ended September 30\t\n\t2019\t2018\t2019\t2018\n\t(In thousands)\t\t\t\nIncome before income taxes\t114278\t82226\t196030\t145829\nIncome tax expense at the U.S. federal statutory rate\t(23998)\t(17267)\t(41166)\t(30624)\nState income tax expense net of U.S. federal income tax benefit\t(887)\t(881)\t(1513)\t(1687)\nTax deficiencies related to stock-based compensation\t(558)\t(10)\t(2672)\t(2552)\n(Recapture) release of valuation allowance\t(5091)\t0\t172632\t0\nDecrease in valuation allowance due to current period activity\t25348\t17400\t44621\t33849\nOther\t(791)\t(122)\t(783)\t(668)\nIncome tax (expense) benefit\t($5977)\t($880)\t171119\t($1682)\n", "q10k_tbl_16": "\tSeptember 30 2019\tDecember 31 2018\n\t(In thousands)\t\nSenior Secured Revolving Credit Facility due 2022\t864812\t744431\n6.25% Senior Notes due 2023\t650000\t650000\nUnamortized debt issuance costs for 6.25% Senior Notes\t(5822)\t(6878)\n8.25% Senior Notes due 2025\t250000\t250000\nUnamortized debt issuance costs for 8.25% Senior Notes\t(3612)\t(3962)\nLong-term debt\t1755378\t1633591\n", "q10k_tbl_17": "Ratio of Outstanding Borrowings to Lender Commitments\tApplicable Margin for Base Rate Loans\tApplicable Margin for Eurodollar Loans\tCommitment Fee\nLess than 25%\t0.25%\t1.25%\t0.375%\nGreater than or equal to 25% but less than 50%\t0.50%\t1.50%\t0.375%\nGreater than or equal to 50% but less than 75%\t0.75%\t1.75%\t0.500%\nGreater than or equal to 75% but less than 90%\t1.00%\t2.00%\t0.500%\nGreater than or equal to 90%\t1.25%\t2.25%\t0.500%\n", "q10k_tbl_18": "\tNine Months Ended September 30\t\n\t2019\t2018\n\t(In thousands)\t\nPreferred Stock beginning of period\t174422\t214262\nRedemption of Preferred Stock\t0\t(42897)\nAccretion on Preferred Stock\t2503\t2264\nPreferred Stock end of period\t176925\t173629\n", "q10k_tbl_19": "\tThree Months Ended September 30\t\t\t\n\t2019\t\t2018\t\n\tRestricted Stock Awards and Units\tWeighted Average Grant Date Fair Value\tRestricted Stock Awards and Units\tWeighted Average Grant Date Fair Value\nUnvested beginning of period\t3335893\t13.94\t2211173\t19.02\nGranted\t0\t0\t43007\t27.17\nVested\t(64657)\t14.76\t(6858)\t26.17\nForfeited\t(25288)\t13.08\t(12887)\t17.94\nUnvested end of period\t3245948\t13.93\t2234435\t19.14\n", "q10k_tbl_20": "\tNine Months Ended September 30\t\t\t\n\t2019\t\t2018\t\n\tRestricted Stock Awards and Units\tWeighted Average Grant Date Fair Value\tRestricted Stock Awards and Units\tWeighted Average Grant Date Fair Value\nUnvested beginning of period\t2266667\t19.28\t1482655\t28.07\nGranted\t2034619\t11.06\t1391422\t15.07\nVested\t(969630)\t20.50\t(615762)\t31.44\nForfeited\t(85708)\t13.12\t(23880)\t18.51\nUnvested end of period\t3245948\t13.93\t2234435\t19.14\n", "q10k_tbl_21": "\tNine Months Ended September 30\t\t\t\t\t\n\t2019\t\t\t2018\t\t\n\tCash SARs\tWeighted Average Exercise Prices\tWeighted Average Remaining Life (In years)\tCash SARs\tWeighted Average Exercise Prices\tWeighted Average Remaining Life (In years)\nOutstanding beginning of period\t1330924\t21.35\t\t714238\t27.12\t\nGranted\t770775\t10.98\t\t616686\t14.67\t\nExercised\t0\t0\t\t0\t0\t\nForfeited\t0\t0\t\t0\t0\t\nExpired\t0\t0\t\t0\t0\t\nOutstanding end of period\t2101699\t17.55\t4.6\t1330924\t21.35\t4.6\nVested end of period\t919800\t24.34\t\t543018\t27.18\t\nVested and exercisable end of period\t0\t24.34\t2.7\t0\t27.18\t2.8\n", "q10k_tbl_22": "\tNine Months Ended September 30\t\n\t2019\t2018\nExpected term (in years)\t6.1\t6.0\nExpected volatility\t56.0%\t54.3%\nRisk-free interest rate\t2.6%\t2.8%\nDividend yield\t-%\t-%\nGrant date fair value per Cash SAR\t6.00\t7.89\n", "q10k_tbl_23": "\tNine Months Ended September 30\t\t\t\n\t2019\t\t2018\t\n\tTarget Performance Shares (1)\tWeighted Average Grant Date Fair Value\tTarget Performance Shares (1)\tWeighted Average Grant Date Fair Value\nUnvested beginning of period\t182209\t27.01\t144955\t47.14\nGranted\t130302\t14.20\t93771\t19.09\nVested at end of performance period\t(31244)\t35.71\t(49458)\t65.51\nDid not vest at end of performance period\t(10407)\t35.71\t(7059)\t65.51\nForfeited\t0\t0\t0\t0\nUnvested end of period\t270860\t19.51\t182209\t27.01\n", "q10k_tbl_24": "\tNine Months Ended September 30\t\n\t2019\t2018\nTarget performance shares granted\t41651\t56517\nMultiplier\t75%\t88%\nPerformance shares vested\t31244\t49458\nPerformance shares that did not vest\t10407\t7059\nAggregate fair value of performance shares vested (In millions)\t0.4\t0.8\n", "q10k_tbl_25": "\tNine Months Ended September 30\t\n\t2019\t2018\nNumber of simulations\t500000\t500000\nExpected term (in years)\t3.1\t3.0\nExpected volatility\t58.2%\t61.5%\nRisk-free interest rate\t2.5%\t2.4%\nDividend yield\t-%\t-%\nGrant date fair value per performance share\t14.20\t19.09\n", "q10k_tbl_26": "\tThree Months Ended September 30\t\tNine Months Ended September 30\t\n\t2019\t2018\t2019\t2018\n\t(In thousands)\t\t\t\nRestricted stock awards and units\t5047\t4487\t15228\t14291\nCash SARs\t(130)\t(868)\t204\t3505\nPerformance shares\t441\t411\t1312\t1374\n\t5358\t4030\t16744\t19170\nLess: amounts capitalized to oil and gas properties\t(1635)\t(968)\t(5052)\t(5384)\nTotal stock-based compensation expense net\t3723\t3062\t11692\t13786\n", "q10k_tbl_27": "\tThree Months Ended September 30\t\tNine Months Ended September 30\t\n\t2019\t2018\t2019\t2018\n\t(In thousands except per share amounts)\t\t\t\nNet Income\t108301\t81346\t367149\t144147\nDividends on preferred stock\t(4474)\t(4457)\t(13286)\t(13794)\nAccretion on preferred stock\t(869)\t(771)\t(2503)\t(2264)\nLoss on redemption of preferred stock\t0\t0\t0\t(7133)\nNet Income Attributable to Common Shareholders\t102958\t76118\t351360\t120956\nBasic weighted average common shares outstanding\t92561\t86727\t92269\t83461\nDilutive effect of restricted stock and performance shares\t201\t1272\t356\t967\nDilutive effect of common stock warrants\t0\t1040\t0\t793\nDiluted weighted average common shares outstanding\t92762\t89039\t92625\t85221\nNet Income Attributable to Common Shareholders Per Common Share\t\t\t\t\nBasic\t1.11\t0.88\t3.81\t1.45\nDiluted\t1.11\t0.85\t3.79\t1.42\n", "q10k_tbl_28": "\tThree Months Ended September 30\t\tNine Months Ended September 30\t\n\t2019\t2018\t2019\t2018\n\t(In thousands)\t\t\t\nAnti-dilutive restricted stock and performance shares\t3080\t0\t2570\t5\nAnti-dilutive common stock warrants\t2750\t0\t2750\t0\nTotal weighted average anti-dilutive securities\t5830\t0\t5320\t5\n", "q10k_tbl_29": "Commodity\tPeriod\tType of Contract\tIndex\tVolumes (Bbls per day)\tFixed Price ($ per Bbl)\tSub-Floor Price ($ per Bbl)\tFloor Price ($ per Bbl)\tCeiling Price ($ per Bbl)\tFixed Price Differential ($ per Bbl)\nCrude oil\t4Q19\tPrice Swaps\tNYMEX WTI\t5000\t64.80\t0\t0\t0\t0\nCrude oil\t4Q19\tThree-Way Collars\tNYMEX WTI\t27000\t0\t41.67\t50.96\t74.23\t0\nCrude oil\t4Q19\tBasis Swaps\tWTI Midland-WTI Cushing\t9200\t0\t0\t0\t0\t($4.64)\nCrude oil\t4Q19\tSold Call Options\tNYMEX WTI\t3875\t0\t0\t0\t81.07\t0\nCrude oil\t2020\tPrice Swaps\tNYMEX WTI\t3000\t55.06\t0\t0\t0\t0\nCrude oil\t2020\tThree-Way Collars\tNYMEX WTI\t22000\t0\t45.34\t55.34\t65.16\t0\nCrude oil\t2020\tBasis Swaps\tWTI Midland-WTI Cushing\t10658\t0\t0\t0\t0\t($1.68)\nCrude oil\t2020\tSold Call Options\tNYMEX WTI\t4575\t0\t0\t0\t75.98\t0\nCrude oil\t2021\tBasis Swaps\tWTI Midland-WTI Cushing\t8000\t0\t0\t0\t0\t0.18\nCrude oil\t2021\tSold Call Options\tNYMEX WTI\t8220\t0\t0\t0\t64.00\t0\n", "q10k_tbl_30": "Commodity\tPeriod\tType of Contract\tIndex\tVolumes (MMBtu per day)\tFixed Price ($ per MMBtu)\tSub-Floor Price ($ per MMBtu)\tFloor Price ($ per MMBtu)\tCeiling Price ($ per MMBtu)\tFixed Price Differential ($ per MMBtu)\nNatural gas\t4Q19\tBasis Swaps\tWaha-NYMEX Henry Hub\t42500\t0\t0\t0\t0\t($1.30)\nNatural gas\t4Q19\tSold Call Options\tNYMEX Henry Hub\t33000\t0\t0\t0\t3.25\t0\nNatural gas\t2020\tBasis Swaps\tWaha-NYMEX Henry Hub\t29541\t0\t0\t0\t0\t($0.77)\nNatural gas\t2020\tSold Call Options\tNYMEX Henry Hub\t33000\t0\t0\t0\t3.50\t0\n", "q10k_tbl_31": "\tYear\tThreshold (1)\tPeriod Cash Flow Occurs\tStatement of Cash Flows Presentation\tContingent Payment - Annual\tRemaining Contingent Payments - Aggregate Limit\tAcquisition Date Fair Value\n\t\t\t\t\t(In thousands)\t\t\n\t\t\t\t\t\t\t($52300)\nActual Settlement\t2018\t50.00\t1Q19\tFinancing\t($50000)\t\t\nRemaining Potential Settlements\t2019-2021\t50.00\t(2)\t(2)\t(50000)\t($75000)\t\n", "q10k_tbl_32": "\tYear\tThreshold (1)\tPeriod Cash Flow Occurs\tStatement of Cash Flows Presentation\tContingent Receipt - Annual\tRemaining Contingent Payments - Aggregate Limit\tDivestiture Date Fair Value\n\t\t\t\t\t(In thousands)\t\t\n\t\t\t\t\t\t\t7880\nActual Settlement\t2018\t55.00\t1Q19\tFinancing\t5000\t\t\nRemaining Potential Settlements\t2019\t55.00\t1Q20\t(2)\t5000\t10000\t\n\t2020\t60.00\t1Q21\t(2)\t5000\t\t\n", "q10k_tbl_33": "\tYear\tThreshold (1)\tPeriod Cash Flow Occurs\tStatement of Cash Flows Presentation\tContingent Receipt - Annual\tRemaining Contingent Payments - Aggregate Limit\tDivestiture Date Fair Value\n\t\t\t\t\t(In thousands)\t\t\n\t\t\t\t\t\t\t2660\nActual Settlement\t2018\t3.13\t1Q19\tN/A\t0\t\t\nRemaining Potential Settlements\t2019\t3.18\t1Q20\t(2)\t3000\t6000\t\n\t2020\t3.30\t1Q21\t(2)\t3000\t\t\n", "q10k_tbl_34": "\tYear\tThreshold (1)\tPeriod Cash Flow Occurs\tStatement of Cash Flows Presentation\tContingent Receipt - Annual\tRemaining Contingent Payments - Aggregate Limit\tDivestiture Date Fair Value\n\t\t\t\t\t(In thousands)\t\t\n\t\t\t\t\t\t\t6145\nActual Settlement\t2018\t50.00\t1Q19\tFinancing\t5000\t\t\nRemaining Potential Settlements\t2019\t53.00\t1Q20\t(2)\t5000\t10000\t\n\t2020\t56.00\t1Q21\t(2)\t5000\t\t\n", "q10k_tbl_35": "\tSeptember 30 2019\t\t\n\tGross Amounts Recognized\tGross Amounts Offset in the Consolidated Balance Sheets\tNet Amounts Presented in the Consolidated Balance Sheets\n\t(In thousands)\t\t\nCommodity derivative instruments\t38183\t($15341)\t22842\nContingent Niobrara Consideration\t3592\t0\t3592\nContingent Utica Consideration\t4691\t0\t4691\nDerivative assets\t46466\t($15341)\t31125\nCommodity derivative instruments\t14158\t(10008)\t4150\nContingent Niobrara Consideration\t1076\t0\t1076\nContingent Marcellus Consideration\t343\t0\t343\nContingent Utica Consideration\t1384\t0\t1384\nOther long-term assets\t16961\t($10008)\t6953\nCommodity derivative instruments\t($17385)\t9555\t($7830)\nDeferred premium obligations\t(5786)\t5786\t0\nContingent ExL Consideration\t(48403)\t0\t(48403)\nDerivative liabilities-current\t($71574)\t15341\t($56233)\nCommodity derivative instruments\t(9849)\t8952\t(897)\nDeferred premium obligations\t(1056)\t1056\t0\nContingent ExL Consideration\t(11657)\t0\t(11657)\nOther long-term liabilities\t($22562)\t10008\t($12554)\n", "q10k_tbl_36": "\tDecember 31 2018\t\t\n\tGross Amounts Recognized\tGross Amounts Offset in the Consolidated Balance Sheets\tNet Amounts Presented in the Consolidated Balance Sheets\n\t(In thousands)\t\t\nCommodity derivative instruments\t50406\t($20502)\t29904\nContingent Niobrara Consideration\t5000\t0\t5000\nContingent Utica Consideration\t5000\t0\t5000\nDerivative assets\t60406\t($20502)\t39904\nCommodity derivative instruments\t6083\t(4236)\t1847\nContingent Niobrara Consideration\t2035\t0\t2035\nContingent Marcellus Consideration\t1369\t0\t1369\nContingent Utica Consideration\t2501\t0\t2501\nOther long-term assets\t11988\t($4236)\t7752\nCommodity derivative instruments\t($15345)\t10140\t($5205)\nDeferred premium obligations\t(10362)\t10362\t0\nContingent ExL Consideration\t(50000)\t0\t(50000)\nDerivative liabilities-current\t($75707)\t20502\t($55205)\nCommodity derivative instruments\t(10751)\t518\t(10233)\nDeferred premium obligations\t(3718)\t3718\t0\nContingent ExL Consideration\t(30584)\t0\t(30584)\nOther long-term liabilities\t($45053)\t4236\t($40817)\n", "q10k_tbl_37": "\tThree Months Ended September 30\t\tNine Months Ended September 30\t\n\t2019\t2018\t2019\t2018\n\t(In thousands)\t\t\t\n(Gain) loss on derivatives net\t\t\t\t\nCrude oil\t($28223)\t43664\t13623\t126612\nNGL\t0\t5086\t(6)\t9885\nNatural gas\t(2961)\t(192)\t(6631)\t(3084)\nContingent ExL Consideration\t(738)\t9990\t29476\t26420\nContingent Niobrara Consideration\t279\t(1705)\t(2633)\t(3795)\nContingent Marcellus Consideration\t107\t215\t1026\t890\nContingent Utica Consideration\t(18)\t(1670)\t(3574)\t(4230)\n(Gain) loss on derivatives net\t($31554)\t55388\t31281\t152698\n", "q10k_tbl_38": "\tThree Months Ended September 30\t\tNine Months Ended September 30\t\n\t2019\t2018\t2019\t2018\nCash Flows From Operating Activities\t(In thousands)\t\t\t\nCash received (paid) for commodity derivative settlements net\t\t\t\t\nCrude oil\t904\t($21261)\t($3114)\t($54594)\nNGL\t0\t(2641)\t623\t(3829)\nNatural gas\t66\t245\t1691\t785\nDeferred premium obligations\t(2749)\t(2605)\t(8139)\t(7072)\nCash paid for commodity derivative settlements net\t($1779)\t($26262)\t($8939)\t($64710)\nCash Flows From Financing Activities\t\t\t\t\nCash received (paid) for settlements of contingent consideration arrangements net\t\t\t\t\nContingent ExL Consideration\t0\t0\t($50000)\t0\nContingent Niobrara Consideration\t0\t0\t5000\t0\nContingent Utica Consideration\t0\t0\t5000\t0\nCash paid for settlements of contingent consideration arrangements net\t0\t0\t($40000)\t0\n", "q10k_tbl_39": "\tSeptember 30 2019\t\t\n\tLevel 1\tLevel 2\tLevel 3\n\t(In thousands)\t\t\nAssets\t\t\t\nCommodity derivative instruments\t0\t26992\t0\nContingent Niobrara Consideration\t0\t4668\t0\nContingent Marcellus Consideration\t0\t343\t0\nContingent Utica Consideration\t0\t6075\t0\nLiabilities\t\t\t\nCommodity derivative instruments\t0\t($8727)\t0\nContingent ExL Consideration\t0\t(60060)\t0\n", "q10k_tbl_40": "\tDecember 31 2018\t\t\n\tLevel 1\tLevel 2\tLevel 3\n\t(In thousands)\t\t\nAssets\t\t\t\nCommodity derivative instruments\t0\t31751\t0\nContingent Niobrara Consideration\t0\t7035\t0\nContingent Marcellus Consideration\t0\t1369\t0\nContingent Utica Consideration\t0\t7501\t0\nLiabilities\t\t\t\nCommodity derivative instruments\t0\t($15438)\t0\nContingent ExL Consideration\t0\t(80584)\t0\n", "q10k_tbl_41": "\tSeptember 30 2019\t\tDecember 31 2018\t\n\tPrincipal Amount\tFair Value\tPrincipal Amount\tFair Value\n\t(In thousands)\t\t\t\n6.25% Senior Notes due 2023\t650000\t615875\t650000\t599625\n8.25% Senior Notes due 2025\t250000\t244375\t250000\t244375\n", "q10k_tbl_42": "\tNine Months Ended September 30\t\n\t2019\t2018\n\t(In thousands)\t\nOperating activities:\t\t\nCash paid for interest net of amounts capitalized\t52196\t44644\nCash paid for income taxes\t590\t0\nInvesting activities:\t\t\nIncrease (decrease) in capital expenditure payables and accruals\t($34624)\t61893\nSupplemental non-cash investing activities:\t\t\nFair value of contingent consideration assets on date of divestiture\t0\t($7880)\nStock-based compensation expense capitalized to oil and gas properties\t5052\t5384\nAsset retirement obligations capitalized to oil and gas properties\t3495\t1127\nSupplemental non-cash financing activities:\t\t\nNon-cash loss on extinguishment of debt net\t0\t2666\n", "q10k_tbl_43": "Commodity\tPeriod\tType of Contract\tIndex\tVolumes (MMBtu per day)\tFixed Price ($ per MMBtu)\tSub-Floor Price ($ per MMBtu)\tFloor Price ($ per MMBtu)\tCeiling Price ($ per MMBtu)\tFixed Price Differential ($ per MMBtu)\nNatural gas\t1Q20\tBasis Swaps\tWaha-NYMEX Henry Hub\t12000\t0\t0\t0\t0\t($1.36)\nNatural gas\t2Q20\tBasis Swaps\tWaha-NYMEX Henry Hub\t14000\t0\t0\t0\t0\t($1.87)\n", "q10k_tbl_44": "\tThree Months Ended September 30 2019\t\t\t\tSeptember 30 2019\t\t\t\n\tDrilled\t\tCompleted\t\tDrilled But Uncompleted\t\tProducing\t\nRegion\tGross\tNet\tGross\tNet\tGross\tNet\tGross\tNet\nEagle Ford\t11\t8.8\t15\t14.9\t16\t12.7\t611\t549.8\nDelaware Basin\t7\t5.7\t7\t5.9\t10\t8.0\t102\t88.9\nTotal\t18\t14.5\t22\t20.8\t26\t20.7\t713\t638.7\n", "q10k_tbl_45": "\tThree Months Ended September 30\t\tAmount Change Between Periods\tPercent Change Between Periods\t\tNine Months Ended September 30\t\tAmount Change Between Periods\tPercent Change Between Periods\n\t2019\t2018\t\t2019\t2018\t\nTotal production volumes\t\t\t\t\t\t\t\t\t\nCrude oil (MBbls)\t4194\t3755\t439\t12%\t\t11901\t10272\t1629\t16%\nNGLs (MBbls)\t1068\t1055\t13\t1%\t\t2909\t2648\t261\t10%\nNatural gas (MMcf)\t7050\t6815\t235\t3%\t\t19065\t16996\t2069\t12%\nTotal barrels of oil equivalent (MBoe)\t6437\t5946\t491\t8%\t\t17988\t15753\t2235\t14%\nDaily production volumes by product\t\t\t\t\t\t\t\t\t\nCrude oil (Bbls/d)\t45587\t40813\t4774\t12%\t\t43594\t37628\t5966\t16%\nNGLs (Bbls/d)\t11612\t11469\t143\t1%\t\t10654\t9699\t955\t10%\nNatural gas (Mcf/d)\t76630\t74072\t2558\t3%\t\t69836\t62258\t7578\t12%\nTotal barrels of oil equivalent (Boe/d)\t69971\t64627\t5344\t8%\t\t65887\t57703\t8184\t14%\nDaily production volumes by region (Boe/d)\t\t\t\t\t\t\t\t\t\nEagle Ford\t42946\t39024\t3922\t10%\t\t41295\t37241\t4054\t11%\nDelaware Basin\t27025\t25577\t1448\t6%\t\t24592\t20236\t4356\t22%\nOther\t0\t26\t(26)\t(100\t%)\t0\t226\t(226)\t(100 %)\nTotal barrels of oil equivalent (Boe/d)\t69971\t64627\t5344\t8%\t\t65887\t57703\t8184\t14%\n", "q10k_tbl_46": "\tThree Months Ended September 30\t\tAmount Change Between Periods\t\tPercent Change Between Periods\t\tNine Months Ended September 30\t\tAmount Change Between Periods\tPercent Change Between Periods\t\n\t2019\t2018\t\t2019\t\t2018\t\nAverage realized prices\t\t\t\t\t\t\t\t\t\t\t\nCrude oil ($ per Bbl)\t56.31\t67.78\t($11.47)\t\t(17\t%)\t57.48\t66.13\t($8.65)\t(13\t%)\nNGLs ($ per Bbl)\t12.01\t32.04\t(20.03)\t\t(63\t%)\t15.06\t27.18\t(12.12)\t(45\t%)\nNatural gas ($ per Mcf)\t1.14\t2.21\t(1.07)\t\t(48\t%)\t1.42\t2.44\t(1.02)\t(42\t%)\nTotal average realized price ($ per Boe)\t39.92\t51.02\t($11.10)\t\t(22\t%)\t41.97\t50.32\t($8.35)\t(17\t%)\nRevenues (In thousands)\t\t\t\t\t\t\t\t\t\t\t\nCrude oil\t236153\t254525\t($18372)\t\t(7\t%)\t684109\t679242\t4867\t1%\t\nNGLs\t12824\t33798\t(20974)\t\t(62\t%)\t43820\t71969\t(28149)\t(39\t%)\nNatural gas\t8017\t15052\t(7035)\t\t(47\t%)\t27072\t41417\t(14345)\t(35\t%)\nTotal revenues\t256994\t303375\t($46381)\t\t(15\t%)\t755001\t792628\t($37627)\t(5\t%)\n", "q10k_tbl_47": "\tThree Months Ended September 30\t\t\t\tNine Months Ended September 30\t\t\t\n\t2019\t\t2018\t\t2019\t\t2018\t\n\t(In thousands except per Boe amounts)\t\t\t\t\t\t\t\n\tAmount\tPer Boe\tAmount\tPer Boe\tAmount\tPer Boe\tAmount\tPer Boe\nLease operating expense\t45213\t7.02\t41022\t6.90\t131758\t7.32\t115446\t7.33\n", "q10k_tbl_48": "\tThree Months Ended September 30\t\t\t\tNine Months Ended September 30\t\t\t\n\t2019\t\t2018\t\t2019\t\t2018\t\n\t(In thousands except % of revenues amounts)\t\t\t\t\t\t\t\n\tAmount\t% of Revenues\tAmount\t% of Revenues\tAmount\t% of Revenues\tAmount\t% of Revenues\nProduction and ad valorem taxes\t14549\t5.7%\t17104\t5.6%\t47236\t6.3%\t45779\t5.8%\n", "q10k_tbl_49": "\tThree Months Ended September 30\t\t\t\tNine Months Ended September 30\t\t\t\n\t2019\t\t2018\t\t2019\t\t2018\t\n\t(In thousands except per Boe amounts)\t\t\t\t\t\t\t\n\tAmount\tPer Boe\tAmount\tPer Boe\tAmount\tPer Boe\tAmount\tPer Boe\nDD&A of proved oil and gas properties\t80774\t12.55\t79051\t13.29\t234126\t13.02\t213727\t13.57\nDepreciation of other property and equipment\t716\t0.11\t607\t0.10\t2138\t0.12\t1801\t0.11\nAmortization of other assets\t197\t0.03\t102\t0.02\t615\t0.03\t476\t0.03\nAccretion of asset retirement obligations\t508\t0.08\t348\t0.06\t1404\t0.08\t1001\t0.06\nDD&A\t82195\t12.77\t80108\t13.47\t238283\t13.25\t217005\t13.78\n", "q10k_tbl_50": "\tThree Months Ended September 30\t\tNine Months Ended September 30\t\n\t2019\t2018\t2019\t2018\n\t(In thousands)\t\t\t\nGeneral and administrative expense net\t13467\t12811\t55500\t58368\n", "q10k_tbl_51": "\tThree Months Ended September 30\t\tNine Months Ended September 30\t\n\t2019\t2018\t2019\t2018\n\t(In thousands)\t\t\t\nCrude oil derivative instruments\t($28223)\t43664\t13623\t126612\nNGL derivative instruments\t0\t5086\t(6)\t9885\nNatural gas derivative instruments\t(2961)\t(192)\t(6631)\t(3084)\nContingent consideration arrangements\t(370)\t6830\t24295\t19285\n(Gain) loss on derivatives net\t($31554)\t55388\t31281\t152698\n", "q10k_tbl_52": "\tThree Months Ended September 30\t\tNine Months Ended September 30\t\n\t2019\t2018\t2019\t2018\n\t(In thousands)\t\t\t\nInterest expense on Senior Notes\t15313\t17750\t45938\t57003\nInterest expense on revolving credit facility\t9536\t5092\t28749\t13741\nAmortization of premiums and debt issuance costs\t994\t956\t2913\t2996\nOther interest expense\t119\t124\t402\t394\nInterest capitalized\t(8241)\t(8516)\t(25806)\t(27612)\nInterest expense net\t17721\t15406\t52196\t46522\n", "q10k_tbl_53": "\tThree Months Ended\t\t\tNine Months Ended\n\tMarch 31 2019\tJune 30 2019\tSeptember 30 2019\tSeptember 30 2019\n\t(In thousands)\t\t\t\nDC&I\t\t\t\t\nEagle Ford\t134275\t86514\t69682\t290471\nDelaware Basin\t80390\t44567\t49354\t174311\nOther\t52\t28\t0\t80\nTotal DC&I\t214717\t131109\t119036\t464862\nLeasehold and seismic\t9107\t3606\t4041\t16754\nTotal capital expenditures (1)\t223824\t134715\t123077\t481616\n", "q10k_tbl_54": "Commodity\tPeriod\tType of Contract\tIndex\tVolumes (Bbls per day)\tFixed Price ($ per Bbl)\tSub-Floor Price ($ per Bbl)\tFloor Price ($ per Bbl)\tCeiling Price ($ per Bbl)\tFixed Price Differential ($ per Bbl)\nCrude oil\t4Q19\tPrice Swaps\tNYMEX WTI\t5000\t64.80\t0\t0\t0\t0\nCrude oil\t4Q19\tThree-Way Collars\tNYMEX WTI\t27000\t0\t41.67\t50.96\t74.23\t0\nCrude oil\t4Q19\tBasis Swaps\tWTI Midland-WTI Cushing\t9200\t0\t0\t0\t0\t($4.64)\nCrude oil\t4Q19\tSold Call Options\tNYMEX WTI\t3875\t0\t0\t0\t81.07\t0\nCrude oil\t2020\tPrice Swaps\tNYMEX WTI\t3000\t55.06\t0\t0\t0\t0\nCrude oil\t2020\tThree-Way Collars\tNYMEX WTI\t22000\t0\t45.34\t55.34\t65.16\t0\nCrude oil\t2020\tBasis Swaps\tWTI Midland-WTI Cushing\t10658\t0\t0\t0\t0\t($1.68)\nCrude oil\t2020\tSold Call Options\tNYMEX WTI\t4575\t0\t0\t0\t75.98\t0\nCrude oil\t2021\tBasis Swaps\tWTI Midland-WTI Cushing\t8000\t0\t0\t0\t0\t0.18\nCrude oil\t2021\tSold Call Options\tNYMEX WTI\t8220\t0\t0\t0\t64.00\t0\n", "q10k_tbl_55": "Commodity\tPeriod\tType of Contract\tIndex\tVolumes (MMBtu per day)\tFixed Price ($ per MMBtu)\tSub-Floor Price ($ per MMBtu)\tFloor Price ($ per MMBtu)\tCeiling Price ($ per MMBtu)\tFixed Price Differential ($ per MMBtu)\nNatural gas\t4Q19\tBasis Swaps\tWaha-NYMEX Henry Hub\t42500\t0\t0\t0\t0\t($1.30)\nNatural gas\t4Q19\tSold Call Options\tNYMEX Henry Hub\t33000\t0\t0\t0\t3.25\t0\nNatural gas\t2020\tBasis Swaps\tWaha-NYMEX Henry Hub\t36005\t0\t0\t0\t0\t($0.93)\nNatural gas\t2020\tSold Call Options\tNYMEX Henry Hub\t33000\t0\t0\t0\t3.50\t0\n", "q10k_tbl_56": "\tOctober - December 2019\t2020\t2021\t2022\t2023\t2024 and Thereafter\tTotal\nLong-term debt (1)\t0\t0\t0\t864812\t650000\t250000\t1764812\nCash interest on senior notes (2)\t20313\t61250\t61250\t61250\t40938\t41250\t286251\nCash interest and commitment fees on revolving credit facility (3)\t8458\t33832\t33832\t11654\t0\t0\t87776\nOperating leases - other (4)\t2452\t10235\t7021\t3750\t3680\t21590\t48728\nOperating leases - drilling rig contracts (5)\t8624\t17360\t912\t0\t0\t0\t26896\nDelivery commitments (6)\t958\t2807\t2487\t30\t7\t19\t6308\nProduced water disposal commitments (7)\t3207\t12813\t12839\t12894\t2412\t0\t44165\nAsset retirement obligations and other (8)\t1399\t3741\t917\t499\t441\t22081\t29078\nTotal Contractual Obligations\t45411\t142038\t119258\t954889\t697478\t334940\t2294014\n", "q10k_tbl_57": "\t12-Month Average Realized Prices\t\tExcess of cost center ceiling over net book value less related deferred income taxes\tIncrease (decrease) of cost center ceiling over net book value less related deferred income taxes\nFull Cost Pool Scenarios\tCrude Oil ($/Bbl)\tNatural Gas ($/Mcf)\t(In millions)\t(In millions)\nSeptember 30 2019 Actual\t55.90\t1.39\t758\t\nCrude Oil and Natural Gas Price Sensitivity\t\t\t\t\nCrude Oil and Natural Gas +10%\t61.67\t1.69\t1290\t532\nCrude Oil and Natural Gas -10%\t50.23\t1.11\t110\t($648)\nCrude Oil Price Sensitivity\t\t\t\t\nCrude Oil +10%\t61.67\t1.39\t1235\t477\nCrude Oil -10%\t50.23\t1.39\t165\t($593)\nNatural Gas Price Sensitivity\t\t\t\t\nNatural Gas +10%\t55.90\t1.69\t812\t54\nNatural Gas -10%\t55.90\t1.11\t704\t($54)\n", "q10k_tbl_58": "\tThree Months Ended September 30 2019\t\t\t\n\tCrude oil\tNGLs\tNatural gas\tTotal\n\t(In thousands)\t\t\t\nRevenues\t236153\t12824\t8017\t256994\nImpact of a 10% fluctuation in average realized prices\t23616\t1283\t804\t25703\n", "q10k_tbl_59": "\tNine Months Ended September 30 2019\t\t\t\n\tCrude oil\tNGLs\tNatural gas\tTotal\n\t(In thousands)\t\t\t\nRevenues\t684109\t43820\t27072\t755001\nImpact of a 10% fluctuation in average realized prices\t68407\t4381\t2707\t75495\n", "q10k_tbl_60": "\tThree Months Ended September 30 2019\t\t\t\n\tCrude oil\tNGLs\tNatural gas\tTotal\n\t(In thousands)\t\t\t\nCash received (paid) for commodity derivative settlements net\t904\t0\t66\t970\nImpact of a 10% increase in settlement prices\t($4429)\t0\t590\t($3839)\nImpact of a 10% decrease in settlement prices\t6938\t0\t($590)\t6348\n", "q10k_tbl_61": "\tNine Months Ended September 30 2019\t\t\t\n\tCrude oil\tNGLs\tNatural gas\tTotal\n\t(In thousands)\t\t\t\nCash received (paid) for commodity derivative settlements net\t($3114)\t623\t1691\t($800)\nImpact of a 10% increase in settlement prices\t($13993)\t($378)\t809\t($13562)\nImpact of a 10% decrease in settlement prices\t19364\t378\t($872)\t18870\n", "q10k_tbl_62": "\tNine Months Ended September 30 2019\t\t\t\n\tContingent ExL Consideration\tContingent Niobrara Consideration\tContingent Marcellus Consideration\tContingent Utica Consideration\n\t(In thousands)\t\t\t\nCash received (paid) for settlements of contingent consideration arrangements net\t($50000)\t5000\t0\t5000\nImpact of a 10% increase in settlement prices\t0\t0\t3000\t0\nImpact of a 10% decrease in settlement prices\t0\t0\t0\t0\n", "q10k_tbl_63": "\t2019\t2020\t2021\nCrude oil:\t\t\t\nNYMEX WTI\t54.62\t51.46\t50.04\nWTI Midland-WTI Cushing\t0.57\t0.65\t0.67\nNatural gas:\t\t\t\nNYMEX Henry Hub\t2.42\t2.42\t2.45\nWaha-NYMEX Henry Hub\t($0.95)\t($1.32)\t($0.81)\n", "q10k_tbl_64": "\tCrude oil\tNGLs\tNatural gas\tTotal\n\t(In thousands)\t\t\t\nFair value (liability) asset as of September 30 2019\t22168\t0\t2940\t25108\nImpact of a 10% increase in forward commodity prices\t($40311)\t0\t1267\t($39044)\nImpact of a 10% decrease in forward commodity prices\t33800\t0\t($1374)\t32426\n", "q10k_tbl_65": "\tContingent ExL Consideration\tContingent Niobrara Consideration\tContingent Marcellus Consideration\tContingent Utica Consideration\n\t(In thousands)\t\t\t\nPotential (payment) receipt per year\t($50000)\t5000\t3000\t5000\nMaximum remaining potential (payment) receipt\t($75000)\t10000\t6000\t10000\nFair value (liability) asset as of September 30 2019\t($60060)\t4668\t343\t6075\nImpact of a 10% increase in forward commodity prices\t($2872)\t1424\t214\t691\nImpact of a 10% decrease in forward commodity prices\t3209\t($1929)\t($160)\t($1003)\n", "q10k_tbl_66": "\tRevolving Credit Facility\tSenior Notes\n\t(In thousands except for percentages)\t\nSeptember 30 2019\t\t\nAmount outstanding\t864812\t900000\nWeighted average interest rate\t3.69%\t6.81%\nThree Months Ended September 30 2019\t\t\nImpact of a 1% increase in interest rate\t2291\t\nImpact of a 1% decrease in interest rate\t($2291)\t\nNine Months Ended September 30 2019\t\t\nImpact of a 1% increase in interest rate\t6710\t\nImpact of a 1% decrease in interest rate\t($6710)\t\n", "q10k_tbl_67": "Exhibit Number\tExhibit Description\n†2.1\tAmendment No. 1 to Agreement and Plan of Merger dated as of August 19 2019 by and between Callon Petroleum Company and Carrizo Oil & Gas Inc. (incorporated herein by reference to Annex A of the Company's definitive proxy statement filed on October 9 2019).\n*31.1-CEO Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.\t\n*31.2-CFO Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.\t\n*32.1-CEO Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.\t\n*32.2-CFO Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.\t\n*101.INS-Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.\t\n*101.SCH-Inline XBRL Taxonomy Extension Schema Document.\t\n*101.CAL-Inline XBRL Taxonomy Extension Calculation Linkbase Document.\t\n*101.DEF-Inline XBRL Taxonomy Extension Definition Linkbase Document.\t\n*101.LAB-Inline XBRL Taxonomy Extension Label Linkbase Document.\t\n*101.PRE-Inline XBRL Taxonomy Extension Presentation Linkbase Document.\t\n*104\tCover Page Interactive Data File (formatted in Inline XBRL and contained in Exhibit 101).\n"}{"bs": "q10k_tbl_3", "is": "q10k_tbl_4", "cf": "q10k_tbl_7"}None
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes☑ No ☐
Indicate by check mark whether the registrant has submitted electronically, if any, every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes☑ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act (Check one):
Large Accelerated Filer
☑
Accelerated Filer
☐
Non-accelerated Filer
☐
Smaller reporting company
☐
Emerging growth company
☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐No☑
Securities registered pursuant to Section 12(b) of the Act:
Common Stock, $0.01 par value
CRZO
NASDAQ Global Select Market
(Title of class)
(Trading Symbol)
(Name of exchange on which registered)
The number of shares outstanding of the registrant’s common stock, par value $0.01 per share, as of October 31, 2019 was 92,610,357.
(In thousands, except share and per share amounts)
(Unaudited)
September 30, 2019
December 31, 2018
Assets
Current assets
Cash and cash equivalents
$2,280
$2,282
Accounts receivable, net
98,161
99,723
Derivative assets
31,125
39,904
Other current assets
7,298
8,460
Total current assets
138,864
150,369
Property and equipment
Oil and gas properties, full cost method
Proved properties, net
2,648,601
2,333,470
Unproved properties, not being amortized
649,347
673,833
Other property and equipment, net
11,022
11,221
Total property and equipment, net
3,308,970
3,018,524
Deferred income taxes
172,632
—
Operating lease right-of-use assets
55,873
—
Other long-term assets
13,885
16,207
Total Assets
$3,690,224
$3,185,100
Liabilities and Shareholders’ Equity
Current liabilities
Accounts payable
$79,744
$98,811
Revenues and royalties payable
59,140
49,003
Accrued capital expenditures
33,757
60,004
Accrued interest
23,640
18,377
Derivative liabilities
56,233
55,205
Operating lease liabilities
30,301
—
Other current liabilities
48,912
40,609
Total current liabilities
331,727
322,009
Long-term debt
1,755,378
1,633,591
Asset retirement obligations
22,876
18,360
Operating lease liabilities
31,723
—
Deferred income taxes
8,845
8,017
Other long-term liabilities
13,946
47,797
Total liabilities
2,164,495
2,029,774
Commitments and contingencies
Preferred stock
Preferred stock, $0.01 par value, 10,000,000 shares authorized; 200,000 issued and outstanding as of September 30, 2019 and December 31, 2018
176,925
174,422
Shareholders’ equity
Common stock, $0.01 par value, 180,000,000 shares authorized; 92,610,669 issued and outstanding as of September 30, 2019 and 91,627,738 issued and outstanding as of December 31, 2018
926
916
Additional paid-in capital
2,132,276
2,131,535
Accumulated deficit
(784,398
)
(1,151,547
)
Total shareholders’ equity
1,348,804
980,904
Total Liabilities and Shareholders’ Equity
$3,690,224
$3,185,100
The accompanying notes are an integral part of these consolidated financial statements.
-2-
CARRIZO OIL & GAS, INC.
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts)
(Unaudited)
Three Months Ended September 30,
Nine Months Ended September 30,
2019
2018
2019
2018
Revenues
Crude oil
$236,153
$254,525
$684,109
$679,242
Natural gas liquids
12,824
33,798
43,820
71,969
Natural gas
8,017
15,052
27,072
41,417
Total revenues
256,994
303,375
755,001
792,628
Costs and Expenses
Lease operating
45,213
41,022
131,758
115,446
Production and ad valorem taxes
14,549
17,104
47,236
45,779
Depreciation, depletion and amortization
82,195
80,108
238,283
217,005
General and administrative, net
13,467
12,811
55,500
58,368
(Gain) loss on derivatives, net
(31,554
)
55,388
31,281
152,698
Interest expense, net
17,721
15,406
52,196
46,522
Loss on extinguishment of debt
—
—
—
8,676
Other (income) expense, net
1,125
(690
)
2,717
2,305
Total costs and expenses
142,716
221,149
558,971
646,799
Income Before Income Taxes
114,278
82,226
196,030
145,829
Income tax (expense) benefit
(5,977
)
(880
)
171,119
(1,682
)
Net Income
$108,301
$81,346
$367,149
$144,147
Dividends on preferred stock
(4,474
)
(4,457
)
(13,286
)
(13,794
)
Accretion on preferred stock
(869
)
(771
)
(2,503
)
(2,264
)
Loss on redemption of preferred stock
—
—
—
(7,133
)
Net Income Attributable to Common Shareholders
$102,958
$76,118
$351,360
$120,956
Net Income Attributable to Common Shareholders Per Common Share
Basic
$1.11
$0.88
$3.81
$1.45
Diluted
$1.11
$0.85
$3.79
$1.42
Weighted Average Common Shares Outstanding
Basic
92,561
86,727
92,269
83,461
Diluted
92,762
89,039
92,625
85,221
The accompanying notes are an integral part of these consolidated financial statements.
-3-
CARRIZO OIL & GAS, INC.
CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
(In thousands, except share amounts)
(Unaudited)
Three Months Ended September 30, 2019 and 2018
Common Stock
Additional Paid-in Capital
Accumulated Deficit
Total Shareholders’ Equity
Shares
Amount
Balance as of June 30, 2019
92,552,930
$926
$2,132,131
($892,699
)
$1,240,358
Stock-based compensation expense
—
—
5,488
—
5,488
Issuance of common stock upon grants of restricted stock awards and vestings of restricted stock units and performance shares
57,739
—
—
—
—
Dividends on preferred stock
—
—
(4,474
)
—
(4,474
)
Accretion on preferred stock
—
—
(869
)
—
(869
)
Net income
—
—
—
108,301
108,301
Balance as of September 30, 2019
92,610,669
$926
$2,132,276
($784,398
)
$1,348,804
Balance as of June 30, 2018
82,107,544
$821
$1,918,820
($1,493,173
)
$426,468
Stock-based compensation expense
—
—
4,944
—
4,944
Issuance of common stock upon grants of restricted stock awards and vestings of restricted stock units and performance shares
12,189
—
(45
)
—
(45
)
Sale of common stock, net of offering costs
9,500,000
95
213,762
—
213,857
Dividends on preferred stock
—
—
(4,457
)
—
(4,457
)
Accretion on preferred stock
—
—
(771
)
—
(771
)
Net income
—
—
—
81,346
81,346
Balance as of September 30, 2018
91,619,733
$916
$2,132,253
($1,411,827
)
$721,342
Nine Months Ended September 30, 2019 and 2018
Common Stock
Additional Paid-in Capital
Accumulated Deficit
Total Shareholders’ Equity
Shares
Amount
Balance as of December 31, 2018
91,627,738
$916
$2,131,535
($1,151,547
)
$980,904
Stock-based compensation expense
—
—
16,540
—
16,540
Issuance of common stock upon grants of restricted stock awards and vestings of restricted stock units and performance shares
982,931
10
(10
)
—
—
Dividends on preferred stock
—
—
(13,286
)
—
(13,286
)
Accretion on preferred stock
—
—
(2,503
)
—
(2,503
)
Net income
—
—
—
367,149
367,149
Balance as of September 30, 2019
92,610,669
$926
$2,132,276
($784,398
)
$1,348,804
Balance as of December 31, 2017
81,454,621
$815
$1,926,056
($1,555,974
)
$370,897
Stock-based compensation expense
—
—
15,701
—
15,701
Issuance of common stock upon grants of restricted stock awards and vestings of restricted stock units and performance shares
665,112
6
(75
)
—
(69
)
Sale of common stock, net of offering costs
9,500,000
95
213,762
—
213,857
Dividends on preferred stock
—
—
(13,794
)
—
(13,794
)
Accretion on preferred stock
—
—
(2,264
)
—
(2,264
)
Loss on redemption of preferred stock
—
—
(7,133
)
—
(7,133
)
Net income
—
—
—
144,147
144,147
Balance as of September 30, 2018
91,619,733
$916
$2,132,253
($1,411,827
)
$721,342
The accompanying notes are an integral part of these consolidated financial statements.
-4-
CARRIZO OIL & GAS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Nine Months Ended September 30,
2019
2018
Cash Flows From Operating Activities
Net income
$367,149
$144,147
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation, depletion and amortization
238,283
217,005
Loss on derivatives, net
31,281
152,698
Cash paid for commodity derivative settlements, net
(8,939
)
(64,710
)
Loss on extinguishment of debt
—
8,676
Stock-based compensation expense, net
11,692
13,786
Deferred income tax (benefit) expense
(171,803
)
1,063
Non-cash interest expense, net
1,950
1,878
Other, net
3,505
4,100
Changes in components of working capital and other assets and liabilities-
Accounts receivable
(7,432
)
(12,763
)
Accounts payable
(752
)
10,863
Accrued liabilities
16,310
(9,336
)
Other assets and liabilities, net
(3,197
)
(2,115
)
Net cash provided by operating activities
478,047
465,292
Cash Flows From Investing Activities
Capital expenditures
(557,304
)
(662,459
)
Acquisitions of oil and gas properties
8,222
(21,500
)
Proceeds from divestitures of oil and gas properties
6,351
377,693
Other, net
(284
)
(2,687
)
Net cash used in investing activities
(543,015
)
(308,953
)
Cash Flows From Financing Activities
Redemptions of senior notes
—
(330,435
)
Redemption of preferred stock
—
(50,030
)
Borrowings under credit agreement
1,280,780
2,415,208
Repayments of borrowings under credit agreement
(1,160,399
)
(2,396,671
)
Payments of credit facility amendment fees
(613
)
(627
)
Sale of common stock, net of offering costs
—
213,857
Payments of dividends on preferred stock
(13,286
)
(13,794
)
Cash paid for settlements of contingent consideration arrangements, net
(40,000
)
—
Other, net
(1,516
)
(972
)
Net cash provided by (used in) financing activities
64,966
(163,464
)
Net Decrease in Cash and Cash Equivalents
(2
)
(7,125
)
Cash and Cash Equivalents, Beginning of Period
2,282
9,540
Cash and Cash Equivalents, End of Period
$2,280
$2,415
The accompanying notes are an integral part of these consolidated financial statements.
-5-
CARRIZO OIL & GAS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. Nature of Operations
Carrizo Oil & Gas, Inc. is a Houston-based energy company which, together with its subsidiaries (collectively, the “Company” or “Carrizo”), is actively engaged in the exploration, development, and production of crude oil, NGLs, and natural gas from resource plays located in the United States. The Company’s current operations are principally focused in proven, producing oil and gas plays in the Eagle Ford Shale in South Texas and the Permian Basin in West Texas.
Proposed Merger of the Company with Callon
On July 14, 2019, the Company entered into an Agreement and Plan of Merger (as amended, the “Merger Agreement”) with Callon Petroleum Company, a Delaware corporation (“Callon”). Pursuant to the Merger Agreement, the Company will be merged with and into Callon, with Callon continuing as the surviving entity (the “Merger”). The Merger was structured as a direct merger with the closing expected to occur in the fourth quarter of 2019.
On and subject to the terms and conditions set forth in the Merger Agreement, upon closing of the Merger, each share of Carrizo’s common stock, par value $0.01 per share, issued and outstanding immediately prior to the effective time of the Merger will automatically be converted into the right to receive 2.05 shares of Callon’s common stock, par value $0.01 per share (the “Exchange Ratio”). Callon’s common stock is listed and traded on the New York Stock Exchange (the “NYSE”) under the ticker symbol CPE. Pursuant to the Merger Agreement, three members of the Company’s board of directors will become directors of Callon immediately after the effective time of the Merger.
Pursuant to the terms of the Merger Agreement, each issued and outstanding share of the Company’s 8.875% redeemable preferred stock, par value $0.01 per share (the “Preferred Stock”), will either be converted into the right to receive one share of 8.875% redeemable preferred stock, par value $0.01 per share, of Callon, which will have substantially the same terms as the Preferred Stock or will be redeemed for an amount in cash specified in the Merger Agreement (the “Preferred Redemption”). Callon is obligated to deposit the amount required to effect the Preferred Redemption (the “Preferred Deposit”) no later than the open of business on the date of the closing of the Merger, though the Company is permitted to fund such amount if Callon fails to do so.
In connection with the proposed Merger, restricted stock awards and units and performance shares that are outstanding immediately prior to closing will generally become vested and converted into shares of Callon common stock based on the Exchange Ratio. Stock appreciation rights that will be settled in cash (“Cash SARs”) that are outstanding immediately prior to the closing will be canceled and converted into a vested stock appreciation right covering shares of Callon common stock, with the calculation of such conversion described in the Merger Agreement.
The completion of the Merger is subject to certain customary closing conditions, including (i) the receipt of the required approvals from the common shareholders of the Company and Callon (for which special shareholder meetings are scheduled for November 14, 2019) (ii) either (a) the approval by the holders of Preferred Stock or (b) the Preferred Deposit having been deposited and the Preferred Redemption having occurred, (iii) the expiration or termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the “HSR Act”), which was terminated effective August 6, 2019, and (iv) the receipt by each party of a customary opinion that the Merger will qualify as a “reorganization” within the meaning of Section 368(a) of the Internal Revenue Code of 1986. The obligation of each party to complete the Merger is also conditioned upon the other party’s representations and warranties being true and correct, subject to certain materiality exceptions, and the other party having performed in all material respects its obligations under the Merger Agreement.
The Merger Agreement contains termination rights for each of the Company and Callon, including, among other things, (i) by either the Company or Callon if the other party’s board of directors changes its recommendation with respect to the transactions contemplated by the Merger Agreement or if the other party willfully breaches the covenant not to solicit alternative business combination proposals from third parties, (ii) by the Company, if its board of directors changes its recommendation with respect to the transactions contemplated by the Merger Agreement and substantially concurrently the Company enters into an acquisition agreement providing for a Company Superior Proposal, as defined in the Merger Agreement, (iii) by the Company or Callon, if the approvals of either their common shareholders shall not have been obtained, (iv) by the Company or Callon, if in certain circumstances, the other party breaches or fails to perform any of its representations, warranties or covenants in the Merger Agreement, and (v) by the Company or Callon, if the Merger shall not have been consummated by February 14, 2020, with a possible extension to April 14, 2020 in certain circumstances. Upon termination of the Merger Agreement under differing specified circumstances, (i) the Company would be required to pay Callon a termination fee of $47.4 million or to reimburse Callon up to $7.5 million in expenses or (ii) Callon would be required to pay the Company a termination fee of $57.0 million or to reimburse the Company up to $7.5 million in expenses.
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On October 4, 2019, Callon filed an amendment to the registration statement on Form S-4 originally filed on August 20, 2019, which includes a joint proxy statement of the Company and Callon. The registration statement was declared effective by the Securities and Exchange Commission (the “SEC”) on October 9, 2019. The Company and Callon commenced mailing the definitive joint proxy statement to each company’s respective shareholders on or about October 11, 2019.
The capitalized terms that are not defined in this description of the proposed Merger shall have the meaning given to such terms in the Merger Agreement. Additional information on the proposed Merger is included in the Form S-4/A filed by Callon with the SEC on October 4, 2019, our Quarterly Report on Form 10-Q for the quarter ended June 30, 2019, the definitive proxy statement filed by the Company with the SEC on October 9, 2019, and this Quarterly Report on Form 10-Q, including “Part II. Other Information—Item 1A. Risk Factors.”
2. Summary of Significant Accounting Policies
Basis of Presentation and Principles of Consolidation
The accompanying unaudited interim consolidated financial statements include the accounts of the Company after elimination of intercompany transactions and balances and have been prepared pursuant to the rules and regulations of the SEC and therefore do not include all disclosures required for financial statements prepared in conformity with accounting principles generally accepted in the U.S. (“GAAP”). In the opinion of management, these financial statements include all adjustments (consisting of normal recurring accruals and adjustments) necessary to present fairly, in all material respects, the Company’s interim financial position, results of operations and cash flows. However, the results of operations for the periods presented are not necessarily indicative of the results of operations that may be expected for the full year. Certain reclassifications have been made to prior period amounts to conform to the current period presentation. Such reclassifications had no material impact on prior period amounts.
Significant Accounting Policies
The Company’s significant accounting policies are described in “Note 2. Summary of Significant Accounting Policies” of the Notes to Consolidated Financial Statements in its Annual Report on Form 10-K for the year ended December 31, 2018 (“2018 Annual Report”) and are supplemented by the notes included in this Quarterly Report on Form 10-Q. The financial statements and related notes included in this report should be read in conjunction with the Company’s 2018 Annual Report.
Recently Adopted Accounting Standards
Leases. Effective January 1, 2019, the Company adopted ASU No. 2016-02, Leases (Topic 842) (“ASC 842”), using the modified retrospective approach and did not have a cumulative-effect adjustment in retained earnings as a result of the adoption. ASC 842 significantly changes accounting for leases by requiring that lessees recognize a liability representing the obligation to make lease payments and a related right-of-use (“ROU”) asset for virtually all lease transactions. However, ASC 842 does not apply to leases of mineral rights to explore for or use crude oil and natural gas. Upon adoption, the Company implemented policy elections and practical expedients which include the following:
•
package of practical expedients which allows the Company to avoid reassessing contracts that commenced prior to adoption that were properly evaluated under legacy lease accounting guidance;
•
excluding ROU assets and lease liabilities for leases with terms that are less than one year;
•
combining lease and non-lease components and accounting for them as a single lease (elected by asset class);
•
excluding land easements that existed or expired prior to adoption; and
•
policy election that eliminates the need for adjusting prior period comparable financial statements prepared under legacy lease accounting guidance.
As a result of adopting ASC 842, the Company recorded lease liabilities of approximately $75.2 million and associated ROU assets of approximately $69.1 million on its consolidated balance sheets. The difference between the lease liabilities and ROU assets is due to a rent holiday and lease build-out incentives that were recorded as deferred lease liabilities under legacy lease accounting guidance. The adoption of ASC 842 did not materially change the Company’s consolidated statements of income or consolidated statements of cash flows. See “Note 6. Leases” for further discussion.
Subsequent Events
The Company evaluates subsequent events through the date the financial statements are issued.
3. Revenue Recognition
The Company’s revenues are comprised solely of revenues from customers and include the sale of crude oil, NGLs, and natural gas. The Company believes that the disaggregation of revenue into these three major product types appropriately depicts how the
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nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors based on its single geographic location. Crude oil, NGL, and natural gas revenues are recognized at a point in time when production is sold to a purchaser at a fixed or determinable price, delivery has occurred, control has transferred and collectability of the revenue is probable.
The transaction price used to recognize revenue is a function of the contract billing terms. Revenue is invoiced by calendar month based on volumes at contractually based rates with payment typically required within 30 days of the end of the production month. At the end of each month when the performance obligation is satisfied, the variable consideration can be reasonably estimated and amounts due from customers are accrued in “Accounts receivable, net” in the consolidated balance sheets. As of September 30, 2019 and December 31, 2018, receivables from contracts with customers were $83.1 million and $77.1 million, respectively. Taxes assessed by governmental authorities on crude oil, NGL, and natural gas sales are presented separately from such revenues in the consolidated statements of operations.
Transaction Price Allocated to Remaining Performance Obligations. The Company applied the practical expedient in ASC 606 exempting the disclosure of the transaction price allocated to remaining performance obligations if the variable consideration is allocated entirely to a wholly unsatisfied performance obligation. Each unit of product typically represents a separate performance obligation, therefore, future volumes are wholly unsatisfied and disclosure of the transaction price allocated to remaining performance obligations is not required.
4. Acquisitions and Divestitures of Oil and Gas Properties
2019 Acquisitions and Divestitures
On July 14, 2019, the Company entered into the Merger Agreement with Callon. See “Note 1. Nature of Operations” for details of the proposed Merger.
2018 Acquisitions and Divestitures
Devon Acquisition. On August 13, 2018, the Company entered into a purchase and sale agreement with Devon Energy Production Company, L.P. (“Devon”), a subsidiary of Devon Energy Corporation, to acquire oil and gas properties in the Delaware Basin in Reeves and Ward counties, Texas (the “Devon Properties”) for an agreed upon price of $215.0 million, with an effective date of April 1, 2018, subject to customary purchase price adjustments (the “Devon Acquisition”). The Company paid $21.5 million as a deposit on August 13, 2018, paid $183.4 million upon initial closing on October 17, 2018, and received $8.3 million as a post-closing adjustment on March 28, 2019, for an aggregate purchase price of $196.6 million.
The Devon Acquisition was accounted for as a business combination, therefore, the purchase price was allocated to the assets acquired and the liabilities assumed based on their estimated acquisition date fair values based on then currently available information. A combination of a discounted cash flow model and market data was used by a third-party valuation specialist in determining the fair value of the oil and gas properties. Significant inputs into the calculation included future commodity prices, estimated volumes of oil and gas reserves, expectations for timing and amount of future development and operating costs, future plugging and abandonment costs and a risk adjusted discount rate. The following table presents the final allocation of the purchase price to the assets acquired and liabilities assumed as of the acquisition date.
Purchase Price Allocation
(In thousands)
Assets
Other current assets
$216
Oil and gas properties
Proved properties
47,118
Unproved properties
150,253
Total oil and gas properties
$197,371
Total assets acquired
$197,587
Liabilities
Revenues and royalties payable
$786
Asset retirement obligations
170
Total liabilities assumed
$956
Net Assets Acquired
$196,631
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The results of operations for the Devon Acquisition have been included in the Company’s consolidated statements of income since the October 17, 2018 closing date, including total revenues and net income attributable to common shareholders for the three and nine months ended September 30,2019 as shown in the table below:
Three Months Ended September 30, 2019
Nine Months Ended September 30, 2019
(In thousands)
Total revenues
$3,676
$12,394
Net Income Attributable to Common Shareholders
$1,962
$6,678
Eagle Ford Divestiture. On December 11, 2017, the Company entered into a purchase and sale agreement with EP Energy E&P Company, L.P. to sell a portion of its assets in the Eagle Ford Shale for an agreed upon price of $245.0 million, with an effective date of October 1, 2017, subject to adjustment and customary terms and conditions. The Company received $24.5 million as a deposit on December 11, 2017, $211.7 million upon closing on January 31, 2018, $10.0 million for leases that were not conveyed at closing on February 16, 2018, and paid $0.5 million as a post-closing adjustment on July 19, 2018, for aggregate net proceeds of $245.7 million.
Niobrara Divestiture.On November 20, 2017, the Company entered into a purchase and sale agreement to sell substantially all of its assets in the Niobrara Formation for an agreed upon price of $140.0 million, with an effective date of October 1, 2017, subject to customary purchase price adjustments. The Company received $14.0 million as a deposit on November 20, 2017, $122.6 million upon closing on January 19, 2018, and paid $1.0 million as a post-closing adjustment on August 14, 2018, for aggregate net proceeds of $135.6 million. As part of this divestiture, the Company agreed to a contingent consideration arrangement (the “Contingent Niobrara Consideration”), which was determined to be an embedded derivative. See “Note 13. Derivative Instruments” and “Note 14. Fair Value Measurements” for further discussion.
The aggregate net proceeds for each of the 2018 divestitures discussed above were recognized as a reduction of proved oil and gas properties with no gain or loss recognized.
5. Property and Equipment, Net
As of September 30, 2019 and December 31, 2018, total property and equipment, net consisted of the following:
September 30, 2019
December 31, 2018
(In thousands)
Oil and gas properties, full cost method
Proved properties
$6,827,578
$6,278,321
Accumulated depreciation, depletion and amortization and impairments
(4,178,977
)
(3,944,851
)
Proved properties, net
2,648,601
2,333,470
Unproved properties, not being amortized
Unevaluated leasehold and seismic costs
567,294
608,830
Capitalized interest
82,053
65,003
Total unproved properties, not being amortized
649,347
673,833
Other property and equipment
31,129
29,191
Accumulated depreciation
(20,107
)
(17,970
)
Other property and equipment, net
11,022
11,221
Total property and equipment, net
$3,308,970
$3,018,524
Average depreciation, depletion and amortization (“DD&A”) per Boe of proved properties was $12.55 and $13.29 for the three months ended September 30,2019 and 2018, respectively, and $13.02 and $13.57 for the nine months ended September 30,2019 and 2018, respectively.
The Company capitalized internal costs of employee compensation and benefits, including stock-based compensation, directly associated with acquisition, exploration, and development activities totaling $3.9 million and $2.9 million for the three months ended September 30,2019 and 2018, respectively, and $16.8 million and $15.6 million for the nine months ended September 30,2019 and 2018, respectively.
Unproved properties, not being amortized, include unevaluated leasehold and seismic costs associated with specific unevaluated properties and related capitalized interest. The Company capitalized interest costs associated with its unproved properties totaling
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$8.2 million and $8.5 million for the three months ended September 30,2019 and 2018, respectively, and $25.8 million and $27.6 million for the nine months ended September 30,2019 and 2018, respectively.
6. Leases
The Company determines if an arrangement is a lease at inception of the contract and, if the contract is determined to be a lease, classifies the lease as an operating or financing lease. The Company recognizes an operating or financing lease on its consolidated balance sheets as a lease liability, which represents the present value of the Company’s obligation to make lease payments arising from the lease, with a related ROU asset, which represents the Company’s right to use the underlying asset for the lease term. The Company’s operating leases typically do not provide an implicit interest rate, therefore, the Company utilizes its incremental borrowing rate to calculate the present value of the lease payments based on information available at inception of the contract.
Lease expense for operating leases is recognized on a straight-line basis over the lease term. Lease expense for financing leases is comprised of interest expense on the financing lease liability and the amortization of the associated ROU asset, which is recognized on a straight-line basis over the lease term. Variable lease expense that is not dependent on an index or rate is not included in the operating or financing lease liability or ROU asset and is recognized in the period in which the obligation for those payments is incurred.
Types of Leases
The Company currently has leases associated with contracts for drilling rigs, office space, and the use of well equipment, vehicles, information technology infrastructure, and other office equipment, with the significant lease types described in more detail below.
Drilling Rigs. The Company enters into contracts for drilling rigs with third parties to support its development plan. These contracts are typically for one to three years and can be extended upon mutual agreement with the third party by providing written notice at least thirty days prior to the end of the primary contractual term. The Company exercises its discretion in choosing whether or not to extend these contracts on a drilling rig by drilling rig basis as a result of evaluating the conditions that exist at the time the contract expires, such as availability of drilling rigs and the Company’s development plan. The Company has determined that it cannot conclude with reasonable certainty that it will choose to extend the contract past its primary term. As such, the Company uses the primary term in its calculation of the lease liability and ROU asset. The Company classifies its drilling rigs as operating leases and capitalizes the costs of the drilling rigs to oil and gas properties.
Office Space. The Company leases office space from third parties for its corporate office and certain field locations. These leases have non-cancelable terms between one to fifteen years. The Company has determined that it cannot conclude with reasonable certainty that it will exercise any option to extend the contract past the non-cancelable term. As such, the Company uses the non-cancelable term in its calculation of the lease liability and ROU asset. The Company classifies its leases for office space as operating leases with the costs recognized as “General and administrative, net” in its consolidated statements of income.
Well Equipment. The Company rents compressors from third parties to facilitate the flow of production from its drilling operations to market. These contracts range from less than one year to three years for the primary term and continue thereafter on a month to month basis subject to cancellation by either party with thirty days notice. The Company classifies the compressors as operating leases with a lease term equal to the primary term for those contracts that have a primary term greater than one year. After the primary term, each party has a substantive right to terminate the lease, therefore, enforceable rights and obligations do not exist subsequent to the primary term. For those contracts that are less than one year, the Company has concluded that they represent short-term operating leases and therefore, an operating lease liability and ROU asset is not recorded in the consolidated balance sheets. These lease payments are recognized as “Lease operating expense” in the Company’s statements of income.
The tables below, which present the components of lease costs, supplemental balance sheet information, and supplemental cash flow information, are presented on a gross basis. Other joint owners in the properties operated by the Company generally pay for their working interest share of costs associated with drilling rigs and well equipment.
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The table below presents the components of the Company’s lease costs for the three and nine months ended September 30,2019.
Three Months Ended September 30, 2019
Nine Months Ended September 30, 2019
(In thousands)
Components of Lease Costs
Finance lease costs
Amortization of right-of-use assets (1)
$410
$1,194
Interest on lease liabilities (2)
110
386
Operating lease costs (3)
9,406
32,186
Short-term lease costs (4)
363
826
Variable lease costs (5)
104
256
Total lease costs
$10,393
$34,848
(1)
Included as a component of “Depletion, depreciation and amortization” in the consolidated statements of income.
(2)
Included as a component of “Interest expense, net” in the consolidated statements of income.
(3)
For the three and nine months ended September 30, 2019, approximately $6.5 millionand$24.1 million are costs associated with drilling rigs and are capitalized to “Oil and gas properties” in the consolidated balance sheets and the other remaining operating lease costs are components of “General and administrative, net” and “Lease operating expense” in the consolidated statements of income.
(4)
Short-term lease costs are primarily associated with certain well equipment that have lease terms for less than one year and are components of “Lease operating expense” in the consolidated statements of income.
(5)
Variable lease costs include additional payments that were not included in the initial measurement of the lease liability and related ROU asset for lease agreements with terms greater than 12 months. Variable lease costs primarily consist of incremental usage associated with drilling rigs.
The table below presents supplemental balance sheet information for the Company’s leases as of September 30, 2019.
September 30, 2019
(In thousands)
Leases
Operating leases:
Operating lease ROU assets
$55,873
Current operating lease liabilities
$30,301
Long-term operating lease liabilities
31,723
Total operating lease liabilities
$62,024
Financing leases:
Other property and equipment, at cost
$7,810
Accumulated depreciation
(5,580
)
Other property and equipment, net
$2,230
Current financing lease liabilities (1)
$1,709
Long-term financing lease liabilities (2)
797
Total financing lease liabilities
$2,506
(1)
Included in “Other current liabilities” in the consolidated balance sheets.
(2)
Included in “Other long-term liabilities” in the consolidated balance sheets.
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The table below presents supplemental cash flow information for the Company’s leases for the nine months ended September 30,2019.
Nine Months Ended September 30, 2019
(In thousands)
Supplemental Cash Flow Information
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases
$7,782
Investing cash flows from operating leases
$29,460
Operating cash flows from financing leases
$386
Financing cash flows from financing leases
$1,324
ROU assets obtained in exchange for lease liabilities
Operating leases
$17,226
Financing leases
$1,082
The table below presents the weighted average remaining lease terms and weighted average discount rates for the Company’s leases as of September 30, 2019.
September 30, 2019
Weighted Average Remaining Lease Term (In years)
Operating leases
4.7 years
Financing leases
2.2 years
Weighted Average Discount Rate
Operating leases
8.0
%
Financing leases
11.7
%
The table below presents the maturity of the Company’s lease liabilities as of September 30, 2019.