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Share Name | Share Symbol | Market | Type |
---|---|---|---|
SRC Energy Inc | AMEX:SRCI | AMEX | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 4.00 | 0 | 01:00:00 |
|
☒
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
☐
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Colorado
|
20-2835920
|
(State or other jurisdiction of incorporation or organization)
|
(I.R.S. Employer Identification No.)
|
Title of each class
|
|
Trading Symbol(s)
|
|
Name of each exchange on which registered
|
Common stock $.001 par value
|
|
SRCI
|
|
NYSE American
|
Large accelerated filer
|
☒
|
|
Accelerated filer
|
☐
|
|
|
|
|
|
|
|
Non-accelerated filer
|
☐
|
|
Smaller reporting company
|
☐
|
|
|
|
|
|
|
|
|
|
|
Emerging growth company
|
☐
|
|
|
|
|
Page
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Part I - FINANCIAL INFORMATION
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Item 1.
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Financial Statements (unaudited)
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Condensed Consolidated Balance Sheets as of September 30, 2019 and December 31, 2018
|
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|
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Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2019 and 2018
|
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|
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Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2019 and 2018
|
|
|
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|
|
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Condensed Consolidated Statements of Changes in Shareholders’ Equity for the three and nine months ended September 30, 2019 and 2018
|
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Notes to Condensed Consolidated Financial Statements
|
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Item 2.
|
Management's Discussion and Analysis of Financial Condition and Results of Operations
|
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Item 3.
|
Quantitative and Qualitative Disclosures About Market Risk
|
|
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|
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Item 4.
|
Controls and Procedures
|
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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 of Senior Securities
|
|
|
|
|
|
|
Item 4.
|
Mine Safety Disclosures
|
|
|
|
|
|
|
Item 5.
|
Other Information
|
|
|
|
|
|
|
Item 6.
|
Exhibits
|
|
|
|
|
|
|
SIGNATURES
|
|
ASSETS
|
September 30, 2019
|
|
December 31, 2018
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
69,496
|
|
|
$
|
49,609
|
|
Accounts receivable:
|
|
|
|
||||
Oil, natural gas, and NGL sales
|
60,611
|
|
|
100,973
|
|
||
Trade
|
19,698
|
|
|
39,415
|
|
||
Commodity derivative assets
|
15,166
|
|
|
34,906
|
|
||
Other current assets
|
14,616
|
|
|
7,537
|
|
||
Total current assets
|
179,587
|
|
|
232,440
|
|
||
|
|
|
|
||||
Property and equipment:
|
|
|
|
||||
Oil and gas properties, full cost method:
|
|
|
|
||||
Proved properties, net of accumulated depletion
|
1,804,476
|
|
|
1,545,445
|
|
||
Wells in progress
|
200,326
|
|
|
227,262
|
|
||
Unproved properties and land, not subject to depletion
|
666,439
|
|
|
740,453
|
|
||
Oil and gas properties, net
|
2,671,241
|
|
|
2,513,160
|
|
||
Other property and equipment, net
|
4,395
|
|
|
5,540
|
|
||
Total property and equipment, net
|
2,675,636
|
|
|
2,518,700
|
|
||
Commodity derivative assets
|
3,287
|
|
|
—
|
|
||
Other assets
|
9,062
|
|
|
3,574
|
|
||
Total assets
|
$
|
2,867,572
|
|
|
$
|
2,754,714
|
|
|
|
|
|
||||
LIABILITIES AND SHAREHOLDERS' EQUITY
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable and accrued expenses
|
$
|
104,840
|
|
|
$
|
150,010
|
|
Revenue payable
|
94,130
|
|
|
97,030
|
|
||
Production taxes payable
|
92,752
|
|
|
95,099
|
|
||
Asset retirement obligations
|
4,832
|
|
|
11,694
|
|
||
Total current liabilities
|
296,554
|
|
|
353,833
|
|
||
|
|
|
|
||||
Revolving credit facility
|
165,000
|
|
|
195,000
|
|
||
Notes payable, net of issuance costs
|
540,293
|
|
|
539,360
|
|
||
Asset retirement obligations
|
43,802
|
|
|
40,052
|
|
||
Deferred taxes
|
87,279
|
|
|
37,967
|
|
||
Other liabilities
|
3,467
|
|
|
2,210
|
|
||
Total liabilities
|
1,136,395
|
|
|
1,168,422
|
|
||
|
|
|
|
||||
Commitments and contingencies (See Note 15)
|
|
|
|
|
|
||
|
|
|
|
||||
Shareholders' equity:
|
|
|
|
||||
Preferred stock - $0.01 par value, 10,000,000 shares authorized: no shares issued and outstanding
|
—
|
|
|
—
|
|
||
Common stock - $0.001 par value, 400,000,000 shares authorized: 243,511,005 and 242,608,284 shares issued and outstanding as of September 30, 2019 and December 31, 2018, respectively
|
244
|
|
|
243
|
|
||
Additional paid-in capital
|
1,502,977
|
|
|
1,492,107
|
|
||
Retained earnings
|
227,956
|
|
|
93,942
|
|
||
Total shareholders' equity
|
1,731,177
|
|
|
1,586,292
|
|
||
|
|
|
|
||||
Total liabilities and shareholders' equity
|
$
|
2,867,572
|
|
|
$
|
2,754,714
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Oil, natural gas, and NGL revenues
|
$
|
134,094
|
|
|
$
|
160,978
|
|
|
$
|
486,151
|
|
|
$
|
455,298
|
|
|
|
|
|
|
|
|
|
||||||||
Expenses:
|
|
|
|
|
|
|
|
||||||||
Lease operating expenses
|
13,377
|
|
|
10,360
|
|
|
43,967
|
|
|
29,868
|
|
||||
Transportation and gathering
|
4,021
|
|
|
1,994
|
|
|
12,739
|
|
|
5,729
|
|
||||
Production taxes
|
10,843
|
|
|
12,824
|
|
|
31,114
|
|
|
41,325
|
|
||||
Depreciation, depletion, and accretion
|
57,401
|
|
|
45,188
|
|
|
176,346
|
|
|
124,146
|
|
||||
General and administrative
|
16,671
|
|
|
10,685
|
|
|
35,383
|
|
|
29,691
|
|
||||
Total expenses
|
102,313
|
|
|
81,051
|
|
|
299,549
|
|
|
230,759
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Operating income
|
31,781
|
|
|
79,927
|
|
|
186,602
|
|
|
224,539
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Other income (expense):
|
|
|
|
|
|
|
|
||||||||
Commodity derivative gain (loss)
|
10,924
|
|
|
(8,529
|
)
|
|
(3,704
|
)
|
|
(28,604
|
)
|
||||
Interest expense, net of amounts capitalized
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Interest income
|
76
|
|
|
23
|
|
|
237
|
|
|
37
|
|
||||
Other income
|
55
|
|
|
125
|
|
|
191
|
|
|
152
|
|
||||
Total other income (expense)
|
11,055
|
|
|
(8,381
|
)
|
|
(3,276
|
)
|
|
(28,415
|
)
|
||||
|
|
|
|
|
|
|
|
||||||||
Income before income taxes
|
42,836
|
|
|
71,546
|
|
|
183,326
|
|
|
196,124
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Income tax expense
|
13,041
|
|
|
8,918
|
|
|
49,312
|
|
|
18,076
|
|
||||
Net income
|
$
|
29,795
|
|
|
$
|
62,628
|
|
|
$
|
134,014
|
|
|
$
|
178,048
|
|
|
|
|
|
|
|
|
|
||||||||
Net income per common share:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
0.12
|
|
|
$
|
0.26
|
|
|
$
|
0.55
|
|
|
$
|
0.74
|
|
Diluted
|
$
|
0.12
|
|
|
$
|
0.26
|
|
|
$
|
0.55
|
|
|
$
|
0.73
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted-average shares outstanding:
|
|
|
|
|
|
|
|
||||||||
Basic
|
243,479,734
|
|
|
242,536,781
|
|
|
243,392,487
|
|
|
242,184,348
|
|
||||
Diluted
|
244,547,642
|
|
|
243,560,046
|
|
|
244,134,202
|
|
|
243,207,058
|
|
|
Nine Months Ended September 30,
|
||||||
|
2019
|
|
2018
|
||||
Cash flows from operating activities:
|
|
|
|
||||
Net income
|
$
|
134,014
|
|
|
$
|
178,048
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
||||
Depletion, depreciation, and accretion
|
176,346
|
|
|
124,146
|
|
||
Settlement of asset retirement obligations
|
(5,689
|
)
|
|
(5,234
|
)
|
||
Provision for deferred taxes
|
49,312
|
|
|
18,076
|
|
||
Stock-based compensation expense
|
9,914
|
|
|
9,347
|
|
||
Mark-to-market of commodity derivative contracts:
|
|
|
|
||||
Total loss on commodity derivatives contracts
|
3,704
|
|
|
28,604
|
|
||
Cash settlements on commodity derivative contracts
|
13,105
|
|
|
(13,263
|
)
|
||
Cash premiums paid for commodity derivative contracts
|
(1,474
|
)
|
|
—
|
|
||
Changes in operating assets and liabilities
|
50,073
|
|
|
3,830
|
|
||
Net cash provided by operating activities
|
429,305
|
|
|
343,554
|
|
||
|
|
|
|
||||
Cash flows from investing activities:
|
|
|
|
||||
Acquisition of oil and gas properties and leaseholds, net of post-closing adjustments
|
(4,120
|
)
|
|
(129,069
|
)
|
||
Capital expenditures for drilling and completion activities
|
(351,407
|
)
|
|
(331,702
|
)
|
||
Other capital expenditures
|
(33,969
|
)
|
|
(26,439
|
)
|
||
Acquisition of land and other property and equipment
|
(329
|
)
|
|
(2,914
|
)
|
||
Proceeds from sales of oil and gas properties and other
|
12,109
|
|
|
1,233
|
|
||
Net cash used in investing activities
|
(377,716
|
)
|
|
(488,891
|
)
|
||
|
|
|
|
||||
Cash flows from financing activities:
|
|
|
|
||||
Proceeds from the employee exercise of stock options
|
—
|
|
|
4,302
|
|
||
Payment of employee payroll taxes in connection with shares withheld
|
(1,167
|
)
|
|
(1,106
|
)
|
||
Proceeds from the revolving credit facility
|
—
|
|
|
115,000
|
|
||
Principal repayments on the revolving credit facility
|
(30,000
|
)
|
|
—
|
|
||
Fees on debt and equity issuances and revolving credit facility amendments
|
(379
|
)
|
|
(2,173
|
)
|
||
Lease payments
|
(156
|
)
|
|
(222
|
)
|
||
Net cash provided by (used in) financing activities
|
(31,702
|
)
|
|
115,801
|
|
||
|
|
|
|
||||
Net increase (decrease) in cash and cash equivalents
|
19,887
|
|
|
(29,536
|
)
|
||
|
|
|
|
||||
Cash and cash equivalents at beginning of period
|
49,609
|
|
|
48,772
|
|
||
|
|
|
|
||||
Cash and cash equivalents at end of period
|
$
|
69,496
|
|
|
$
|
19,236
|
|
|
Number of Common
Shares |
|
Par Value
Common Stock |
|
Additional
Paid-In Capital |
|
Retained
Earnings (Deficit) |
|
Total Shareholders'
Equity |
|||||||||
Balance, December 31, 2017
|
241,365,522
|
|
|
$
|
241
|
|
|
$
|
1,474,273
|
|
|
$
|
(166,080
|
)
|
|
$
|
1,308,434
|
|
Shares issued under stock bonus and equity incentive plans
|
268,676
|
|
|
1
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
||||
Shares issued for exercise of stock options
|
268,303
|
|
|
—
|
|
|
1,064
|
|
|
—
|
|
|
1,064
|
|
||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
3,395
|
|
|
—
|
|
|
3,395
|
|
||||
Payment of tax withholdings using withheld shares
|
—
|
|
|
—
|
|
|
(705
|
)
|
|
—
|
|
|
(705
|
)
|
||||
Other activity
|
—
|
|
|
—
|
|
|
(73
|
)
|
|
—
|
|
|
(73
|
)
|
||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
65,796
|
|
|
65,796
|
|
||||
Balance, March 31, 2018
|
241,902,501
|
|
|
242
|
|
|
1,477,953
|
|
|
(100,284
|
)
|
|
1,377,911
|
|
||||
Shares issued under stock bonus and equity incentive plans
|
69,420
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Shares issued for exercise of stock options
|
524,159
|
|
|
—
|
|
|
3,127
|
|
|
—
|
|
|
3,127
|
|
||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
3,768
|
|
|
—
|
|
|
3,768
|
|
||||
Payment of tax withholdings using withheld shares
|
—
|
|
|
—
|
|
|
(305
|
)
|
|
—
|
|
|
(305
|
)
|
||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
49,624
|
|
|
49,624
|
|
||||
Balance, June 30, 2018
|
242,496,080
|
|
|
242
|
|
|
1,484,543
|
|
|
(50,660
|
)
|
|
1,434,125
|
|
||||
Shares issued under stock bonus and equity incentive plans
|
58,519
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Shares issued for exercise of stock options
|
17,600
|
|
|
1
|
|
|
111
|
|
|
—
|
|
|
112
|
|
||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
4,030
|
|
|
—
|
|
|
4,030
|
|
||||
Payment of tax withholdings using withheld shares
|
—
|
|
|
—
|
|
|
(96
|
)
|
|
—
|
|
|
(96
|
)
|
||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
62,628
|
|
|
62,628
|
|
||||
Balance, September 30, 2018
|
242,572,199
|
|
|
$
|
243
|
|
|
$
|
1,488,588
|
|
|
$
|
11,968
|
|
|
$
|
1,500,799
|
|
|
Number of Common
Shares |
|
Par Value
Common Stock |
|
Additional
Paid-In Capital |
|
Retained
Earnings |
|
Total Shareholders'
Equity |
|||||||||
Balance, December 31, 2018
|
242,608,284
|
|
|
$
|
243
|
|
|
$
|
1,492,107
|
|
|
$
|
93,942
|
|
|
$
|
1,586,292
|
|
Shares issued under stock bonus and equity incentive plans
|
709,042
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
4,413
|
|
|
—
|
|
|
4,413
|
|
||||
Payment of tax withholdings using withheld shares
|
—
|
|
|
—
|
|
|
(876
|
)
|
|
—
|
|
|
(876
|
)
|
||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
49,751
|
|
|
49,751
|
|
||||
Balance, March 31, 2019
|
243,317,326
|
|
|
243
|
|
|
1,495,644
|
|
|
143,693
|
|
|
1,639,580
|
|
||||
Shares issued under stock bonus and equity incentive plans
|
110,880
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
3,819
|
|
|
—
|
|
|
3,819
|
|
||||
Payment of tax withholdings using withheld shares
|
—
|
|
|
—
|
|
|
(250
|
)
|
|
—
|
|
|
(250
|
)
|
||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
54,468
|
|
|
54,468
|
|
||||
Balance, June 30, 2019
|
243,428,206
|
|
|
243
|
|
|
1,499,213
|
|
|
198,161
|
|
|
1,697,617
|
|
||||
Shares issued under stock bonus and equity incentive plans
|
82,799
|
|
|
1
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
3,806
|
|
|
—
|
|
|
3,806
|
|
||||
Payment of tax withholdings using withheld shares
|
—
|
|
|
—
|
|
|
(41
|
)
|
|
—
|
|
|
(41
|
)
|
||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
29,795
|
|
|
29,795
|
|
||||
Balance, September 30, 2019
|
243,511,005
|
|
|
$
|
244
|
|
|
$
|
1,502,977
|
|
|
$
|
227,956
|
|
|
$
|
1,731,177
|
|
1.
|
Organization and Summary of Significant Accounting Policies
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||
Major Customers
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
Company A
|
|
26%
|
|
14%
|
|
26%
|
|
11%
|
Company B
|
|
14%
|
|
21%
|
|
20%
|
|
19%
|
Company C
|
|
24%
|
|
23%
|
|
17%
|
|
13%
|
Company D
|
|
12%
|
|
14%
|
|
10%
|
|
28%
|
Company E
|
|
*
|
|
14%
|
|
*
|
|
16%
|
|
|
As of
|
|
As of
|
Major Customers
|
|
September 30, 2019
|
|
December 31, 2018
|
Company A
|
|
13%
|
|
15%
|
Company B
|
|
18%
|
|
12%
|
Company C
|
|
*
|
|
13%
|
Company D
|
|
11%
|
|
*
|
Company E
|
|
15%
|
|
12%
|
2.
|
Property and Equipment
|
|
As of
|
|
As of
|
||||
Oil and gas properties, full cost method:
|
September 30, 2019
|
|
December 31, 2018
|
||||
Costs of proved properties:
|
|
|
|
||||
Producing and non-producing
|
$
|
2,817,646
|
|
|
$
|
2,385,958
|
|
Less, accumulated depletion and full cost ceiling impairments
|
(1,013,170
|
)
|
|
(840,513
|
)
|
||
Subtotal, proved properties, net
|
1,804,476
|
|
|
1,545,445
|
|
||
|
|
|
|
||||
Costs of wells in progress
|
200,326
|
|
|
227,262
|
|
||
|
|
|
|
||||
Costs of unproved properties and land, not subject to depletion:
|
|
|
|
||||
Lease acquisition and other costs
|
657,044
|
|
|
731,058
|
|
||
Land
|
9,395
|
|
|
9,395
|
|
||
Subtotal, unproved properties and land
|
666,439
|
|
|
740,453
|
|
||
|
|
|
|
||||
Costs of other property and equipment:
|
|
|
|
||||
Other property and equipment
|
10,060
|
|
|
9,642
|
|
||
Less, accumulated depreciation
|
(5,665
|
)
|
|
(4,102
|
)
|
||
Subtotal, other property and equipment, net
|
4,395
|
|
|
5,540
|
|
||
|
|
|
|
||||
Total property and equipment, net
|
$
|
2,675,636
|
|
|
$
|
2,518,700
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Capitalized overhead
|
$
|
3,485
|
|
|
$
|
3,129
|
|
|
$
|
10,635
|
|
|
$
|
9,522
|
|
3.
|
Depletion, depreciation, and accretion ("DD&A")
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Depletion of oil and gas properties
|
$
|
55,984
|
|
|
$
|
44,230
|
|
|
$
|
172,009
|
|
|
$
|
121,259
|
|
Depreciation and accretion
|
1,417
|
|
|
958
|
|
|
4,337
|
|
|
2,887
|
|
||||
Total DD&A Expense
|
$
|
57,401
|
|
|
$
|
45,188
|
|
|
$
|
176,346
|
|
|
$
|
124,146
|
|
4.
|
Asset Retirement Obligations
|
|
Nine Months Ended September 30, 2019
|
||
Asset retirement obligations, December 31, 2018
|
$
|
51,746
|
|
Obligations incurred with development activities
|
1,616
|
|
|
Accretion expense
|
2,645
|
|
|
Obligations discharged with asset retirements and divestitures
|
(7,373
|
)
|
|
Asset retirement obligation, September 30, 2019
|
$
|
48,634
|
|
Less, current portion
|
(4,832
|
)
|
|
Long-term portion
|
$
|
43,802
|
|
5.
|
Revolving Credit Facility
|
6.
|
Notes Payable
|
7.
|
Commodity Derivative Instruments
|
Settlement Period
|
|
Derivative
Instrument
|
|
Volumes
(Bbls per day)
|
|
Weighted-Average
Floor Price / Fixed Price
|
|
Weighted-Average Ceiling Price
|
|||||
Crude Oil - NYMEX WTI
|
|
|
|
|
|
|
|
|
|||||
Oct 1, 2019 - Dec 31, 2019
|
|
Collar
|
|
16,000
|
|
|
$
|
55.00
|
|
|
$
|
70.65
|
|
Jan 1, 2020 - Dec 31, 2020
|
|
Swap
|
|
8,000
|
|
|
$
|
55.04
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|||||
Settlement Period
|
|
Derivative
Instrument
|
|
Volumes
(MMBtu per day)
|
|
Weighted-Average
Floor Price |
|
Weighted-Average Ceiling Price
|
|||||
Natural Gas - NYMEX Henry Hub
|
|
|
|
|
|
|
|
|
|||||
Oct 1, 2019 - Dec 31, 2019
|
|
Collar
|
|
30,000
|
|
|
$
|
3.00
|
|
|
$
|
3.50
|
|
|
|
|
|
|
|
|
|
|
|||||
Settlement Period
|
|
Derivative
Instrument
|
|
Volumes
(MMBtu per day)
|
|
Fixed Basis Difference
|
|
|
|||||
Natural Gas - CIG Rocky Mountain
|
|
|
|
|
|
|
|
|
|||||
Oct 1, 2019 - Dec 31, 2019
|
|
Swap
|
|
30,000
|
|
|
$
|
(0.75
|
)
|
|
|
||
|
|
|
|
|
|
|
|
|
|||||
Settlement Period
|
|
Derivative
Instrument
|
|
Volumes
(Bbls per day) |
|
Weighted-Average Fixed Price
|
|
|
|||||
Propane - Mont Belvieu
|
|
|
|
|
|
|
|
|
|||||
Oct 1, 2019 - Dec 31, 2019
|
|
Swap
|
|
2,000
|
|
|
$
|
37.52
|
|
|
|
|
|
|
|
As of September 30, 2019
|
||||||||||
Underlying
|
|
Balance Sheet
Location
|
|
Gross Amounts of Recognized Assets and Liabilities
|
|
Gross Amounts Offset in the
Balance Sheet
|
|
Net Amounts of Assets and Liabilities Presented in the
Balance Sheet
|
||||||
Commodity derivative contracts
|
|
Current assets
|
|
$
|
44,510
|
|
|
$
|
(29,344
|
)
|
|
$
|
15,166
|
|
Commodity derivative contracts
|
|
Noncurrent assets
|
|
12,382
|
|
|
(9,095
|
)
|
|
3,287
|
|
|||
Commodity derivative contracts
|
|
Current liabilities
|
|
29,344
|
|
|
(29,344
|
)
|
|
—
|
|
|||
Commodity derivative contracts
|
|
Noncurrent liabilities
|
|
$
|
9,095
|
|
|
$
|
(9,095
|
)
|
|
$
|
—
|
|
|
|
|
|
As of December 31, 2018
|
||||||||||
Underlying
|
|
Balance Sheet
Location
|
|
Gross Amounts of Recognized Assets and Liabilities
|
|
Gross Amounts Offset in the
Balance Sheet
|
|
Net Amounts of Assets and Liabilities Presented in the
Balance Sheet
|
||||||
Commodity derivative contracts
|
|
Current assets
|
|
$
|
39,485
|
|
|
$
|
(4,579
|
)
|
|
$
|
34,906
|
|
Commodity derivative contracts
|
|
Noncurrent assets
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Commodity derivative contracts
|
|
Current liabilities
|
|
4,579
|
|
|
(4,579
|
)
|
|
—
|
|
|||
Commodity derivative contracts
|
|
Noncurrent liabilities
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Realized gain (loss) on commodity derivatives
|
$
|
4,532
|
|
|
$
|
(8,273
|
)
|
|
$
|
12,749
|
|
|
$
|
(16,228
|
)
|
Unrealized gain (loss) on commodity derivatives
|
6,392
|
|
|
(256
|
)
|
|
(16,453
|
)
|
|
(12,376
|
)
|
||||
Total gain (loss)
|
$
|
10,924
|
|
|
$
|
(8,529
|
)
|
|
$
|
(3,704
|
)
|
|
$
|
(28,604
|
)
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Monthly settlement
|
$
|
5,029
|
|
|
$
|
(8,273
|
)
|
|
$
|
14,223
|
|
|
$
|
(16,228
|
)
|
Premiums paid
|
(497
|
)
|
|
—
|
|
|
(1,474
|
)
|
|
—
|
|
||||
Total realized gain (loss)
|
$
|
4,532
|
|
|
$
|
(8,273
|
)
|
|
$
|
12,749
|
|
|
$
|
(16,228
|
)
|
8.
|
Fair Value Measurements
|
•
|
Level 1: Quoted prices available in active markets for identical assets or liabilities;
|
•
|
Level 2: Quoted prices in active markets for similar assets and liabilities that are observable for the asset or liability; and
|
•
|
Level 3: Unobservable pricing inputs that are generally less observable from objective sources, such as discounted cash or valuation models.
|
|
Fair Value Measurements at September 30, 2019
|
||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Financial assets and liabilities:
|
|
|
|
|
|
|
|
||||||||
Commodity derivative asset
|
$
|
—
|
|
|
$
|
18,453
|
|
|
$
|
—
|
|
|
$
|
18,453
|
|
Commodity derivative liability
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Fair Value Measurements at December 31, 2018
|
||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Financial assets and liabilities:
|
|
|
|
|
|
|
|
||||||||
Commodity derivative asset
|
$
|
—
|
|
|
$
|
34,906
|
|
|
$
|
—
|
|
|
$
|
34,906
|
|
Commodity derivative liability
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
9.
|
Interest Expense
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Revolving credit facility
|
$
|
1,768
|
|
|
$
|
376
|
|
|
$
|
6,073
|
|
|
$
|
461
|
|
2025 Senior Notes
|
8,593
|
|
|
8,593
|
|
|
25,781
|
|
|
25,781
|
|
||||
Amortization of issuance costs and other
|
937
|
|
|
905
|
|
|
2,585
|
|
|
2,905
|
|
||||
Less: interest capitalized
|
(11,298
|
)
|
|
(9,874
|
)
|
|
(34,439
|
)
|
|
(29,147
|
)
|
||||
Interest expense, net of amounts capitalized
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
10.
|
Stock-Based Compensation
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Stock options
|
$
|
447
|
|
|
$
|
1,072
|
|
|
$
|
2,269
|
|
|
$
|
3,470
|
|
Performance-vested stock units
|
1,272
|
|
|
1,187
|
|
|
3,601
|
|
|
3,216
|
|
||||
Restricted stock units and stock bonus shares
|
2,087
|
|
|
1,771
|
|
|
6,168
|
|
|
4,507
|
|
||||
Total stock-based compensation
|
$
|
3,806
|
|
|
$
|
4,030
|
|
|
$
|
12,038
|
|
|
$
|
11,193
|
|
Less: stock-based compensation capitalized
|
(717
|
)
|
|
(625
|
)
|
|
(2,124
|
)
|
|
(1,846
|
)
|
||||
Total stock-based compensation expense
|
$
|
3,089
|
|
|
$
|
3,405
|
|
|
$
|
9,914
|
|
|
$
|
9,347
|
|
|
Number of Shares
|
|
Weighted-Average Exercise Price
|
|
Weighted-Average Remaining Contractual Life
|
|
Aggregate Intrinsic Value (thousands)
|
|||||
Outstanding, December 31, 2018
|
4,652,634
|
|
|
$
|
10.06
|
|
|
6.4 years
|
|
$
|
49
|
|
Granted
|
—
|
|
|
—
|
|
|
|
|
|
|||
Exercised
|
—
|
|
|
—
|
|
|
|
|
—
|
|
||
Expired
|
(24,000
|
)
|
|
9.01
|
|
|
|
|
|
|||
Forfeited
|
(58,800
|
)
|
|
8.28
|
|
|
|
|
|
|||
Outstanding, September 30, 2019
|
4,569,834
|
|
|
$
|
10.09
|
|
|
5.6 years
|
|
$
|
47
|
|
Outstanding, Exercisable at September 30, 2019
|
3,949,534
|
|
|
$
|
10.27
|
|
|
5.5 years
|
|
$
|
47
|
|
|
|
Outstanding Options
|
|
Exercisable Options
|
||||||||||||||
Range of Exercise Prices
|
|
Options
|
|
Weighted-Average Exercise Price per Share
|
|
Weighted-Average Remaining Contractual Life
|
|
Options
|
|
Weighted-Average Exercise Price per Share
|
|
Weighted-Average Remaining Contractual Life
|
||||||
Under $5.00
|
|
35,000
|
|
|
$
|
3.31
|
|
|
2.8 years
|
|
35,000
|
|
|
$
|
3.31
|
|
|
2.8 years
|
$5.00 - $6.99
|
|
671,000
|
|
|
6.29
|
|
|
5.6 years
|
|
472,000
|
|
|
6.28
|
|
|
5.2 years
|
||
$7.00 - $10.99
|
|
1,360,334
|
|
|
9.42
|
|
|
5.6 years
|
|
1,121,934
|
|
|
9.48
|
|
|
5.5 years
|
||
$11.00 - $13.46
|
|
2,503,500
|
|
|
11.57
|
|
|
5.6 years
|
|
2,320,600
|
|
|
11.57
|
|
|
5.6 years
|
||
Total
|
|
4,569,834
|
|
|
$
|
10.09
|
|
|
5.6 years
|
|
3,949,534
|
|
|
$
|
10.27
|
|
|
5.5 years
|
Unrecognized compensation (in thousands)
|
$
|
1,977
|
|
Remaining vesting period
|
1.3 years
|
|
|
Number of Shares
|
|
Weighted-Average Grant-Date Fair Value
|
|||
Not vested, December 31, 2018
|
1,639,918
|
|
|
$
|
8.07
|
|
Granted
|
1,733,634
|
|
|
4.88
|
|
|
Vested
|
(674,909
|
)
|
|
8.50
|
|
|
Forfeited
|
(71,787
|
)
|
|
6.36
|
|
|
Not vested, September 30, 2019
|
2,626,856
|
|
|
$
|
5.90
|
|
Unrecognized compensation cost (in thousands)
|
$
|
10,828
|
|
Remaining vesting period
|
2.0 years
|
|
|
Nine Months Ended September 30,
|
||||
|
2019
|
|
2018
|
||
Weighted-average expected term
|
2.9 years
|
|
|
2.8 years
|
|
Weighted-average expected volatility
|
48
|
%
|
|
52
|
%
|
Weighted-average risk-free rate
|
2.49
|
%
|
|
2.41
|
%
|
|
Number of Units1
|
|
Weighted-Average Grant-Date Fair Value
|
|||
Not vested, December 31, 2018
|
780,028
|
|
|
$
|
11.73
|
|
Granted
|
918,842
|
|
|
5.74
|
|
|
Vested
|
—
|
|
|
—
|
|
|
Forfeited
|
—
|
|
|
—
|
|
|
Not vested, September 30, 2019
|
1,698,870
|
|
|
$
|
8.49
|
|
11.
|
Weighted-Average Shares Outstanding
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||
Weighted-average shares outstanding — basic
|
243,479,734
|
|
|
242,536,781
|
|
|
243,392,487
|
|
|
242,184,348
|
|
Potentially dilutive common shares from:
|
|
|
|
|
|
|
|
||||
Stock options
|
9,365
|
|
|
230,067
|
|
|
11,603
|
|
|
332,953
|
|
TSR PSUs 1
|
752,984
|
|
|
411,738
|
|
|
424,659
|
|
|
336,882
|
|
Restricted stock units and stock bonus shares
|
305,559
|
|
|
381,460
|
|
|
305,453
|
|
|
352,875
|
|
Weighted-average shares outstanding — diluted
|
244,547,642
|
|
|
243,560,046
|
|
|
244,134,202
|
|
|
243,207,058
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||
Potentially dilutive common shares from:
|
|
|
|
|
|
|
|
||||
Stock options 1
|
4,534,834
|
|
|
3,456,300
|
|
|
4,534,834
|
|
|
3,438,167
|
|
TSR PSUs 1,2
|
773,954
|
|
|
160,754
|
|
|
773,954
|
|
|
160,754
|
|
Goal-Based PSUs 2,3
|
274,898
|
|
|
281,872
|
|
|
274,898
|
|
|
281,872
|
|
Restricted stock units and stock bonus shares 1
|
565,183
|
|
|
13,907
|
|
|
668,862
|
|
|
13,907
|
|
Total
|
6,148,869
|
|
|
3,912,833
|
|
|
6,252,548
|
|
|
3,894,700
|
|
12.
|
Income Taxes
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
Revenues (in thousands):
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Oil
|
$
|
113,411
|
|
|
$
|
123,540
|
|
|
$
|
392,589
|
|
|
$
|
354,601
|
|
Natural Gas and NGLs
|
20,683
|
|
|
37,438
|
|
|
93,562
|
|
|
100,697
|
|
||||
|
$
|
134,094
|
|
|
$
|
160,978
|
|
|
$
|
486,151
|
|
|
$
|
455,298
|
|
•
|
Discount Rate - Unless implicitly defined, the Company will determine the present value of future lease payments using an estimated incremental secured borrowing rate based on a yield curve analysis that factors in certain assumptions, including the term of the lease and credit rating of the Company at lease commencement.
|
•
|
Lease Term - The Company evaluates each contract containing a lease arrangement at inception to determine the length of the lease term when recognizing a ROU asset and corresponding lease liability. When determining the lease term, options available to extend or early terminate the arrangement are evaluated and included when it is reasonably certain these options will be exercised. There are no available options to extend that the Company is reasonably certain to exercise.
|
|
Three Months Ended September 30, 2019
|
|
Nine Months Ended September 30, 2019
|
||||
Finance lease cost:
|
|
|
|
||||
Amortization of ROU assets
|
$
|
66
|
|
|
$
|
189
|
|
Interest on lease liabilities
|
8
|
|
|
23
|
|
||
|
|
|
|
||||
Operating lease cost
|
1,215
|
|
|
2,992
|
|
||
Variable lease cost
|
420
|
|
|
420
|
|
||
Short-term lease cost 1
|
22,997
|
|
|
92,843
|
|
||
Total Lease Cost
|
$
|
24,706
|
|
|
$
|
96,467
|
|
|
Three Months Ended September 30, 2019
|
|
Nine Months Ended September 30, 2019
|
||||
Cash paid for amounts included in the measurement of lease liabilities
|
|
|
|
||||
Operating cash flows from operating leases
|
$
|
1,215
|
|
|
$
|
2,992
|
|
Financing cash flows from finance leases
|
51
|
|
|
156
|
|
||
|
|
|
|
||||
ROU assets obtained in exchange for new finance lease liabilities
|
48
|
|
|
186
|
|
||
ROU assets obtained in exchange for new operating lease liabilities
|
—
|
|
|
8,538
|
|
|
As of
September 30, 2019 |
|
Weighted-average remaining lease term - finance leases
|
2.8 years
|
|
Weighted-average remaining lease term - operating leases
|
1.8 years
|
|
Weighted-average discount rate - finance leases
|
4.75
|
%
|
Weighted-average discount rate - operating leases
|
4.75
|
%
|
Year
|
|
Finance Leases
|
|
Operating Leases
|
||||
2019
|
|
$
|
49
|
|
|
$
|
1,178
|
|
2020
|
|
197
|
|
|
4,450
|
|
||
2021
|
|
224
|
|
|
1,530
|
|
||
2022
|
|
194
|
|
|
500
|
|
||
2023
|
|
38
|
|
|
—
|
|
||
Thereafter
|
|
—
|
|
|
—
|
|
||
Total lease payments
|
|
$
|
702
|
|
|
$
|
7,658
|
|
Less imputed interest
|
|
(53
|
)
|
|
(314
|
)
|
||
Total lease liability
|
|
$
|
649
|
|
|
$
|
7,344
|
|
Year
|
|
Rig Contracts
|
|
Capital Leases
|
|
Operating Leases
|
||||||
2019
|
|
$
|
11,102
|
|
|
$
|
183
|
|
|
$
|
896
|
|
2020
|
|
—
|
|
|
186
|
|
|
916
|
|
|||
2021
|
|
—
|
|
|
204
|
|
|
913
|
|
|||
2022
|
|
—
|
|
|
167
|
|
|
500
|
|
|||
2023
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Thereafter
|
|
—
|
|
|
—
|
|
|
—
|
|
As of September 30, 2019
|
|
Financing Leases
|
|
Operating Leases
|
||||
Other property and equipment, net
|
|
$
|
737
|
|
|
$
|
—
|
|
Other assets
|
|
—
|
|
|
5,842
|
|
||
|
|
|
|
|
||||
Accounts payable and accrued expenses
|
|
171
|
|
|
4,355
|
|
||
Other liabilities
|
|
478
|
|
|
2,989
|
|
||
|
|
$
|
649
|
|
|
$
|
7,344
|
|
15.
|
Other Commitments and Contingencies
|
Year ending December 31, 2019
|
|
Oil
|
|
|
(MBbls)
|
||
Remainder of 2019
|
|
2,682
|
|
2020
|
|
9,493
|
|
2021
|
|
7,147
|
|
2022
|
|
5,475
|
|
2023
|
|
5,475
|
|
2024
|
|
5,490
|
|
Thereafter
|
|
9,120
|
|
Total
|
|
44,882
|
|
16.
|
Supplemental Schedule of Information to the Condensed Consolidated Statements of Cash Flows
|
|
Nine Months Ended September 30,
|
||||||
Supplemental cash flow information:
|
2019
|
|
2018
|
||||
Interest paid
|
$
|
22,931
|
|
|
$
|
17,701
|
|
|
|
|
|
||||
Non-cash investing and financing activities:
|
|
|
|
||||
Accrued well costs as of period end
|
$
|
72,381
|
|
|
$
|
143,015
|
|
Asset retirement obligations incurred with development activities
|
1,616
|
|
|
1,488
|
|
||
Asset retirement obligations assumed with acquisitions
|
—
|
|
|
26,150
|
|
||
Obligations discharged with asset retirements and divestitures
|
$
|
(7,373
|
)
|
|
$
|
(8,944
|
)
|
|
|
|
|
||||
Net changes in operating assets and liabilities:
|
|
|
|
||||
Accounts receivable
|
$
|
54,934
|
|
|
$
|
(31,170
|
)
|
Accounts payable and accrued expenses
|
165
|
|
|
(842
|
)
|
||
Revenue payable
|
(2,917
|
)
|
|
15,858
|
|
||
Production taxes payable
|
(3,001
|
)
|
|
20,504
|
|
||
Other
|
892
|
|
|
(520
|
)
|
||
Changes in operating assets and liabilities
|
$
|
50,073
|
|
|
$
|
3,830
|
|
ITEM 2.
|
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
|
Year Ended December 31,
|
||||||||||||||
|
2018
|
|
2017
|
|
2016
|
|
2015
|
||||||||
Average NYMEX prices
|
|
|
|
|
|
|
|
||||||||
Oil (per Bbl)
|
$
|
64.94
|
|
|
$
|
50.93
|
|
|
$
|
43.20
|
|
|
$
|
48.73
|
|
Natural gas (per Mcf)
|
$
|
3.09
|
|
|
$
|
3.00
|
|
|
$
|
2.52
|
|
|
$
|
2.58
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Oil (NYMEX-WTI)
|
|
|
|
|
|
|
|
||||||||
Average NYMEX Price
|
$
|
56.37
|
|
|
$
|
69.76
|
|
|
$
|
56.99
|
|
|
$
|
66.89
|
|
Realized Price *
|
49.39
|
|
|
63.48
|
|
|
50.05
|
|
|
60.13
|
|
||||
Differential *
|
$
|
(6.98
|
)
|
|
$
|
(6.28
|
)
|
|
$
|
(6.94
|
)
|
|
$
|
(6.76
|
)
|
|
|
|
|
|
|
|
|
||||||||
Natural Gas (NYMEX-Henry Hub)
|
|
|
|
|
|
|
|
||||||||
Average NYMEX Price
|
$
|
2.23
|
|
|
$
|
2.90
|
|
|
$
|
2.67
|
|
|
$
|
2.90
|
|
Realized Price *
|
1.21
|
|
|
1.79
|
|
|
1.75
|
|
|
1.84
|
|
||||
Differential *
|
$
|
(1.02
|
)
|
|
$
|
(1.11
|
)
|
|
$
|
(0.92
|
)
|
|
$
|
(1.06
|
)
|
|
|
|
|
|
|
|
|
||||||||
NGL Realized Price
|
$
|
4.65
|
|
|
$
|
19.93
|
|
|
$
|
8.84
|
|
|
$
|
18.91
|
|
Vertical Wells
|
||||||||||||||||
Operated Wells
|
|
Non-Operated Wells
|
|
Totals
|
||||||||||||
Gross
|
|
Net
|
|
Gross
|
|
Net
|
|
Gross
|
|
Net
|
||||||
497
|
|
|
481
|
|
|
159
|
|
|
42
|
|
|
656
|
|
|
523
|
|
Horizontal Wells
|
||||||||||||||||
Operated Wells
|
|
Non-Operated Wells
|
|
Totals
|
||||||||||||
Gross
|
|
Net
|
|
Gross
|
|
Net
|
|
Gross
|
|
Net
|
||||||
445
|
|
|
421
|
|
|
338
|
|
|
59
|
|
|
783
|
|
|
480
|
|
|
Three Months Ended September 30,
|
|
Percentage
|
|||||||
|
2019
|
|
2018
|
|
Change
|
|||||
Production:
|
|
|
|
|
|
|||||
Oil (MBbls) 1
|
2,224
|
|
|
1,915
|
|
|
16
|
%
|
||
Natural Gas (MMcf) 2
|
12,556
|
|
|
9,471
|
|
|
33
|
%
|
||
NGLs (MBbls) 1
|
1,088
|
|
|
1,030
|
|
|
6
|
%
|
||
MBOE 3
|
5,405
|
|
|
4,523
|
|
|
20
|
%
|
||
BOED 4
|
58,745
|
|
|
49,165
|
|
|
19
|
%
|
||
|
|
|
|
|
|
|||||
Revenues (in thousands):
|
|
|
|
|
|
|||||
Oil
|
$
|
113,411
|
|
|
$
|
123,540
|
|
|
(8
|
)%
|
Natural Gas
|
15,622
|
|
|
16,908
|
|
|
(8
|
)%
|
||
NGLs
|
5,061
|
|
|
20,530
|
|
|
(75
|
)%
|
||
|
$
|
134,094
|
|
|
$
|
160,978
|
|
|
(17
|
)%
|
Average sales price:
|
|
|
|
|
|
|||||
Oil 5
|
$
|
49.39
|
|
|
$
|
63.48
|
|
|
(22
|
)%
|
Natural Gas 5
|
1.21
|
|
|
1.79
|
|
|
(32
|
)%
|
||
NGLs
|
4.65
|
|
|
19.93
|
|
|
(77
|
)%
|
||
BOE 5
|
$
|
24.07
|
|
|
$
|
35.15
|
|
|
(32
|
)%
|
|
Three Months Ended September 30,
|
||||||
(in thousands)
|
2019
|
|
2018
|
||||
Depletion of oil and gas properties
|
$
|
55,984
|
|
|
$
|
44,230
|
|
Depreciation and accretion
|
1,417
|
|
|
958
|
|
||
Total DD&A
|
$
|
57,401
|
|
|
$
|
45,188
|
|
|
|
|
|
||||
DD&A expense per BOE
|
$
|
10.62
|
|
|
$
|
9.99
|
|
|
Three Months Ended September 30,
|
||||||
(in thousands)
|
2019
|
|
2018
|
||||
Total Non-Cash G&A
|
$
|
3,806
|
|
|
$
|
4,030
|
|
Total Cash G&A
|
16,379
|
|
|
9,806
|
|
||
Capitalized G&A Costs
|
(3,514
|
)
|
|
(3,151
|
)
|
||
Total G&A Expense
|
$
|
16,671
|
|
|
$
|
10,685
|
|
|
|
|
|
||||
Non-Cash G&A Expense
|
$
|
3,089
|
|
|
$
|
3,405
|
|
Cash G&A Expense
|
13,582
|
|
|
7,280
|
|
||
Total G&A Expense
|
$
|
16,671
|
|
|
$
|
10,685
|
|
|
|
|
|
||||
Non-Cash G&A Expense per BOE
|
$
|
0.57
|
|
|
$
|
0.75
|
|
Cash G&A Expense per BOE
|
2.51
|
|
|
1.61
|
|
||
G&A Expense per BOE
|
$
|
3.08
|
|
|
$
|
2.36
|
|
|
Nine Months Ended September 30,
|
|
Percentage
|
|||||||
|
2019
|
|
2018
|
|
Change
|
|||||
Production:
|
|
|
|
|
|
|||||
Oil (MBbls)
|
7,632
|
|
|
5,802
|
|
|
32
|
%
|
||
Natural Gas (MMcf)
|
35,852
|
|
|
26,177
|
|
|
37
|
%
|
||
NGLs (MBbls)
|
3,253
|
|
|
2,780
|
|
|
17
|
%
|
||
MBOE
|
16,860
|
|
|
12,945
|
|
|
30
|
%
|
||
BOED
|
61,757
|
|
|
47,416
|
|
|
30
|
%
|
||
|
|
|
|
|
|
|||||
Revenues (in thousands):
|
|
|
|
|
|
|||||
Oil
|
$
|
392,589
|
|
|
$
|
354,601
|
|
|
11
|
%
|
Natural Gas
|
64,795
|
|
|
48,139
|
|
|
35
|
%
|
||
NGLs
|
28,767
|
|
|
52,558
|
|
|
(45
|
)%
|
||
|
$
|
486,151
|
|
|
$
|
455,298
|
|
|
7
|
%
|
Average sales price:
|
|
|
|
|
|
|||||
Oil
|
$
|
50.05
|
|
|
$
|
60.13
|
|
|
(17
|
)%
|
Natural Gas
|
1.75
|
|
|
1.84
|
|
|
(5
|
)%
|
||
NGLs
|
8.84
|
|
|
18.91
|
|
|
(53
|
)%
|
||
BOE
|
$
|
28.08
|
|
|
$
|
34.73
|
|
|
(19
|
)%
|
|
Nine Months Ended September 30,
|
||||||
(in thousands)
|
2019
|
|
2018
|
||||
Depletion of oil and gas properties
|
$
|
172,009
|
|
|
$
|
121,259
|
|
Depreciation and accretion
|
4,337
|
|
|
2,887
|
|
||
Total DD&A
|
$
|
176,346
|
|
|
$
|
124,146
|
|
|
|
|
|
||||
DD&A expense per BOE
|
$
|
10.46
|
|
|
$
|
9.59
|
|
|
Nine Months Ended September 30,
|
||||||
(in thousands)
|
2019
|
|
2018
|
||||
Total Non-Cash G&A
|
$
|
12,038
|
|
|
$
|
11,193
|
|
Total Cash G&A
|
34,061
|
|
|
28,105
|
|
||
Capitalized G&A Costs
|
(10,716
|
)
|
|
(9,607
|
)
|
||
Total G&A Expense
|
$
|
35,383
|
|
|
$
|
29,691
|
|
|
|
|
|
||||
Non-Cash G&A Expense
|
$
|
9,914
|
|
|
$
|
9,347
|
|
Cash G&A Expense
|
25,469
|
|
|
20,344
|
|
||
Total G&A Expense
|
$
|
35,383
|
|
|
$
|
29,691
|
|
|
|
|
|
||||
Non-Cash G&A Expense per BOE
|
$
|
0.59
|
|
|
$
|
0.72
|
|
Cash G&A Expense per BOE
|
1.51
|
|
|
1.57
|
|
||
G&A Expense per BOE
|
$
|
2.10
|
|
|
$
|
2.29
|
|
|
Nine Months Ended September 30,
|
||||||
|
2019
|
|
2018
|
||||
Net cash provided by operations
|
$
|
429,305
|
|
|
$
|
343,554
|
|
Capital expenditures
|
(389,825
|
)
|
|
(490,124
|
)
|
||
Net cash provided by other investing activities
|
12,109
|
|
|
1,233
|
|
||
Net cash provided by (used in) equity financing activities
|
(1,167
|
)
|
|
3,039
|
|
||
Net cash provided by (used in) debt financing activities
|
(30,535
|
)
|
|
112,762
|
|
||
Net increase (decrease) in cash and cash equivalents
|
$
|
19,887
|
|
|
$
|
(29,536
|
)
|
|
Nine Months Ended September 30,
|
||||||
|
2019
|
|
2018
|
||||
Capital expenditures for drilling and completion activities
|
$
|
290,136
|
|
|
$
|
408,334
|
|
Acquisitions of oil and gas properties and leasehold1
|
4,805
|
|
|
162,081
|
|
||
Capitalized interest, capitalized G&A, and other
|
47,876
|
|
|
40,037
|
|
||
Accrual basis capital expenditures2
|
$
|
342,817
|
|
|
$
|
610,452
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Adjusted EBITDA:
|
|
|
|
|
|
|
|
||||||||
Net income
|
$
|
29,795
|
|
|
$
|
62,628
|
|
|
$
|
134,014
|
|
|
$
|
178,048
|
|
Depreciation, depletion, and accretion
|
57,401
|
|
|
45,188
|
|
|
176,346
|
|
|
124,146
|
|
||||
Stock-based compensation expense
|
3,089
|
|
|
3,405
|
|
|
9,914
|
|
|
9,347
|
|
||||
Mark-to-market of commodity derivative contracts:
|
|
|
|
|
|
|
|
||||||||
Total (gain) loss on commodity derivatives contracts
|
(10,924
|
)
|
|
8,529
|
|
|
3,704
|
|
|
28,604
|
|
||||
Cash settlements on commodity derivative contracts
|
5,390
|
|
|
(7,142
|
)
|
|
13,105
|
|
|
(13,263
|
)
|
||||
Cash premiums paid for commodity derivative contracts
|
(497
|
)
|
|
—
|
|
|
(1,474
|
)
|
|
—
|
|
||||
Interest income
|
(76
|
)
|
|
(23
|
)
|
|
(237
|
)
|
|
(37
|
)
|
||||
Income tax expense
|
13,041
|
|
|
8,918
|
|
|
49,312
|
|
|
18,076
|
|
||||
Adjusted EBITDA
|
$
|
97,219
|
|
|
$
|
121,503
|
|
|
$
|
384,684
|
|
|
$
|
344,921
|
|
•
|
declines in oil and natural gas prices;
|
•
|
the effects of, changes in and the costs of compliance with federal, state, and local regulations applicable to our business, including those related to hydraulic stimulation and SB19-181;
|
•
|
operating hazards that adversely affect our ability to conduct business;
|
•
|
uncertainties in the estimates of proved reserves;
|
•
|
the availability and capacity of gathering and processing systems, pipelines, and other midstream infrastructure for our production;
|
•
|
the effect of seasonal weather conditions and wildlife and plant species restrictions on our operations;
|
•
|
our ability to fund, develop, produce, and acquire additional oil and natural gas reserves that are economically recoverable;
|
•
|
our ability to obtain adequate financing;
|
•
|
the effect of local and regional factors on oil and natural gas prices;
|
•
|
incurrence of ceiling test write-downs;
|
•
|
our inability to control operations on properties that we do not operate;
|
•
|
the strength and financial resources of our competitors;
|
•
|
our ability to successfully identify, execute, and integrate acquisitions;
|
•
|
our ability to market our production;
|
•
|
the effect of environmental liabilities;
|
•
|
changes in U.S. tax laws;
|
•
|
our ability to satisfy our contractual obligations and commitments;
|
•
|
the amount of our indebtedness and our ability to maintain compliance with debt covenants;
|
•
|
the effectiveness of our disclosure controls and our internal controls over financial reporting;
|
•
|
the geographic concentration of our principal properties;
|
•
|
our ability to protect critical data and technology systems;
|
•
|
the availability of water for use in our operations;
|
•
|
the completion of the pending merger transaction with PDC, including the possibility that we may incur significant transaction and other costs in connection with the merger, risks related to disruption of ongoing business operations due to the merger, the outcome of litigation relating to the merger, and the risk the parties may not be able to satisfy the conditions to the completion of the merger in a timely matter or at all; and
|
•
|
the risks and uncertainties described and referenced in "Risk Factors" in this report and other filings with the SEC.
|
ITEM 3.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISKS
|
ITEM 4.
|
CONTROLS AND PROCEDURES
|
Item 1.
|
Legal Proceedings
|
Item 1A.
|
Risk Factors
|
Item 2.
|
Unregistered Sales of Equity Securities and Use of Proceeds
|
Period
|
|
Total Number of Shares Purchased
|
|
Average Price Paid per Share
|
|||
July 1, 2019 - July 31, 2019 (1)
|
|
—
|
|
|
$
|
—
|
|
August 1, 2019 - August 31, 2019 (1)
|
|
6,597
|
|
|
4.15
|
|
|
September 1, 2019 - September 30, 2019 (1)
|
|
2,898
|
|
|
$
|
5.02
|
|
Total
|
|
9,495
|
|
|
|
Item 3.
|
Defaults Upon Senior Securities
|
Item 4.
|
Mine Safety Disclosures
|
Item 5.
|
Other Information
|
Exhibit
Number
|
|
Exhibit
|
2.1
|
|
Agreement and Plan of Merger, dated as of August 25, 2019, by and between PDC Energy, Inc. and SRC Energy Inc. (the "Company") (incorporated by reference to Exhibit 2.1 to the Current Report on Form 8-K of the Company filed on August 26, 2019) †
|
31.1
|
|
|
31.2
|
|
|
32.1
|
|
|
101.INS
|
|
XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
|
101.SCH
|
|
XBRL Taxonomy Extension Schema
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase
|
104
|
|
Cover Page Interactive Data File (embedded within the Inline XBRL document)
|
|
|
|
|
|
|
*
|
|
Filed herewith
|
**
|
|
Furnished herewith
|
†
|
|
Schedules have been omitted pursuant to Item 601(a)(5) of Regulation S-K. The registrant hereby undertakes to furnish supplementally copies of any of the omitted schedules upon request by the Securities and Exchange Commission.
|
|
SRC Energy Inc.
|
|
|
|
/s/ Lynn A. Peterson
|
|
Lynn A. Peterson, President and Chief Executive Officer
(Principal Executive Officer)
|
|
|
|
/s/ James P. Henderson
|
|
James P. Henderson, Executive Vice President and Chief Financial Officer
(Principal Financial Officer)
|
|
|
|
/s/ Jared C. Grenzenbach
|
|
Jared C. Grenzenbach, Vice President and Chief Accounting Officer
(Principal Accounting Officer)
|
1 Year SRC Energy Chart |
1 Month SRC Energy Chart |
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