Price | 37.52 | EPS | -1 | |
Shares | 23 | P/E | -27 | |
MCap | 869 | P/FCF | 6 | |
Net Debt | 707 | EBIT | -10 | |
TEV | 1,576 | TEV/EBIT | -159 | TTM 2018-09-30, in MM, except price, ratios |
10-Q | 2018-09-30 | Filed 2018-11-05 |
10-Q | 2018-06-30 | Filed 2018-08-06 |
10-Q | 2018-03-31 | Filed 2018-05-07 |
10-K | 2017-12-31 | Filed 2018-03-12 |
10-Q | 2017-09-30 | Filed 2017-11-06 |
10-Q | 2017-06-30 | Filed 2017-08-07 |
10-Q | 2017-03-31 | Filed 2017-05-03 |
10-K | 2016-12-31 | Filed 2017-03-13 |
10-Q | 2016-09-30 | Filed 2016-11-07 |
10-Q | 2016-06-30 | Filed 2016-08-08 |
10-Q | 2016-03-31 | Filed 2016-05-09 |
10-K | 2015-12-31 | Filed 2016-03-07 |
10-Q | 2015-09-30 | Filed 2015-11-09 |
10-Q | 2015-06-30 | Filed 2015-08-10 |
10-Q | 2015-03-31 | Filed 2015-05-11 |
10-K | 2014-12-31 | Filed 2015-03-05 |
10-Q | 2014-09-30 | Filed 2014-11-10 |
10-Q | 2014-06-30 | Filed 2014-08-11 |
10-Q | 2014-03-31 | Filed 2014-05-12 |
10-K | 2013-12-31 | Filed 2014-03-10 |
10-Q | 2013-09-30 | Filed 2013-11-05 |
10-Q | 2013-06-30 | Filed 2013-08-05 |
10-Q | 2013-03-31 | Filed 2013-05-06 |
10-Q | 2012-06-30 | Filed 2012-08-06 |
10-Q | 2012-03-31 | Filed 2012-05-08 |
10-Q | 2011-09-30 | Filed 2011-11-07 |
10-Q | 2011-06-30 | Filed 2011-08-08 |
10-Q | 2011-03-31 | Filed 2011-05-06 |
10-K | 2010-12-31 | Filed 2011-03-15 |
10-Q | 2010-09-30 | Filed 2010-11-15 |
10-Q | 2010-06-30 | Filed 2010-08-12 |
10-Q | 2010-03-31 | Filed 2010-05-11 |
10-K | 2009-12-31 | Filed 2010-03-30 |
8-K | 2019-03-01 | |
8-K | 2019-02-22 | |
8-K | 2019-02-14 | |
8-K | 2019-02-11 | |
8-K | 2018-11-19 | |
8-K | 2018-11-18 | |
8-K | 2018-10-11 | |
8-K | 2018-09-30 | |
8-K | 2018-09-14 | |
8-K | 2018-06-30 | |
8-K | 2018-06-19 | |
8-K | 2018-06-11 | |
8-K | 2018-05-15 | |
8-K | 2018-05-09 | |
8-K | 2018-04-05 | |
8-K | 2018-03-31 | |
8-K | 2018-03-16 | |
8-K | 2018-03-12 | |
8-K | 2018-02-26 | |
8-K | 2018-02-13 | |
8-K | 2018-02-08 | |
8-K | 2018-01-01 |
Note 1 - Organization and Nature of Business |
Note 2 - Basis of Presentation and Summary of Significant Accounting Policies |
Note 3 - Acquisitions and Divestitures |
Note 4 - Earnings per Share |
Note 5 - Long Term Debt |
Note 6 - Income Taxes |
Note 7 - Stockholders' Equity and Long-Term Employee Incentive Plan |
Note 8 - Derivative Instruments |
Note 9 -Revenue |
Note 10 - Related Parties |
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations |
Item 3. Quantitative and Qualitative Disclosures About Market Risk |
Item 4. Controls and Procedures |
Part II Other Information |
Item 1. Legal Proceedings |
Item 1A. Risk Factors |
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds |
Item 3. Defaults Upon Senior Securities |
Item 4. Mine Safety Disclosures |
Item 5. Other Information |
Item 6. Exhibits |
EX-31.1 | ren-ex311_6.htm |
EX-31.2 | ren-ex312_8.htm |
EX-32.1 | ren-ex321_7.htm |
Balance Sheet | Income Statement | Cash Flow |
---|---|---|
Assets, Equity
|
Rev, G Profit, Net Income
|
Ops, Inv, Fin
|
\
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-Q
☑ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended September 30, 2018
OR
☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Commission File No. 001-34464
RESOLUTE ENERGY CORPORATION
(Exact Name of Registrant as Specified in its Charter)
Delaware |
| 27-0659371 |
(State or other Jurisdiction of Incorporation or Organization) |
| (I.R.S. Employer Identification Number) |
|
|
|
1700 Lincoln Street, Suite 2800 Denver, CO |
| 80203 |
(Address of Principal Executive Offices) |
| (Zip Code) |
(303) 534-4600
(Registrant’s telephone number, including area code)
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 every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) 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.
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). ☐ No ☑
As of October 31, 2018, 23,164,035 shares of the Registrant’s $0.0001 par value Common Stock were outstanding.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q contains “forward-looking statements” as that term is defined in the Private Securities Litigation Reform Act of 1995. The use of any statements containing the words “expect,” “estimate,” “project,” “budget,” “forecast,” “anticipate,” “intend,” “plan,” “may,” “will,” “could,” “should,” “poised,” “believes,” “predicts,” “potential,” “continue,” or similar expressions are intended to identify such statements; however the absence of these words does not mean the statements are not forward-looking. Forward-looking statements included in this report relate to, among other things, anticipated capital expenditures and activity in 2018; the impact and amount of contingency payments from the parent of the Aneth Field purchaser; future earn-out payments; future infrastructure and other capital projects; our financial condition and management of the Company in the current commodity price environment, including expectations regarding price and basis differential fluctuations; future financial and operating results; liquidity and availability of capital; future pad drilling timing and plans and expected resulting cost savings and production impact; reserve growth and decline rates; our plans and expectations regarding our development activities including drilling and completing wells, the number of such potential projects and locations; the potential impact of well interference and the effectiveness of operational adjustments to mitigate it; the prospectivity of our properties and acreage; and the anticipated accounting treatment of various activities. Although we believe that these statements are based upon reasonable current assumptions, no assurance can be given that the future results covered by the forward-looking statements will be achieved. Forward-looking statements can be subject to risks, uncertainties and other factors that could cause actual results to differ materially from future results expressed or implied by the forward-looking statements. The forward-looking statements in this report are primarily, although not exclusively, located under the heading “Risk Factors.” All forward-looking statements speak only as of the date made. All subsequent written and oral forward-looking statements attributable to us, or persons acting on our behalf, are expressly qualified in their entirety by the cautionary statements. Except as required by law, we undertake no obligation to update any forward-looking statement. Factors that could cause actual results to differ materially from our expectations include, among others, those factors referenced in the “Risk Factors” section of this report, if any, in our Annual Report on Form 10-K for the year ended December 31, 2017, as amended (“Form 10-K”), and such things as:
| • | the Company’s ability to successfully implement its strategy; |
| • | volatility of oil and gas prices, including extended periods of depressed prices that would adversely affect our revenue, income, cash flow from operations and liquidity and the discovery, estimation and development of, and our ability to replace oil and gas reserves; |
| • | a lack of available capital and financing, including the capital needed to pursue our operations and other development plans for our properties, on acceptable terms, including as a result of a reduction in the borrowing base under our revolving credit facility; |
| • | increases in the differentials between index oil and gas prices and the prices we receive; |
| • | disruptions to, capacity constraints in or other limitations on the pipeline systems that deliver our oil, NGL and gas to markets and other processing and transportation considerations; |
| • | the success of the development plan for and production from our oil and gas properties, including our results from pad drilling; |
| • | the completion, timing and success of drilling on our properties; |
| • | the potential for downspacing, infill or multi-lateral drilling in the Permian Basin or obstacles thereto; |
| • | uncertainties and potential operational disruption caused by the actions of stockholder activists; |
| • | the completion and success of exploratory drilling on our properties; |
| • | the timing and amount of future production of oil and gas; |
| • | changes in our production mix of oil and gas; |
| • | risks related to our level of indebtedness; |
| • | our ability to fulfill our obligations under our revolving credit facility, the senior notes and any additional indebtedness we may incur; |
| • | constraints imposed on our business and operations by our revolving credit facility and senior notes which may limit our ability to execute our business strategy; |
| • | future write downs of reserves and the carrying value of our oil and gas properties; |
| • | acquisitions and other business opportunities (or lack thereof) that may be presented to and pursued by us, and the risk that any opportunity currently being pursued will fail to consummate or encounter material complications; |
| • | risks associated with unanticipated liabilities assumed, or title, environmental or other problems resulting from, our acquisitions; |
| • | our future cash flow, liquidity and financial position; |
| • | the success of our business and financial strategy, hedging strategies and plans; |
| • | inaccuracies in reserve estimates; |
| • | operational problems, or uninsured or underinsured losses affecting our operations or financial results; |
| • | the amount, nature and timing of our capital expenditures, including future development costs; |
| • | the impact of any U.S. or global economic recession; |
| • | the ability to sell or otherwise monetize assets at values and on terms that are advantageous to us; |
| • | our ability to achieve the growth and benefits we expect from our acquisitions; |
| • | availability of, or delays related to, drilling, completion and production, personnel, supplies and equipment; |
| • | risks and uncertainties in the application of available horizontal drilling and completion techniques; |
| • | uncertainty surrounding occurrence and timing of identifying drilling locations, the number of economic drilling locations and necessary capital to drill such locations; |
| • | our ability to fund and develop our estimated proved undeveloped reserves and resources; |
| • | the effect of third party activities on our oil and gas operations, including our dependence on third party-owned water sourcing, gathering and disposal, oil gathering and gas gathering and processing systems; |
| • | the concentration of our credit risk as the result of depending on one primary oil purchaser and one primary gas purchaser in the Delaware Basin; |
| • | our operating costs and other expenses; |
| • | our success in marketing oil and gas; |
| • | the impact and costs related to compliance with, or changes in, laws or regulations governing our oil and gas operations and the potential for increased regulation of drilling and completion techniques, underground injection or fracing operations; |
| • | our relationship with the local communities in the areas where we operate; |
| • | the availability of water and our ability to adequately treat and dispose of water while and after drilling and completing wells; |
| • | potential regulation of waste water injection intended to address seismic activity; |
| • | the concentration of our producing properties in a single geographic area; |
| • | potential changes to regulations affecting derivatives instruments; |
| • | environmental liabilities under existing or future laws and regulations; |
| • | the impact of climate change regulations on oil and gas production and demand; |
| • | potential changes in income tax deductions and credits currently available to the oil and gas industry; |
| • | the impact of weather and the occurrence of disasters, such as fires, explosions, floods and other events and natural disasters; |
| • | competition in the oil and gas industry and failure to keep pace with technological development; |
| • | actions, announcements and other developments in the Organization of Petroleum Exporting Countries (OPEC) and in other oil and gas producing countries; |
| • | risks relating to our joint interest partners’ and other counterparties’ inability to fulfill their contractual commitments; |
| • | loss of senior management or key technical personnel; |
| • | the impact of long-term incentive programs, including performance-based awards and stock appreciation rights; |
| • | timing of issuance of permits and rights of way, including the effects of any government shut-downs; |
| • | potential power disruptions or supply limitations in the electrical infrastructure serving our operations; |
| • | timing of installation of gathering infrastructure in areas of new exploration and development; |
| • | potential breakdown of equipment and machinery relating to the gathering and compression infrastructure; |
| • | losses possible from pending or future litigation; |
| • | cybersecurity risks; |
| • | the risk of a transaction that could trigger a change of control under our debt agreements; |
| • | risks related to our common stock, potential declines in stock prices and potential future dilution to stockholders; |
| • | risk factors discussed or referenced in this report; and |
| • | other factors, many of which are beyond our control. |
Additionally, the Securities and Exchange Commission (“SEC”) requires oil and gas companies, in filings made with the SEC, to disclose proved reserves, which are those quantities of oil and gas, which, by analysis of geoscience and engineering data, can be estimated with reasonable certainty to be economically producible from a given date forward, from known reservoirs, under existing economic conditions, operating methods and governmental regulations. The SEC permits the optional disclosure of probable and possible reserves. From time to time, we may elect to disclose “probable” reserves and “possible” reserves, excluding their valuation, in our SEC filings, press releases and investor presentations. The SEC defines “probable” reserves as “those additional reserves that are less certain to be recovered than proved reserves but which, together with proved reserves, are likely as not to be recovered.” The SEC defines “possible” reserves as “those additional reserves that are less certain to be recovered than probable reserves.” The Company applies these definitions when estimating probable and possible reserves. Statements of reserves are only estimates and may not correspond to the ultimate quantities of oil and gas recovered. Any reserves estimates or potential resources disclosed in our public filings, press releases and investor presentations that are not specifically designated as being estimates of proved reserves may include estimated reserves not necessarily calculated in accordance with, or contemplated by, the SEC’s reserves reporting guidelines.
SEC rules prohibit us from including resource estimates in our public filings with the SEC. Our potential resource estimates include estimates of hydrocarbon quantities for (i) new areas for which we do not have sufficient information to date to classify as proved, probable or possible reserves, (ii) other areas to take into account the level of certainty of recovery of the resources and (iii) uneconomic proved, probable or possible reserves. Potential resource estimates do not take into account the certainty of resource recovery and are therefore not indicative of the expected future recovery and should not be relied upon for such purpose. Potential resources might never be recovered and are contingent on exploration success, technical improvements in drilling access, commerciality and other factors. In our press releases and investor presentations, we sometimes include estimates of quantities of oil and gas using certain terms, such as “resource,” “resource potential,” “EUR,” “oil in place,” or other descriptions of volumes of reserves, which terms include quantities of oil and gas that may not meet the SEC definition of proved, probable and possible reserves. These estimates are by their nature more speculative than estimates of proved reserves and accordingly are subject to substantially greater risk of being recovered by Resolute. The Company believes its potential resource estimates are reasonable, but such estimates have not been reviewed by independent engineers. Furthermore, estimates of potential resources may change significantly as development provides additional data, and actual quantities that are ultimately recovered may differ substantially from prior estimates.
Production rates, including “early time” rates, 24-hour peak IP rates, 30-day peak IP rates, 60-day peak IP rates, 90-day peak IP rates, 120-day peak IP rates and 150-day peak IP rates for both our wells and for those wells that are located near to our properties are limited data points in each well’s productive history and represent three stream gross production. These rates are sometimes actual rates and sometimes extrapolated or normalized rates. As such, the rates for a particular well may change as additional data becomes available. Peak production rates are not necessarily indicative or predictive of future production rates, EUR or economic rates of return from such wells and should not be relied upon for such purpose. Equally, the way we calculate and report peak IP rates and the methodologies employed by others may not be consistent, and thus the values reported may not be directly and meaningfully comparable. Lateral lengths described are indicative only. Actual completed lateral lengths depend on various considerations such as lease‐line offsets. Standard length laterals, sometimes referred to as 5,000 foot laterals, are laterals with completed length generally between 4,000 feet and 5,500 feet. Mid‐length laterals, sometimes referred to as 7,500 foot laterals, are laterals with completed length generally between 6,000 feet and 8,000 feet. Long laterals, sometimes referred to as 10,000 foot laterals, are laterals with completed length generally longer than 8,000 feet.
You are urged to consider closely the disclosure in this Form 10-Q and in our Form 10-K, in particular the factors described under “Risk Factors.”
TABLE OF CONTENTS
PART I - |
|
| 1 | |
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|
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|
Item 1. |
|
| 1 | |
|
|
|
|
|
Item 2. |
| Management’s Discussion and Analysis of Financial Condition and Results of Operations |
| 22 |
|
|
|
|
|
Item 3. |
|
| 35 | |
|
|
|
|
|
Item 4. |
|
| 37 | |
|
|
|
|
|
PART II - |
|
| 38 | |
|
|
|
|
|
Item 1. |
|
| 38 | |
|
|
|
|
|
Item 1 A. |
|
| 38 | |
|
|
|
|
|
Item 2. |
|
| 38 | |
|
|
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|
Item 3. |
|
| 38 | |
|
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|
Item 4. |
|
| 38 | |
|
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|
Item 5. |
|
| 38 | |
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Item 6. |
|
| 39 | |
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|
| 40 |
RESOLUTE ENERGY CORPORATION
Condensed Consolidated Balance Sheets (Unaudited)
(in thousands, except share amounts)
| September 30, |
|
| December 31, |
| ||
| 2018 |
|
| 2017 |
| ||
Assets |
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
Cash and cash equivalents | $ | 3,269 |
|
| $ | 3,762 |
|
Accounts receivable |
| 65,655 |
|
|
| 63,420 |
|
Commodity derivative instruments |
| 5,241 |
|
|
| 526 |
|
Contingent payment derivative instrument |
| 639 |
|
|
| 8,311 |
|
Prepaid expenses and other current assets |
| 2,225 |
|
|
| 1,856 |
|
Total current assets |
| 77,029 |
|
|
| 77,875 |
|
Property and equipment, at cost: |
|
|
|
|
|
|
|
Oil and gas properties, full cost method of accounting |
|
|
|
|
|
|
|
Unproved |
| 276,543 |
|
|
| 248,059 |
|
Proved |
| 2,327,780 |
|
|
| 2,030,316 |
|
Other property and equipment |
| 14,262 |
|
|
| 12,879 |
|
Accumulated depletion, depreciation and amortization |
| (1,816,310 | ) |
|
| (1,737,116 | ) |
Net property and equipment |
| 802,275 |
|
|
| 554,138 |
|
Other assets: |
|
|
|
|
|
|
|
Contingent payment derivative instrument |
| 18,214 |
|
|
| 9,635 |
|
Other assets |
| 274 |
|
|
| 274 |
|
Total assets | $ | 897,792 |
|
| $ | 641,922 |
|
Liabilities and Stockholders’ Deficit |
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
Accounts payable | $ | 25,170 |
|
| $ | 16,077 |
|
Accrued expenses |
| 101,674 |
|
|
| 53,754 |
|
Accrued revenue payable |
| 36,556 |
|
|
| 28,255 |
|
Accrued cash-settled incentive awards |
| 39,124 |
|
|
| 34,317 |
|
Accrued interest payable |
| 21,489 |
|
|
| 7,574 |
|
Commodity derivative instruments |
| 46,787 |
|
|
| 20,822 |
|
Total current liabilities |
| 270,800 |
|
|
| 160,799 |
|
Long-term liabilities: |
|
|
|
|
|
|
|
Revolving credit facility |
| 108,151 |
|
|
| 27,487 |
|
Senior notes |
| 597,994 |
|
|
| 523,240 |
|
Commodity derivative instruments |
| 11,392 |
|
|
| 990 |
|
Other long-term liabilities |
| 4,299 |
|
|
| 3,815 |
|
Total liabilities |
| 992,636 |
|
|
| 716,331 |
|
Stockholders’ deficit: |
|
|
|
|
|
|
|
Convertible preferred stock, $0.0001 par value; 1,000,000 shares authorized; issued and outstanding 62,500 shares at September 30, 2018 and December 31, 2017; $62.5 million liquidation preference |
| — |
|
|
| — |
|
Common stock, $0.0001 par value; 45,000,000 shares authorized; issued and outstanding 23,165,855 and 22,527,652 shares at September 30, 2018 and December 31, 2017, respectively |
| 2 |
|
|
| 2 |
|
Additional paid-in capital |
| 971,690 |
|
|
| 957,426 |
|
Accumulated deficit |
| (1,066,536 | ) |
|
| (1,031,837 | ) |
Total stockholders’ deficit |
| (94,844 | ) |
|
| (74,409 | ) |
Total liabilities and stockholders’ deficit | $ | 897,792 |
|
| $ | 641,922 |
|
See notes to condensed consolidated financial statements
1
RESOLUTE ENERGY CORPORATION
Condensed Consolidated Statements of Operations (Unaudited)
(in thousands, except per share data)
| Three Months Ended September 30, |
|
| Nine Months Ended September 30, |
| ||||||||||
| 2018 |
|
| 2017 |
|
| 2018 |
|
| 2017 |
| ||||
Revenue: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Oil | $ | 80,689 |
|
| $ | 67,665 |
|
| $ | 198,735 |
|
| $ | 186,027 |
|
Gas |
| 9,202 |
|
|
| 7,144 |
|
|
| 21,232 |
|
|
| 17,963 |
|
Natural gas liquids |
| 16,856 |
|
|
| 4,562 |
|
|
| 34,878 |
|
|
| 10,233 |
|
Total revenue |
| 106,747 |
|
|
| 79,371 |
|
|
| 254,845 |
|
|
| 214,223 |
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Lease operating |
| 18,762 |
|
|
| 25,093 |
|
|
| 45,793 |
|
|
| 63,339 |
|
Production and ad valorem taxes |
| 7,390 |
|
|
| 6,586 |
|
|
| 18,451 |
|
|
| 18,120 |
|
Depletion, depreciation and amortization |
| 33,022 |
|
|
| 25,521 |
|
|
| 80,053 |
|
|
| 63,889 |
|
General and administrative |
| 10,199 |
|
|
| 9,546 |
|
|
| 47,141 |
|
|
| 29,433 |
|
Cash-settled incentive awards |
| 11,539 |
|
|
| 4,996 |
|
|
| 22,833 |
|
|
| 9,010 |
|
Total operating expenses |
| 80,912 |
|
|
| 71,742 |
|
|
| 214,271 |
|
|
| 183,791 |
|
Income from operations |
| 25,835 |
|
|
| 7,629 |
|
|
| 40,574 |
|
|
| 30,432 |
|
Other income (expense): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense, net |
| (9,963 | ) |
|
| (8,527 | ) |
|
| (26,046 | ) |
|
| (35,003 | ) |
Commodity derivative instruments gain (loss) |
| (32,618 | ) |
|
| (13,719 | ) |
|
| (54,141 | ) |
|
| 4,579 |
|
Contingent payment derivative instrument gain |
| 2,425 |
|
|
| — |
|
|
| 8,707 |
|
|
| — |
|
Other income (expense) |
| 19 |
|
|
| (13 | ) |
|
| 15 |
|
|
| 63 |
|
Total other expense |
| (40,137 | ) |
|
| (22,259 | ) |
|
| (71,465 | ) |
|
| (30,361 | ) |
Income (loss) before income taxes |
| (14,302 | ) |
|
| (14,630 | ) |
|
| (30,891 | ) |
|
| 71 |
|
Income tax benefit |
| — |
|
|
| 28 |
|
|
| — |
|
|
| 28 |
|
Net income (loss) |
| (14,302 | ) |
|
| (14,602 | ) |
|
| (30,891 | ) |
|
| 99 |
|
Preferred stock dividends |
| (1,269 | ) |
|
| — |
|
|
| (3,808 | ) |
|
| (3,935 | ) |
Net loss available to common stockholders | $ | (15,571 | ) |
| $ | (14,602 | ) |
| $ | (34,699 | ) |
| $ | (3,836 | ) |
Net loss per common share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted | $ | (0.70 | ) |
| $ | (0.71 | ) |
| $ | (1.56 | ) |
| $ | (0.22 | ) |
Weighted average common shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted |
| 22,337 |
|
|
| 21,941 |
|
|
| 22,242 |
|
|
| 21,866 |
|
See notes to condensed consolidated financial statements
2
RESOLUTE ENERGY CORPORATION
Condensed Consolidated Statements of Stockholders’ Deficit (Unaudited)
(in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Additional |
|
|
|
|
|
| Total |
| ||
| Common Stock |
|
| Preferred Stock |
|
| Paid-in |
|
| Accumulated |
|
| Stockholders’ |
| |||||||||||||
| Shares |
|
| Amount |
|
| Shares |
|
| Amount |
|
| Capital |
|
| Deficit |
|
| Deficit |
| |||||||
Balance as of January 1, 2018 |
| 22,528 |
|
| $ | 2 |
|
|
| 63 |
|
| $ | — |
|
| $ | 957,426 |
|
| $ | (1,031,837 | ) |
| $ | (74,409 | ) |
Issuance of stock, restricted stock and stock-based compensation |
| 559 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 16,949 |
|
|
| — |
|
|
| 16,949 |
|
Redemption of restricted stock for employee income tax and restricted stock forfeitures |
| (108 | ) |
|
| — |
|
|
| — |
|
|
| — |
|
|
| (3,059 | ) |
|
| — |
|
|
| (3,059 | ) |
Exercise of employee options to purchase common stock |
| 187 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 374 |
|
|
| — |
|
|
| 374 |
|
Preferred stock dividend |
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| (3,808 | ) |
|
| (3,808 | ) |
Net loss |
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| (30,891 | ) |
|
| (30,891 | ) |
Balance as of September 30, 2018 |
| 23,166 |
|
| $ | 2 |
|
|
| 63 |
|
| $ | — |
|
| $ | 971,690 |
|
| $ | (1,066,536 | ) |
| $ | (94,844 | ) |
See notes to condensed consolidated financial statements
3
RESOLUTE ENERGY CORPORATION
Condensed Consolidated Statements of Cash Flows (Unaudited)
(in thousands)
| Nine Months Ended September 30, |
| |||||
| 2018 |
|
| 2017 |
| ||
Operating activities: |
|
|
|
|
|
|
|
Net income (loss) | $ | (30,891 | ) |
| $ | 99 |
|
Adjustments to reconcile net income (loss) to net cash provided by operating activities: |
|
|
|
|
|
|
|
Depletion, depreciation and amortization |
| 80,053 |
|
|
| 63,889 |
|
Amortization of deferred financing costs and long-term debt premium and discount |
| 1,803 |
|
|
| 8,801 |
|
Stock-based compensation |
| 17,495 |
|
|
| 8,952 |
|
Commodity derivative instruments (gain) loss |
| 54,141 |
|
|
| (4,579 | ) |
Commodity derivative settlement gain (loss) |
| (22,488 | ) |
|
| 3,760 |
|
Unrealized contingent payment derivative instrument gain |
| (8,707 | ) |
|
| — |
|
Change in operating assets and liabilities: |
|
|
|
|
|
|
|
Accounts receivable |
| 11,597 |
|
|
| (12,541 | ) |
Other current assets |
| (369 | ) |
|
| (632 | ) |
Accounts payable and accrued expenses |
| 22,006 |
|
|
| 31,334 |
|
Accrued interest payable |
| 13,915 |
|
|
| 12,867 |
|
Net cash provided by operating activities |
| 138,555 |
|
|
| 111,950 |
|
Investing activities: |
|
|
|
|
|
|
|
Oil and gas exploration and development expenditures |
| (291,132 | ) |
|
| (218,972 | ) |
Proceeds from sale of oil and gas properties |
| 8,231 |
|
|
| 28,439 |
|
Purchase of oil and gas properties |
| — |
|
|
| (161,264 | ) |
Deposit for Aneth disposition |
| — |
|
|
| 10,000 |
|
Purchase of other property and equipment |
| (3,269 | ) |
|
| (3,517 | ) |
Restricted cash |
| — |
|
|
| (58 | ) |
Other long-term assets |
| — |
|
|
| 31 |
|
Net cash used in investing activities |
| (286,170 | ) |
|
| (345,341 | ) |
Financing activities: |
|
|
|
|
|
|
|
Proceeds from bank borrowings |
| 339,000 |
|
|
| 291,000 |
|
Repayments of bank borrowings |
| (259,000 | ) |
|
| (176,000 | ) |
Proceeds from issuance of senior notes |
| 74,625 |
|
|
| 126,875 |
|
Repayment of term loan |
| — |
|
|
| (128,303 | ) |
Payment of financing costs |
| (1,010 | ) |
|
| (5,296 | ) |
Payment of preferred dividend |
| (3,808 | ) |
|
| (3,935 | ) |
Redemption of restricted stock for employee income taxes |
| (3,059 | ) |
|
| (3,393 | ) |
Proceeds from exercise of employee options to purchase common stock |
| 374 |
|
|
| 242 |
|
Net cash provided by financing activities |
| 147,122 |
|
|
| 101,190 |
|
Net decrease in cash and cash equivalents |
| (493 | ) |
|
| (132,201 | ) |
Cash and cash equivalents at beginning of period |
| 3,762 |
|
|
| 133,089 |
|
Cash and cash equivalents at end of period | $ | 3,269 |
|
| $ | 888 |
|
See notes to condensed consolidated financial statements
4
RESOLUTE ENERGY CORPORATION
Notes to Condensed Consolidated Financial Statements
Note 1 — Organization and Nature of Business
Resolute Energy Corporation (“Resolute” or the “Company”) is an independent oil and gas company engaged in the exploitation, development, exploration for and acquisition of oil and gas properties. The Company’s operating assets are comprised of properties in the Delaware Basin in west Texas (the “Delaware Basin Properties”). The Company closed on the sale of Aneth Field, located in the Paradox Basin in southeast Utah (the “Aneth Field Properties” or “Aneth Field”), on November 6, 2017. All 2017 periods presented include the results related to Aneth Field, prior to the disposition. The Company conducts all of its activities in the United States of America.
Resolute Energy Corporation, the stand-alone parent entity, has insignificant independent assets and no operations. Its guarantees are full and unconditional and joint and several, and there are no subsidiaries of the parent company other than the Guarantors (defined below). There are no restrictions on the Company’s ability to obtain cash dividends or other distributions of funds from its subsidiaries, except those imposed by applicable law.
Note 2 — Basis of Presentation and Summary of Significant Accounting Policies
Basis of Presentation
The unaudited condensed consolidated financial statements include Resolute and its subsidiaries, and have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) and Regulation S-X for interim financial reporting. Except as disclosed herein, there has been no material change in our basis of presentation from the information disclosed in the notes to Resolute’s consolidated financial statements for the year ended December 31, 2017. In the opinion of management, all adjustments consisting of normal recurring accruals considered necessary for a fair presentation of the interim financial information have been included. Operating results for the periods presented are not necessarily indicative of the results that may be expected for the full year. All intercompany transactions have been eliminated upon consolidation. Certain prior period amounts have been reclassified to conform to the current period presentation.
In connection with the preparation of the condensed consolidated financial statements, Resolute evaluated subsequent events that occurred after the balance sheet date, through the date of filing.
Significant Accounting Policies
The significant accounting policies followed by Resolute are set forth in Resolute’s consolidated financial statements for the year ended December 31, 2017. These unaudited condensed consolidated financial statements are to be read in conjunction with the consolidated financial statements appearing in Resolute’s Form 10-K and related notes.
Effective January 1, 2018, Resolute adopted ASC 606, Revenue from Contracts with Customers, utilizing the modified retrospective method. See Note 9 for further details related to the Company’s adoption of this standard and revenue recognition accounting policy.
Assumptions, Judgments and Estimates
The preparation of the condensed consolidated financial statements in conformity with GAAP requires management to make various assumptions, judgments and estimates to determine the reported amounts of assets, liabilities, revenue and expenses, and in the disclosures of commitments and contingencies. Changes in these assumptions, judgments and estimates will occur as a result of the passage of time and the occurrence of future events. Accordingly, actual results could differ from amounts previously established.
Significant estimates with regard to the condensed consolidated financial statements include proved oil and gas reserve volumes and the related present value of estimated future net cash flows used in the ceiling test applied to capitalized oil and gas properties; the estimated fair value and allocation of the purchase price related to business combinations; stock-based compensation expense; cash-settled long-term incentive expense; depletion, depreciation, and amortization; accrued liabilities; and revenue and related receivables.
5
Accounts Receivable
The Company’s accounts receivable consist of the following as of the dates indicated (in thousands):
|
| September 30, 2018 |
|
| December 31, 2017 |
| ||
Trade |
| $ | 9,701 |
|
| $ | 18,079 |
|
Revenue |
|
| 39,605 |
|
|
| 43,136 |
|
Contingent payment derivative |
|
| 9,360 |
|
|
| 1,560 |
|
Accrued earn-outs |
|
| 6,690 |
|
| – |
| |
Other |
|
| 299 |
|
|
| 645 |
|
Total accounts receivable |
| $ | 65,655 |
|
| $ | 63,420 |
|
The Company’s accounts receivable consist mainly of receivables from oil, gas and natural gas liquids (“NGL”) purchasers and from joint interest owners on properties the Company operates. For receivables from joint interest owners, the Company typically has the ability to withhold future revenue disbursements to recover non-payment of joint interest billings. Generally, the Company’s oil and gas receivables are due between fifteen and thirty days and are collected in less than two months, and the Company has had minimal bad debts.
The Company routinely assesses the recoverability of all material trade and other receivables to determine their collectability. As of September 30, 2018 and December 31, 2017, the Company had no allowance for doubtful accounts recorded.
Accrued Expenses
The Company’s accrued expenses consist of the following as of the dates indicated (in thousands):
|
| September 30, 2018 |
|
| December 31, 2017 |
| ||
Capital expenditures |
| $ | 60,792 |
|
| $ | 14,942 |
|
Lease operating |
|
| 15,598 |
|
|
| 9,294 |
|
General and administrative |
|
| 8,943 |
|
|
| 14,510 |
|
Other |
|
| 16,341 |
|
|
| 15,008 |
|
Total accrued expenses |
| $ | 101,674 |
|
| $ | 53,754 |
|
The majority of the Company’s accrued expenses consist of accrued capital expenditures related to the exploration and development of oil and gas properties.
Oil and Gas Properties
Pursuant to full cost accounting rules, Resolute is required to perform a quarterly “ceiling test” calculation to test its oil and gas properties for possible impairment. The primary components impacting the calculation are commodity prices, reserve quantities and associated production, overall exploration and development costs and depletion expense. If the net capitalized cost of the Company’s oil and gas properties subject to amortization (the “carrying value”) exceeds the ceiling limitation, the excess would be charged to expense. The ceiling limitation is equal to the sum of the present value discounted at 10% of estimated future net cash flows from proved reserves, the cost of properties not being amortized and all related income tax effects.
No impairment was recorded for the three and nine months ended September 30, 2018 and 2017. If in future periods a negative factor affects one or more of the components of the calculation, including market prices of oil and gas (based on a trailing twelve-month unweighted average of the oil and gas prices in effect on the first day of each month), differentials from posted prices, future drilling and capital plans, operating costs or expected production, the Company may incur full cost ceiling impairment related to its oil and gas properties in such periods.
Recent Accounting Pronouncements
In January 2017, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business, which clarifies the definition of a business to assist entities with evaluating when a set of transferred assets and activities is deemed to be a business. Determining whether a transferred set constitutes a business is important because the accounting for a business combination differs from that of an asset acquisition. The definition of a business also affects the accounting for dispositions. Under the new standard, when substantially all of the fair value of assets acquired is concentrated in a single asset, or a group of similar assets, the assets acquired would not represent a business and business combination accounting would not be required. The Company adopted this standard in the second quarter of 2017.
6
In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606). ASC 606 requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The Company elected the modified retrospective transition method. The adoption of this standard had no impact on the Company’s consolidated financial statements. See Note 9 for further details related to the Company’s adoption of this standard.
In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), which requires lessees to present nearly all leasing arrangements on the balance sheet as liabilities along with a corresponding right-of-use (“ROU”) asset. The ASU will replace most existing lease guidance in GAAP when it becomes effective for the Company on January 1, 2019. Although early application is permitted, the Company does not plan to early adopt the ASU. Currently, the Company is evaluating the standard’s applicability to its various contractual arrangements. We believe that adoption of the standard will result in increases to our assets and liabilities on our consolidated balance sheet. However, we have not yet determined the extent of the adjustments that will be required upon implementation of the standard. The Company is updating its accounting policies and internal controls that would be impacted by the new guidance and implementing information technology tools to assist in its ongoing lease data collection and analysis to ensure readiness for adoption in the first quarter of 2019. Currently, the Company plans to make certain elections allowing the Company not to reassess contracts that commenced prior to adoption, to continue applying its current accounting policy for existing land easements, and not to recognize ROU assets or lease liabilities for short-term leases. As permitted by ASU No. 2018-11, Leases (Topic 842): Targeted Improvements, the Company does not expect to adjust comparative-period financial statements. We continue to monitor relevant industry guidance regarding the implementation of ASU 2016-02 and will adjust our implementation strategies as necessary.
Note 3 — Acquisitions and Divestitures
Acquisition of Reeves County Properties in the Delaware Basin
In May 2017, Resolute Natural Resources Southwest, LLC (“Resolute Southwest”), a wholly owned subsidiary of the Company, closed on a Purchase and Sale Agreement with CP Exploration II, LLC and Petrocap CPX, LLC pursuant to which Resolute Southwest acquired certain undeveloped and developed oil and gas properties in the Delaware Basin in Reeves County, Texas (the “Delaware Basin Bronco Acquisition”).
The acquisition was accounted for as an asset acquisition, and therefore, the properties were recorded based on the fair value of the total consideration transferred on the acquisition date and transaction costs were capitalized as a component of the cost of the assets acquired. The Company acquired these properties for $161.3 million, which it financed substantially with proceeds received from the offering of $125 million of 8.50% Senior Notes due 2020 (as defined in Note 5) that closed in May 2017. The Company recorded $144.8 million of the consideration as unproved oil and gas property.
The properties acquired included approximately 4,600 net acres in Reeves County, Texas, which were considered predominantly unproved, consisting of 2,187 net acres adjacent to the Company’s existing operating area in Reeves County and 2,405 net acres in southern Reeves County.
Divestiture of Aneth Field
In November 2017, Resolute and certain of its wholly-owned subsidiaries closed on a Purchase and Sale Agreement pursuant to which the Company sold its respective equity interests in Resolute Aneth, LLC, the entity which held all of Resolute’s interest in Aneth Field, and certain other assets associated with Aneth Field operations, to an affiliate of Elk Petroleum Limited (“Elk Petroleum”) (the “Aneth Field Sale”).
Under the terms of the Purchase and Sale Agreement, the buyer funded a performance deposit of $10 million which was credited against the purchase price. Resolute received additional cash consideration of $150 million at closing, subject to normal purchase price adjustments. The proceeds of the sale were used to reduce amounts outstanding under the Company’s Revolving Credit Facility (as defined in Note 5) and for other corporate purposes. Additionally, Resolute is entitled to receive additional cash consideration of up to $35 million if oil prices exceed certain levels in the three years after closing, as follows: Elk Petroleum, an affiliate of buyer, will pay Resolute $40,000 for each week day in the twelve months after closing that the WTI spot oil price exceeds $52.50 per barrel (up to $10 million); $50,000 for each week day in the twelve months following the first anniversary of closing that the oil price exceeds $55.00 per barrel (up to $10 million) and $60,000 for each week day in the twelve months following the second anniversary of closing that the oil price exceeds $60.00 per barrel (up to $15 million). As of closing, the fair value of the additional consideration was $16.0 million. Through September 30, 2018, $9.4 million of the additional $35 million has been earned. Under seller accounting for contingent consideration, the Company has determined that this arrangement meets the definition of a derivative. See Note 8 – Derivative Instruments, for additional information regarding the contingent payment derivative instrument. As the sale did not significantly alter the relationship between capital costs and proved reserves, no gain or loss was recognized.
7
In conjunction with the Aneth Field Sale, certain management members resigned from their positions effective January 1, 2018. In connection with their resignation, these individuals and the Company entered into separation agreements. The material terms of the separation agreements, including compensation payable thereunder and treatment of long-term incentive awards, are consistent with their respective employment agreements with the Company dated January 1, 2017, and various long-term incentive award agreements. Effective January 1, 2018, all awards held were modified contemporaneously with the termination of their employment.
Divestiture of Southeast New Mexico Properties in the Permian Basin
In February 2017, the Company closed on the sale of its Denton and South Knowles properties in the Northwest Shelf project area in Lea County, New Mexico (the “New Mexico Properties”), for approximately $14.5 million in cash, subject to customary purchase price adjustments.
Divestiture of Midstream Assets in the Delaware Basin
In 2016, in connection with the Purchase and Sale Agreement with Caprock Permian Processing LLC and Caprock Field Services LLC, as buyers (collectively, “Caprock”) of the Mustang and Appaloosa project areas in Reeves County, Texas (“Mustang” and “Appaloosa,” respectively), Resolute Southwest also entered into a definitive Earn-out Agreement (the “Earn-out Agreement”), pursuant to which Resolute Southwest will be entitled to receive certain earn-out payments based on drilling and completion activity in Appaloosa and Mustang through 2020 that will deliver gas and produced water into the system. Earn-out payments for each qualifying well will vary depending on the lateral length of the well and the year in which the well is drilled and completed. In March 2017, the Earn-out Agreement was amended by the parties to provide for an increase in earn-out payments for wells drilled and completed in 2017. Earn-out payments are contingent on future drilling, and therefore will be recognized when earned. As of September 30, 2018, we have earned $42.7 million of earn-out payments, $6.7 million and $14.1 million of this total was earned in the three and nine months ended September 30, 2018, respectively.
In connection with the closing of the transactions contemplated by the Purchase and Sale Agreement related to the Mustang and Appaloosa project areas, Resolute Southwest entered into fifteen year commercial agreements with Caprock for gas gathering services and water handling and disposal services for all current and future gas and water produced by Resolute Southwest in Mustang and Appaloosa in exchange for customary fees based on the volume of gas and water produced and delivered. Resolute Southwest has agreed to dedicate and deliver all gas and water produced from its acreage in Mustang and Appaloosa to Caprock for gathering, processing, compression and disposal services for a term of fifteen years.
In April 2017, Resolute Southwest entered into a Crude Oil Connection and Dedication Agreement with Caprock Permian Crude LLC (“Caprock Crude”), an affiliate of Caprock. Pursuant to the agreement, Caprock Crude constructed the gathering systems, pipelines and other infrastructure for the gathering of crude oil from our Mustang and Appaloosa operating areas in exchange for customary fees based on the volume of crude oil produced and delivered. Resolute Southwest has agreed to dedicate and deliver all crude oil produced from its acreage in Mustang and Appaloosa to Caprock Crude for gathering for a term through July 31, 2031, coterminous with our other commercial agreements with Caprock. For the first five years of the agreement, the crude oil will be delivered to Midland Station under a joint tariff arrangement between Caprock Crude and Plains Pipeline, L.P. In April 2017, Resolute Southwest also entered into a Crude Oil Purchase Contract with Plains Marketing, L.P. (“Plains”) providing for the sale to Plains of substantially all of the crude oil produced from the Mustang and Appaloosa areas for a price equal to an indexed market price less a differential (currently $1.85 per barrel) that will cover the joint tariff payable to Caprock Crude under the Crude Oil Connection and Dedication Agreement.
Pro Forma Financial Information
The unaudited pro forma financial information for the three and nine months ended September 30, 2017 reflects Resolute’s results as if the Aneth Field Sale had occurred on January 1, 2017 (in thousands):
|
| Three Months Ended |
| Nine Months Ended |
| ||
|
| September 30, 2017 |
| September 30, 2017 |
| ||
Revenue |
| $ | 58,267 |
| $ | 148,004 |
|
Income from operations |
|
| 8,013 |
|
| 26,981 |
|
Net income (loss) available to common stockholders |
|
| (5,128 | ) |
| 2,762 |
|
8
Note 4 — Earnings per Share
The Company computes basic net income (loss) per share using the weighted average number of shares of common stock outstanding during the period. Diluted net income (loss) per share is computed using the weighted average number of shares of common stock and, if dilutive, potential shares of common stock outstanding during the period. Net income (loss) available to common stockholders is computed by deducting both the dividends declared in the period on preferred stock and the dividends accumulated for the period on preferred stock from net income (loss). Potentially dilutive shares consist of the incremental shares and options issuable under the Company’s 2009 Performance Incentive Plan (the “Incentive Plan”) as well as common shares issuable upon the assumed conversion of the Convertible Preferred Stock (as defined in Note 7). The treasury stock method is used to measure the dilutive impact of potentially dilutive shares.
The following table details the potential weighted average dilutive and anti-dilutive securities for the periods presented (in thousands):
| Three Months Ended |
|
| Nine Months Ended |
| ||||||||||
| September 30, |
|
| September 30, |
| ||||||||||
| 2018 |
|
| 2017 |
|
| 2018 |
|
| 2017 |
| ||||
Potential dilutive and anti-dilutive securities |
| 3,951 |
|
|
| 3,762 |
|
|
| 3,954 |
|
|
| 3,724 |
|
The following table sets forth the computation of basic and diluted net income (loss) per share of common stock for the periods presented (in thousands, except per share amounts):
| Three Months Ended |
|
| Nine Months Ended |
| ||||||||||
| September 30, |
|
| September 30, |
| ||||||||||
| 2018 |
|
| 2017 |
|
| 2018 |
|
| 2017 |
| ||||
Net loss available to common stockholders | $ | (15,571 | ) |
| $ | (14,602 | ) |
| $ | (34,699 | ) |
| $ | (3,836 | ) |
Accumulated undeclared dividend |
| — |
|
|
| (1,058 | ) |
|
| — |
|
|
| (1,058 | ) |
Adjusted net loss available to common stockholders | $ | (15,571 | ) |
| $ | (15,660 | ) |
| $ | (34,699 | ) |
| $ | (4,894 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic weighted average common shares outstanding |
| 22,337 |
|
|
| 21,941 |
|
|
| 22,242 |
|
|
| 21,866 |
|
Add: dilutive effect of non-vested restricted stock |
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
Add: dilutive effect of options |
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
Diluted weighted average common shares outstanding |
| 22,337 |
|
|
| 21,941 |
|
|
| 22,242 |
|
|
| 21,866 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted net loss per common share | $ | (0.70 | ) |
| $ | (0.71 | ) |
| $ | (1.56 | ) |
| $ | (0.22 | ) |
Note 5 — Long Term Debt
As of the dates indicated, the Company’s long-term debt consisted of the following (in thousands):
| Principal |
|
| Unamortized net premium |
|
| Unamortized deferred financing costs |
|
| September 30, 2018 |
| ||||
Revolving credit facility | $ | 110,000 |
|
| $ | — |
|
| $ | (1,849 | ) |
| $ | 108,151 |
|
8.50% senior notes |
| 600,000 |
|
|
| 1,253 |
|
|
| (3,259 | ) |
|
| 597,994 |
|
Total long-term debt | $ | 710,000 |
|
| $ | 1,253 |
|
| $ | (5,108 | ) |
| $ | 706,145 |
|
| Principal |
|
| Unamortized net premium |
|
| Unamortized deferred financing costs |
|
| December 31, 2017 |
| ||||
Revolving credit facility | $ | 30,000 |
|
| $ | — |
|
| $ | (2,513 | ) |
| $ | 27,487 |
|
8.50% senior notes |
| 525,000 |
|
|
| 2,222 |
|
|
| (3,982 | ) |
|
| 523,240 |
|
Total long-term debt | $ |