Company Quick10K Filing
SM Energy
Price10.31 EPS-1
Shares113 P/E-14
MCap1,168 P/FCF2
Net Debt-4 EBIT17
TEV1,165 TEV/EBIT69
TTM 2019-09-30, in MM, except price, ratios
10-Q 2020-03-31 Filed 2020-04-29
10-K 2019-12-31 Filed 2020-02-20
10-Q 2019-09-30 Filed 2019-11-01
10-Q 2019-06-30 Filed 2019-08-02
10-Q 2019-03-31 Filed 2019-05-02
10-K 2018-12-31 Filed 2019-02-21
10-Q 2018-09-30 Filed 2018-11-02
10-Q 2018-06-30 Filed 2018-08-02
10-Q 2018-03-31 Filed 2018-05-04
10-K 2017-12-31 Filed 2018-02-21
10-Q 2017-09-30 Filed 2017-11-03
10-Q 2017-06-30 Filed 2017-08-04
10-Q 2017-03-31 Filed 2017-05-04
10-K 2016-12-31 Filed 2017-02-23
10-Q 2016-09-30 Filed 2016-11-02
10-Q 2016-06-30 Filed 2016-08-03
10-Q 2016-03-31 Filed 2016-05-04
10-K 2015-12-31 Filed 2016-02-24
10-Q 2015-09-30 Filed 2015-10-28
10-Q 2015-06-30 Filed 2015-07-29
10-Q 2015-03-31 Filed 2015-05-06
10-K 2014-12-31 Filed 2015-02-25
10-Q 2014-09-30 Filed 2014-10-29
10-Q 2014-06-30 Filed 2014-07-30
10-Q 2014-03-31 Filed 2014-04-30
10-K 2013-12-31 Filed 2014-02-19
10-Q 2013-09-30 Filed 2013-10-30
10-Q 2013-06-30 Filed 2013-07-31
10-Q 2013-03-31 Filed 2013-05-01
10-K 2012-12-31 Filed 2013-02-21
10-Q 2012-09-30 Filed 2012-11-01
10-Q 2012-06-30 Filed 2012-08-03
10-Q 2012-03-31 Filed 2012-05-03
10-K 2011-12-31 Filed 2012-02-23
10-Q 2011-09-30 Filed 2011-11-02
10-Q 2011-06-30 Filed 2011-08-03
10-Q 2011-03-31 Filed 2011-05-03
10-K 2010-12-31 Filed 2011-02-25
10-Q 2010-09-30 Filed 2010-11-03
10-Q 2010-06-30 Filed 2010-08-03
10-Q 2010-03-31 Filed 2010-05-04
10-K 2009-12-31 Filed 2010-02-24
8-K 2020-06-17
8-K 2020-06-15
8-K 2020-06-08
8-K 2020-06-01
8-K 2020-05-28
8-K 2020-05-27
8-K 2020-05-13
8-K 2020-05-05
8-K 2020-04-29
8-K 2020-04-29
8-K 2020-04-09
8-K 2020-02-19
8-K 2019-10-31
8-K 2019-09-19
8-K 2019-09-10
8-K 2019-08-16
8-K 2019-08-01
8-K 2019-07-18
8-K 2019-06-18
8-K 2019-06-03
8-K 2019-05-01
8-K 2019-04-18
8-K 2019-04-17
8-K 2019-03-21
8-K 2019-02-20
8-K 2019-02-04
8-K 2018-11-19
8-K 2018-11-01
8-K 2018-10-18
8-K 2018-10-06
8-K 2018-09-28
8-K 2018-09-12
8-K 2018-09-07
8-K 2018-08-17
8-K 2018-08-06
8-K 2018-08-06
8-K 2018-08-01
8-K 2018-07-19
8-K 2018-06-25
8-K 2018-06-15
8-K 2018-05-30
8-K 2018-05-22
8-K 2018-05-21
8-K 2018-05-03
8-K 2018-04-17
8-K 2018-03-26
8-K 2018-02-21
8-K 2018-01-08

SM 10Q Quarterly Report

Part I. Financial Information
Item 1. Financial Statements
Note 1 - Summary of Significant Accounting Policies
Note 2 - Revenue From Contracts with Customers
Note 3 - Divestitures, Assets Held for Sale, and Acquisitions
Note 4 - Income Taxes
Note 5 - Long - Term Debt
Note 6 - Commitments and Contingencies
Note 7 - Compensation Plans
Note 8 - Pension Benefits
Note 9 - Earnings per Share
Note 10 - Derivative Financial Instruments
Note 11 - Fair Value Measurements
Note 12 - Leases
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 6. Exhibits
EX-10.1 exhibit1013rdamendment.htm
EX-31.1 exhibit311certificationjot.htm
EX-31.2 exhibit312certificationwpu.htm
EX-32.1 exhibit321906certification.htm

SM Energy Earnings 2020-03-31

Balance SheetIncome StatementCash Flow
10.08.06.04.02.00.02012201420172020
Assets, Equity
0.80.60.30.1-0.2-0.42012201420172020
Rev, G Profit, Net Income
0.90.4-0.1-0.6-1.1-1.62012201420172020
Ops, Inv, Fin

Document
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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 March 31, 2020

OR

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ___________ to ___________

Commission File Number 001-31539
smenergylogohorizontalaa08.jpg
SM ENERGY COMPANY
(Exact name of registrant as specified in its charter)
 
Delaware
 
41-0518430
 
 
(State or other jurisdiction of incorporation or organization)
 
(I.R.S. Employer Identification No.)
 
 
1775 Sherman Street, Suite 1200,
Denver,
Colorado
 
80203
 
 
(Address of principal executive offices)
 
(Zip Code)
 
(303) 861-8140
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
 
Trading symbol(s)
 
Name of each exchange on which registered
Common stock, $0.01 par value
 
SM
 
New York Stock Exchange
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, a 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). Yes No
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
As of April 22, 2020, the registrant had 112,988,682 shares of common stock outstanding.



1


TABLE OF CONTENTS

Item
 
 
Page
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 


2


Cautionary Information about Forward-Looking Statements
This Report on Form 10-Q (“Form 10-Q”) contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). All statements, other than statements of historical facts, included in this report that address activities, events, or developments with respect to our financial condition, results of operations, business prospects or economic performance that we expect, believe, or anticipate will or may occur in the future, or that address plans and objectives of management for future operations, are forward-looking statements. The words “anticipate,” “assume,” “believe,” “budget,” “could,” “estimate,” “expect,” “forecast,” “intend,” “pending,” “plan,” “potential,” “project,” “target,” “will,” and similar expressions are intended to identify forward-looking statements. Forward-looking statements appear throughout this report, and include statements about such matters as:
the impacts of the competition between Russia and Saudi Arabia for crude oil market share and the global COVID-19 pandemic on us, our financial condition, results of operations, future operations, business prospects, capital and financial resources, ability to service our debt, ability to access the capital markets, and our plans to address the foregoing;
the amount and nature of future capital expenditures and the availability of liquidity and capital resources to fund capital expenditures;
the expected total production volumes for the fiscal year 2020;
any changes to the borrowing base or aggregate lender commitments under our Sixth Amended and Restated Credit Agreement, as amended (“Credit Agreement”);
our outlook on future crude oil, natural gas, and natural gas liquids (also respectively referred to as “oil,” “gas,” and “NGLs” throughout this report) prices, well costs, service costs, lease operating costs, and general and administrative costs;
the drilling of wells and other exploration and development activities, the ability to obtain permits and governmental approvals, and plans by us, our joint development partners, and/or other third-party operators;
possible or expected acquisitions and divestitures, including the possible divestiture or farm-down of, or joint venture relating to, certain properties;
oil, gas, and NGL reserve estimates and the estimates of both future net revenues and the present value of future net revenues associated with those reserve estimates;
future oil, gas, and NGL production estimates, identified drilling locations, as well as drilling prospects, inventories, projects and programs;
cash flows, anticipated liquidity, interest and related debt service expenses, changes in our effective tax rate, and the future repayment of debt;
business strategies and other plans and objectives for future operations, including plans for expansion and growth of operations or to defer capital investment, plans with respect to future dividend payments, and our outlook on our future financial condition or results of operations;
plans, objectives, expectations and intentions; and
other similar matters, such as those discussed in Management’s Discussion and Analysis of Financial Condition and Results of Operations in Part I, Item 2 of this report.
Our forward-looking statements are based on assumptions and analyses made by us in light of our experience and our perception of historical trends, current conditions, expected future developments, and other factors that we believe are appropriate under the circumstances. These statements are subject to known and unknown risks and uncertainties, which may cause our actual results and performance to be materially different from any future results or performance expressed or implied by the forward-looking statements. Factors that may cause our financial condition, results of operations, business prospects or economic performance to differ from expectations include the factors discussed in the Risk Factors section in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2019 (“2019 Form 10-K”) and in the Risk Factors section in Part II, Item 1A of this report.
We caution you that forward-looking statements are not guarantees of future performance and actual results or performance may be materially different from those expressed or implied in forward-looking statements. The forward-looking statements in this report speak only as of the filing of this report. Although we may from time to time voluntarily update our prior forward-looking statements, we disclaim any commitment to do so except as required by applicable securities laws.


3


PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
SM ENERGY COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(in thousands, except share data)
 
March 31,
2020
 
December 31,
2019
ASSETS
 
 
 
Current assets:
 
 
 
Cash and cash equivalents
$
15

 
$
10

Accounts receivable
143,311

 
184,732

Derivative assets
463,992

 
55,184

Prepaid expenses and other
17,842

 
12,708

Total current assets
625,160

 
252,634

Property and equipment (successful efforts method):
 
 
 
Proved oil and gas properties
8,043,156

 
8,934,020

Accumulated depletion, depreciation, and amortization
(4,389,103
)
 
(4,177,876
)
Unproved oil and gas properties
972,844

 
1,005,887

Wells in progress
224,509

 
118,769

Other property and equipment, net of accumulated depreciation of $64,815 and $64,032, respectively
36,932

 
72,848

Total property and equipment, net
4,888,338

 
5,953,648

Noncurrent assets:
 
 
 
Derivative assets
44,909

 
20,624

Other noncurrent assets
56,618

 
65,326

Total noncurrent assets
101,527

 
85,950

Total assets
$
5,615,025

 
$
6,292,232

LIABILITIES AND STOCKHOLDERS' EQUITY
 
 
 
Current liabilities:
 
 
 
Accounts payable and accrued expenses
$
359,406

 
$
402,008

Derivative liabilities
8,277

 
50,846

Other current liabilities
15,780

 
19,189

Total current liabilities
383,463

 
472,043

Noncurrent liabilities:
 
 
 
Revolving credit facility
72,000

 
122,500

Senior Notes, net of unamortized deferred financing costs
2,413,663

 
2,453,035

Senior Convertible Notes, net of unamortized discount and deferred financing costs
159,721

 
157,263

Asset retirement obligations
85,267

 
84,134

Deferred income taxes
93,918

 
189,386

Derivative liabilities
7,202

 
3,444

Other noncurrent liabilities
58,074

 
61,433

Total noncurrent liabilities
2,889,845

 
3,071,195

 
 
 
 
Commitments and contingencies (note 6)


 


 
 
 
 
Stockholders’ equity:
 
 
 
Common stock, $0.01 par value - authorized: 200,000,000 shares; issued and outstanding: 112,988,682 and 112,987,952 shares, respectively
1,130

 
1,130

Additional paid-in capital
1,797,154

 
1,791,596

Retained earnings
554,562

 
967,587

Accumulated other comprehensive loss
(11,129
)
 
(11,319
)
Total stockholders’ equity
2,341,717

 
2,748,994

Total liabilities and stockholders’ equity
$
5,615,025

 
$
6,292,232


The accompanying notes are an integral part of these condensed consolidated financial statements.

4


SM ENERGY COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(in thousands, except per share data)
 
For the Three Months Ended
March 31,
 
2020
 
2019
Operating revenues and other income:
 
 
 
Oil, gas, and NGL production revenue
$
354,233

 
$
340,476

Net gain on divestiture activity

 
61

Other operating revenues
1,501

 
393

Total operating revenues and other income
355,734


340,930

Operating expenses:





Oil, gas, and NGL production expense
119,552

 
121,305

Depletion, depreciation, amortization, and asset retirement obligation liability accretion
233,489

 
177,746

Exploration
11,349

 
11,348

Impairment
989,763

 
6,338

General and administrative
27,447

 
32,086

Net derivative (gain) loss
(545,340
)
 
177,081

Other operating expenses, net
566

 
335

Total operating expenses
836,826


526,239

Loss from operations
(481,092
)

(185,309
)
Interest expense
(41,512
)
 
(37,980
)
Gain on extinguishment of debt
12,195

 

Other non-operating expense, net
(494
)
 
(317
)
Loss before income taxes
(510,903
)

(223,606
)
Income tax benefit
99,008

 
46,038

Net loss
$
(411,895
)

$
(177,568
)
 





Basic weighted-average common shares outstanding
113,009

 
112,252

Diluted weighted-average common shares outstanding
113,009

 
112,252

Basic net loss per common share
$
(3.64
)
 
$
(1.58
)
Diluted net loss per common share
$
(3.64
)
 
$
(1.58
)
Dividends per common share
$
0.01

 
$
0.05

The accompanying notes are an integral part of these condensed consolidated financial statements.

5


SM ENERGY COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (UNAUDITED)
(in thousands)
 
For the Three Months Ended
March 31,
 
2020
 
2019
Net loss
$
(411,895
)
 
$
(177,568
)
Other comprehensive income, net of tax:
 
 
 
Pension liability adjustment
190

 
263

Total other comprehensive income, net of tax
190

 
263

Total comprehensive loss
$
(411,705
)
 
$
(177,305
)

The accompanying notes are an integral part of these condensed consolidated financial statements.

6


SM ENERGY COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (UNAUDITED)
(in thousands, except share data and dividends per share)
 
 
 
Additional Paid-in Capital
 
 
 
Accumulated Other Comprehensive Loss
 
Total Stockholders’ Equity
 
Common Stock
 
 
Retained Earnings
 
 
 
Shares
 
Amount
 
 
 
 
Balances, December 31, 2019
112,987,952

 
$
1,130

 
$
1,791,596

 
$
967,587

 
$
(11,319
)
 
$
2,748,994

Net loss

 

 

 
(411,895
)
 

 
(411,895
)
Other comprehensive income

 

 

 

 
190

 
190

Cash dividends declared, $0.01 per share

 

 

 
(1,130
)
 

 
(1,130
)
Issuance of common stock upon vesting of RSUs, net of shares used for tax withholdings
730

 

 
(3
)
 

 

 
(3
)
Stock-based compensation expense

 

 
5,561

 

 

 
5,561

Balances, March 31, 2020
112,988,682

 
$
1,130

 
$
1,797,154

 
$
554,562

 
$
(11,129
)
 
$
2,341,717


 
 
 
Additional Paid-in Capital
 
 
 
Accumulated Other Comprehensive Loss
 
Total Stockholders’ Equity
 
Common Stock
 
 
Retained Earnings
 
 
 
Shares
 
Amount
 
 
 
 
Balances, December 31, 2018
112,241,966

 
$
1,122

 
$
1,765,738

 
$
1,165,842

 
$
(12,380
)
 
$
2,920,322

Net loss

 

 

 
(177,568
)
 

 
(177,568
)
Other comprehensive income

 

 

 

 
263

 
263

Cash dividends declared, $0.05 per share

 

 

 
(5,612
)
 

 
(5,612
)
Issuance of common stock upon vesting of RSUs, net of shares used for tax withholdings
2,579

 

 
(18
)
 

 

 
(18
)
Stock-based compensation expense

 

 
5,838

 

 

 
5,838

Balances, March 31, 2019
112,244,545

 
$
1,122

 
$
1,771,558

 
$
982,662

 
$
(12,117
)
 
$
2,743,225


The accompanying notes are an integral part of these condensed consolidated financial statements.

7


SM ENERGY COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(in thousands)
 
For the Three Months Ended
March 31,
 
2020
 
2019
Cash flows from operating activities:
 
 
 
Net loss
$
(411,895
)
 
$
(177,568
)
Adjustments to reconcile net loss to net cash provided by operating activities
 
 
 
Net gain on divestiture activity

 
(61
)
Depletion, depreciation, amortization, and asset retirement obligation liability accretion
233,489

 
177,746

Impairment
989,763

 
6,338

Stock-based compensation expense
5,561

 
5,838

Net derivative (gain) loss
(545,340
)
 
177,081

Derivative settlement gain (loss)
73,437

 
(4,969
)
Amortization of debt discount and deferred financing costs
3,992

 
3,789

Gain on extinguishment of debt
(12,195
)
 

Deferred income taxes
(99,347
)
 
(47,003
)
Other, net
(816
)
 
(2,530
)
Net change in working capital
(18,517
)
 
(20,159
)
Net cash provided by operating activities
218,132

 
118,502

 
 
 
 
Cash flows from investing activities:
 
 
 
Net proceeds from the sale of oil and gas properties

 
6,114

Capital expenditures
(139,306
)
 
(249,340
)
Other, net

 
291

Net cash used in investing activities
(139,306
)
 
(242,935
)
 
 
 
 
Cash flows from financing activities:
 
 
 
Proceeds from revolving credit facility
425,500

 
172,000

Repayment of revolving credit facility
(476,000
)
 
(125,500
)
Cash paid to repurchase 6.125% Senior Notes due 2022
(28,318
)
 

Other, net
(3
)
 
(18
)
Net cash provided by (used in) financing activities
(78,821
)
 
46,482

 
 
 
 
Net change in cash, cash equivalents, and restricted cash
5

 
(77,951
)
Cash, cash equivalents, and restricted cash at beginning of period
10

 
77,965

Cash, cash equivalents, and restricted cash at end of period
$
15

 
$
14

 
 
 
 
Supplemental schedule of additional cash flow information and non-cash activities:
 
 
 
 
 
 
 
Operating activities:
 
 
 
Cash paid for interest, net of capitalized interest
$
(47,469
)
 
$
(39,957
)
 
 
 
 
Investing activities:
 
 
 
Increase in capital expenditure accruals and other
$
16,802

 
$
62,185

 
 
 
 
Supplemental non-cash investing activities:
 
 
 
Carrying value of properties exchanged
$

 
$
65,788


The accompanying notes are an integral part of these condensed consolidated financial statements.

8


SM ENERGY COMPANY AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
Note 1 - Summary of Significant Accounting Policies
Description of Operations
SM Energy Company, together with its consolidated subsidiaries (“SM Energy” or the “Company”), is an independent energy company engaged in the acquisition, exploration, development, and production of oil, gas, and NGLs in the State of Texas.
Basis of Presentation
The accompanying unaudited condensed consolidated financial statements include the accounts of the Company and have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information, the instructions to Quarterly Report on Form 10-Q, and Regulation S-X. These financial statements do not include all information and notes required by GAAP for annual financial statements. However, except as disclosed herein, there has been no material change in the information disclosed in the notes to the consolidated financial statements included in the 2019 Form 10-K. In the opinion of management, all adjustments, consisting of normal recurring adjustments considered necessary for a fair presentation of interim financial information, have been included. Operating results for the periods presented are not necessarily indicative of expected results for the full year. In connection with the preparation of the Company’s unaudited condensed consolidated financial statements, the Company evaluated events subsequent to the balance sheet date of March 31, 2020, and through the filing of this report. Additionally, certain prior period amounts have been reclassified to conform to current period presentation in the accompanying unaudited condensed consolidated financial statements.
Significant Accounting Policies
The significant accounting policies followed by the Company are set forth in Note 1 - Summary of Significant Accounting Policies in the 2019 Form 10-K and are supplemented by the notes to the unaudited condensed consolidated financial statements included in this report. These unaudited condensed consolidated financial statements should be read in conjunction with the 2019 Form 10-K.
Recently Issued Accounting Standards
In December 2019, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes (“ASU 2019-12”). ASU 2019-12 was issued to reduce the complexity of accounting for income taxes for those entities that fall within the scope of the accounting standard. The guidance is to be applied using a prospective method, excluding amendments related to franchise taxes, which should be applied on either a retrospective basis for all periods presented or a modified retrospective basis through a cumulative-effect adjustment to retained earnings as of the beginning of the fiscal year of adoption. ASU 2019-12 is effective for fiscal years beginning after December 15, 2020, with early adoption permitted. The Company early adopted ASU 2019-12 on January 1, 2020, and there was no material impact on the Company’s unaudited condensed consolidated financial statements or disclosures upon adoption.
In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting (“ASU 2020-04”). ASU 2020-04 was issued to provide optional guidance for a limited period of time to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform on financial reporting. Generally, the guidance is to be applied as of any date from the beginning of an interim period that includes or is subsequent to March 12, 2020, or prospectively from a date within an interim period that includes or is subsequent to March 12, 2020, up to the date that the financial statements are available to be issued. ASU 2020-04 is effective for all entities as of March 12, 2020 through December 31, 2022. The Company is evaluating the options provided by ASU 2020-04. Please refer to Note 5 - Long-Term Debt for discussion of the use of the London Interbank Offered Rate (“LIBOR”) in connection with borrowings under the Credit Agreement.
As disclosed in the 2019 Form 10-K, the Company adopted ASU No. 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, and ASU No. 2018-15, Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract on January 1, 2020. As expected, there was no material impact on the Company’s unaudited condensed consolidated financial statements or disclosures upon adoption of these ASUs.
There are no ASUs that would have a material effect on the Company’s unaudited condensed consolidated financial statements and related disclosures that have been issued but not yet adopted by the Company as of March 31, 2020, and through the filing of this report.

9


Note 2 - Revenue from Contracts with Customers
The Company recognizes its share of revenue from the sale of produced oil, gas, and NGLs from its Midland Basin and South Texas assets. Oil, gas, and NGL production revenue presented within the accompanying unaudited condensed consolidated statements of operations (“accompanying statements of operations”) is reflective of the revenue generated from contracts with customers.
The table below presents oil, gas, and NGL production revenue by product type for each of the Company’s operating regions for the three months ended March 31, 2020, and 2019:
 
Midland Basin
 
South Texas
 
Total
 
Three Months Ended March 31,
 
Three Months Ended March 31,
 
Three Months Ended March 31,
 
2020
 
2019
 
2020
 
2019
 
2020
 
2019
 
(in thousands)
Oil production revenue
$
276,136

 
$
225,247

 
$
15,557

 
$
13,814

 
$
291,693

 
$
239,061

Gas production revenue
11,334

 
15,592

 
29,376

 
49,521

 
40,710

 
65,113

NGL production revenue
58

 
21

 
21,772

 
36,281

 
21,830

 
36,302

Total
$
287,528

 
$
240,860

 
$
66,705

 
$
99,616

 
$
354,233

 
$
340,476

Relative percentage
81
%
 
71
%
 
19
%
 
29
%
 
100
%
 
100
%
____________________________________________
Note: Amounts may not calculate due to rounding.
The Company recognizes oil, gas, and NGL production revenue at the point in time when custody and title (“control”) of the product transfers to the purchaser, which differs depending on the applicable contractual terms. Transfer of control drives the presentation of transportation, gathering, processing, and other post-production expenses (“fees and other deductions”) within the accompanying statements of operations. Fees and other deductions incurred by the Company prior to control transfer are recorded within the oil, gas, and NGL production expense line item on the accompanying statements of operations. When control is transferred at or near the wellhead, sales are based on a wellhead market price that is impacted by fees and other deductions incurred by the purchaser subsequent to the transfer of control. Please refer to Note 2 - Revenue from Contracts with Customers in the 2019 Form 10-K for more information regarding the types of contracts under which oil, gas, and NGL production revenue is generated.
Significant judgments made in applying the guidance in Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers, relate to the point in time when control transfers to purchasers in gas processing arrangements with midstream processors. The Company does not believe that significant judgments are required with respect to the determination of the transaction price, including amounts that represent variable consideration, as volume and price carry a low level of estimation uncertainty given the precision of volumetric measurements and the use of index pricing with generally predictable differentials. Accordingly, the Company does not consider estimates of variable consideration to be constrained.
The Company’s performance obligations arise upon the production of hydrocarbons from wells in which the Company has an ownership interest. The performance obligations are considered satisfied upon control transferring to a purchaser at the wellhead, inlet, or tailgate of the midstream processor’s processing facility, or other contractually specified delivery point. The time period between production and satisfaction of performance obligations is generally less than one day; thus, there are no material unsatisfied or partially unsatisfied performance obligations at the end of the reporting period.
Revenue is recorded in the month when performance obligations are satisfied. However, settlement statements from the purchasers of hydrocarbons and the related cash consideration are received 30 to 90 days after production has occurred. As a result, the Company must estimate the amount of production delivered to the customer and the consideration that will ultimately be received for sale of the product. Estimated revenue due to the Company is recorded within the accounts receivable line item on the accompanying unaudited condensed consolidated balance sheets (“accompanying balance sheets”) until payment is received. The accounts receivable balances from contracts with customers within the accompanying balance sheets as of March 31, 2020, and December 31, 2019, were $62.0 million and $146.3 million, respectively. To estimate accounts receivable from contracts with customers, the Company uses knowledge of its properties, historical performance, contractual arrangements, index pricing, quality and transportation differentials, and other factors as the basis for these estimates. Differences between estimates and actual amounts received for product sales are recorded in the month that payment is received from the purchaser.
Note 3 - Divestitures, Assets Held for Sale, and Acquisitions
Divestitures
No material divestitures occurred during the first quarters of 2020 and 2019, and there were no assets classified as held for sale as of March 31, 2020, or December 31, 2019.

10


Acquisitions
No material acquisitions or acreage trades of oil and gas properties occurred during the first quarter of 2020. During the first quarter of 2019, the Company completed several non-monetary acreage trades of primarily undeveloped properties located in Howard, Martin, and Midland Counties, Texas, resulting in the exchange of approximately 2,000 net acres, with $65.8 million of carrying value attributed to the properties transferred by the Company. These trades were recorded at carryover basis with no gain or loss recognized.
Note 4 - Income Taxes
The provision for income taxes for the three months ended March 31, 2020, and 2019, consisted of the following:
 
For the Three Months Ended March 31,
 
2020
 
2019
 
(in thousands)
Current portion of income tax (expense) benefit:
 
 
 
Federal
$

 
$

State
(339
)
 
(965
)
Deferred portion of income tax benefit
99,347

 
47,003

Income tax benefit
$
99,008

 
$
46,038

Effective tax rate
19.4
%
 
20.6
%

Recorded income tax expense or benefit differs from the amounts that would be provided by applying the statutory United States federal income tax rate to income or loss before income taxes. These differences primarily relate to the effect of state income taxes, excess tax benefits and deficiencies from stock-based compensation awards, tax limitations on the compensation of covered individuals, changes in valuation allowances, and the cumulative impact of other smaller permanent differences. The quarterly rate can also be affected by the proportional impacts of forecasted net income or loss for each period presented, as reflected in the table above.
A change in the Company’s effective tax rate between reporting periods will generally reflect differences in estimating permanent differences compared to changes in forecasted net income or loss. Each quarter, the Company evaluates its deferred tax assets for potential realization, weighing both positive and negative evidence to determine, on a more likely than not basis, the future utilization by asset and jurisdiction. When the significance of negative evidence outweighs the Company’s positive support of realization, a valuation allowance is recorded.
The Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) was enacted on March 27, 2020. The primary feature of the CARES Act that the Company will benefit from is the acceleration of its refundable Alternative Minimum Tax (“AMT”) credits. On April 1, 2020, the Company filed an election to accelerate its remaining refundable AMT credits of $7.6 million that are expected to be received during the second quarter of 2020.
For all years before 2015, the Company is generally no longer subject to United States federal or state income tax examinations by tax authorities.
Note 5 - Long-Term Debt
Credit Agreement
On April 29, 2020, the Company and its lenders entered into the Third Amendment to the Credit Agreement (“Third Amendment”). The Company’s Credit Agreement provides for a senior secured revolving credit facility with a maximum loan amount of $2.5 billion. Also on April 29, 2020, as a result of the regular semi-annual borrowing base redetermination, the borrowing base and aggregate lender commitments were both reduced to $1.1 billion due to a decrease in the value of proved reserves driven by decreased commodity pricing. The Third Amendment permits the Company to incur second lien debt of up to $900.0 million (“Permitted Lien Debt”) prior to the next scheduled redetermination date of October 1, 2020, provided that all principal amounts of such debt are used to redeem unsecured senior debt of the Company for less than or equal to par value. Additionally, the Third Amendment reduces the limit on the amount of dividends that the Company may declare and pay on an annual basis from $50.0 million to $12.0 million. The Third Amendment also amends certain other covenants of the Company in the Credit Agreement.
The Credit Agreement is scheduled to mature on September 28, 2023, except that, pursuant to the Third Amendment, upon the Company’s incurrence of Permitted Lien Debt to redeem the 6.125% Senior Notes due 2022 (“2022 Senior Notes”), the maturity date under the Credit Agreement will be July 2, 2023. Without regard to which maturity date is in effect, the maturity date could occur earlier on August 16, 2022, if the Company has not completed certain repurchase, redemption, or refinancing activities associated with its 2022 Senior Notes, and does not have certain unused availability for borrowing under the Credit Agreement, as outlined in the Credit

11


Agreement and the Third Amendment. The Company must comply with certain financial and non-financial covenants under the terms of the Credit Agreement and was in compliance with all such covenants as of March 31, 2020, and through the filing of this report.
Interest and commitment fees associated with the revolving credit facility are accrued based on a borrowing base utilization grid set forth in the Credit Agreement. The borrowing base utilization grid was amended by the Third Amendment as presented in the table below. Please refer to Note 5 - Long-Term Debt in the 2019 Form 10-K for the utilization grid in effect prior to the Third Amendment. At the Company’s election, borrowings under the Credit Agreement may be in the form of Eurodollar, Alternate Base Rate (“ABR”), or Swingline loans. Eurodollar loans accrue interest at LIBOR, plus the applicable margin from the utilization grid, and ABR and Swingline loans accrue interest at a market-based floating rate, plus the applicable margin from the utilization grid. Commitment fees are accrued on the unused portion of the aggregate lender commitment amount at rates from the utilization grid and are included in the interest expense line item on the accompanying statements of operations. Please refer to Note 5 - Long-Term Debt in the 2019 Form 10-K for additional detail on the terms of the Company’s Credit Agreement.
Borrowing Base Utilization Percentage
<25%
 
≥25% <50%
 
≥50% <75%
 
≥75% <90%
 
≥90%
Eurodollar Loans (1)
1.750
%
 
2.000
%
 
2.500
%
 
2.750
%
 
3.000
%
ABR Loans or Swingline Loans
0.750
%
 
1.000
%
 
1.500
%
 
1.750
%
 
2.000
%
Commitment Fee Rate
0.375
%
 
0.375
%
 
0.500
%
 
0.500
%
 
0.500
%
____________________________________________
(1) 
The Credit Agreement specifies that in the event that LIBOR is no longer a widely used benchmark rate, or that it is no longer used for determining interest rates for loans in the United States, a replacement interest rate that fairly reflects the cost to the lenders of funding loans shall be established by the Administrative Agent, as defined in the Credit Agreement, in consultation with the Company. Please refer to Note 1 - Summary of Significant Accounting Policies for discussion of FASB ASU 2020-04, which provides guidance related to reference rate reform.
The following table presents the outstanding balance, total amount of letters of credit outstanding, and available borrowing capacity under the Credit Agreement as of filing on April 29, 2020, March 31, 2020, and December 31, 2019:
 
As of filing on April 29, 2020
 
As of March 31, 2020
 
As of December 31, 2019
 
(in thousands)
Revolving credit facility (1)
$
93,500

 
$
72,000

 
$
122,500

Letters of credit

 

 

Available borrowing capacity
1,006,500

 
1,128,000

 
1,077,500

Total aggregate lender commitment amount
$
1,100,000

 
$
1,200,000

 
$
1,200,000

____________________________________________
(1) 
Unamortized deferred financing costs attributable to the revolving credit facility are presented as a component of the other noncurrent assets line item on the accompanying balance sheets and totaled $5.5 million and $5.9 million as of March 31, 2020, and December 31, 2019, respectively. These costs are being amortized over the term of the revolving credit facility on a straight-line basis.
Senior Notes
The Senior Notes, net of unamortized deferred financing costs line item on the accompanying balance sheets as of March 31, 2020, and December 31, 2019, consisted of the following:
 
As of March 31, 2020
 
As of December 31, 2019
 
Principal Amount
 
Unamortized Deferred Financing Costs
 
Principal Amount, Net of Unamortized Deferred Financing Costs
 
Principal Amount
 
Unamortized Deferred Financing Costs
 
Principal Amount, Net of Unamortized Deferred Financing Costs
 
(in thousands)
6.125% Senior Notes due 2022
$
436,047

 
$
2,442

 
$
433,605

 
$
476,796

 
$
2,920

 
$
473,876

5.0% Senior Notes due 2024
500,000

 
3,535

 
496,465

 
500,000

 
3,766

 
496,234

5.625% Senior Notes due 2025
500,000

 
4,677

 
495,323

 
500,000

 
4,903

 
495,097

6.75% Senior Notes due 2026
500,000

 
5,362

 
494,638

 
500,000

 
5,571

 
494,429

6.625% Senior Notes due 2027
500,000

 
6,368

 
493,632

 
500,000

 
6,601

 
493,399

Total
$
2,436,047

 
$
22,384

 
$
2,413,663

 
$
2,476,796

 
$
23,761

 
$
2,453,035


The senior notes listed above (collectively referred to as the “Senior Notes”) are unsecured senior obligations and rank equal in right of payment with all of the Company’s existing and any future unsecured senior debt and are senior in right of payment to any

12


future subordinated debt. There are no subsidiary guarantors of any of the Senior Notes. The Company is subject to certain covenants under the indentures governing the Senior Notes and was in compliance with all covenants as of March 31, 2020, and through the filing of this report. The Company may redeem some or all of its Senior Notes prior to their maturity at redemption prices based on a premium, plus accrued and unpaid interest as described in the indentures governing the Senior Notes. Please refer to Note 5 - Long-Term Debt in the 2019 Form 10-K for additional detail on the Company’s Senior Notes.
During the first quarter of 2020, the Company repurchased a total of $40.7 million in aggregate principal amount of its 2022 Senior Notes in open market transactions for a total settlement amount, excluding accrued interest, of $28.3 million. In connection with the repurchase, the Company recorded a gain on extinguishment of debt of $12.2 million for the three months ended March 31, 2020. This amount included discounts realized upon repurchase of $12.4 million partially offset by approximately $235,000 of accelerated unamortized deferred financing costs. The Company canceled all repurchased 2022 Senior Notes upon cash settlement.
Senior Convertible Notes
As of March 31, 2020, the Company’s senior convertible notes consisted of $172.5 million in aggregate principal amount of 1.50% Senior Convertible Notes due July 1, 2021 (the “Senior Convertible Notes”). The Senior Convertible Notes are unsecured senior obligations and rank equal in right of payment with all of the Company’s existing and any future unsecured senior debt and are senior in right of payment to any future subordinated debt. Please refer to Note 5 - Long-Term Debt in the 2019 Form 10-K for additional detail on the Company’s Senior Convertible Notes and associated capped call transactions.
The Senior Convertible Notes were not convertible at the option of holders as of March 31, 2020, or through the filing of this report. Notwithstanding the inability to convert, the if-converted value of the Senior Convertible Notes as of March 31, 2020, did not exceed the principal amount. The debt discount and debt-related issuance costs are amortized to the principal value of the Senior Convertible Notes as interest expense through the maturity date of July 1, 2021. Interest expense recognized on the Senior Convertible Notes related to the stated interest rate and amortization of the debt discount totaled $2.9 million and $2.7 million for the three months ended March 31, 2020, and 2019, respectively.
There have been no changes to the initial net carrying amount of the equity component of the Senior Convertible Notes recorded in additional paid-in capital on the accompanying balance sheets since issuance. The Senior Convertible Notes, net of unamortized discount and deferred financing costs line on the accompanying balance sheets as of March 31, 2020, and December 31, 2019, consisted of the following:
 
As of March 31, 2020
 
As of December 31, 2019
 
(in thousands)
Principal amount of Senior Convertible Notes
$
172,500

 
$
172,500

Unamortized debt discount
(11,633
)
 
(13,861
)
Unamortized deferred financing costs
(1,146
)
 
(1,376
)
Senior Convertible Notes, net of unamortized discount and deferred financing costs
$
159,721

 
$
157,263


The Company is subject to certain covenants under the indenture governing the Senior Convertible Notes and was in compliance with all covenants as of March 31, 2020, and through the filing of this report.
Capitalized Interest
Capitalized interest costs for the three months ended March 31, 2020, and 2019, totaled $2.7 million and $4.9 million, respectively. The amount of interest the Company capitalizes generally fluctuates based on the amount borrowed, the Company’s capital program, and the timing and amount of costs associated with capital projects that are considered in progress. Capitalized interest costs are included in total costs incurred.
Note 6 - Commitments and Contingencies
Commitments
Other than those items discussed below, there have been no changes in commitments through the filing of this report that differ materially from those disclosed in the 2019 Form 10-K. Please refer to Note 6 - Commitments and Contingencies in the 2019 Form 10-K for additional discussion of the Company’s commitments.
Subsequent to March 31, 2020, the Company amended certain of its drilling rig contracts resulting in the reduction of day rates and potential early termination fees and the extension of contract terms. As of the filing of this report, the Company’s drilling rig commitments totaled $22.3 million. If all of these contracts were terminated as of the filing of this report, the Company would avoid a portion of the contractual service commitments; however, the Company would be required to pay $12.9 million in early termination fees. The Company does not expect to incur material penalties with regard to its drilling rig contracts.

13


Subsequent to March 31, 2020, the Company entered into an agreement that included minimum drilling and completion footage requirements on certain existing leases. If these minimum requirements are not satisfied by March 31, 2021, the Company would be required to pay liquidated damages based on the difference between the actual footage drilled and completed and the minimum requirements. The liquidated damages could range from zero to a maximum of $42.0 million, with the maximum exposure assuming no development activity occurred prior to March 31, 2021. As of the filing of this report, the Company expects to meet its obligations under this agreement.
Contingencies
The Company is subject to litigation and claims arising in the ordinary course of business. The Company accrues for such items when a liability is both probable and the amount can be reasonably estimated. In the opinion of management, the anticipated results of any pending litigation and claims are not expected to have a material effect on the results of operations, the financial position, or the cash flows of the Company.
Note 7 - Compensation Plans
Equity Incentive Compensation Plan
As of March 31, 2020, 4.5 million shares of common stock were available for grant under the Company’s Equity Incentive Compensation Plan (“Equity Plan”).
Performance Share Units
The Company grants performance share units (“PSUs”) to eligible employees as part of its Equity Plan. The number of shares of the Company’s common stock issued to settle PSUs ranges from zero to two times the number of PSUs awarded and is determined based on certain performance criteria over a three-year performance period. PSUs generally vest on the third anniversary of the date of the grant or upon other triggering events as set forth in the Equity Plan.
For PSUs granted in 2017, which the Company has determined to be equity awards, the settlement criteria include a combination of the Company’s Total Shareholder Return (“TSR”) on an absolute basis, and the Company’s TSR relative to the TSR of certain peer companies over the associated three-year performance period. The fair value of the PSUs granted in 2017 was measured on the grant date using a stochastic Monte Carlo simulation using geometric Brownian motion (“GBM Model”). As these awards depend entirely on market-based settlement criteria, the associated compensation expense is recognized on a straight-line basis within general and administrative expense and exploration expense over the vesting periods of the respective awards.
For PSUs granted in 2018 and 2019, the settlement criteria include a combination of the Company’s TSR relative to the TSR of certain peer companies and the Company’s cash return on total capital invested (“CRTCI”) relative to the CRTCI of certain peer companies over the associated three-year performance period. In addition to these performance measures, the award agreements for these grants also stipulate that if the Company’s absolute TSR is negative over the three-year performance period, the maximum number of shares of common stock that can be issued to settle outstanding PSUs is capped at one times the number of PSUs granted on the award date, regardless of the Company’s TSR and CRTCI performance relative to its peer group. The fair value of the PSUs granted in 2018 and 2019 was measured on the applicable grant dates using the GBM Model, with the assumption that the associated CRTCI performance condition will be met at the target amount at the end of the respective performance periods. Compensation expense for PSUs granted in 2018 and 2019 is recognized within general and administrative expense and exploration expense over the vesting periods of the respective awards. As these awards depend on a combination of performance-based settlement criteria and market-based settlement criteria, compensation expense may be adjusted in future periods as the number of units expected to vest increases or decreases based on the Company’s expected CRTCI performance relative to the applicable peer companies.
The Company records compensation expense associated with the issuance of PSUs based on the fair value of the awards as of the date of grant. Total compensation expense recorded for PSUs was $2.6 million and $2.8 million for the three months ended March 31, 2020, and 2019, respectively. As of March 31, 2020, there was $12.9 million of total unrecognized compensation expense related to non-vested PSU awards, which is being amortized through 2022. There have been no material changes to the outstanding and non-vested PSUs during the three months ended March 31, 2020.
Employee Restricted Stock Units
The Company grants restricted stock units (“RSUs”) to eligible persons as part of its Equity Plan. Each RSU represents a right to receive one share of the Company’s common stock upon settlement of the award at the end of the specified vesting period. RSUs generally vest one-third of the total grant on each anniversary date of the grant over a three-year vesting period or upon other triggering events as set forth in the Equity Plan.
The Company records compensation expense associated with the issuance of RSUs based on the fair value of the awards as of the date of grant. The fair value of an RSU is equal to the closing price of the Company’s common stock on the day of the grant. Compensation expense for RSUs is recognized within general and administrative expense and exploration expense over the vesting periods of the respective awards. Total compensation expense recorded for employee RSUs was $2.6 million and $2.7 million for the

14


three months ended March 31, 2020, and 2019, respectively. As of March 31, 2020, there was $13.6 million of total unrecognized compensation expense related to non-vested RSU awards, which is being amortized through 2022. There have been no material changes to the outstanding and non-vested RSUs during the three months ended March 31, 2020.
Please refer to Note 7 - Compensation Plans in the 2019 Form 10-K for additional detail on the Company’s Equity Plan.
Note 8 - Pension Benefits
Pension Plans
The Company has a non-contributory defined benefit pension plan covering employees who meet age and service requirements and who began employment with the Company prior to January 1, 2016 (the “Qualified Pension Plan”). The Company also has a supplemental non-contributory pension plan covering certain management employees (the “Nonqualified Pension Plan” and together with the Qualified Pension Plan, the “Pension Plans”). The Company froze the Pension Plans to new participants, effective as of January 1, 2016. Employees participating in the Pension Plans prior to the plans being frozen will continue to earn benefits.
Components of Net Periodic Benefit Cost for the Pension Plans
 
For the Three Months Ended
March 31,
 
2020
 
2019
 
(in thousands)
Components of net periodic benefit cost:
 
 
 
Service cost
$
1,395

 
$
1,683

Interest cost
698

 
656

Expected return on plan assets that reduces periodic pension benefit cost
(393
)
 
(466
)
Amortization of prior service cost
4

 
4

Amortization of net actuarial loss
240

 
332

Net periodic benefit cost
$
1,944

 
$
2,209


Prior service costs are amortized on a straight-line basis over the average remaining service period of active participants. Gains and losses in excess of 10 percent of the greater of the benefit obligation or the market-related value of assets are amortized over the average remaining service period of active participants. The service cost component of net periodic benefit cost for the Pension Plans is presented as an operating expense within the general and administrative and exploration expense line items on the accompanying statements of operations while the other components of net periodic benefit cost for the Pension Plans are presented as non-operating expenses within the other non-operating expense, net line item on the accompanying statements of operations.
Contributions
As of the filing of this report, the Company has contributed $3.3 million to the Qualified Pension Plan in 2020.
Note 9 - Earnings Per Share
Basic net income or loss per common share is calculated by dividing net income or loss available to common stockholders by the basic weighted-average number of common shares outstanding for the respective period. Diluted net income or loss per common share is calculated by dividing net income or loss available to common stockholders by the diluted weighted-average number of common shares outstanding, which includes the effect of potentially dilutive securities. Potentially dilutive securities for this calculation consist primarily of non-vested RSUs, contingent PSUs, and shares into which the Senior Convertible Notes are convertible, which are measured using the treasury stock method. Shares of the Company’s common stock traded at an average closing price below the $40.50 conversion price for the three months ended March 31, 2020, and 2019, therefore, the Senior Convertible Notes had no dilutive impact. Please refer to Note 9 - Earnings Per Share in the 2019 Form 10-K for additional detail on these potentially dilutive securities.
When the Company recognizes a net loss from continuing operations, all potentially dilutive shares are anti-dilutive and are consequently excluded from the calculation of diluted net loss per common share. The following table details the weighted-average anti-dilutive securities for the periods presented:
 
For the Three Months Ended March 31,
 
2020
 
2019
 
(in thousands)
Anti-dilutive
1,219

 
781



15


The following table sets forth the calculations of basic and diluted net loss per common share:
 
For the Three Months Ended March 31,
 
2020
 
2019
 
(in thousands, except per share data)
Net loss
$
(411,895
)
 
$
(177,568
)
 
 
 
 
Basic weighted-average common shares outstanding
113,009

 
112,252

Dilutive effect of non-vested RSUs and contingent PSUs

 

Diluted weighted-average common shares outstanding
113,009

 
112,252

 
 
 
 
Basic net loss per common share
$
(3.64
)
 
$
(1.58
)
Diluted net loss per common share
$
(3.64
)
 
$
(1.58
)

Note 10 - Derivative Financial Instruments
Summary of Oil, Gas, and NGL Derivative Contracts in Place
The Company has entered into various commodity derivative contracts to mitigate a portion of its exposure to potentially adverse market changes in commodity prices and the associated impact on cash flows. As of March 31, 2020, all derivative counterparties were members of the Company’s Credit Agreement lender group and all contracts were entered into for other-than-trading purposes. The Company’s commodity derivative contracts consist of swap and collar arrangements for oil production, and swap arrangements for gas and NGL production. In a typical commodity swap agreement, if the agreed upon published third-party index price (“index price”) is lower than the swap fixed price, the Company receives the difference between the index price and the agreed upon swap fixed price. If the index price is higher than the swap fixed price, the Company pays the difference. For collar arrangements, the Company receives the difference between an agreed upon index price and the floor price if the index price is below the floor price. The Company pays the difference between the agreed upon ceiling price and the index price if the index price is above the ceiling price. No amounts are paid or received if the index price is between the floor and ceiling prices.
The Company has also entered into fixed price oil basis swaps in order to mitigate exposure to adverse pricing differentials between certain industry benchmark prices and the actual physical pricing points where the Company’s production volumes are sold. Currently, the Company has basis swap contracts with fixed price differentials between New York Mercantile Exchange (“NYMEX”) WTI and WTI Midland for a portion of its Midland Basin production with sales contracts that settle at WTI Midland prices. The Company also has basis swaps with fixed price differentials between NYMEX WTI and Intercontinental Exchange Brent Crude (“ICE Brent”) for a portion of its Midland Basin oil production with sales contracts that settle at ICE Brent prices.
As of March 31, 2020, the Company had commodity derivative contracts outstanding through the fourth quarter of 2022 as summarized in the tables below.
Oil Swaps

Contract Period
 
NYMEX WTI Volumes
 
Weighted-Average
 Contract Price
 
 
(MBbl)
 
(per Bbl)
Second quarter 2020
 
2,838

 
$
58.81

Third quarter 2020
 
3,361

 
$
56.43

Fourth quarter 2020
 
4,397

 
$
57.03

2021
 
2,085

 
$
45.70

Total
 
12,681

 
 

16


Oil Collars
Contract Period
 
NYMEX WTI Volumes
 
Weighted-Average Floor Price
 
Weighted-Average Ceiling Price
 
 
(MBbl)
 
(per Bbl)
 
(per Bbl)
Second quarter 2020
 
1,881

 
$
55.00

 
$
62.17

Third quarter 2020
 
1,252

 
$
55.00

 
$
62.90

Fourth quarter 2020
 
610

 
$
55.00

 
$
61.90

2021
 
329

 
$
55.00

 
$
56.70

Total
 
4,072

 
 
 
 
Oil Basis Swaps
Contract Period
 
WTI Midland-NYMEX WTI Volumes
 
Weighted-Average
 Contract Price (1)
 
NYMEX WTI-ICE Brent Volumes