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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Gulfport Energy Corporation | NASDAQ:GPOR | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 0.1383 | 0.1396 | 0.14 | 0 | 01:00:00 |
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☒
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ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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☐
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TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF SECURITIES EXCHANGE ACT OF 1934
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|
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Delaware
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73-1521290
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(State or Other Jurisdiction of Incorporation or Organization)
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(IRS Employer Identification Number)
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3001 Quail Springs Parkway
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|
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Oklahoma City,
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Oklahoma
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73134
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(Address of Principal Executive Offices)
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(Zip Code)
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Title of Each Class
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Trading Symbol(s)
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Name of Each Exchange on Which Registered
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Common Stock, par value $0.01 per share
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GPOR
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The Nasdaq Stock Market LLC
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Page
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ITEM 1.
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ITEM 1A.
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ITEM 1B.
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ITEM 2.
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ITEM 3.
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ITEM 4.
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ITEM 5.
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ITEM 6.
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ITEM 7.
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ITEM 7A.
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ITEM 8.
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ITEM 9.
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ITEM 9A.
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ITEM 9B.
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ITEM 10.
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ITEM 11.
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ITEM 12.
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ITEM 13.
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ITEM 14.
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ITEM 15.
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ITEM 16.
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ITEM 1.
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BUSINESS
|
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2019
|
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2018
|
|
2017
|
||||||||||||
|
Gross
|
|
Net
|
|
Gross
|
|
Net
|
|
Gross
|
|
Net
|
||||||
Recompletions:
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Productive
|
—
|
|
|
—
|
|
|
47
|
|
|
47
|
|
|
81
|
|
|
81
|
|
Dry
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Total
|
—
|
|
|
—
|
|
|
47
|
|
|
47
|
|
|
81
|
|
|
81
|
|
Development:
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Productive
|
25
|
|
|
22.4
|
|
|
34
|
|
|
30
|
|
|
124
|
|
|
115.4
|
|
Dry
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|
2
|
|
Total
|
25
|
|
|
22.4
|
|
|
34
|
|
|
30
|
|
|
126
|
|
|
117.4
|
|
Exploratory:
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Productive
|
1
|
|
|
0.8
|
|
|
2
|
|
|
1.5
|
|
|
—
|
|
|
—
|
|
Dry
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Total
|
1
|
|
|
0.8
|
|
|
2
|
|
|
1.5
|
|
|
—
|
|
|
—
|
|
|
Operated
|
|
Non-Operated
|
||||||||||||||||||||
Field
|
Drilled
|
|
Turned to Sales
|
|
Drilled
|
|
Turned to Sales
|
||||||||||||||||
Gross
|
|
Net
|
|
Gross
|
|
Net
|
|
Gross
|
|
Net
|
|
Gross
|
|
Net
|
|||||||||
Utica Shale (1)
|
16
|
|
|
14.6
|
|
|
47
|
|
|
41.6
|
|
|
5
|
|
|
0.9
|
|
|
14
|
|
|
3.3
|
|
SCOOP (2)
|
10
|
|
|
8.6
|
|
|
14
|
|
|
12.6
|
|
|
42
|
|
|
1.6
|
|
|
39
|
|
|
1.2
|
|
Niobrara Formation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Bakken Formation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Total
|
26
|
|
|
23.2
|
|
|
61
|
|
|
54.2
|
|
|
47
|
|
|
2.5
|
|
|
53
|
|
|
4.5
|
|
(1)
|
Of the 16 gross wells we drilled in 2019, six were completed as producing wells and 10 were in various stages of completion as of December 31, 2019.
|
(2)
|
Of the 10 gross wells we drilled in 2019, five were completed as producing wells, four were in various stages of completion and one was being drilled as of December 31, 2019.
|
|
Average NRI/WI (1)
|
|
Productive
Oil Wells
|
|
Productive
Gas Wells
|
|
Non-Productive
Oil Wells
|
|
Non-Productive
Gas Wells
|
|
Developed
Acreage
|
|
Undeveloped
Acreage
|
||||||||||||||||||||||||
Field
|
Percentages
|
|
Gross
|
|
Net
|
|
Gross
|
|
Net
|
|
Gross
|
|
Net
|
|
Gross
|
|
Net
|
|
Gross
|
|
Net
|
|
Gross
|
|
Net
|
||||||||||||
Utica Shale
|
45.93/56.32
|
|
126
|
|
|
40.36
|
|
|
503
|
|
|
313.41
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|
1.58
|
|
|
107,076
|
|
|
85,381
|
|
|
130,734
|
|
|
119,428
|
|
SCOOP
|
26.21/32.64
|
|
118
|
|
|
24.28
|
|
|
480
|
|
|
153.16
|
|
|
13
|
|
|
3.69
|
|
|
56
|
|
|
36.58
|
|
|
50,721
|
|
|
35,602
|
|
|
7,373
|
|
|
5,999
|
|
Niobrara Formation
|
24.41/29.18
|
|
5
|
|
|
1.46
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,998
|
|
|
999
|
|
|
1,292
|
|
|
646
|
|
Bakken Formation
|
1.11/1.97
|
|
18
|
|
|
0.35
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
386
|
|
|
77
|
|
|
3,505
|
|
|
701
|
|
Overrides/Royalty Non-operated
|
Various
|
|
401
|
|
|
0.02
|
|
|
5
|
|
|
0.02
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Total
|
|
|
668
|
|
|
66.47
|
|
|
988
|
|
|
466.59
|
|
|
15
|
|
|
3.69
|
|
|
58
|
|
|
38.16
|
|
|
160,181
|
|
|
122,059
|
|
|
142,904
|
|
|
126,774
|
|
(1)
|
Net Revenue Interest (NRI)/Working Interest (WI).
|
|
Undeveloped Acres
|
||||
|
Gross Acres
|
|
Net Acres
|
||
Years Ending December 31:
|
|
|
|
||
2020
|
16,572
|
|
|
14,803
|
|
2021
|
13,773
|
|
|
12,685
|
|
2022
|
17,960
|
|
|
16,039
|
|
After 2022
|
20,088
|
|
|
18,975
|
|
Held by production or operations
|
74,511
|
|
|
64,272
|
|
Total
|
142,904
|
|
|
126,774
|
|
|
December 31, 2019
|
||||||||||
|
Oil
(MMbbl) |
|
Natural
Gas
(Bcf)
|
|
NGL (MMbbl)
|
|
Total (Bcfe)
|
||||
Proved developed
|
8
|
|
|
1,757
|
|
|
30
|
|
|
1,984
|
|
Proved undeveloped
|
10
|
|
|
2,291
|
|
|
32
|
|
|
2,544
|
|
Total proved(1)
|
18
|
|
|
4,048
|
|
|
62
|
|
|
4,528
|
|
|
Proved Developed
|
|
Proved Undeveloped
|
|
Total Proved
|
||||||
|
($ in millions)
|
||||||||||
Estimated future net revenue(2)
|
$
|
2,086
|
|
|
$
|
1,461
|
|
|
$
|
3,547
|
|
Present value of estimated future net revenue (PV-10)(2)
|
$
|
1,383
|
|
|
$
|
320
|
|
|
$
|
1,704
|
|
Standardized measure(2)
|
|
|
|
|
$
|
1,704
|
|
(1)
|
Utica and SCOOP accounted for approximately 71% and 29%, respectively, of our estimated proved reserves by volume as of December 31, 2019.
|
(2)
|
Estimated future net revenue represents the estimated future revenue to be generated from the production of proved reserves, net of estimated production and future development costs, using prices and costs under existing economic conditions as of December 31, 2019, and assuming commodity prices as set forth below. For the purpose of determining prices used in our reserve reports, we used the unweighted arithmetic average of the prices on the first day of each month within the 12-month period ended December 31, 2019. The prices used in our PV-10 measure were $55.85 per barrel and $2.58 per MMBtu, before basis differential adjustments. These prices should not be interpreted as a prediction of future prices, nor do they reflect the value of our commodity derivative instruments in place as of December 31, 2019. The amounts shown do not give effect to non-property-related expenses, such as corporate general and administrative expenses and debt service, or to depreciation, depletion and amortization. The present value of estimated future net revenue typically differs from the standardized measure because the former does not include the effects of estimated future income tax expense. There was no effect of estimated future income tax expense as of December 31, 2019, primarily as a result of significant net operating loss carryforwards that can be used to offset income taxes on future taxable income.
|
Proved Reserves, December 31, 2018
|
4,743
|
|
Sales of oil and natural gas reserves in place
|
(77
|
)
|
Extensions and discoveries
|
1,097
|
|
Revisions of prior reserve estimates
|
(734
|
)
|
Current production
|
(502
|
)
|
Proved Reserves, December 31, 2019
|
4,528
|
|
Proved Undeveloped Reserves, December 31, 2018
|
2,628
|
|
Sales of oil and natural gas reserves in place
|
(69
|
)
|
Extensions and discoveries
|
1,078
|
|
Conversion to proved developed reserves
|
(654
|
)
|
Revisions of prior reserve estimates
|
(439
|
)
|
Proved Undeveloped Reserves, December 31, 2019
|
2,544
|
|
•
|
review and verification of historical production, operating, marketing and capital data, which data is based on actual production as reported by us;
|
•
|
verification of property ownership by our land department;
|
•
|
preparation of reserve estimates by NSAI in coordination with our experienced reservoir engineers;
|
•
|
direct reporting responsibilities by our reservoir engineering department to our Chief Operating Officer;
|
•
|
review by our reservoir engineering department of all of our reported proved reserves at the close of each quarter, including the review of all significant reserve changes and all new proved undeveloped reserves additions;
|
•
|
provision of quarterly updates to our board of directors regarding operational data, including production, drilling and completion activity levels and any significant changes in our reserves;
|
•
|
annual review by our board of directors of our year-end reserve report and year-over-year changes in our proved reserves, as well as any changes to our previously adopted development plans;
|
•
|
annual review and approval by our senior management and our board of directors of a multi-year development plan;
|
•
|
annual review by our senior management of adjustments to our previously adopted development plan and considerations involved in making such adjustments; and
|
•
|
annual review by our board of directors of changes in our previously approved development plan made by senior management and technical staff during the year, including the substitution, removal or deferral of PUD locations.
|
|
Year Ended December 31,
|
|||||||||||||
Field
|
2019
|
|||||||||||||
Net Production
|
||||||||||||||
Natural Gas (MMcf)
|
|
Oil and Condensate (Mbbls)
|
|
NGL (MGal)
|
|
Natural gas equivalents (MMcfe)
|
|
MMcfe per Day
|
||||||
Utica Shale
|
387,473
|
|
|
247
|
|
|
76,112
|
|
|
399,828
|
|
|
1,095
|
|
SCOOP
|
70,669
|
|
|
1,610
|
|
|
136,948
|
|
|
99,891
|
|
|
274
|
|
Niobrara Formation
|
—
|
|
|
14
|
|
|
—
|
|
|
86
|
|
|
—
|
|
Bakken Formation
|
35
|
|
|
41
|
|
|
67
|
|
|
292
|
|
|
1
|
|
Louisiana and Other
|
1
|
|
|
274
|
|
|
2
|
|
|
1,645
|
|
|
5
|
|
Total
|
458,178
|
|
|
2,186
|
|
|
213,129
|
|
|
501,742
|
|
|
1,375
|
|
|
2019
|
|
2018
|
|
2017
|
||||||
|
($ In thousands)
|
||||||||||
Natural gas sales
|
|
|
|
|
|
||||||
Natural gas production volumes (MMcf)
|
458,178
|
|
|
443,742
|
|
|
350,061
|
|
|||
|
|
|
|
|
|
||||||
Total natural gas sales
|
$
|
918,263
|
|
|
$
|
1,121,815
|
|
|
$
|
845,999
|
|
|
|
|
|
|
|
||||||
Natural gas sales without the impact of derivatives ($/Mcf)
|
$
|
2.00
|
|
|
$
|
2.53
|
|
|
$
|
2.42
|
|
Impact from settled derivatives ($/Mcf)
|
$
|
0.23
|
|
|
$
|
(0.04
|
)
|
|
$
|
0.07
|
|
Average natural gas sales price, including settled derivatives
($/Mcf)
|
$
|
2.23
|
|
|
$
|
2.49
|
|
|
$
|
2.49
|
|
|
|
|
|
|
|
||||||
Oil and condensate sales
|
|
|
|
|
|
||||||
Oil and condensate production volumes (Mbbls)
|
2,186
|
|
|
2,801
|
|
|
2,579
|
|
|||
|
|
|
|
|
|
||||||
Total oil and condensate sales
|
$
|
117,937
|
|
|
$
|
177,793
|
|
|
$
|
124,568
|
|
|
|
|
|
|
|
||||||
Oil and condensate sales without the impact of derivatives ($/Bbl)
|
$
|
53.95
|
|
|
$
|
63.48
|
|
|
$
|
48.29
|
|
Impact from settled derivatives ($/Bbl)
|
$
|
1.86
|
|
|
$
|
(9.51
|
)
|
|
$
|
1.59
|
|
Average oil and condensate sales price, including settled derivatives ($/Bbl)
|
$
|
55.81
|
|
|
$
|
53.97
|
|
|
$
|
49.88
|
|
|
|
|
|
|
|
||||||
NGL sales
|
|
|
|
|
|
||||||
NGL production volumes (MGal)
|
213,129
|
|
|
251,720
|
|
|
224,038
|
|
|||
|
|
|
|
|
|
||||||
Total NGL sales
|
$
|
101,448
|
|
|
$
|
178,915
|
|
|
$
|
136,057
|
|
|
|
|
|
|
|
||||||
NGL sales without the impact of derivatives ($/Gal)
|
$
|
0.48
|
|
|
$
|
0.71
|
|
|
$
|
0.61
|
|
Impact from settled derivatives ($/Gal)
|
$
|
0.06
|
|
|
$
|
(0.05
|
)
|
|
$
|
(0.03
|
)
|
Average NGL sales price, including settled derivatives ($/Gal)
|
$
|
0.54
|
|
|
$
|
0.66
|
|
|
$
|
0.58
|
|
|
|
|
|
|
|
||||||
Natural gas, oil and condensate and NGL sales
|
|
|
|
|
|
||||||
Natural gas equivalents (MMcfe)
|
501,742
|
|
|
496,505
|
|
|
397,543
|
|
|||
|
|
|
|
|
|
||||||
Total natural gas, oil and condensate and NGL sales
|
$
|
1,137,648
|
|
|
$
|
1,478,523
|
|
|
$
|
1,106,624
|
|
|
|
|
|
|
|
||||||
Natural gas, oil and condensate and NGL sales without the impact of derivatives ($/Mcfe)
|
$
|
2.27
|
|
|
$
|
2.98
|
|
|
$
|
2.78
|
|
Impact from settled derivatives ($/Mcfe)
|
$
|
0.24
|
|
|
$
|
(0.12
|
)
|
|
$
|
0.07
|
|
Average natural gas, oil and condensate and NGL sales price, including settled derivatives ($/Mcfe)
|
$
|
2.51
|
|
|
$
|
2.86
|
|
|
$
|
2.85
|
|
|
|
|
|
|
|
||||||
Production Costs:
|
|
|
|
|
|
||||||
Average production costs ($/Mcfe)
|
$
|
0.17
|
|
|
$
|
0.18
|
|
|
$
|
0.20
|
|
Average production taxes ($/Mcfe)
|
$
|
0.06
|
|
|
$
|
0.07
|
|
|
$
|
0.05
|
|
Average midstream gathering and processing ($/Mcfe)
|
$
|
0.58
|
|
|
$
|
0.58
|
|
|
$
|
0.63
|
|
Total production costs, midstream costs and production taxes ($/Mcfe)
|
$
|
0.81
|
|
|
$
|
0.83
|
|
|
$
|
0.88
|
|
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Utica Shale
|
|
|
|
|
|
||||||
Net Production
|
|
|
|
|
|
||||||
Natural gas (MMcf)
|
387,473
|
|
|
379,417
|
|
|
309,450
|
|
|||
Oil (Mbbls)
|
247
|
|
|
299
|
|
|
473
|
|
|||
NGL (Mgal)
|
76,112
|
|
|
113,379
|
|
|
139,634
|
|
|||
Total (MMcfe)
|
399,828
|
|
|
397,406
|
|
|
332,238
|
|
|||
Average Sales Price Without the Impact of Derivatives:
|
|
|
|
|
|
||||||
Natural gas ($/Mcf)
|
$
|
1.99
|
|
|
$
|
2.50
|
|
|
$
|
2.38
|
|
Oil ($/Bbl)
|
$
|
51.11
|
|
|
$
|
60.22
|
|
|
$
|
44.26
|
|
NGL ($/Gal)
|
$
|
0.47
|
|
|
$
|
0.67
|
|
|
$
|
0.60
|
|
Average Production Costs ($/Mcfe)
|
$
|
0.14
|
|
|
$
|
0.14
|
|
|
$
|
0.15
|
|
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017 (1)
|
||||||
SCOOP
|
|
|
|
|
|
||||||
Net Production
|
|
|
|
|
|
||||||
Natural gas (MMcf)
|
70,669
|
|
|
64,258
|
|
|
40,501
|
|
|||
Oil (Mbbls)
|
1,610
|
|
|
1,710
|
|
|
1,083
|
|
|||
NGL (Mgal)
|
136,948
|
|
|
138,261
|
|
|
84,283
|
|
|||
Total (MMcfe)
|
99,891
|
|
|
94,268
|
|
|
59,038
|
|
|||
Average Sales Price Without the Impact of Derivatives:
|
|
|
|
|
|
||||||
Natural gas ($/Mcf)
|
$
|
2.08
|
|
|
$
|
2.67
|
|
|
$
|
2.68
|
|
Oil ($/Bbl)
|
$
|
53.32
|
|
|
$
|
62.36
|
|
|
$
|
48.70
|
|
NGL ($/Gal)
|
$
|
0.48
|
|
|
$
|
0.75
|
|
|
$
|
0.62
|
|
Average Production Costs ($/Mcfe)
|
$
|
0.18
|
|
|
$
|
0.20
|
|
|
$
|
0.19
|
|
(1)
|
We acquired our SCOOP assets through an acquisition completed on February 17, 2017. See Note 2 in the notes to our consolidated financial statements for additional discussion of this acquisition.
|
•
|
reporting of workplace injuries and illnesses;
|
•
|
industrial hygiene monitoring;
|
•
|
worker protection and workplace safety;
|
•
|
approval or permits to drill and to conduct operations;
|
•
|
provision of financial assurances (such as bonds) covering drilling and well operations;
|
•
|
calculation and disbursement of royalty payments and production taxes;
|
•
|
seismic operations and data;
|
•
|
location, drilling, cementing and casing of wells;
|
•
|
well design and construction of pad and equipment;
|
•
|
construction and operations activities in sensitive areas, such as wetlands, coastal regions or areas that contain endangered or threatened species, their habitats, or sites of cultural significance;
|
•
|
method of completing wells;
|
•
|
hydraulic fracturing;
|
•
|
water withdrawal;
|
•
|
well production and operations, including processing and gathering systems;
|
•
|
emergency response, contingency plans and spill prevention plans;
|
•
|
air emissions and fluid discharges;
|
•
|
climate change;
|
•
|
use, transportation, storage and disposal of fluids and materials incidental to oil and gas operations;
|
•
|
surface usage, maintenance, monitoring and the restoration of properties associated with well pads, pipelines, impoundments and access roads;
|
•
|
plugging and abandoning of wells; and
|
•
|
transportation of production.
|
ITEM 1A.
|
RISK FACTORS
|
•
|
domestic and worldwide supplies of oil, natural gas and NGL, including U.S. inventories of oil and natural gas reserves;
|
•
|
the level of prices, and expectations about future prices, of oil and natural gas;
|
•
|
changes in the level of consumer and industrial demand, including impacts from global or national health epidemics and concerns, such as the recent coronavirus;
|
•
|
the cost of exploring for, developing, producing and delivering oil and natural gas;
|
•
|
the expected rates of declining current production;
|
•
|
changes in the level of consumer and industrial demand;
|
•
|
the price and availability of alternative fuels;
|
•
|
technological advances affecting energy consumption;
|
•
|
risks associated with operating drilling rigs;
|
•
|
the effectiveness of worldwide conservation measures;
|
•
|
the availability, proximity and capacity of pipelines, other transportation facilities and processing facilities;
|
•
|
the level and effect of trading in commodity futures markets, including by commodity price speculators and others;
|
•
|
U.S. exports of oil, natural gas, liquefied natural gas and NGL;
|
•
|
the price and level of foreign imports;
|
•
|
the nature and extent of domestic and foreign governmental regulations and taxes;
|
•
|
the ability of the members of the Organization of Petroleum Exporting Countries to agree to and maintain oil price and production controls;
|
•
|
political or economic instability or armed conflict in oil and natural gas producing regions, including the Middle East, Africa, South America and Russia;
|
•
|
weather conditions;
|
•
|
acts of terrorism; and
|
•
|
domestic and global economic conditions.
|
•
|
our high level of indebtedness could make it more difficult for us to satisfy our obligations with respect to our indebtedness, and any failure to comply with the obligations under any of our debt instruments, including their restrictive covenants,
|
•
|
the restrictions imposed on the operation of our business by the terms of our debt agreements may hinder our ability to take advantage of strategic opportunities to grow our business;
|
•
|
our ability to obtain additional financing for working capital, capital expenditures, debt service requirements, restructuring, acquisitions or general corporate purposes may be impaired, which could be exacerbated by further volatility in the credit markets;
|
•
|
we must use a substantial portion of our cash flow from operations to pay interest on our senior notes and our other indebtedness, which will reduce the funds available to us for operations and other purposes;
|
•
|
our level of indebtedness could place us at a competitive disadvantage compared to our competitors that may have proportionately less debt;
|
•
|
our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate may be limited;
|
•
|
our high level of indebtedness makes us more vulnerable to economic downturns and adverse developments in our business; and
|
•
|
we may be vulnerable to interest rate increases, as our borrowings under our revolving credit facility are at variable interest rates.
|
•
|
incur or guarantee additional indebtedness;
|
•
|
make certain investments;
|
•
|
declare or pay dividends or make distributions on our capital stock;
|
•
|
prepay subordinated indebtedness;
|
•
|
sell assets, including capital stock of restricted subsidiaries;
|
•
|
agree to payment restrictions affecting our restricted subsidiaries;
|
•
|
consolidate, merge, sell or otherwise dispose of all or substantially all of our assets;
|
•
|
enter into transactions with our affiliates;
|
•
|
incur liens;
|
•
|
engage in business other than the oil and gas business; and
|
•
|
designate certain of our subsidiaries as unrestricted subsidiaries.
|
•
|
limit our ability to plan for, or react to, market conditions, to meet capital needs or otherwise to restrict our activities or business plan;
|
•
|
adversely affect our ability to finance our operations, enter into acquisitions or divestitures to engage in other business activities that would be in our interest; or
|
•
|
withstand a continuing future downturn in our business.
|
•
|
our proved reserves;
|
•
|
the volume of oil and natural gas we are able to produce from existing wells;
|
•
|
the prices at which oil and natural gas are sold;
|
•
|
our ability to acquire, locate and produce economically new reserves; and
|
•
|
our ability to borrow under our credit facility.
|
•
|
unexpected drilling conditions, pressure conditions or irregularities in reservoir formations;
|
•
|
loss of drilling fluid circulation;
|
•
|
equipment failures or accidents;
|
•
|
fires, explosions, blowouts, cratering or loss of well control, as well as the mishandling or underground migration of fluids and chemicals;
|
•
|
risks associated with hydraulic fracturing, including any mishandling, surface spillage or potential underground migration of fracturing fluids, including chemical additives;
|
•
|
adverse weather conditions and natural disasters, such as tornadoes, earthquakes, hurricanes and extreme temperatures;
|
•
|
issues with title or in receiving governmental permits or approvals;
|
•
|
restricted takeaway capacity for our production, including due to inadequate midstream infrastructure or constrained downstream markets;
|
•
|
environmental hazards or liabilities, including liabilities for environmental damage caused by previous owners of properties purchased by us;
|
•
|
restrictions in access to, or disposal of, water used or produced in drilling and completion operations;
|
•
|
shortages or delays in the availability of services or delivery of equipment; and
|
•
|
unexpected or unforeseen changes in regulatory policy, and political or public opinions.
|
•
|
the timing and amount of capital expenditures;
|
•
|
the availability of suitable drilling equipment, production and transportation infrastructure and qualified operating personnel;
|
•
|
the operator's expertise and financial resources;
|
•
|
approval of other participants in drilling wells;
|
•
|
selection of technology; and
|
•
|
the rate of production of the reserves.
|
•
|
any acquisition would be successfully integrated into our operations and internal controls;
|
•
|
the due diligence conducted prior to an acquisition would uncover situations that could result in financial or legal exposure, such as title defects and potential environmental and other liabilities;
|
•
|
post-closing purchase price adjustments will be realized in our favor;
|
•
|
any investment, acquisition, disposition or integration would not divert management resources from the operation of our business; and
|
•
|
any investment, acquisition, or disposition or integration would not have a material adverse effect on our financial condition, results of operations, cash flows or reserves.
|
•
|
recoverable reserves;
|
•
|
future oil and natural gas prices and their applicable differentials;
|
•
|
operating costs; and
|
•
|
potential environmental and other liabilities.
|
•
|
denial of or delay in receiving requisite regulatory approvals or permits;
|
•
|
unplanned increases in the cost of construction materials or labor;
|
•
|
disruptions in transportation of components or construction materials;
|
•
|
adverse weather conditions, natural disasters or other events (such as equipment malfunctions, explosions, fires or spills) affecting our facilities, or those of vendors or suppliers;
|
•
|
shortages of sufficiently skilled labor, or labor disagreements resulting in unplanned work stoppages;
|
•
|
market-related increases in a project's debt or equity financing costs; and
|
•
|
nonperformance by, or disputes with, vendors, suppliers, contractors or subcontractors.
|
ITEM 1B.
|
UNRESOLVED STAFF COMMENTS
|
ITEM 2.
|
PROPERTIES
|
ITEM 3.
|
LEGAL PROCEEDINGS
|
ITEM 4.
|
MINE SAFETY DISCLOSURES
|
ITEM 5.
|
MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
|
ITEM 6.
|
SELECTED FINANCIAL DATA
|
|
Fiscal Year Ended December 31,
|
||||||||||||||||||
|
2019
|
|
2018
|
|
2017
|
|
2016
|
|
2015
|
||||||||||
|
(In thousands, except share data)
|
||||||||||||||||||
Selected Consolidated Statements of Operations Data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenues
|
$
|
1,346,008
|
|
|
$
|
1,355,044
|
|
|
$
|
1,320,303
|
|
|
$
|
385,910
|
|
|
$
|
708,990
|
|
Costs and expenses:
|
|
|
|
|
|
|
|
|
|
||||||||||
Lease operating expenses
|
82,998
|
|
|
91,640
|
|
|
80,246
|
|
|
68,877
|
|
|
69,475
|
|
|||||
Production taxes
|
28,571
|
|
|
33,480
|
|
|
21,126
|
|
|
13,276
|
|
|
14,740
|
|
|||||
Midstream gathering and processing expenses
|
291,725
|
|
|
290,188
|
|
|
248,995
|
|
|
165,972
|
|
|
138,590
|
|
|||||
Depreciation, depletion and amortization
|
550,108
|
|
|
486,664
|
|
|
364,629
|
|
|
245,974
|
|
|
337,694
|
|
|||||
Impairment of oil and natural gas properties
|
2,039,770
|
|
|
—
|
|
|
—
|
|
|
715,495
|
|
|
1,440,418
|
|
|||||
General and administrative expenses
|
47,979
|
|
|
49,994
|
|
|
45,523
|
|
|
37,681
|
|
|
38,086
|
|
|||||
Restructuring costs
|
4,611
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Accretion expense
|
3,939
|
|
|
4,119
|
|
|
1,611
|
|
|
1,057
|
|
|
820
|
|
|||||
Acquisition expense
|
—
|
|
|
—
|
|
|
2,392
|
|
|
—
|
|
|
—
|
|
|||||
|
3,049,701
|
|
|
956,085
|
|
|
764,522
|
|
|
1,248,332
|
|
|
2,039,823
|
|
|||||
(Loss) Income from Operations
|
(1,703,693
|
)
|
|
398,959
|
|
|
555,781
|
|
|
(862,422
|
)
|
|
(1,330,833
|
)
|
|||||
Other Expense (Income):
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest expense
|
141,786
|
|
|
141,912
|
|
|
115,613
|
|
|
69,258
|
|
|
55,102
|
|
|||||
Interest income
|
(801
|
)
|
|
(314
|
)
|
|
(1,009
|
)
|
|
(1,230
|
)
|
|
(643
|
)
|
|||||
(Gain) loss on debt extinguishment
|
(48,630
|
)
|
|
—
|
|
|
—
|
|
|
23,776
|
|
|
—
|
|
|||||
Gain on sale of equity method investments
|
—
|
|
|
(124,768
|
)
|
|
(12,523
|
)
|
|
(3,391
|
)
|
|
—
|
|
|||||
Loss (income) from equity method investments, net
|
210,148
|
|
|
(49,904
|
)
|
|
17,780
|
|
|
37,376
|
|
|
106,093
|
|
|||||
Other expense (income)
|
3,725
|
|
|
1,542
|
|
|
(1,041
|
)
|
|
(5,589
|
)
|
|
(10,500
|
)
|
|||||
|
306,228
|
|
|
(31,532
|
)
|
|
118,820
|
|
|
120,200
|
|
|
150,052
|
|
|||||
(Loss) Income from Continuing Operations before Income Taxes
|
(2,009,921
|
)
|
|
430,491
|
|
|
436,961
|
|
|
(982,622
|
)
|
|
(1,480,885
|
)
|
|||||
Income Tax (Benefit) Expense
|
(7,563
|
)
|
|
(69
|
)
|
|
1,809
|
|
|
(2,913
|
)
|
|
(256,001
|
)
|
|||||
(Loss) Income from Continuing Operations
|
(2,002,358
|
)
|
|
430,560
|
|
|
435,152
|
|
|
(979,709
|
)
|
|
(1,224,884
|
)
|
|||||
Net (Loss) Income Available to Common Stockholders
|
$
|
(2,002,358
|
)
|
|
$
|
430,560
|
|
|
$
|
435,152
|
|
|
$
|
(979,709
|
)
|
|
$
|
(1,224,884
|
)
|
Net (Loss) Income Per Common Share—Basic:
|
$
|
(12.49
|
)
|
|
$
|
2.46
|
|
|
$
|
2.42
|
|
|
$
|
(7.97
|
)
|
|
$
|
(12.27
|
)
|
Net (Loss) Income Per Common Share—Diluted:
|
$
|
(12.49
|
)
|
|
$
|
2.45
|
|
|
$
|
2.41
|
|
|
$
|
(7.97
|
)
|
|
$
|
(12.27
|
)
|
|
At December 31,
|
||||||||||||||||||
|
2019
|
|
2018
|
|
2017
|
|
2016
|
|
2015
|
||||||||||
|
(In thousands)
|
||||||||||||||||||
Selected Consolidated Balance Sheet Data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Total assets
|
$
|
3,882,819
|
|
|
$
|
6,051,036
|
|
|
$
|
5,807,752
|
|
|
$
|
4,223,145
|
|
|
$
|
3,334,734
|
|
Total debt, including current maturities
|
$
|
1,978,651
|
|
|
$
|
2,087,416
|
|
|
$
|
2,038,943
|
|
|
$
|
1,593,875
|
|
|
$
|
946,263
|
|
Total liabilities
|
$
|
2,568,227
|
|
|
$
|
2,723,268
|
|
|
$
|
2,706,138
|
|
|
$
|
2,039,253
|
|
|
$
|
1,295,897
|
|
Stockholders’ equity
|
$
|
1,314,592
|
|
|
$
|
3,327,768
|
|
|
$
|
3,101,614
|
|
|
$
|
2,183,892
|
|
|
$
|
2,038,837
|
|
ITEM 7.
|
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
•
|
During the year ended December 31, 2019, we entered into several agreements to divest of certain non-core assets as part of our strategic initiatives to focus development in our core operating areas. These non-core divestitures consisted of the following:
|
◦
|
We sold our non-core assets located in the West Cote Blanche Bay ("WCBB") and Hackberry fields of Louisiana for a purchase price of approximately $19.7 million, subject to customary closing terms and adjustments. We received approximately $9.2 million in cash and retained contingent overriding royalty interests. In addition, we could also receive contingent payments based on commodity prices exceeding specified thresholds over the two years following the closing date. The buyer assumed all plugging and abandonment liabilities associated with these assets, which totaled approximately $30.0 million at the divestiture date. The sale closed on July 3, 2019.
|
◦
|
We sold certain non-operated interests in the Utica Shale for cash proceeds of $29.0 million subject to customary closing terms and adjustments. The sale closed on December 30, 2019.
|
◦
|
We sold certain overriding royalty interests associated with assets we held in the Bakken for cash proceeds of approximately $7.0 million subject to customary closing terms and adjustments. The sale closed on December 11, 2019.
|
◦
|
In December 2019, we entered into an agreement to divest our water infrastructure assets across our SCOOP position to a third-party water service provider. This transaction closed on January 2, 2020. We received $50.0 million in cash upon closing and have an opportunity to earn potential additional incentive payments over the next 15 years, subject to our ability to meet certain thresholds which will be driven by, among other things, our future development program and future water production levels. The agreement contains no
|
•
|
During the year ended December 31, 2019, we used borrowings under our revolving credit facility to repurchase in the open market approximately $190.1 million aggregate principal amount of our outstanding 6.625% Senior Notes due 2023 ("2023 Notes"), 6.000% Senior Notes due 2024 ("2024 Notes"), 6.375% Senior Notes due 2025 ("2025 Notes"), and 6.375% Senior Notes due 2026 ("2026 Notes") (collectively the "Notes"), for $138.8 million. We recognized a $48.6 million gain on debt extinguishment, which included retirement of unamortized issuance costs and fees associated with the repurchased debt.
|
•
|
Production increased 1% to approximately 501,742 MMcfe for the year ended December 31, 2019 from approximately 496,505 MMcfe for the year ended December 31, 2018.
|
•
|
During 2019, we spud 26 gross (23.2 net) wells, turned to sales 61 gross (54.1 net) operated wells, participated in an additional 47 gross (2.5 net) wells that were drilled by other operators on our Utica Shale and SCOOP acreage. Of our 26 new wells spud during 2019, 11 were completed as producing wells and, at year end, 14 were in various stages of completion and one was being drilled.
|
•
|
During the year ended December 31, 2019, we reduced our unit lease operating expense by 10% to $0.17 per Mcfe from $0.18 per Mcfe during the year ended December 31, 2018.
|
•
|
During the year ended December 31, 2019, we reduced our general and administrative expense by 4% to $48.0 million from $50.0 million during the year ended December 31, 2018.
|
Natural Gas Derivatives
|
|||||||||||
Year
|
|
Type of Derivative Instrument
|
|
Index
|
|
Daily Volume (MMBtu/day)
|
|
Weighted
Average Price
|
|||
2020
|
|
Swaps
|
|
NYMEX Henry Hub
|
|
548,000
|
|
|
$
|
2.88
|
|
2020
|
|
Basis Swaps
|
|
Various
|
|
70,000
|
|
|
$
|
(0.12
|
)
|
2022
|
|
Sold Call Options
|
|
NYMEX Henry Hub
|
|
628,000
|
|
|
$
|
2.90
|
|
2023
|
|
Sold Call Options
|
|
NYMEX Henry Hub
|
|
628,000
|
|
|
$
|
2.90
|
|
Oil Derivatives
|
|||||||||||
Year
|
|
Type of Derivative Instrument
|
|
Index
|
|
Daily Volume (Bbls/day)
|
|
Weighted
Average Price
|
|||
2020
|
|
Swaps
|
|
NYMEX WTI
|
|
6,000
|
|
|
$
|
59.82
|
|
NGL Derivatives
|
|||||||||||
Year
|
|
Type of Derivative Instrument
|
|
Index
|
|
Daily Volume (Bbls/day)
|
|
Weighted
Average Price
|
|||
2020
|
|
Swaps
|
|
Mont Belvieu C3
|
|
500
|
|
|
$
|
21.63
|
|
|
Payment due by period
|
||||||||||||||||||
Contractual Obligations
|
Total
|
|
Less than 1 year
|
|
1-3 years
|
|
3-5 years
|
|
More than 5
years
|
||||||||||
|
(In thousands)
|
||||||||||||||||||
Long-term debt(1):
|
|
|
|
|
|
|
|
|
|
||||||||||
Principal
|
$
|
2,002,402
|
|
|
$
|
631
|
|
|
$
|
121,357
|
|
|
$
|
934,380
|
|
|
$
|
946,034
|
|
Interest
|
613,260
|
|
|
118,428
|
|
|
236,198
|
|
|
203,330
|
|
|
55,304
|
|
|||||
Firm transportation contracts(2)
|
3,560,504
|
|
|
274,813
|
|
|
573,252
|
|
|
548,513
|
|
|
2,163,926
|
|
|||||
Operating lease liabilities(3)
|
57,438
|
|
|
35,045
|
|
|
22,275
|
|
|
118
|
|
|
—
|
|
|||||
Other
|
15,000
|
|
|
7,500
|
|
|
7,500
|
|
|
—
|
|
|
—
|
|
|||||
Total contractual cash obligations(4)
|
$
|
6,248,604
|
|
|
$
|
436,417
|
|
|
$
|
960,582
|
|
|
$
|
1,686,341
|
|
|
$
|
3,165,264
|
|
(1)
|
See Note 5 of the notes to our consolidated financial statements included in Item 8 of this report for a description of our long-term debt.
|
(2)
|
See Note 16 of the notes to our consolidated financial statements included in Item 8 of this report for a description of our firm transportation contracts.
|
(3)
|
See Note 9 of the notes to our consolidated financial statements included in Item 8 of this report for a description of our operating lease liabilities.
|
(4)
|
|
Years Ended December 31,
|
||||||
|
2019
|
|
2018
|
||||
|
(In thousands)
|
||||||
Oil and Natural Gas Property Expenditures:
|
|
|
|
||||
Drilling and completion costs
|
654,407
|
|
|
713,031
|
|
||
Leasehold acquisitions
|
39,664
|
|
|
125,585
|
|
||
Other
|
25,986
|
|
|
60,467
|
|
||
Total oil and natural gas property expenditures
|
720,057
|
|
|
899,083
|
|
||
Other Uses of Cash and Cash Equivalents
|
|
|
|
||||
Cash paid to repurchase senior notes
|
138,786
|
|
|
—
|
|
||
Cash paid to repurchase common stock
|
30,688
|
|
|
200,251
|
|
||
Additions to other property and equipment
|
5,021
|
|
|
7,870
|
|
||
Contributions to equity method investments
|
432
|
|
|
2,319
|
|
||
Other
|
288
|
|
|
831
|
|
||
Total other uses of cash and cash equivalents
|
$
|
175,215
|
|
|
$
|
211,271
|
|
Total uses of cash and cash equivalents
|
$
|
895,272
|
|
|
$
|
1,110,354
|
|
|
Years Ended December 31,
|
||||||
|
2019
|
|
2018
|
||||
|
(In thousands, unless otherwise stated)
|
||||||
Natural gas sales
|
|
|
|
||||
Natural gas production volumes (MMcf)
|
458,178
|
|
|
443,742
|
|
||
|
|
|
|
||||
Total natural gas sales
|
$
|
918,263
|
|
|
$
|
1,121,815
|
|
|
|
|
|
||||
Natural gas sales without the impact of derivatives ($/Mcf)
|
$
|
2.00
|
|
|
$
|
2.53
|
|
Impact from settled derivatives ($/Mcf)
|
$
|
0.23
|
|
|
$
|
(0.04
|
)
|
Average natural gas sales price, including settled derivatives ($/Mcf)
|
$
|
2.23
|
|
|
$
|
2.49
|
|
|
|
|
|
||||
Oil and condensate sales
|
|
|
|
||||
Oil and condensate production volumes (Mbbls)
|
2,186
|
|
|
2,801
|
|
||
|
|
|
|
||||
Total oil and condensate sales
|
$
|
117,937
|
|
|
$
|
177,793
|
|
|
|
|
|
||||
Oil and condensate sales without the impact of derivatives ($/Bbl)
|
$
|
53.95
|
|
|
$
|
63.48
|
|
Impact from settled derivatives ($/Bbl)
|
$
|
1.86
|
|
|
$
|
(9.51
|
)
|
Average oil and condensate sales price, including settled derivatives ($/Bbl)
|
$
|
55.81
|
|
|
$
|
53.97
|
|
|
|
|
|
||||
NGL sales
|
|
|
|
||||
NGL production volumes (MGal)
|
213,129
|
|
|
251,720
|
|
||
|
|
|
|
||||
Total NGL sales
|
$
|
101,448
|
|
|
$
|
178,915
|
|
|
|
|
|
||||
NGL sales without the impact of derivatives ($/Gal)
|
$
|
0.48
|
|
|
$
|
0.71
|
|
Impact from settled derivatives ($/Gal)
|
$
|
0.06
|
|
|
$
|
(0.05
|
)
|
Average NGL price, including settled derivatives ($/Gal)
|
$
|
0.54
|
|
|
$
|
0.66
|
|
|
|
|
|
||||
Natural gas, oil and condensate and NGL sales
|
|
|
|
||||
Natural gas equivalents (MMcfe)
|
501,742
|
|
|
496,505
|
|
||
|
|
|
|
||||
Total natural gas, oil and condensate and NGL sales
|
$
|
1,137,648
|
|
|
$
|
1,478,523
|
|
|
|
|
|
||||
Natural gas, oil and condensate and NGL sales without the impact of derivatives ($/Mcfe)
|
$
|
2.27
|
|
|
$
|
2.98
|
|
Impact from settled derivatives ($/Mcfe)
|
$
|
0.24
|
|
|
$
|
(0.12
|
)
|
Average natural gas, oil and condensate and NGL sales price, including settled derivatives ($/Mcfe)
|
$
|
2.51
|
|
|
$
|
2.86
|
|
|
|
|
|
||||
Production Costs:
|
|
|
|
||||
Average production costs ($/Mcfe)
|
$
|
0.17
|
|
|
$
|
0.18
|
|
Average production taxes ($/Mcfe)
|
$
|
0.06
|
|
|
$
|
0.07
|
|
Average midstream gathering and processing ($/Mcfe)
|
$
|
0.58
|
|
|
$
|
0.58
|
|
Total production costs, midstream costs and production taxes ($/Mcfe)
|
$
|
0.81
|
|
|
$
|
0.83
|
|
|
Years Ended December 31,
|
|||||||||
|
2019
|
|
2018
|
|
change
|
|||||
|
($ In thousands)
|
|||||||||
Natural gas
|
918,263
|
|
|
1,121,815
|
|
|
(18
|
)%
|
||
Oil and condensate
|
117,937
|
|
|
177,793
|
|
|
(34
|
)%
|
||
NGL
|
101,448
|
|
|
178,915
|
|
|
(43
|
)%
|
||
Natural gas, oil and NGL revenues
|
$
|
1,137,648
|
|
|
$
|
1,478,523
|
|
|
(23
|
)%
|
|
Years Ended December 31,
|
||||||
|
2019
|
|
2018
|
||||
|
($ In thousands)
|
||||||
Natural gas derivatives - fair value (gains) losses
|
$
|
(89,576
|
)
|
|
$
|
98,130
|
|
Natural gas derivatives - settlement (gains) losses
|
(104,874
|
)
|
|
18,000
|
|
||
Total (gains) losses on natural gas derivatives
|
(194,450
|
)
|
|
116,130
|
|
||
|
|
|
|
||||
Oil and condensate derivatives - fair value (gains) losses
|
(2,952
|
)
|
|
(13,546
|
)
|
||
Oil and condensate derivatives - settlement (gains) losses
|
(4,083
|
)
|
|
26,630
|
|
||
Total (gains) losses on oil and condensate derivatives
|
(7,035
|
)
|
|
13,084
|
|
||
|
|
|
|
||||
NGL derivatives - fair value (gains) losses
|
7,541
|
|
|
(19,533
|
)
|
||
NGL derivatives - settlement (gains) losses
|
(14,173
|
)
|
|
13,798
|
|
||
Total (gains) losses on NGL derivatives
|
(6,632
|
)
|
|
(5,735
|
)
|
||
|
|
|
|
||||
Contingent consideration arrangement - fair value gains
|
(243
|
)
|
|
—
|
|
||
Total (gains) losses on natural gas, oil and NGL derivatives
|
$
|
(208,360
|
)
|
|
$
|
123,479
|
|
|
Years Ended December 31,
|
|||||||||
|
2019
|
|
2018
|
|
change
|
|||||
|
($ In thousands, except per unit)
|
|||||||||
Lease operating expenses
|
|
|
|
|
|
|||||
Utica
|
$
|
55,839
|
|
|
$
|
54,347
|
|
|
3
|
%
|
SCOOP
|
18,239
|
|
|
18,385
|
|
|
(1
|
)%
|
||
WCBB
|
6,941
|
|
|
14,178
|
|
|
(51
|
)%
|
||
Hackberry
|
1,679
|
|
|
4,435
|
|
|
(62
|
)%
|
||
Other(1)
|
300
|
|
|
295
|
|
|
2
|
%
|
||
Total lease operating expenses
|
$
|
82,998
|
|
|
$
|
91,640
|
|
|
(9
|
)%
|
|
|
|
|
|
|
|||||
Lease operating expenses per Mcfe
|
|
|
|
|
|
|||||
Utica
|
$
|
0.14
|
|
|
$
|
0.14
|
|
|
2
|
%
|
SCOOP
|
0.18
|
|
|
0.20
|
|
|
(6
|
)%
|
||
WCBB
|
4.87
|
|
|
3.87
|
|
|
26
|
%
|
||
Hackberry
|
7.65
|
|
|
6.57
|
|
|
16
|
%
|
||
Other(1)
|
0.79
|
|
|
0.60
|
|
|
32
|
%
|
||
Total lease operating expenses per Mcfe
|
$
|
0.17
|
|
|
$
|
0.18
|
|
|
(10
|
)%
|
(1)
|
Includes Niobrara and Bakken
|
|
Years Ended December 31,
|
|||||||||
|
2019
|
|
2018
|
|
change
|
|||||
|
($ In thousands, except per unit)
|
|||||||||
Production taxes
|
$
|
28,571
|
|
|
$
|
33,480
|
|
|
(15
|
)%
|
Production taxes per Mcfe
|
$
|
0.06
|
|
|
$
|
0.07
|
|
|
(16
|
)%
|
|
Years Ended December 31,
|
|||||||||
|
2019
|
|
2018
|
|
change
|
|||||
|
($ In thousands, except per unit)
|
|||||||||
Midstream gathering and processing expenses
|
$
|
291,725
|
|
|
$
|
290,188
|
|
|
1
|
%
|
Midstream gathering and processing expenses per Mcfe
|
$
|
0.58
|
|
|
$
|
0.58
|
|
|
(1
|
)%
|
|
Years Ended December 31,
|
|||||||||
|
2019
|
|
2018
|
|
change
|
|||||
|
($ In thousands, except per unit)
|
|||||||||
Depreciation, depletion and amortization
|
$
|
550,108
|
|
|
$
|
486,664
|
|
|
13
|
%
|
Depreciation, depletion and amortization per Mcfe
|
$
|
1.10
|
|
|
$
|
0.98
|
|
|
12
|
%
|
|
Years Ended December 31,
|
|||||||||
|
2019
|
|
2018
|
|
change
|
|||||
|
($ In thousands, except per unit)
|
|||||||||
Gain on sale of equity method investments
|
$
|
—
|
|
|
$
|
(124,768
|
)
|
|
(100
|
)%
|
Loss (income) from equity method investments, net
|
$
|
210,148
|
|
|
$
|
(49,904
|
)
|
|
(521
|
)%
|
|
Years Ended December 31,
|
|||||||||
|
2019
|
|
2018
|
|
change
|
|||||
|
($ In thousands, except per unit)
|
|||||||||
General and administrative expenses, gross
|
$
|
89,291
|
|
|
$
|
97,526
|
|
|
(8
|
)%
|
Reimbursed from third parties
|
(11,173
|
)
|
|
(9,820
|
)
|
|
14
|
%
|
||
Capitalized general and administrative expenses
|
(30,139
|
)
|
|
(37,712
|
)
|
|
(20
|
)%
|
||
General and administrative expenses, net
|
$
|
47,979
|
|
|
$
|
49,994
|
|
|
(4
|
)%
|
|
|
|
|
|
|
|||||
General and administrative expenses, net per Mcfe
|
$
|
0.10
|
|
|
$
|
0.10
|
|
|
(5
|
)%
|
|
Years Ended December 31,
|
||||||
|
2019
|
|
2018
|
||||
|
($ In thousands, except per unit)
|
||||||
Interest expense on senior notes
|
125,687
|
|
|
129,125
|
|
||
Interest expense on revolving credit agreement
|
12,088
|
|
|
9,601
|
|
||
Interest expense on construction loan and other
|
1,055
|
|
|
1,535
|
|
||
Capitalized interest
|
(3,372
|
)
|
|
(4,470
|
)
|
||
Amortization of loan costs
|
6,328
|
|
|
6,121
|
|
||
Total interest expense
|
$
|
141,786
|
|
|
$
|
141,912
|
|
|
|
|
|
||||
Interest expense per Mcfe
|
$
|
0.28
|
|
|
$
|
0.29
|
|
|
|
|
|
||||
Weighted average debt outstanding under revolving credit facility
|
$
|
161,416
|
|
|
$
|
83,589
|
|
ITEM 7A.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
•
|
Swaps: We receive a fixed price and pay a floating market price to the counterparty for the hedged commodity. In exchange for higher fixed prices on certain of our swap trades, we may sell call options.
|
•
|
Basis Swaps: These instruments are arrangements that guarantee a fixed price differential to NYMEX from a specified delivery point. We receive the fixed price differential and pay the floating market price differential to the counterparty for the hedged commodity.
|
•
|
Options: We sell, and occasionally buy, call options in exchange for a premium. At the time of settlement, if the market price exceeds the fixed price of the call option, we pay the counterparty the excess on sold call options, and we receive the excess on bought call options. If the market price settles below the fixed price of the call option, no payment is due from either party.
|
|
|
|
|
Weighted Average Price
|
|
Fair Value
|
|||||||||||||
|
|
Volume
|
|
Fixed
|
|
Call
|
|
Differential
|
|
Asset (Liability)
|
|||||||||
|
|
MMBtu/day
|
|
$/MMBtu
|
|
(in thousands)
|
|||||||||||||
Natural Gas:
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Swaps:
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Short-term
|
|
548,000
|
|
|
$
|
2.88
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
121,934
|
|
Call Options (sold)(1):
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Long-term
|
|
628,000
|
|
|
$
|
—
|
|
|
$
|
2.90
|
|
|
$
|
—
|
|
|
$
|
(53,135
|
)
|
Basis Swaps:
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Short-term
|
|
70,000
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(0.12
|
)
|
|
$
|
(267
|
)
|
Total Natural Gas
|
|
|
|
|
|
|
|
|
|
$
|
68,532
|
|
|||||||
|
|
Bbls/day
|
|
$/Bbl
|
|
|
|||||||||||||
Oil:
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Swaps:
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Short-term
|
|
6,000
|
|
|
$
|
59.82
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,952
|
|
Total Oil
|
|
|
|
|
|
|
|
|
|
$
|
2,952
|
|
|||||||
|
|
Bbls/day
|
|
$/Bbl
|
|
|
|||||||||||||
NGL:
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Swaps:
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Short-term
|
|
500
|
|
|
$
|
21.63
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
461
|
|
Total NGL
|
|
|
|
|
|
|
|
|
|
$
|
461
|
|
|||||||
Total Commodities
|
|
|
|
|
|
|
|
|
|
$
|
71,945
|
|
|||||||
Contingent Consideration:
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Louisiana Divestiture(2):
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Short-term
|
|
|
|
|
|
|
|
|
|
$
|
818
|
|
|||||||
Long-term
|
|
|
|
|
|
|
|
|
|
$
|
563
|
|
|||||||
Total
|
|
|
|
|
|
|
|
|
|
$
|
1,381
|
|
|||||||
Total Derivative Asset
|
|
|
|
|
|
|
|
$
|
73,326
|
|
(1)
|
In the third quarter of 2019, we sold call options in exchange for a premium, and used the associated premiums received to enhance the fixed price for a portion of the fixed price natural gas swaps primarily for 2020 listed above. Each short call option has an established ceiling price. When the referenced settlement price is above the price ceiling established by these short call options, we pay our counterparty an amount equal to the difference between the referenced settlement price and the price ceiling multiplied by the hedged contract volumes.
|
(2)
|
The purchase and sale agreement for the sale of our non-core assets located in the WCBB and Hackberry fields of Louisiana included a contingent consideration arrangement that entitles us to receive bonus payments if commodity prices exceed specified thresholds. The calculated fair value of this contingent payment arrangement was approximately $1.1 million as of the closing date of the divestiture.
|
ITEM 8.
|
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
|
|
Page
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
•
|
We tested the design and operating effectiveness of internal controls relating to management’s estimation of proved reserves for the purpose of estimating depletion, depreciation and amortization expense and assessing the Company’s oil and gas properties for potential ceiling test impairment.
|
•
|
We evaluated the independence, objectivity, and professional qualifications of the Company’s reserve specialists, made inquiries of those reservoir engineers regarding the process followed and judgments made to estimate the Company’s proved reserve volumes and read the report prepared by the Company’s reserve specialists.
|
•
|
We evaluated sensitive inputs and assumptions used to determine proved reserve volumes and other cash flow inputs and assumptions that are derived from the Company’s accounting records, such as historical pricing differentials, operating costs, estimated capital costs, and ownership interests. We tested management’s process for determining the assumptions, including examining the underlying support, on a sample basis where applicable. Specifically, our audit procedures involved testing management’s assumptions as follows:
|
◦
|
Compared the estimated pricing differentials used in the reserve report to realized prices related to revenue transactions recorded in the current year and examined contractual support for pricing differentials, where applicable;
|
◦
|
Tested the model used to estimate the operating costs at year end and compared to historical operating costs;
|
◦
|
Tested the model used to determine the future capital expenditures and compared estimated future capital expenditures used in the reserve report to amounts expended for recently drilled and completed wells, where applicable;
|
◦
|
Tested the working and net revenue interests used in the reserve report by inspecting land and division order records;
|
◦
|
Evaluated the Company’s evidence supporting the proved undeveloped properties reflected in the reserve report by examining historical conversion rates and support for the Company’s ability to fund and intent to develop the proved undeveloped properties; and
|
◦
|
Applied analytical procedures to the reserve report by comparing to historical actual results and to the prior year’s reserve report.
|
•
|
We tested the effectiveness of controls over management’s estimates of the realization of the deferred tax assets, including those over management’s corporate model which was the basis for the forecast of future taxable income, management’s tax planning strategies and the determination of whether it is more likely than not that the deferred tax assets will be realized prior to expiration.
|
•
|
With the assistance of our income tax specialists, we evaluated the forecast of future taxable income considering whether the estimated future sources of taxable income were of the appropriate character to utilize the net operating loss carryforwards and other temporary differences giving rise to the deferred tax assets under current tax law.
|
•
|
With the assistance of our income tax specialists, we evaluated management’s Internal Revenue Code Section 382 ownership change calculations.
|
•
|
We tested the reasonableness of management’s corporate model used to estimate future taxable income by comparing the estimates to the following:
|
◦
|
Historical taxable income.
|
◦
|
Internal communications with the board of directors.
|
◦
|
Evidence obtained in other areas of the audit.
|
◦
|
Management’s history of carrying out its stated plans and its ability to carry out its plans considering contractual commitments, available financing, or debt covenants.
|
|
December 31, 2019
|
|
December 31, 2018
|
||||
|
(In thousands, except share data)
|
||||||
Assets
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
6,060
|
|
|
$
|
52,297
|
|
Accounts receivable—oil and natural gas sales
|
121,210
|
|
|
210,200
|
|
||
Accounts receivable—joint interest and other
|
47,975
|
|
|
22,497
|
|
||
Prepaid expenses and other current assets
|
4,431
|
|
|
10,017
|
|
||
Short-term derivative instruments
|
126,201
|
|
|
21,352
|
|
||
Total current assets
|
305,877
|
|
|
316,363
|
|
||
Property and equipment:
|
|
|
|
||||
Oil and natural gas properties, full-cost accounting, $1,686,666 and $2,873,037 excluded from amortization in 2019 and 2018, respectively
|
10,595,735
|
|
|
10,026,836
|
|
||
Other property and equipment
|
96,719
|
|
|
92,667
|
|
||
Accumulated depletion, depreciation, amortization and impairment
|
(7,228,660
|
)
|
|
(4,640,098
|
)
|
||
Property and equipment, net
|
3,463,794
|
|
|
5,479,405
|
|
||
Other assets:
|
|
|
|
||||
Equity investments
|
32,044
|
|
|
236,121
|
|
||
Long-term derivative instruments
|
563
|
|
|
—
|
|
||
Deferred tax asset
|
7,563
|
|
|
—
|
|
||
Inventories
|
5,182
|
|
|
5,344
|
|
||
Operating lease assets
|
14,168
|
|
|
—
|
|
||
Operating lease assets - related parties
|
43,270
|
|
|
—
|
|
||
Other assets
|
10,358
|
|
|
13,803
|
|
||
Total other assets
|
113,148
|
|
|
255,268
|
|
||
Total assets
|
$
|
3,882,819
|
|
|
$
|
6,051,036
|
|
Liabilities and stockholders’ equity
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable and accrued liabilities
|
$
|
415,218
|
|
|
$
|
518,380
|
|
Short-term derivative instruments
|
303
|
|
|
20,401
|
|
||
Current portion of operating lease liabilities
|
13,826
|
|
|
—
|
|
||
Current portion of operating lease liabilities - related parties
|
21,220
|
|
|
—
|
|
||
Current maturities of long-term debt
|
631
|
|
|
651
|
|
||
Total current liabilities
|
451,198
|
|
|
539,432
|
|
||
Long-term derivative instruments
|
53,135
|
|
|
13,992
|
|
||
Asset retirement obligation—long-term
|
60,355
|
|
|
79,952
|
|
||
Uncertain tax position liability
|
3,127
|
|
|
3,127
|
|
||
Non-current operating lease liabilities
|
342
|
|
|
—
|
|
||
Non-current operating lease liabilities - related parties
|
22,050
|
|
|
—
|
|
||
Long-term debt, net of current maturities
|
1,978,020
|
|
|
2,086,765
|
|
||
Total liabilities
|
2,568,227
|
|
|
2,723,268
|
|
||
Commitments and contingencies (Notes 16 and 17)
|
|
|
|
||||
Preferred stock, $.01 par value; 5,000,000 authorized (30,000 authorized as redeemable 12% cumulative preferred stock, Series A), and none issued and outstanding
|
—
|
|
|
—
|
|
||
Stockholders’ equity:
|
|
|
|
||||
Common stock - $.01 par value, 200,000,000 shares authorized, 159,710,955 issued and outstanding in 2019 and 162,986,045 in 2018
|
1,597
|
|
|
1,630
|
|
||
Paid-in capital
|
4,207,554
|
|
|
4,227,532
|
|
||
Accumulated other comprehensive loss
|
(46,833
|
)
|
|
(56,026
|
)
|
||
Accumulated deficit
|
(2,847,726
|
)
|
|
(845,368
|
)
|
||
Total stockholders’ equity
|
1,314,592
|
|
|
3,327,768
|
|
||
Total liabilities and stockholders’ equity
|
$
|
3,882,819
|
|
|
$
|
6,051,036
|
|
|
For the Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
|
(In thousands, except share data)
|
||||||||||
Revenues:
|
|
|
|
|
|
||||||
Natural gas sales
|
$
|
918,263
|
|
|
$
|
1,121,815
|
|
|
$
|
845,999
|
|
Oil and condensate sales
|
117,937
|
|
|
177,793
|
|
|
124,568
|
|
|||
Natural gas liquid sales
|
101,448
|
|
|
178,915
|
|
|
136,057
|
|
|||
Net gain (loss) on natural gas, oil, and NGL derivatives
|
208,360
|
|
|
(123,479
|
)
|
|
213,679
|
|
|||
|
1,346,008
|
|
|
1,355,044
|
|
|
1,320,303
|
|
|||
Costs and expenses:
|
|
|
|
|
|
||||||
Lease operating expenses
|
82,998
|
|
|
91,640
|
|
|
80,246
|
|
|||
Production taxes
|
28,571
|
|
|
33,480
|
|
|
21,126
|
|
|||
Midstream gathering and processing expenses
|
291,725
|
|
|
290,188
|
|
|
248,995
|
|
|||
Depreciation, depletion and amortization
|
550,108
|
|
|
486,664
|
|
|
364,629
|
|
|||
Impairment of oil and natural gas properties
|
2,039,770
|
|
|
—
|
|
|
—
|
|
|||
General and administrative expenses
|
47,979
|
|
|
49,994
|
|
|
45,523
|
|
|||
Restructuring costs
|
4,611
|
|
|
—
|
|
|
—
|
|
|||
Accretion expense
|
3,939
|
|
|
4,119
|
|
|
1,611
|
|
|||
Acquisition expense
|
—
|
|
|
—
|
|
|
2,392
|
|
|||
|
3,049,701
|
|
|
956,085
|
|
|
764,522
|
|
|||
(LOSS) INCOME FROM OPERATIONS
|
(1,703,693
|
)
|
|
398,959
|
|
|
555,781
|
|
|||
OTHER EXPENSE (INCOME):
|
|
|
|
|
|
||||||
Interest expense
|
141,786
|
|
|
141,912
|
|
|
115,613
|
|
|||
Interest income
|
(801
|
)
|
|
(314
|
)
|
|
(1,009
|
)
|
|||
Gain on debt extinguishment
|
(48,630
|
)
|
|
—
|
|
|
—
|
|
|||
Gain on sale of equity method investments
|
—
|
|
|
(124,768
|
)
|
|
(12,523
|
)
|
|||
Loss (income) from equity method investments, net
|
210,148
|
|
|
(49,904
|
)
|
|
17,780
|
|
|||
Other expense (income), net
|
3,725
|
|
|
1,542
|
|
|
(1,041
|
)
|
|||
|
306,228
|
|
|
(31,532
|
)
|
|
118,820
|
|
|||
(LOSS) INCOME BEFORE INCOME TAXES
|
(2,009,921
|
)
|
|
430,491
|
|
|
436,961
|
|
|||
INCOME TAX (BENEFIT) EXPENSE
|
(7,563
|
)
|
|
(69
|
)
|
|
1,809
|
|
|||
NET (LOSS) INCOME
|
$
|
(2,002,358
|
)
|
|
$
|
430,560
|
|
|
$
|
435,152
|
|
NET (LOSS) INCOME PER COMMON SHARE:
|
|
|
|
|
|
||||||
Basic
|
$
|
(12.49
|
)
|
|
$
|
2.46
|
|
|
$
|
2.42
|
|
Diluted
|
$
|
(12.49
|
)
|
|
$
|
2.45
|
|
|
$
|
2.41
|
|
Weighted average common shares outstanding—Basic
|
160,341,125
|
|
|
174,675,840
|
|
|
179,834,146
|
|
|||
Weighted average common shares outstanding—Diluted
|
160,341,125
|
|
|
175,398,706
|
|
|
180,253,024
|
|
|
For the Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
|
(In thousands)
|
||||||||||
Net (loss) income
|
$
|
(2,002,358
|
)
|
|
$
|
430,560
|
|
|
$
|
435,152
|
|
Foreign currency translation adjustment (1)
|
9,193
|
|
|
(15,487
|
)
|
|
12,519
|
|
|||
Other comprehensive income (loss)
|
9,193
|
|
|
(15,487
|
)
|
|
12,519
|
|
|||
Comprehensive (loss) income
|
$
|
(1,993,165
|
)
|
|
$
|
415,073
|
|
|
$
|
447,671
|
|
(1)
|
No taxes were recorded for the years ended December 31, 2019, 2018 and 2017.
|
|
|
|
|
|
Paid-in
Capital
|
|
Accumulated
Other
Comprehensive
Loss
|
|
Accumulated Deficit
|
|
Total
Stockholders’
Equity
|
|||||||||||
|
Common Stock
|
|
|
|
|
|||||||||||||||||
|
Shares
|
|
Amount
|
|
|
|
|
|||||||||||||||
|
(In thousands, except share data)
|
|||||||||||||||||||||
Balance at January 1, 2017
|
158,829,816
|
|
|
1,588
|
|
|
3,946,442
|
|
|
(53,058
|
)
|
|
(1,711,080
|
)
|
|
2,183,892
|
|
|||||
Net Income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
435,152
|
|
|
435,152
|
|
|||||
Other Comprehensive Income
|
—
|
|
|
—
|
|
|
—
|
|
|
12,519
|
|
|
—
|
|
|
12,519
|
|
|||||
Stock-based Compensation
|
—
|
|
|
—
|
|
|
10,615
|
|
|
—
|
|
|
—
|
|
|
10,615
|
|
|||||
Issuance of Common Stock for the Vitruvian Acquisition, net of related expenses
|
23,852,117
|
|
|
239
|
|
|
459,197
|
|
|
—
|
|
|
—
|
|
|
459,436
|
|
|||||
Issuance of Restricted Stock
|
423,977
|
|
|
4
|
|
|
(4
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Balance at December 31, 2017
|
183,105,910
|
|
|
1,831
|
|
|
4,416,250
|
|
|
(40,539
|
)
|
|
(1,275,928
|
)
|
|
3,101,614
|
|
|||||
Net Income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
430,560
|
|
|
430,560
|
|
|||||
Other Comprehensive Loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(15,487
|
)
|
|
—
|
|
|
(15,487
|
)
|
|||||
Stock-based Compensation
|
—
|
|
|
—
|
|
|
11,332
|
|
|
—
|
|
|
—
|
|
|
11,332
|
|
|||||
Shares Repurchased
|
(20,746,536
|
)
|
|
(207
|
)
|
|
(200,044
|
)
|
|
—
|
|
|
—
|
|
|
(200,251
|
)
|
|||||
Issuance of Restricted Stock
|
626,671
|
|
|
6
|
|
|
(6
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Balance at December 31, 2018
|
162,986,045
|
|
|
1,630
|
|
|
4,227,532
|
|
|
(56,026
|
)
|
|
(845,368
|
)
|
|
3,327,768
|
|
|||||
Net Loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,002,358
|
)
|
|
(2,002,358
|
)
|
|||||
Other Comprehensive Income
|
—
|
|
|
—
|
|
|
—
|
|
|
9,193
|
|
|
—
|
|
|
9,193
|
|
|||||
Stock-based Compensation
|
—
|
|
|
—
|
|
|
10,677
|
|
|
—
|
|
|
—
|
|
|
10,677
|
|
|||||
Shares Repurchased
|
(3,951,198
|
)
|
|
(40
|
)
|
|
(30,648
|
)
|
|
—
|
|
|
—
|
|
|
(30,688
|
)
|
|||||
Issuance of Restricted Stock
|
676,108
|
|
|
7
|
|
|
(7
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Balance at December 31, 2019
|
159,710,955
|
|
|
$
|
1,597
|
|
|
$
|
4,207,554
|
|
|
$
|
(46,833
|
)
|
|
$
|
(2,847,726
|
)
|
|
$
|
1,314,592
|
|
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
|
(In thousands)
|
||||||||||
Cash flows from operating activities:
|
|
|
|
|
|
||||||
Net (loss) income
|
$
|
(2,002,358
|
)
|
|
$
|
430,560
|
|
|
$
|
435,152
|
|
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
|
|
|
|
|
|
||||||
Accretion expense
|
3,939
|
|
|
4,119
|
|
|
1,611
|
|
|||
Depletion, depreciation and amortization
|
550,108
|
|
|
486,664
|
|
|
364,629
|
|
|||
Impairment of oil and natural gas properties
|
2,039,770
|
|
|
—
|
|
|
—
|
|
|||
Stock-based compensation expense
|
4,911
|
|
|
6,799
|
|
|
6,369
|
|
|||
Loss (income) from equity investments, net
|
210,289
|
|
|
(49,625
|
)
|
|
18,513
|
|
|||
Gain on debt extinguishment
|
(48,630
|
)
|
|
—
|
|
|
—
|
|
|||
Change in fair value of derivative instruments
|
(85,230
|
)
|
|
65,051
|
|
|
(188,802
|
)
|
|||
Deferred income tax (benefit) expense
|
(7,563
|
)
|
|
1,208
|
|
|
1,690
|
|
|||
Amortization of loan costs
|
6,328
|
|
|
6,121
|
|
|
5,011
|
|
|||
Gain on sale of equity method investments and other assets
|
(220
|
)
|
|
(124,768
|
)
|
|
(12,523
|
)
|
|||
Distributions from equity method investments
|
2,457
|
|
|
3,206
|
|
|
—
|
|
|||
Changes in operating assets and liabilities:
|
|
|
|
|
|
||||||
Decrease (increase) in accounts receivable—oil and natural gas sales
|
88,990
|
|
|
(63,427
|
)
|
|
(35,879
|
)
|
|||
(Increase) decrease in accounts receivable—joint interest and other
|
(25,478
|
)
|
|
12,943
|
|
|
(9,573
|
)
|
|||
Decrease in accounts receivable—related parties
|
—
|
|
|
—
|
|
|
16
|
|
|||
Decrease (increase) in prepaid expenses and other current assets
|
5,586
|
|
|
(5,695
|
)
|
|
(1,777
|
)
|
|||
Decrease (increase) in other assets
|
915
|
|
|
4,066
|
|
|
(7,866
|
)
|
|||
(Decrease) increase in accounts payable, accrued liabilities and other
|
(19,548
|
)
|
|
9,768
|
|
|
106,375
|
|
|||
Settlement of asset retirement obligation
|
(273
|
)
|
|
(719
|
)
|
|
(3,057
|
)
|
|||
Net cash provided by operating activities
|
723,993
|
|
|
786,271
|
|
|
679,889
|
|
|||
Cash flows from investing activities:
|
|
|
|
|
|
||||||
Deductions to cash held in escrow
|
—
|
|
|
—
|
|
|
8
|
|
|||
Additions to other property and equipment
|
(5,021
|
)
|
|
(7,870
|
)
|
|
(19,372
|
)
|
|||
Acquisitions of oil and natural gas properties
|
—
|
|
|
—
|
|
|
(1,348,657
|
)
|
|||
Additions to oil and natural gas properties
|
(720,057
|
)
|
|
(899,083
|
)
|
|
(1,064,678
|
)
|
|||
Proceeds from sale of oil and gas properties
|
48,527
|
|
|
5,114
|
|
|
4,866
|
|
|||
Proceeds from sale of other property and equipment
|
267
|
|
|
351
|
|
|
1,569
|
|
|||
Proceeds from sale of equity method investments
|
—
|
|
|
226,487
|
|
|
—
|
|
|||
Contributions to equity method investments
|
(432
|
)
|
|
(2,319
|
)
|
|
(55,280
|
)
|
|||
Distributions from equity method investments
|
1,945
|
|
|
446
|
|
|
7,376
|
|
|||
Net cash used in investing activities
|
(674,771
|
)
|
|
(676,874
|
)
|
|
(2,474,168
|
)
|
|||
Cash flows from financing activities:
|
|
|
|
|
|
||||||
Principal payments on borrowings
|
(877,697
|
)
|
|
(220,575
|
)
|
|
(365,276
|
)
|
|||
Borrowings on line of credit
|
952,000
|
|
|
265,000
|
|
|
365,000
|
|
|||
Proceeds from bond issuance
|
—
|
|
|
—
|
|
|
450,000
|
|
|||
Repurchase of senior notes
|
(138,786
|
)
|
|
—
|
|
|
—
|
|
|||
Borrowings on term loan
|
—
|
|
|
—
|
|
|
2,951
|
|
|||
Debt issuance costs and loan commitment fees
|
(288
|
)
|
|
(831
|
)
|
|
(14,350
|
)
|
|||
Payments on repurchase of stock
|
(30,688
|
)
|
|
(200,251
|
)
|
|
—
|
|
|||
Proceeds from issuance of common stock, net of offering costs and exercise of stock options
|
—
|
|
|
—
|
|
|
(5,364
|
)
|
|||
Net cash (used in) provided by financing activities
|
(95,459
|
)
|
|
(156,657
|
)
|
|
432,961
|
|
|||
Net decrease in cash, cash equivalents and restricted cash
|
(46,237
|
)
|
|
(47,260
|
)
|
|
(1,361,318
|
)
|
|||
Cash, cash equivalents and restricted cash at beginning of period
|
52,297
|
|
|
99,557
|
|
|
1,460,875
|
|
|||
Cash, cash equivalents and restricted cash at end of period
|
$
|
6,060
|
|
|
$
|
52,297
|
|
|
$
|
99,557
|
|
Supplemental disclosure of cash flow information:
|
|
|
|
|
|
||||||
Interest payments
|
$
|
142,664
|
|
|
$
|
132,995
|
|
|
$
|
107,548
|
|
Income tax receipts
|
$
|
(1,794
|
)
|
|
$
|
—
|
|
|
$
|
(1,105
|
)
|
Supplemental disclosure of non-cash transactions:
|
|
|
|
|
|
||||||
Capitalized stock-based compensation
|
$
|
5,766
|
|
|
$
|
4,533
|
|
|
$
|
4,246
|
|
Asset retirement obligation capitalized
|
$
|
6,883
|
|
|
$
|
1,452
|
|
|
$
|
42,270
|
|
Asset retirement obligation removed due to divestiture
|
$
|
(30,146
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
Interest capitalized
|
$
|
3,372
|
|
|
$
|
4,470
|
|
|
$
|
9,470
|
|
Fair value of contingent consideration asset on date of divestiture
|
$
|
(1,137
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
Foreign currency translation gain (loss) on equity method investments
|
$
|
9,193
|
|
|
$
|
(15,487
|
)
|
|
$
|
12,519
|
|
1.
|
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
|
|
(In thousands)
|
|
|
December 31, 2016
|
$
|
(51,709
|
)
|
December 31, 2017
|
$
|
(39,190
|
)
|
December 31, 2018
|
$
|
(54,677
|
)
|
December 31, 2019
|
$
|
(45,484
|
)
|
2.
|
ACQUISITIONS AND DIVESTITURES
|
|
|
December 31, 2017
|
||
|
|
(In thousands, except share data)
|
||
Pro forma revenue
|
|
$
|
1,356,202
|
|
Pro forma net income
|
|
$
|
448,398
|
|
Pro forma earnings per share (basic)
|
|
$
|
2.49
|
|
Pro forma earnings per share (diluted)
|
|
$
|
2.49
|
|
3.
|
PROPERTY AND EQUIPMENT
|
|
December 31,
|
||||||
|
2019
|
|
2018
|
||||
|
(In thousands)
|
||||||
Oil and natural gas properties
|
$
|
10,595,735
|
|
|
$
|
10,026,836
|
|
Other depreciable property and equipment
|
91,198
|
|
|
87,146
|
|
||
Land
|
5,521
|
|
|
5,521
|
|
||
Total property and equipment
|
10,692,454
|
|
|
10,119,503
|
|
||
Accumulated depletion, depreciation, amortization and impairment
|
(7,228,660
|
)
|
|
(4,640,098
|
)
|
||
Property and equipment, net
|
$
|
3,463,794
|
|
|
$
|
5,479,405
|
|
|
Costs Incurred in
|
||||||||||||||||||
|
2019
|
|
2018
|
|
2017
|
|
Prior to 2017
|
|
Total
|
||||||||||
|
(In thousands)
|
||||||||||||||||||
Acquisition costs
|
$
|
9,089
|
|
|
$
|
98,870
|
|
|
$
|
756,963
|
|
|
$
|
806,982
|
|
|
$
|
1,671,904
|
|
Exploration costs
|
259
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
259
|
|
|||||
Development costs
|
1,213
|
|
|
548
|
|
|
869
|
|
|
10,325
|
|
|
12,955
|
|
|||||
Capitalized interest
|
888
|
|
|
413
|
|
|
247
|
|
|
—
|
|
|
1,548
|
|
|||||
Total oil and natural gas properties not subject to amortization
|
$
|
11,449
|
|
|
$
|
99,831
|
|
|
$
|
758,079
|
|
|
$
|
817,307
|
|
|
$
|
1,686,666
|
|
|
December 31, 2019
|
||
|
(In thousands)
|
||
Utica
|
$
|
976,593
|
|
MidContinent
|
709,739
|
|
|
Other
|
334
|
|
|
|
$
|
1,686,666
|
|
|
December 31,
|
||||||
|
2019
|
|
2018
|
||||
|
(In thousands)
|
||||||
Asset retirement obligation, beginning of period
|
$
|
79,952
|
|
|
$
|
75,100
|
|
Liabilities incurred
|
5,935
|
|
|
1,827
|
|
||
Liabilities settled
|
(273
|
)
|
|
(719
|
)
|
||
Liabilities removed due to divestitures
|
(30,146
|
)
|
|
—
|
|
||
Accretion expense
|
3,939
|
|
|
4,119
|
|
||
Revisions in estimated cash flows
|
948
|
|
|
(375
|
)
|
||
Asset retirement obligation as of end of period
|
$
|
60,355
|
|
|
$
|
79,952
|
|
4.
|
EQUITY INVESTMENTS
|
|
|
|
Carrying Value
|
|
Loss (income) from equity method investments
|
|||||||||||||||||
|
Approximate Ownership %
|
|
December 31,
|
|
For the Year Ended December 31,
|
|||||||||||||||||
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
2017
|
||||||||||||
|
|
|
(In thousands)
|
|||||||||||||||||||
Investment in Tatex Thailand II, LLC
|
23.5
|
%
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(2,086
|
)
|
|
$
|
(241
|
)
|
|
$
|
(549
|
)
|
Investment in Tatex Thailand III, LLC(1)
|
—
|
%
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(183
|
)
|
|||||
Investment in Grizzly Oil Sands ULC
|
24.9999
|
%
|
|
21,000
|
|
|
44,259
|
|
|
32,710
|
|
|
510
|
|
|
2,189
|
|
|||||
Investment in Timber Wolf Terminals LLC(2)
|
—
|
%
|
|
—
|
|
|
—
|
|
|
—
|
|
|
536
|
|
|
8
|
|
|||||
Investment in Windsor Midstream LLC
|
22.5
|
%
|
|
39
|
|
|
39
|
|
|
—
|
|
|
(9
|
)
|
|
25,233
|
|
|||||
Investment in Stingray Cementing LLC(3)
|
—
|
%
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
205
|
|
|||||
Investment in Blackhawk Midstream LLC(4)
|
—
|
%
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(38
|
)
|
|
—
|
|
|||||
Investment in Stingray Energy Services LLC(3)
|
—
|
%
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
282
|
|
|||||
Investment in Sturgeon Acquisitions LLC(3)
|
—
|
%
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
|
(71
|
)
|
|||||
Investment in Mammoth Energy Services, Inc.(3)
|
21.8
|
%
|
|
11,005
|
|
|
191,823
|
|
|
179,524
|
|
|
(49,969
|
)
|
|
(11,288
|
)
|
|||||
Investment in Strike Force Midstream LLC(5)
|
—
|
%
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(693
|
)
|
|
1,954
|
|
|||||
|
|
|
$
|
32,044
|
|
|
$
|
236,121
|
|
|
$
|
210,148
|
|
|
$
|
(49,904
|
)
|
|
$
|
17,780
|
|
(1)
|
In December 2017, the Company received its final distribution from Tatex Thailand III, LLC ("Tatex III"), which was dissolved in 2017.
|
(2)
|
On June 5, 2018, the Company received its final distribution from Timber Wolf Terminals LLC ("Timber Wolf"), which was dissolved in 2018.
|
(3)
|
On June 5, 2017, Mammoth Energy acquired Stingray Cementing LLC, Stingray Energy Services LLC and Sturgeon Acquisitions LLC. See below under Mammoth Energy Services, Inc. for information regarding these transactions.
|
(4)
|
On December 31, 2018, the Company received its final distribution from Blackhawk Midstream LLC ("Blackhawk"), which was dissolved in 2018.
|
(5)
|
On May 1, 2018, the Company sold its 25% interest in Strike Force Midstream LLC ("Strike Force") to EQT Midstream Partners, LP for proceeds of $175.0 million in cash. As a result of the sale, the Company recognized a gain of $96.4 million net of transaction fees, which is included in gain on sale of equity method investments in the accompanying consolidated statement of operations.
|
|
December 31,
|
||||||
|
2019
|
|
2018
|
||||
|
(In thousands)
|
||||||
Current assets
|
$
|
421,326
|
|
|
$
|
471,733
|
|
Noncurrent assets
|
$
|
1,260,075
|
|
|
$
|
1,302,488
|
|
Current liabilities
|
$
|
132,569
|
|
|
$
|
239,975
|
|
Noncurrent liabilities
|
$
|
163,241
|
|
|
$
|
94,575
|
|
|
December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
|
(In thousands)
|
||||||||||
Gross revenue
|
$
|
625,012
|
|
|
$
|
1,729,778
|
|
|
$
|
755,374
|
|
Net (loss) income
|
$
|
(76,523
|
)
|
|
$
|
253,451
|
|
|
$
|
(37,102
|
)
|
5.
|
LONG-TERM DEBT
|
|
2019
|
|
2018
|
||||
|
(In thousands)
|
||||||
Revolving credit agreement(1)
|
$
|
120,000
|
|
|
$
|
45,000
|
|
6.625% senior unsecured notes due 2023
|
329,467
|
|
|
350,000
|
|
||
6.000% senior unsecured notes due 2024
|
603,428
|
|
|
650,000
|
|
||
6.375% senior unsecured notes due 2025
|
529,525
|
|
|
600,000
|
|
||
6.375% senior unsecured notes due 2026
|
397,529
|
|
|
450,000
|
|
||
Net unamortized debt issuance costs(2)
|
(23,751
|
)
|
|
(30,733
|
)
|
||
Construction loan
|
22,453
|
|
|
23,149
|
|
||
Less: current maturities of long term debt
|
(631
|
)
|
|
(651
|
)
|
||
Debt reflected as long term
|
$
|
1,978,020
|
|
|
$
|
2,086,765
|
|
|
(In thousands)
|
||
2020
|
$
|
631
|
|
2021
|
120,663
|
|
|
2022
|
694
|
|
|
2023
|
330,194
|
|
|
2024
|
604,186
|
|
|
Thereafter
|
946,034
|
|
|
Total
|
$
|
2,002,402
|
|
|
2019
|
|
2018
|
|
2017
|
||||||
|
(In thousands)
|
||||||||||
Cash paid for interest
|
$
|
142,664
|
|
|
$
|
132,995
|
|
|
$
|
107,548
|
|
Change in accrued interest
|
(3,834
|
)
|
|
7,266
|
|
|
12,524
|
|
|||
Capitalized interest
|
(3,372
|
)
|
|
(4,470
|
)
|
|
(9,470
|
)
|
|||
Amortization of loan costs
|
6,328
|
|
|
6,121
|
|
|
5,011
|
|
|||
Total interest expense
|
$
|
141,786
|
|
|
$
|
141,912
|
|
|
$
|
115,613
|
|
6.
|
CHANGES IN CAPITALIZATION
|
7.
|
STOCK-BASED COMPENSATION
|
|
Number of
Unvested
Restricted Stock Units
|
|
Weighted
Average
Grant Date
Fair Value
|
|
Number of
Unvested
Performance Vesting Restricted Stock Units
|
|
Weighted
Average
Grant Date
Fair Value
|
|||||||
Unvested shares as of January 1, 2017
|
613,056
|
|
|
$
|
32.90
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Granted
|
876,846
|
|
|
15.14
|
|
|
—
|
|
|
—
|
|
|||
Vested
|
(423,977
|
)
|
|
29.90
|
|
|
—
|
|
|
—
|
|
|||
Forfeited
|
(89,898
|
)
|
|
27.91
|
|
|
—
|
|
|
—
|
|
|||
Unvested shares as of December 31, 2017
|
976,027
|
|
|
$
|
18.71
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Granted
|
1,579,911
|
|
|
$
|
9.90
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Vested
|
(626,671
|
)
|
|
18.05
|
|
|
—
|
|
|
—
|
|
|||
Forfeited
|
(393,456
|
)
|
|
12.23
|
|
|
—
|
|
|
—
|
|
|||
Unvested shares as of December 31, 2018
|
1,535,811
|
|
|
$
|
11.57
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Granted
|
4,011,073
|
|
|
3.74
|
|
|
2,009,144
|
|
|
2.85
|
|
|||
Vested
|
(676,108
|
)
|
|
12.89
|
|
|
—
|
|
|
—
|
|
|||
Forfeited
|
(772,458
|
)
|
|
6.05
|
|
|
(225,484
|
)
|
|
1.98
|
|
|||
Unvested shares as of December 31, 2019
|
4,098,318
|
|
|
$
|
4.73
|
|
|
1,783,660
|
|
|
$
|
2.96
|
|
8.
|
REVENUE FROM CONTRACTS WITH CUSTOMERS
|
9.
|
LEASES
|
|
|
(In thousands)
|
||
2020
|
|
$
|
36,415
|
|
2021
|
|
22,569
|
|
|
2022
|
|
115
|
|
|
2023
|
|
90
|
|
|
2024
|
|
30
|
|
|
Total lease payments
|
|
$
|
59,219
|
|
Less: Imputed interest
|
|
(1,781
|
)
|
|
Total
|
|
$
|
57,438
|
|
(1)
|
The majority of the Company's total lease cost was capitalized to the full cost pool, and the remainder was included in general and administrative expenses in the accompanying consolidated statements of operations.
|
Cash paid for amounts included in the measurement of lease liabilities
|
|
(In thousands)
|
|
Operating cash flows from operating leases
|
|
182
|
|
Investing cash flow from operating leases
|
|
24,263
|
|
Investing cash flow from operating leases - related party
|
|
84,750
|
|
10.
|
INCOME TAXES
|
|
2019
|
|
2018
|
|
2017
|
||||||
|
(In thousands)
|
||||||||||
Current:
|
|
|
|
|
|
||||||
State
|
$
|
—
|
|
|
$
|
(1,530
|
)
|
|
$
|
2,167
|
|
Federal
|
(7
|
)
|
|
253
|
|
|
3,362
|
|
|||
Deferred:
|
|
|
|
|
|
||||||
State
|
(7,556
|
)
|
|
1,530
|
|
|
(118
|
)
|
|||
Federal
|
—
|
|
|
(322
|
)
|
|
(3,602
|
)
|
|||
Total income tax (benefit) expense provision
|
$
|
(7,563
|
)
|
|
$
|
(69
|
)
|
|
$
|
1,809
|
|
|
2019
|
|
2018
|
|
2017
|
||||||
|
(In thousands)
|
||||||||||
Income (loss) before federal income taxes
|
$
|
(2,009,921
|
)
|
|
$
|
430,491
|
|
|
$
|
436,961
|
|
Expected income tax at statutory rate
|
(422,083
|
)
|
|
90,403
|
|
|
152,936
|
|
|||
State income taxes
|
(28,316
|
)
|
|
(511
|
)
|
|
2,299
|
|
|||
Other differences
|
3,372
|
|
|
1,078
|
|
|
5,731
|
|
|||
Remeasurement due to Tax Cut and Jobs Act
|
—
|
|
|
—
|
|
|
190,034
|
|
|||
Change in valuation allowance due to current year activity
|
439,464
|
|
|
(91,039
|
)
|
|
(158,704
|
)
|
|||
Change in valuation allowance due to Tax Cuts and Jobs Act
|
—
|
|
|
—
|
|
|
(190,487
|
)
|
|||
Income tax (benefit) expense recorded
|
$
|
(7,563
|
)
|
|
$
|
(69
|
)
|
|
$
|
1,809
|
|
|
2019
|
|
2018
|
|
2017
|
||||||
|
(In thousands)
|
||||||||||
Deferred tax assets:
|
|
|
|
|
|
||||||
Net operating loss carryforward
|
$
|
269,851
|
|
|
$
|
164,363
|
|
|
$
|
120,626
|
|
Oil and gas property basis difference
|
289,850
|
|
|
3,595
|
|
|
151,260
|
|
|||
Investment in pass through entities
|
58,951
|
|
|
8,620
|
|
|
12,343
|
|
|||
Stock-based compensation expense
|
1,440
|
|
|
616
|
|
|
813
|
|
|||
Business energy investment tax credit
|
370
|
|
|
369
|
|
|
369
|
|
|||
Charitable contributions carryover
|
297
|
|
|
269
|
|
|
255
|
|
|||
Change in fair value of derivative instruments
|
11,219
|
|
|
2,761
|
|
|
—
|
|
|||
Foreign tax credit carryforwards
|
943
|
|
|
2,009
|
|
|
2,074
|
|
|||
Accrued liabilities
|
669
|
|
|
834
|
|
|
285
|
|
|||
ARO liability
|
12,744
|
|
|
16,923
|
|
|
15,897
|
|
|||
Non-oil and gas property basis difference
|
—
|
|
|
104
|
|
|
171
|
|
|||
Lease liability
|
12,128
|
|
|
—
|
|
|
—
|
|
|||
State net operating loss carryover
|
13,258
|
|
|
11,526
|
|
|
6,954
|
|
|||
Interest expense carryforward
|
23,818
|
|
|
—
|
|
|
—
|
|
|||
Total deferred tax assets
|
695,538
|
|
|
211,989
|
|
|
311,047
|
|
|||
Valuation allowance for deferred tax assets
|
(647,575
|
)
|
|
(211,987
|
)
|
|
(298,830
|
)
|
|||
Deferred tax assets, net of valuation allowance
|
47,963
|
|
|
2
|
|
|
12,217
|
|
|||
Deferred tax liabilities:
|
|
|
|
|
|
||||||
Non-oil and gas property basis difference
|
1,859
|
|
|
—
|
|
|
—
|
|
|||
Change in fair value of derivative instruments
|
26,410
|
|
|
2
|
|
|
11,009
|
|
|||
Right of use asset
|
12,128
|
|
|
—
|
|
|
—
|
|
|||
Other
|
3
|
|
|
—
|
|
|
—
|
|
|||
Total deferred tax liabilities
|
40,400
|
|
|
2
|
|
|
11,009
|
|
|||
Net deferred tax asset
|
$
|
7,563
|
|
|
$
|
—
|
|
|
$
|
1,208
|
|
11.
|
EARNINGS PER SHARE
|
|
For the Year Ended December 31,
|
|||||||||||||||||||||||||||||||
|
2019
|
|
2018
|
|
2017
|
|||||||||||||||||||||||||||
|
Loss
|
|
Shares
|
|
Per
Share
|
|
Income
|
|
Shares
|
|
Per
Share
|
|
Income
|
|
Shares
|
|
Per Share
|
|||||||||||||||
|
(In thousands, except share data)
|
|||||||||||||||||||||||||||||||
Basic:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Net (loss) income
|
$
|
(2,002,358
|
)
|
|
160,341,125
|
|
|
$
|
(12.49
|
)
|
|
$
|
430,560
|
|
|
174,675,840
|
|
|
$
|
2.46
|
|
|
$
|
435,152
|
|
|
179,834,146
|
|
|
$
|
2.42
|
|
Effect of dilutive securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Stock options and awards
|
—
|
|
|
—
|
|
|
|
|
—
|
|
|
722,866
|
|
|
|
|
—
|
|
|
418,878
|
|
|
|
|||||||||
Diluted:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Net (loss) income
|
$
|
(2,002,358
|
)
|
|
160,341,125
|
|
|
$
|
(12.49
|
)
|
|
$
|
430,560
|
|
|
175,398,706
|
|
|
$
|
2.45
|
|
|
$
|
435,152
|
|
|
180,253,024
|
|
|
$
|
2.41
|
|
12.
|
DERIVATIVE INSTRUMENTS
|
|
Index
|
Daily Volume (MMBtu/day)
|
|
Weighted
Average Price
|
|||
2020
|
NYMEX Henry Hub
|
548,000
|
|
|
$
|
2.88
|
|
|
Index
|
Daily Volume
(Bbls/day) |
|
Weighted
Average Price |
||
2020
|
NYMEX WTI
|
6,000
|
|
|
59.82
|
|
|
Index
|
Daily Volume (Bbls/day)
|
|
Weighted
Average Price
|
|||
2020
|
Mont Belvieu C3
|
500
|
|
|
$
|
21.63
|
|
|
Index
|
Daily Volume (MMBtu/day)
|
|
Weighted
Average Price
|
|||
2022
|
NYMEX Henry Hub
|
628,000
|
|
|
$
|
2.90
|
|
2023
|
NYMEX Henry Hub
|
628,000
|
|
|
$
|
2.90
|
|
|
Gulfport Pays
|
Gulfport Receives
|
Daily Volume (MMBtu/day)
|
|
Weighted Average Fixed Spread
|
|||
2020
|
Transco Zone 4
|
NYMEX Plus Fixed Spread
|
60,000
|
|
|
$
|
(0.05
|
)
|
2020
|
Fixed Spread
|
ONEOK Minus NYMEX
|
10,000
|
|
|
$
|
(0.54
|
)
|
Period
|
Threshold(1)
|
Payment to be received(2)
|
||
July 2020 - June 2021
|
Greater than or equal to $60.65
|
$
|
150,000
|
|
|
Between $52.62 - $60.65
|
Calculated Value(3)
|
|
|
|
Less than or equal to $52.62
|
$
|
—
|
|
(1)
|
Based on the "WTI NYMEX + Argus LLS Differential," as published by Argus Media.
|
(2)
|
Payment will be assessed monthly from July 2020 through June 2021. If threshold is met, payment shall be received within five business days after the end of each calendar month.
|
(3)
|
If average daily price, as defined in (1), is greater than $52.62 but less than $60.65, payment received will be $150,000 multiplied by a fraction, the numerator of which is the amount determined by subtracting $52.62 from such average daily price, and the denominator of which is $8.03.
|
|
December 31,
|
|||||
|
2019
|
|
2018
|
|||
|
(In thousands)
|
|||||
Commodity derivative instruments
|
125,383
|
|
|
21,352
|
|
|
Contingent consideration arrangement
|
818
|
|
|
—
|
|
|
Total short-term derivative instruments – asset
|
126,201
|
|
|
21,352
|
|
|
|
|
|
|
|||
Commodity derivative instruments
|
—
|
|
|
—
|
|
|
Contingent consideration arrangement
|
563
|
|
|
—
|
|
|
Total long-term derivative instruments – asset
|
563
|
|
|
—
|
|
|
|
|
|
|
|||
Total short-term derivative instruments – liability
|
303
|
|
|
$
|
20,401
|
|
|
|
|
|
|||
Total long-term derivative instruments – liability
|
53,135
|
|
|
$
|
13,992
|
|
|
Net gain (loss) on derivative instruments
|
||||||||||
|
For the Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
|
(In thousands)
|
||||||||||
Natural gas derivatives
|
$
|
194,450
|
|
|
$
|
(116,130
|
)
|
|
$
|
232,143
|
|
Oil derivatives
|
7,035
|
|
|
(13,084
|
)
|
|
(3,350
|
)
|
|||
NGL derivatives
|
6,632
|
|
|
5,735
|
|
|
(15,114
|
)
|
|||
Contingent consideration arrangement
|
243
|
|
|
—
|
|
|
—
|
|
|||
Total
|
$
|
208,360
|
|
|
$
|
(123,479
|
)
|
|
$
|
213,679
|
|
|
As of December 31, 2019
|
||||||||||
|
Derivative instruments, gross
|
|
Netting adjustments
|
|
Derivative instruments, net
|
||||||
|
(In thousands)
|
||||||||||
Derivative assets
|
$
|
126,764
|
|
|
$
|
(53,438
|
)
|
|
$
|
73,326
|
|
Derivative liabilities
|
$
|
(53,438
|
)
|
|
$
|
53,438
|
|
|
$
|
—
|
|
|
As of December 31, 2018
|
||||||||||
|
Derivative instruments, gross
|
|
Netting adjustments
|
|
Derivative instruments, net
|
||||||
|
(In thousands)
|
||||||||||
Derivative assets
|
$
|
21,352
|
|
|
$
|
(19,289
|
)
|
|
$
|
2,063
|
|
Derivative liabilities
|
$
|
(34,393
|
)
|
|
$
|
19,289
|
|
|
$
|
(15,104
|
)
|
13.
|
RESTRUCTURING COSTS
|
14.
|
FAIR VALUE MEASUREMENTS
|
|
December 31, 2019
|
|||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|||||
|
(In thousands)
|
|||||||||
Assets:
|
|
|
|
|
|
|||||
Derivative Instruments
|
$
|
—
|
|
|
126,764
|
|
|
$
|
—
|
|
Liabilities:
|
|
|
|
|
|
|||||
Derivative Instruments
|
$
|
—
|
|
|
53,438
|
|
|
$
|
—
|
|
|
December 31, 2018
|
||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||
|
(In thousands)
|
||||||||||
Assets:
|
|
|
|
|
|
||||||
Derivative Instruments
|
$
|
—
|
|
|
$
|
21,352
|
|
|
$
|
—
|
|
Liabilities:
|
|
|
|
|
|
||||||
Derivative Instruments
|
$
|
—
|
|
|
$
|
34,393
|
|
|
$
|
—
|
|
15.
|
RELATED PARTY TRANSACTIONS
|
16.
|
COMMITMENTS
|
17.
|
CONTINGENCIES
|
18.
|
CONDENSED CONSOLIDATING FINANCIAL INFORMATION
|
|
December 31, 2019
|
||||||||||||||||||
|
Parent
|
|
Guarantors
|
|
Non-Guarantor
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
||||||||||
Current assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
2,768
|
|
|
$
|
3,097
|
|
|
$
|
195
|
|
|
$
|
—
|
|
|
$
|
6,060
|
|
Accounts receivable - oil and natural gas sales
|
859
|
|
|
120,351
|
|
|
—
|
|
|
—
|
|
|
121,210
|
|
|||||
Accounts receivable - joint interest and other
|
5,279
|
|
|
42,696
|
|
|
—
|
|
|
—
|
|
|
47,975
|
|
|||||
Accounts receivable - intercompany
|
1,065,593
|
|
|
843,223
|
|
|
—
|
|
|
(1,908,816
|
)
|
|
—
|
|
|||||
Prepaid expenses and other current assets
|
4,047
|
|
|
308
|
|
|
76
|
|
|
—
|
|
|
4,431
|
|
|||||
Short-term derivative instruments
|
126,201
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
126,201
|
|
|||||
Total current assets
|
1,204,747
|
|
|
1,009,675
|
|
|
271
|
|
|
(1,908,816
|
)
|
|
305,877
|
|
|||||
Property and equipment:
|
|
|
|
|
|
|
|
|
|
||||||||||
Oil and natural gas properties, full-cost accounting
|
1,314,933
|
|
|
9,273,681
|
|
|
7,850
|
|
|
(729
|
)
|
|
10,595,735
|
|
|||||
Other property and equipment
|
92,650
|
|
|
50
|
|
|
4,019
|
|
|
—
|
|
|
96,719
|
|
|||||
Accumulated depletion, depreciation, amortization and impairment
|
(1,418,888
|
)
|
|
(5,808,254
|
)
|
|
(1,518
|
)
|
|
—
|
|
|
(7,228,660
|
)
|
|||||
Property and equipment, net
|
(11,305
|
)
|
|
3,465,477
|
|
|
10,351
|
|
|
(729
|
)
|
|
3,463,794
|
|
|||||
Other assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Equity investments and investments in subsidiaries
|
3,064,503
|
|
|
6,332
|
|
|
21,000
|
|
|
(3,059,791
|
)
|
|
32,044
|
|
|||||
Long-term derivative instruments
|
563
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
563
|
|
|||||
Deferred tax asset
|
7,563
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7,563
|
|
|||||
Inventories
|
—
|
|
|
5,182
|
|
|
—
|
|
|
—
|
|
|
5,182
|
|
|||||
Operating lease assets
|
14,168
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
14,168
|
|
|||||
Operating lease assets - related parties
|
43,270
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
43,270
|
|
|||||
Other assets
|
10,026
|
|
|
332
|
|
|
|
|
|
|
|
|
10,358
|
|
|||||
Total other assets
|
3,140,093
|
|
|
11,846
|
|
|
21,000
|
|
|
(3,059,791
|
)
|
|
113,148
|
|
|||||
Total assets
|
$
|
4,333,535
|
|
|
$
|
4,486,998
|
|
|
$
|
31,622
|
|
|
$
|
(4,969,336
|
)
|
|
$
|
3,882,819
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Liabilities and stockholders' equity
|
|
|
|
|
|
|
|
|
|
||||||||||
Current liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Accounts payable and accrued liabilities
|
$
|
48,006
|
|
|
$
|
367,088
|
|
|
$
|
124
|
|
|
$
|
—
|
|
|
$
|
415,218
|
|
Accounts payable - intercompany
|
878,283
|
|
|
1,026,249
|
|
|
4,285
|
|
|
(1,908,817
|
)
|
|
—
|
|
|||||
Short-term derivative instruments
|
303
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
303
|
|
|||||
Current portion of operating lease liabilities
|
13,826
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
13,826
|
|
|||||
Current portion of operating lease liabilities - related parties
|
21,220
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
21,220
|
|
|||||
Current maturities of long-term debt
|
631
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
631
|
|
|||||
Total current liabilities
|
962,269
|
|
|
1,393,337
|
|
|
4,409
|
|
|
(1,908,817
|
)
|
|
451,198
|
|
|||||
Long-term derivative instruments
|
53,135
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
53,135
|
|
|||||
Asset retirement obligation - long-term
|
—
|
|
|
58,322
|
|
|
2,033
|
|
|
—
|
|
|
60,355
|
|
|||||
Uncertain tax position liability
|
3,127
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,127
|
|
|||||
Non-current operating lease liabilities
|
342
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
342
|
|
|||||
Non-current operating lease liabilities - related parties
|
22,050
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
22,050
|
|
|||||
Long-term debt, net of current maturities
|
1,978,020
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,978,020
|
|
|||||
Total liabilities
|
3,018,943
|
|
|
1,451,659
|
|
|
6,442
|
|
|
(1,908,817
|
)
|
|
2,568,227
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Stockholders' equity:
|
|
|
|
|
|
|
|
|
|
||||||||||
Common stock
|
1,597
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,597
|
|
|||||
Paid-in capital
|
4,207,554
|
|
|
4,171,408
|
|
|
267,557
|
|
|
(4,438,965
|
)
|
|
4,207,554
|
|
|||||
Accumulated other comprehensive loss
|
(46,833
|
)
|
|
—
|
|
|
(44,763
|
)
|
|
44,763
|
|
|
(46,833
|
)
|
|||||
Accumulated deficit
|
(2,847,726
|
)
|
|
(1,136,069
|
)
|
|
(197,614
|
)
|
|
1,333,683
|
|
|
(2,847,726
|
)
|
|||||
Total stockholders' equity
|
1,314,592
|
|
|
3,035,339
|
|
|
25,180
|
|
|
(3,060,519
|
)
|
|
1,314,592
|
|
|||||
Total liabilities and stockholders' equity
|
$
|
4,333,535
|
|
|
$
|
4,486,998
|
|
|
$
|
31,622
|
|
|
$
|
(4,969,336
|
)
|
|
$
|
3,882,819
|
|
|
December 31, 2018
|
||||||||||||||||||
|
Parent
|
|
Guarantors
|
|
Non-Guarantor
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
||||||||||
Current assets
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
25,585
|
|
|
$
|
26,711
|
|
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
52,297
|
|
Accounts receivable - oil and natural gas
|
146,075
|
|
|
64,125
|
|
|
—
|
|
|
—
|
|
|
210,200
|
|
|||||
Accounts receivable - joint interest and other
|
16,212
|
|
|
6,285
|
|
|
—
|
|
|
—
|
|
|
22,497
|
|
|||||
Accounts receivable - intercompany
|
671,633
|
|
|
319,464
|
|
|
—
|
|
|
(991,097
|
)
|
|
—
|
|
|||||
Prepaid expenses and other current assets
|
7,843
|
|
|
2,174
|
|
|
—
|
|
|
—
|
|
|
10,017
|
|
|||||
Short-term derivative instruments
|
21,352
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
21,352
|
|
|||||
Total current assets
|
888,700
|
|
|
418,759
|
|
|
1
|
|
|
(991,097
|
)
|
|
316,363
|
|
|||||
Property and equipment:
|
|
|
|
|
|
|
|
|
|
||||||||||
Oil and natural gas properties, full-cost accounting,
|
7,044,550
|
|
|
2,983,015
|
|
|
—
|
|
|
(729
|
)
|
|
10,026,836
|
|
|||||
Other property and equipment
|
91,916
|
|
|
751
|
|
|
—
|
|
|
—
|
|
|
92,667
|
|
|||||
Accumulated depletion, depreciation, amortization and impairment
|
(4,640,059
|
)
|
|
(39
|
)
|
|
—
|
|
|
—
|
|
|
(4,640,098
|
)
|
|||||
Property and equipment, net
|
2,496,407
|
|
|
2,983,727
|
|
|
—
|
|
|
(729
|
)
|
|
5,479,405
|
|
|||||
Other assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Equity investments and investments in subsidiaries
|
2,856,988
|
|
|
—
|
|
|
44,259
|
|
|
(2,665,126
|
)
|
|
236,121
|
|
|||||
Inventories
|
4,210
|
|
|
1,134
|
|
|
—
|
|
|
—
|
|
|
5,344
|
|
|||||
Other assets
|
12,624
|
|
|
1,178
|
|
|
—
|
|
|
1
|
|
|
13,803
|
|
|||||
Total other assets
|
2,873,822
|
|
|
2,312
|
|
|
44,259
|
|
|
(2,665,125
|
)
|
|
255,268
|
|
|||||
Total assets
|
$
|
6,258,929
|
|
|
$
|
3,404,798
|
|
|
$
|
44,260
|
|
|
$
|
(3,656,951
|
)
|
|
$
|
6,051,036
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Liabilities and stockholders' equity
|
|
|
|
|
|
|
|
|
|
||||||||||
Current liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Accounts payable and accrued liabilities
|
$
|
419,107
|
|
|
$
|
99,273
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
518,380
|
|
Accounts payable - intercompany
|
320,259
|
|
|
670,708
|
|
|
130
|
|
|
(991,097
|
)
|
|
—
|
|
|||||
Short-term derivative instruments
|
20,401
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
20,401
|
|
|||||
Current maturities of long-term debt
|
651
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
651
|
|
|||||
Total current liabilities
|
760,418
|
|
|
769,981
|
|
|
130
|
|
|
(991,097
|
)
|
|
539,432
|
|
|||||
Long-term derivative instruments
|
13,992
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
13,992
|
|
|||||
Asset retirement obligation - long-term
|
66,859
|
|
|
13,093
|
|
|
—
|
|
|
—
|
|
|
79,952
|
|
|||||
Uncertain tax position liability
|
3,127
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,127
|
|
|||||
Long-term debt, net of current maturities
|
2,086,765
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,086,765
|
|
|||||
Total liabilities
|
2,931,161
|
|
|
783,074
|
|
|
130
|
|
|
(991,097
|
)
|
|
2,723,268
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Stockholders' equity:
|
|
|
|
|
|
|
|
|
|
||||||||||
Common stock
|
1,630
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,630
|
|
|||||
Paid-in capital
|
4,227,532
|
|
|
1,915,598
|
|
|
261,626
|
|
|
(2,177,224
|
)
|
|
4,227,532
|
|
|||||
Accumulated other comprehensive loss
|
(56,026
|
)
|
|
—
|
|
|
(53,783
|
)
|
|
53,783
|
|
|
(56,026
|
)
|
|||||
(Accumulated deficit) retained earnings
|
(845,368
|
)
|
|
706,126
|
|
|
(163,713
|
)
|
|
(542,413
|
)
|
|
(845,368
|
)
|
|||||
Total stockholders' equity
|
3,327,768
|
|
|
2,621,724
|
|
|
44,130
|
|
|
(2,665,854
|
)
|
|
3,327,768
|
|
|||||
Total liabilities and stockholders' equity
|
$
|
6,258,929
|
|
|
$
|
3,404,798
|
|
|
$
|
44,260
|
|
|
$
|
(3,656,951
|
)
|
|
$
|
6,051,036
|
|
|
Year Ended December 31, 2019
|
||||||||||||||||||
|
Parent
|
|
Guarantors
|
|
Non-Guarantor
|
|
Eliminations
|
|
Consolidated
|
||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Total revenues
|
$
|
524,089
|
|
|
$
|
821,919
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,346,008
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Costs and expenses:
|
|
|
|
|
|
|
|
|
|
||||||||||
Lease operating expenses
|
26,923
|
|
|
56,075
|
|
|
—
|
|
|
—
|
|
|
82,998
|
|
|||||
Production taxes
|
6,117
|
|
|
22,454
|
|
|
—
|
|
|
—
|
|
|
28,571
|
|
|||||
Midstream gathering and processing expenses
|
71,420
|
|
|
220,305
|
|
|
—
|
|
|
—
|
|
|
291,725
|
|
|||||
Depreciation, depletion and amortization
|
203,921
|
|
|
345,504
|
|
|
683
|
|
|
—
|
|
|
550,108
|
|
|||||
Impairment of oil and gas properties
|
—
|
|
|
2,039,770
|
|
|
—
|
|
|
—
|
|
|
2,039,770
|
|
|||||
General and administrative expenses
|
71,219
|
|
|
(23,748
|
)
|
|
508
|
|
|
—
|
|
|
47,979
|
|
|||||
Restructuring costs
|
4,611
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,611
|
|
|||||
Accretion expense
|
1,390
|
|
|
2,549
|
|
|
—
|
|
|
—
|
|
|
3,939
|
|
|||||
|
385,601
|
|
|
2,662,909
|
|
|
1,191
|
|
|
—
|
|
|
3,049,701
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
INCOME (LOSS) FROM OPERATIONS
|
138,488
|
|
|
(1,840,990
|
)
|
|
(1,191
|
)
|
|
—
|
|
|
(1,703,693
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
OTHER (INCOME) EXPENSE:
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest expense
|
144,645
|
|
|
(2,859
|
)
|
|
—
|
|
|
—
|
|
|
141,786
|
|
|||||
Interest income
|
(501
|
)
|
|
(300
|
)
|
|
—
|
|
|
—
|
|
|
(801
|
)
|
|||||
Gain on debt extinguishment
|
(48,630
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(48,630
|
)
|
|||||
Loss (income) from equity method investments and investments in subsidiaries
|
2,053,533
|
|
|
|
|
|
32,710
|
|
|
(1,876,095
|
)
|
|
210,148
|
|
|||||
Other (income) expense, net
|
(638
|
)
|
|
3,364
|
|
|
—
|
|
|
999
|
|
|
3,725
|
|
|||||
|
2,148,409
|
|
|
205
|
|
|
32,710
|
|
|
(1,875,096
|
)
|
|
306,228
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
(LOSS) INCOME BEFORE INCOME TAXES
|
(2,009,921
|
)
|
|
(1,841,195
|
)
|
|
(33,901
|
)
|
|
1,875,096
|
|
|
(2,009,921
|
)
|
|||||
INCOME TAX BENEFIT
|
(7,563
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(7,563
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
NET (LOSS) INCOME
|
$
|
(2,002,358
|
)
|
|
$
|
(1,841,195
|
)
|
|
$
|
(33,901
|
)
|
|
$
|
1,875,096
|
|
|
$
|
(2,002,358
|
)
|
|
Year Ended December 31, 2018
|
||||||||||||||||||
|
Parent
|
|
Guarantors
|
|
Non-Guarantor
|
|
Eliminations
|
|
Consolidated
|
||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Total revenues
|
$
|
839,241
|
|
|
$
|
515,803
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,355,044
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Costs and expenses:
|
|
|
|
|
|
|
|
|
|
||||||||||
Lease operating expenses
|
66,947
|
|
|
24,693
|
|
|
—
|
|
|
—
|
|
|
91,640
|
|
|||||
Production taxes
|
17,140
|
|
|
16,340
|
|
|
—
|
|
|
—
|
|
|
33,480
|
|
|||||
Midstream gathering and processing expenses
|
199,607
|
|
|
90,581
|
|
|
—
|
|
|
—
|
|
|
290,188
|
|
|||||
Depreciation, depletion and amortization
|
486,661
|
|
|
3
|
|
|
—
|
|
|
—
|
|
|
486,664
|
|
|||||
General and administrative expenses
|
52,664
|
|
|
(2,673
|
)
|
|
3
|
|
|
—
|
|
|
49,994
|
|
|||||
Accretion expense
|
3,228
|
|
|
891
|
|
|
—
|
|
|
—
|
|
|
4,119
|
|
|||||
|
826,247
|
|
|
129,835
|
|
|
3
|
|
|
—
|
|
|
956,085
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
INCOME (LOSS) FROM OPERATIONS
|
12,994
|
|
|
385,968
|
|
|
(3
|
)
|
|
—
|
|
|
398,959
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
OTHER (INCOME) EXPENSE:
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest expense
|
144,533
|
|
|
(2,621
|
)
|
|
—
|
|
|
—
|
|
|
141,912
|
|
|||||
Interest income
|
(287
|
)
|
|
(27
|
)
|
|
—
|
|
|
—
|
|
|
(314
|
)
|
|||||
Gain on sale of equity method investments
|
(28,349
|
)
|
|
(96,419
|
)
|
|
—
|
|
|
—
|
|
|
(124,768
|
)
|
|||||
(Income) loss from equity method investments and investments in subsidiaries
|
(532,869
|
)
|
|
(694
|
)
|
|
510
|
|
|
483,149
|
|
|
(49,904
|
)
|
|||||
Other (income) expense, net
|
(525
|
)
|
|
(33
|
)
|
|
—
|
|
|
2,100
|
|
|
1,542
|
|
|||||
|
(417,497
|
)
|
|
(99,794
|
)
|
|
510
|
|
|
485,249
|
|
|
(31,532
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
INCOME (LOSS) BEFORE INCOME TAXES
|
430,491
|
|
|
485,762
|
|
|
(513
|
)
|
|
(485,249
|
)
|
|
430,491
|
|
|||||
INCOME TAX BENEFIT
|
(69
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(69
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
NET INCOME (LOSS)
|
$
|
430,560
|
|
|
$
|
485,762
|
|
|
$
|
(513
|
)
|
|
$
|
(485,249
|
)
|
|
$
|
430,560
|
|
|
Year Ended December 31, 2017
|
||||||||||||||||||
|
Parent
|
|
Guarantors
|
|
Non-Guarantor
|
|
Eliminations
|
|
Consolidated
|
||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Total revenues
|
$
|
1,010,989
|
|
|
$
|
309,314
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,320,303
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Costs and expenses:
|
|
|
|
|
|
|
|
|
|
||||||||||
Lease operating expenses
|
65,793
|
|
|
14,453
|
|
|
—
|
|
|
—
|
|
|
80,246
|
|
|||||
Production taxes
|
15,100
|
|
|
6,026
|
|
|
—
|
|
|
—
|
|
|
21,126
|
|
|||||
Midstream gathering and processing expenses
|
187,678
|
|
|
61,317
|
|
|
—
|
|
|
—
|
|
|
248,995
|
|
|||||
Depreciation, depletion and amortization
|
364,625
|
|
|
4
|
|
|
—
|
|
|
—
|
|
|
364,629
|
|
|||||
Impairment of oil and natural gas properties
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
General and administrative expenses
|
48,174
|
|
|
(2,654
|
)
|
|
3
|
|
|
—
|
|
|
45,523
|
|
|||||
Accretion expense
|
1,246
|
|
|
365
|
|
|
—
|
|
|
—
|
|
|
1,611
|
|
|||||
Acquisition expense
|
—
|
|
|
2,392
|
|
|
—
|
|
|
—
|
|
|
2,392
|
|
|||||
|
682,616
|
|
|
81,903
|
|
|
3
|
|
|
—
|
|
|
764,522
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
INCOME (LOSS) FROM OPERATIONS
|
328,373
|
|
|
227,411
|
|
|
(3
|
)
|
|
—
|
|
|
555,781
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
OTHER (INCOME) EXPENSE:
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest expense
|
120,147
|
|
|
(4,534
|
)
|
|
—
|
|
|
—
|
|
|
115,613
|
|
|||||
Interest income
|
(988
|
)
|
|
(21
|
)
|
|
—
|
|
|
—
|
|
|
(1,009
|
)
|
|||||
Gain on sale of equity method investments
|
(12,523
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(12,523
|
)
|
|||||
(Income) loss from equity method investments and investments in subsidiaries
|
(213,607
|
)
|
|
1,955
|
|
|
2,189
|
|
|
227,243
|
|
|
17,780
|
|
|||||
Other (income) expense, net
|
(1,617
|
)
|
|
(324
|
)
|
|
—
|
|
|
900
|
|
|
(1,041
|
)
|
|||||
|
(108,588
|
)
|
|
(2,924
|
)
|
|
2,189
|
|
|
228,143
|
|
|
118,820
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
INCOME (LOSS) BEFORE INCOME TAXES
|
436,961
|
|
|
230,335
|
|
|
(2,192
|
)
|
|
(228,143
|
)
|
|
436,961
|
|
|||||
INCOME TAX EXPENSE
|
1,809
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,809
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
NET INCOME (LOSS)
|
$
|
435,152
|
|
|
$
|
230,335
|
|
|
$
|
(2,192
|
)
|
|
$
|
(228,143
|
)
|
|
$
|
435,152
|
|
|
Year Ended December 31, 2019
|
||||||||||||||||||
|
Parent
|
|
Guarantors
|
|
Non-Guarantor
|
|
Eliminations
|
|
Consolidated
|
||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Net (loss) income
|
$
|
(2,002,358
|
)
|
|
$
|
(1,841,195
|
)
|
|
$
|
(33,901
|
)
|
|
$
|
1,875,096
|
|
|
$
|
(2,002,358
|
)
|
Foreign currency translation adjustment
|
9,193
|
|
|
173
|
|
|
9,020
|
|
|
(9,193
|
)
|
|
9,193
|
|
|||||
Other comprehensive loss (income)
|
9,193
|
|
|
173
|
|
|
9,020
|
|
|
(9,193
|
)
|
|
9,193
|
|
|||||
Comprehensive income (loss)
|
$
|
(1,993,165
|
)
|
|
$
|
(1,841,022
|
)
|
|
$
|
(24,881
|
)
|
|
$
|
1,865,903
|
|
|
$
|
(1,993,165
|
)
|
|
Year Ended December 31, 2018
|
||||||||||||||||||
|
Parent
|
|
Guarantors
|
|
Non-Guarantor
|
|
Eliminations
|
|
Consolidated
|
||||||||||
|
|
||||||||||||||||||
Net income (loss)
|
$
|
430,560
|
|
|
$
|
485,762
|
|
|
$
|
(513
|
)
|
|
$
|
(485,249
|
)
|
|
$
|
430,560
|
|
Foreign currency translation adjustment
|
(15,487
|
)
|
|
(297
|
)
|
|
(15,190
|
)
|
|
15,487
|
|
|
(15,487
|
)
|
|||||
Other comprehensive (loss) income
|
(15,487
|
)
|
|
(297
|
)
|
|
(15,190
|
)
|
|
15,487
|
|
|
(15,487
|
)
|
|||||
Comprehensive income (loss)
|
$
|
415,073
|
|
|
$
|
485,465
|
|
|
$
|
(15,703
|
)
|
|
$
|
(469,762
|
)
|
|
$
|
415,073
|
|
|
Year Ended December 31, 2017
|
||||||||||||||||||
|
Parent
|
|
Guarantors
|
|
Non-Guarantor
|
|
Eliminations
|
|
Consolidated
|
||||||||||
|
|
||||||||||||||||||
Net income (loss)
|
$
|
435,152
|
|
|
$
|
230,335
|
|
|
$
|
(2,192
|
)
|
|
$
|
(228,143
|
)
|
|
$
|
435,152
|
|
Foreign currency translation adjustment
|
12,519
|
|
|
182
|
|
|
12,337
|
|
|
(12,519
|
)
|
|
$
|
12,519
|
|
||||
Other comprehensive income (loss)
|
12,519
|
|
|
182
|
|
|
12,337
|
|
|
(12,519
|
)
|
|
12,519
|
|
|||||
Comprehensive income (loss)
|
$
|
447,671
|
|
|
$
|
230,517
|
|
|
$
|
10,145
|
|
|
$
|
(240,662
|
)
|
|
$
|
447,671
|
|
|
Year Ended December 31, 2019
|
||||||||||||||||||
|
Parent
|
|
Guarantors
|
|
Non-Guarantor
|
|
Eliminations
|
|
Consolidated
|
||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Net cash provided by operating activities
|
$
|
64,037
|
|
|
$
|
656,443
|
|
|
$
|
3,510
|
|
|
$
|
3
|
|
|
$
|
723,993
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net cash provided by (used in) investing activities
|
8,605
|
|
|
(680,057
|
)
|
|
(3,751
|
)
|
|
432
|
|
|
(674,771
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Net cash (used in) provided by financing activities
|
(95,459
|
)
|
|
—
|
|
|
435
|
|
|
(435
|
)
|
|
(95,459
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Net (decrease) increase in cash and cash equivalents
|
(22,817
|
)
|
|
(23,614
|
)
|
|
194
|
|
|
—
|
|
|
(46,237
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents at beginning of period
|
25,585
|
|
|
26,711
|
|
|
1
|
|
|
—
|
|
|
52,297
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents at end of period
|
$
|
2,768
|
|
|
$
|
3,097
|
|
|
$
|
195
|
|
|
$
|
—
|
|
|
$
|
6,060
|
|
|
Year Ended December 31, 2018
|
||||||||||||||||||
|
Parent
|
|
Guarantors
|
|
Non-Guarantor
|
|
Eliminations
|
|
Consolidated
|
||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Net cash provided by operating activities
|
$
|
560,203
|
|
|
$
|
226,067
|
|
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
786,271
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net cash (used in) provided by investing activities
|
(445,869
|
)
|
|
(231,005
|
)
|
|
(2,318
|
)
|
|
2,318
|
|
|
(676,874
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Net cash (used in) provided by financing activities
|
(156,657
|
)
|
|
—
|
|
|
2,319
|
|
|
(2,319
|
)
|
|
(156,657
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Net (decrease) increase in cash and cash equivalents
|
(42,323
|
)
|
|
(4,938
|
)
|
|
1
|
|
|
—
|
|
|
(47,260
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents at beginning of period
|
67,908
|
|
|
31,649
|
|
|
—
|
|
|
—
|
|
|
99,557
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents at end of period
|
$
|
25,585
|
|
|
$
|
26,711
|
|
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
52,297
|
|
|
Year Ended December 31, 2017
|
||||||||||||||||||
|
Parent
|
|
Guarantors
|
|
Non-Guarantor
|
|
Eliminations
|
|
Consolidated
|
||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Net cash provided by operating activities
|
$
|
392,680
|
|
|
$
|
287,209
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
679,889
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net cash (used in) provided by investing activities
|
(2,216,615
|
)
|
|
(1,674,690
|
)
|
|
(2,280
|
)
|
|
1,419,417
|
|
|
(2,474,168
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Net cash provided by (used in)financing activities
|
432,961
|
|
|
1,417,137
|
|
|
2,280
|
|
|
(1,419,417
|
)
|
|
432,961
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Net (decrease) increase in cash and cash equivalents
|
(1,390,974
|
)
|
|
29,656
|
|
|
—
|
|
|
—
|
|
|
(1,361,318
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents at beginning of period
|
1,458,882
|
|
|
1,993
|
|
|
—
|
|
|
—
|
|
|
1,460,875
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents at end of period
|
$
|
67,908
|
|
|
$
|
31,649
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
99,557
|
|
19.
|
SUPPLEMENTAL INFORMATION ON OIL AND GAS EXPLORATION AND PRODUCTION ACTIVITIES (UNAUDITED)
|
|
2019
|
|
2018
|
||||
|
(In thousands)
|
||||||
Proved properties
|
$
|
8,909,069
|
|
|
$
|
7,153,799
|
|
Unproved properties
|
1,686,666
|
|
|
2,873,037
|
|
||
|
10,595,735
|
|
|
10,026,836
|
|
||
Accumulated depreciation, depletion, amortization and impairment
|
(7,191,957
|
)
|
|
(4,613,293
|
)
|
||
Net capitalized costs
|
$
|
3,403,778
|
|
|
$
|
5,413,543
|
|
|
|
|
|
||||
Equity investment in Grizzly Oil Sands ULC
|
|
|
|
||||
Proved properties
|
$
|
64,476
|
|
|
$
|
67,475
|
|
Unproved properties
|
85,395
|
|
|
79,605
|
|
||
|
149,871
|
|
|
147,080
|
|
||
Accumulated depreciation, depletion, amortization and impairment
|
(1,634
|
)
|
|
(1,553
|
)
|
||
Net capitalized costs
|
$
|
148,237
|
|
|
$
|
145,527
|
|
|
2019
|
|
2018
|
|
2017
|
||||||
|
(In thousands)
|
||||||||||
Acquisition
|
$
|
37,598
|
|
|
$
|
119,444
|
|
|
$
|
1,946,416
|
|
Development
|
594,673
|
|
|
714,269
|
|
|
1,138,951
|
|
|||
Exploratory
|
9,762
|
|
|
22,081
|
|
|
9,058
|
|
|||
Total
|
$
|
642,033
|
|
|
$
|
855,794
|
|
|
$
|
3,094,425
|
|
|
|
|
|
|
|
||||||
Equity investment in Grizzly Oil Sands ULC
|
|
|
|
|
|
||||||
Acquisition
|
$
|
—
|
|
|
$
|
238
|
|
|
$
|
503
|
|
Development
|
—
|
|
|
—
|
|
|
—
|
|
|||
Exploratory
|
849
|
|
|
—
|
|
|
—
|
|
|||
Total
|
$
|
849
|
|
|
$
|
238
|
|
|
$
|
503
|
|
|
2019
|
|
2018
|
|
2017
|
||||||
|
(In thousands)
|
||||||||||
Revenues
|
$
|
1,137,648
|
|
|
$
|
1,478,523
|
|
|
$
|
1,106,624
|
|
Production costs
|
(403,294
|
)
|
|
(415,308
|
)
|
|
(350,367
|
)
|
|||
Depletion
|
(539,379
|
)
|
|
(476,517
|
)
|
|
(358,792
|
)
|
|||
Impairment
|
(2,039,770
|
)
|
|
—
|
|
|
—
|
|
|||
Income tax benefit
|
7,563
|
|
|
68
|
|
|
240
|
|
|||
Results of operations from producing activities
|
$
|
(1,837,232
|
)
|
|
$
|
586,766
|
|
|
$
|
397,705
|
|
Depletion per Mcf of gas equivalent (Mcfe)
|
$
|
1.08
|
|
|
$
|
0.96
|
|
|
$
|
0.90
|
|
|
|
|
|
|
|
||||||
Results of Operations from equity method investment in Grizzly Oil Sands ULC
|
|
|
|
|
|
||||||
Revenues
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Production costs
|
—
|
|
|
—
|
|
|
—
|
|
|||
Depletion
|
—
|
|
|
—
|
|
|
—
|
|
|||
Income tax expense
|
—
|
|
|
—
|
|
|
—
|
|
|||
Results of operations from producing activities
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
2019
|
|
2018
|
|
2017
|
|||||||||||||||||||||
|
Oil
|
|
Natural Gas
|
|
NGL
|
|
Oil
|
|
Natural Gas
|
|
NGL
|
|
Oil
|
|
Natural Gas
|
|
NGL
|
|||||||||
|
(Mbbls)
|
|
(MMcf)
|
|
(Mbbls)
|
|
(Mbbls)
|
|
(MMcf)
|
|
(Mbbls)
|
|
(Mbbls)
|
|
(MMcf)
|
|
(Mbbls)
|
|||||||||
Proved Reserves
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Beginning of the period
|
21,050
|
|
|
4,133,889
|
|
|
80,520
|
|
|
19,157
|
|
|
4,825,310
|
|
|
75,766
|
|
|
5,546
|
|
|
2,167,068
|
|
|
20,127
|
|
Purchases in oil and natural gas reserves in place
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
15,132
|
|
|
1,098,644
|
|
|
53,617
|
|
Extensions and discoveries
|
3,612
|
|
|
997,014
|
|
|
12,992
|
|
|
5,205
|
|
|
622,271
|
|
|
9,631
|
|
|
951
|
|
|
1,594,734
|
|
|
4,619
|
|
Sales of oil and natural gas reserves in place
|
(2,369
|
)
|
|
(62,557
|
)
|
|
—
|
|
|
(134
|
)
|
|
(43,444
|
)
|
|
(112
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
Revisions of prior reserve estimates
|
(1,749
|
)
|
|
(561,890
|
)
|
|
(26,909
|
)
|
|
(377
|
)
|
|
(826,506
|
)
|
|
1,228
|
|
|
107
|
|
|
314,925
|
|
|
2,737
|
|
Current production
|
(2,186
|
)
|
|
(458,178
|
)
|
|
(5,074
|
)
|
|
(2,801
|
)
|
|
(443,742
|
)
|
|
(5,993
|
)
|
|
(2,579
|
)
|
|
(350,061
|
)
|
|
(5,334
|
)
|
End of period
|
18,357
|
|
|
4,048,279
|
|
|
61,528
|
|
|
21,050
|
|
|
4,133,889
|
|
|
80,520
|
|
|
19,157
|
|
|
4,825,310
|
|
|
75,766
|
|
Proved developed reserves
|
7,887
|
|
|
1,757,303
|
|
|
29,898
|
|
|
9,570
|
|
|
1,813,184
|
|
|
40,810
|
|
|
10,245
|
|
|
1,616,930
|
|
|
36,247
|
|
Proved undeveloped reserves
|
10,470
|
|
|
2,290,976
|
|
|
31,630
|
|
|
11,480
|
|
|
2,320,705
|
|
|
39,710
|
|
|
8,912
|
|
|
3,208,380
|
|
|
39,519
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Equity investment in Grizzly Oil Sands ULC
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Beginning of the period
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Purchases in oil and natural gas reserves in place
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Extensions and discoveries
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Revisions of prior reserve estimates
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Current production
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
End of period
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Proved developed reserves
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Proved undeveloped reserves
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Year ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
|
(In thousands)
|
||||||||||
Future cash flows
|
$
|
10,451,179
|
|
|
$
|
14,483,197
|
|
|
$
|
11,202,692
|
|
Future development and abandonment costs
|
(2,058,374
|
)
|
|
(2,437,853
|
)
|
|
(3,005,217
|
)
|
|||
Future production costs
|
(4,512,940
|
)
|
|
(5,067,554
|
)
|
|
(2,152,821
|
)
|
|||
Future production taxes
|
(332,525
|
)
|
|
(455,840
|
)
|
|
(289,944
|
)
|
|||
Future income taxes
|
—
|
|
|
(943,293
|
)
|
|
(573,965
|
)
|
|||
Future net cash flows
|
3,547,340
|
|
|
5,578,657
|
|
|
5,180,745
|
|
|||
10% discount to reflect timing of cash flows
|
(1,843,753
|
)
|
|
(2,595,932
|
)
|
|
(2,537,181
|
)
|
|||
Standardized measure of discounted future net cash flows
|
$
|
1,703,587
|
|
|
$
|
2,982,725
|
|
|
$
|
2,643,564
|
|
|
|
|
|
|
|
||||||
Equity investment in Grizzly Oil Sands ULC Standardized measure of discounted cash flows
|
|
|
|
|
|
||||||
Future cash flows
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Future development and abandonment costs
|
—
|
|
|
—
|
|
|
—
|
|
|||
Future production costs
|
—
|
|
|
—
|
|
|
—
|
|
|||
Future production taxes
|
—
|
|
|
—
|
|
|
—
|
|
|||
Future income taxes
|
—
|
|
|
—
|
|
|
—
|
|
|||
Future net cash flows
|
—
|
|
|
—
|
|
|
—
|
|
|||
10% discount to reflect timing of cash flows
|
|
|
|
|
|
|
|
|
|||
Standardized measure of discounted future net cash flows
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Year ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
|
(In thousands)
|
||||||||||
Sales and transfers of oil and gas produced, net of production costs
|
$
|
(734,354
|
)
|
|
$
|
(1,063,215
|
)
|
|
$
|
(756,257
|
)
|
Net changes in prices, production costs, and development costs
|
(1,372,443
|
)
|
|
590,519
|
|
|
913,714
|
|
|||
Acquisition of oil and gas reserves in place
|
—
|
|
|
—
|
|
|
703,866
|
|
|||
Extensions and discoveries
|
388,151
|
|
|
519,137
|
|
|
618,039
|
|
|||
Previously estimated development costs incurred during the period
|
405,979
|
|
|
402,156
|
|
|
390,673
|
|
|||
Revisions of previous quantity estimates, less related production costs
|
(321,397
|
)
|
|
(356,933
|
)
|
|
155,200
|
|
|||
Sales of oil and gas reserves in place
|
(48,547
|
)
|
|
(25,882
|
)
|
|
—
|
|
|||
Accretion of discount
|
298,273
|
|
|
264,356
|
|
|
68,804
|
|
|||
Net changes in income taxes
|
424,628
|
|
|
(185,157
|
)
|
|
(231,545
|
)
|
|||
Change in production rates and other
|
(319,428
|
)
|
|
194,180
|
|
|
93,030
|
|
|||
Total change in standardized measure of discounted future net cash flows
|
$
|
(1,279,138
|
)
|
|
$
|
339,161
|
|
|
$
|
1,955,524
|
|
|
|
|
|
|
|
||||||
Equity investment in Grizzly Oil Sands ULC Changes in standardized measure of discounted cash flows
|
|
|
|
|
|
||||||
Sales and transfers of oil and gas produced, net of production costs
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Net changes in prices, production costs, and development costs
|
—
|
|
|
—
|
|
|
—
|
|
|||
Acquisition of oil and gas reserves in place
|
—
|
|
|
—
|
|
|
—
|
|
|||
Extensions and discoveries
|
—
|
|
|
—
|
|
|
—
|
|
|||
Previously estimated development costs incurred during the period
|
—
|
|
|
—
|
|
|
—
|
|
|||
Revisions of previous quantity estimates, less related production costs
|
—
|
|
|
—
|
|
|
—
|
|
|||
Accretion of discount
|
—
|
|
|
—
|
|
|
—
|
|
|||
Net changes in income taxes
|
—
|
|
|
—
|
|
|
—
|
|
|||
Change in production rates and other
|
—
|
|
|
—
|
|
|
—
|
|
|||
Total change in standardized measure of discounted future net cash flows
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
20.
|
SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)
|
|
|
2019
|
||||||||||||||
|
|
First
Quarter
|
|
Second
Quarter
|
|
Third
Quarter
|
|
Fourth
Quarter
|
||||||||
|
|
(In thousands)
|
||||||||||||||
Revenues
|
|
$
|
320,578
|
|
|
$
|
458,994
|
|
|
$
|
285,175
|
|
|
$
|
281,261
|
|
Income (loss) from operations
|
|
93,011
|
|
|
218,456
|
|
|
(570,955
|
)
|
|
(1,444,205
|
)
|
||||
Income tax (benefit) expense
|
|
—
|
|
|
(179,331
|
)
|
|
(144,047
|
)
|
|
315,815
|
|
||||
Net income (loss)
|
|
62,242
|
|
|
234,956
|
|
|
(484,802
|
)
|
|
(1,814,754
|
)
|
||||
Income (loss) per share:
|
|
|
|
|
|
|
|
|
||||||||
Basic
|
|
$
|
0.38
|
|
|
$
|
1.47
|
|
|
$
|
(3.04
|
)
|
|
$
|
(11.36
|
)
|
Diluted
|
|
$
|
0.38
|
|
|
$
|
1.47
|
|
|
$
|
(3.04
|
)
|
|
$
|
(11.36
|
)
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
2018
|
||||||||||||||
|
|
First
Quarter
|
|
Second
Quarter
|
|
Third
Quarter
|
|
Fourth
Quarter
|
||||||||
|
|
(In thousands)
|
||||||||||||||
Revenues
|
|
$
|
325,392
|
|
|
$
|
252,740
|
|
|
$
|
360,962
|
|
|
$
|
415,950
|
|
Income from operations
|
|
111,990
|
|
|
15,373
|
|
|
115,116
|
|
|
156,480
|
|
||||
Income tax benefit
|
|
(69
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Net income
|
|
90,090
|
|
|
111,319
|
|
|
95,150
|
|
|
134,001
|
|
||||
Income per share:
|
|
|
|
|
|
|
|
|
||||||||
Basic
|
|
$
|
0.50
|
|
|
$
|
0.64
|
|
|
$
|
0.55
|
|
|
$
|
0.78
|
|
Diluted
|
|
$
|
0.50
|
|
|
$
|
0.64
|
|
|
$
|
0.55
|
|
|
$
|
0.78
|
|
21.
|
SUBSEQUENT EVENTS
|
ITEM 9.
|
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
|
ITEM 9A.
|
CONTROLS AND PROCEDURES
|
/s/ David M. Wood
|
|
/s/ Quentin Hicks
|
||||
Name:
|
|
David M. Wood
|
|
Name:
|
|
Quentin Hicks
|
Title:
|
|
Chief Executive Officer and President
|
|
Title:
|
|
Chief Financial Officer
|
ITEM 9B.
|
OTHER INFORMATION
|
ITEM 10.
|
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
|
ITEM 11.
|
EXECUTIVE COMPENSATION
|
ITEM 12.
|
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
|
ITEM 13.
|
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
|
ITEM 14.
|
PRINCIPAL ACCOUNTING FEES AND SERVICES
|
ITEM 15.
|
EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
|
1.
|
Financial Statements. Gulfport's consolidated financial statements are included in Item 8 of Part II of this report. Reference is made to the accompanying Index to Financial Statements.
|
2.
|
Financial Statement Schedules. No financial statement schedules are applicable or required.
|
3.
|
Exhibits. The exhibits listed below in the Index of Exhibits are filed, furnished or incorporated by reference pursuant to the requirements of Item 601 of Regulation S-K.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8-K
|
|
000-19514
|
|
4.1
|
|
2/24/2017
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8-K
|
|
000-19514
|
|
4.1
|
|
6/12/2015
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
X
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
DEF 14A
|
|
000-19514
|
|
Appendix A
|
|
4/30/19
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8-K
|
|
000-19514
|
|
10.3
|
|
8/12/19
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8-K
|
|
000-19514
|
|
10.1
|
|
4/7/2014
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8-K
|
|
000-19514
|
|
10.2
|
|
4/26/2006
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10-K
|
|
000-19514
|
|
10.3
|
|
2/28/2014
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
S-4
|
|
333-189992
|
|
10.1
|
|
7/17/2013
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10-Q
|
|
000-19514
|
|
10.3
|
|
8/2/2019
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10-Q
|
|
000-19514
|
|
10.4
|
|
8/2/2019
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10-Q
|
|
000-19514
|
|
10.5
|
|
8/2/2019
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8-K
|
|
000-19514
|
|
10.1
|
|
8/12/19
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8-K
|
|
000-19514
|
|
10.2
|
|
8/12/19
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8-K
|
|
000-19514
|
|
10.1
|
|
1/3/2014
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8-K
|
|
000-19514
|
|
10.1
|
|
4/28/2014
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8-K
|
|
000-19514
|
|
10.1
|
|
12/3/2014
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8-K
|
|
000-19514
|
|
10.1
|
|
4/15/2015
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10-Q
|
|
000-19514
|
|
10.2
|
|
8/7/2015
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8-K
|
|
000-19514
|
|
10.1
|
|
9/24/2015
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10-Q
|
|
000-19514
|
|
10.2
|
|
5/5/2016
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8-K
|
|
000-19514
|
|
10.1
|
|
12/15/2016
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8-K
|
|
000-19514
|
|
10.1
|
|
4/4/2017
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10-Q
|
|
000-19514
|
|
10.2
|
|
5/9/2017
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8-K
|
|
000-19514
|
|
10.1
|
|
10/5/2017
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8-K
|
|
000-19514
|
|
10.1
|
|
11/28/2017
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8-K
|
|
000-19514
|
|
10.1
|
|
5/25/2018
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8-K
|
|
000-19514
|
|
10.1
|
|
12/4/2018
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10-Q
|
|
000-19514
|
|
10.1
|
|
11/7/2014
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10-Q
|
|
000-19514
|
|
10.2
|
|
11/5/2015
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10-Q
|
|
000-19514
|
|
10.2
|
|
11/1/2018
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10-Q
|
|
000-19514
|
|
10.2
|
|
11/7/2014
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10-K
|
|
000-19514
|
|
10.19
|
|
2/19/2016
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10-Q
|
|
000-19514
|
|
10.2
|
|
8/2/2018
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
S-4
|
|
333-199905
|
|
10.1
|
|
11/6/2014
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8-K
|
|
000-19514
|
|
14
|
|
2/14/2006
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
X
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
X
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
X
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
X
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
X
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
X
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
X
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
X
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
101.INS
|
|
Inline XBRL Instance Document.
|
|
|
|
|
|
|
|
|
|
X
|
|
|
|
|
|
|
|
|
|
|
|
|
|
11.SCH*
|
|
Inline XBRL Taxonomy Extension Schema Document.
|
|
|
|
|
|
|
|
|
|
X
|
|
|
|
|
|
|
|
|
|
|
|
|
|
101.CAL
|
|
Inline XBRL Taxonomy Extension Calculation Linkbase Document.
|
|
|
|
|
|
|
|
|
|
X
|
|
|
|
|
|
|
|
|
|
|
|
|
|
101.DEF
|
|
Inline XBRL Taxonomy Extension Definition Linkbase Document.
|
|
|
|
|
|
|
|
|
|
X
|
|
|
|
|
|
|
|
|
|
|
|
|
|
101.LAB
|
|
Inline XBRL Taxonomy Extension Labels Linkbase Document.
|
|
|
|
|
|
|
|
|
|
X
|
|
|
|
|
|
|
|
|
|
|
|
|
|
101.PRE
|
|
Inline XBRL Taxonomy Extension Presentation Linkbase Document.
|
|
|
|
|
|
|
|
|
|
X
|
*
|
Schedules have been omitted pursuant to Item 601(b)(2) of Regulation S-K. The registrant hereby undertakes to furnish supplemental copies of any of the omitted schedules upon request by the SEC.
|
**
|
The Company agrees to furnish a copy of any of its unfiled long-term debt instruments to the Securities and Exchange Commission upon request.
|
+
|
Management contract, compensatory plan or arrangement.
|
#
|
Confidential treatment has been requested for portions of this exhibit. These portions have been omitted and submitted separately to the Securities and Exchange Commission.
|
ITEM 16.
|
FORM 10-K SUMMARY
|
GULFPORT ENERGY CORPORATION
|
||
|
|
|
By:
|
|
/s/ Quentin Hicks
|
|
|
Quentin Hicks
Chief Financial Officer
|
Date:
|
February 27, 2020
|
By:
|
|
/s/ DAVID M. WOOD
|
|
|
|
|
David M. Wood
Chief Executive Officer and President, Director
(Principal Executive Officer)
|
|
|
|
||
Date:
|
February 27, 2020
|
By:
|
|
/s/ DAVID L. HOUSTON
|
|
|
|
|
David L. Houston
Chairman of the Board and Director
|
|
|
|
||
Date:
|
February 27, 2020
|
By:
|
|
/s/ QUENTIN HICKS
|
|
|
|
|
Quentin Hicks
Chief Financial Officer
(Principal Accounting and Financial Officer)
|
|
|
|
||
Date:
|
February 27, 2020
|
By:
|
|
/s/ DEBORAH G. ADAMS
|
|
|
|
|
Deborah G. Adams
Director
|
|
|
|
|
|
Date:
|
February 27, 2020
|
By:
|
|
/s/ ALVIN BLEDSOE
|
|
|
|
|
Alvin Bledsoe
Director
|
|
|
|
|
|
Date:
|
February 27, 2020
|
By:
|
|
/s/ VALERIE JOCHEN
|
|
|
|
|
Valerie Jochen
Director
|
|
|
|
|
|
Date:
|
February 27, 2020
|
By:
|
|
/s/ C. DOUG JOHNSON
|
|
|
|
|
C. Doug Johnson
Director
|
|
|
|
|
|
Date:
|
February 27, 2020
|
By:
|
|
/s/ BEN T. MORRIS
|
|
|
|
|
Ben T. Morris
Director
|
|
|
|
|
|
Date:
|
February 27, 2020
|
By:
|
|
/s/ PAUL WESTERMAN
|
|
|
|
|
Paul Westerman
Director
|
1 Year Gulfport Energy Chart |
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