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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Qep Resources Inc | NYSE:QEP | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 4.08 | 0 | 01:00:00 |
☒
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
☐
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Delaware
|
|
87-0287750
|
(State or other jurisdiction of
|
|
(I.R.S. Employer
|
incorporation or organization)
|
|
Identification No.)
|
Title of each class
|
Trading Symbol(s)
|
Name of each exchange on which registered
|
Common stock, $0.01 par value
|
QEP
|
New York Stock Exchange
|
Large accelerated filer
|
☒
|
Accelerated filer
|
☐
|
Non-accelerated filer
|
☐
|
Smaller reporting company
|
☐
|
|
|
Emerging growth company
|
☐
|
|
|
|
Page
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ITEM 1.
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ITEM 2.
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ITEM 3.
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ITEM 4.
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ITEM 1.
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ITEM 1A.
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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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||
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ITEM 6.
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||
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Three Months Ended
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Nine Months Ended
|
||||||||||||
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September 30,
|
|
September 30,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
REVENUES
|
(in millions, except per share amounts)
|
||||||||||||||
Oil and condensate, gas and NGL sales
|
$
|
305.6
|
|
|
$
|
544.0
|
|
|
$
|
875.8
|
|
|
$
|
1,474.1
|
|
Other revenues
|
1.8
|
|
|
3.8
|
|
|
7.1
|
|
|
11.8
|
|
||||
Purchased oil and gas sales
|
0.1
|
|
|
13.0
|
|
|
1.4
|
|
|
36.2
|
|
||||
Total Revenues
|
307.5
|
|
|
560.8
|
|
|
884.3
|
|
|
1,522.1
|
|
||||
OPERATING EXPENSES
|
|
|
|
|
|
|
|
||||||||
Purchased oil and gas expense
|
0.1
|
|
|
13.3
|
|
|
1.5
|
|
|
38.6
|
|
||||
Lease operating expense
|
38.3
|
|
|
64.6
|
|
|
135.5
|
|
|
203.6
|
|
||||
Transportation and processing costs
|
18.0
|
|
|
28.0
|
|
|
38.8
|
|
|
93.2
|
|
||||
Gathering and other expense
|
3.1
|
|
|
4.6
|
|
|
9.9
|
|
|
10.8
|
|
||||
General and administrative
|
29.6
|
|
|
48.3
|
|
|
124.4
|
|
|
164.2
|
|
||||
Production and property taxes
|
20.0
|
|
|
37.4
|
|
|
67.6
|
|
|
103.9
|
|
||||
Depreciation, depletion and amortization
|
144.2
|
|
|
234.9
|
|
|
395.5
|
|
|
673.6
|
|
||||
Exploration expenses
|
—
|
|
|
—
|
|
|
—
|
|
|
0.1
|
|
||||
Impairment
|
—
|
|
|
—
|
|
|
5.0
|
|
|
404.4
|
|
||||
Total Operating Expenses
|
253.3
|
|
|
431.1
|
|
|
778.2
|
|
|
1,692.4
|
|
||||
Net gain (loss) from asset sales, inclusive of restructuring costs
|
(2.1
|
)
|
|
27.1
|
|
|
2.5
|
|
|
26.7
|
|
||||
OPERATING INCOME (LOSS)
|
52.1
|
|
|
156.8
|
|
|
108.6
|
|
|
(143.6
|
)
|
||||
Realized and unrealized gains (losses) on derivative contracts (Note 7)
|
87.4
|
|
|
(108.0
|
)
|
|
(55.8
|
)
|
|
(240.3
|
)
|
||||
Interest and other income (expense)
|
0.9
|
|
|
(0.3
|
)
|
|
4.6
|
|
|
(4.1
|
)
|
||||
Interest expense
|
(32.8
|
)
|
|
(38.7
|
)
|
|
(100.0
|
)
|
|
(111.9
|
)
|
||||
INCOME (LOSS) BEFORE INCOME TAXES
|
107.6
|
|
|
9.8
|
|
|
(42.6
|
)
|
|
(499.9
|
)
|
||||
Income tax (provision) benefit
|
(26.6
|
)
|
|
(2.5
|
)
|
|
55.7
|
|
|
117.6
|
|
||||
NET INCOME (LOSS)
|
$
|
81.0
|
|
|
$
|
7.3
|
|
|
$
|
13.1
|
|
|
$
|
(382.3
|
)
|
|
|
|
|
|
|
|
|
||||||||
Earnings (loss) per common share
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
0.34
|
|
|
$
|
0.03
|
|
|
$
|
0.06
|
|
|
$
|
(1.60
|
)
|
Diluted
|
$
|
0.34
|
|
|
$
|
0.03
|
|
|
$
|
0.06
|
|
|
$
|
(1.60
|
)
|
|
|
|
|
|
|
|
|
||||||||
Weighted-average common shares outstanding
|
|
|
|
|
|
|
|
||||||||
Used in basic calculation
|
237.9
|
|
|
236.9
|
|
|
237.7
|
|
|
238.3
|
|
||||
Used in diluted calculation
|
237.9
|
|
|
237.0
|
|
|
237.7
|
|
|
238.3
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
September 30,
|
|
September 30,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
|
(in millions)
|
||||||||||||||
Net income (loss)
|
$
|
81.0
|
|
|
$
|
7.3
|
|
|
$
|
13.1
|
|
|
$
|
(382.3
|
)
|
Other comprehensive income (loss), net of tax:
|
|
|
|
|
|
|
|
||||||||
Fair value of plan assets adjustment(1)
|
—
|
|
|
—
|
|
|
—
|
|
|
0.3
|
|
||||
Pension and other postretirement plans adjustments:
|
|
|
|
|
|
|
|
||||||||
Amortization of prior service costs(2)
|
0.1
|
|
|
0.2
|
|
|
0.2
|
|
|
0.4
|
|
||||
Amortization of actuarial losses(3)
|
—
|
|
|
0.1
|
|
|
0.1
|
|
|
0.5
|
|
||||
Net curtailment(4)
|
—
|
|
|
—
|
|
|
(0.3
|
)
|
|
—
|
|
||||
Other comprehensive income (loss)
|
0.1
|
|
|
0.3
|
|
|
—
|
|
|
1.2
|
|
||||
Comprehensive income (loss)
|
$
|
81.1
|
|
|
$
|
7.6
|
|
|
$
|
13.1
|
|
|
$
|
(381.1
|
)
|
(1)
|
Adjustment recorded during the nine months ended September 30, 2018, related to a change in the fair value of plan assets as of December 31, 2017.
|
(2)
|
Presented net of income tax expense of $0.1 million for the nine months ended September 30, 2018.
|
(3)
|
Presented net of income tax benefit of $0.1 million and expense of $0.1 million for the three and nine months ended September 30, 2018, respectively.
|
(4)
|
Presented net of income tax benefit of $0.1 million for the nine months ended September 30, 2019.
|
|
September 30,
2019 |
|
December 31,
2018 |
||||
ASSETS
|
(in millions)
|
||||||
Current Assets
|
|
|
|
||||
Cash and cash equivalents
|
$
|
92.4
|
|
|
$
|
—
|
|
Accounts receivable, net
|
104.3
|
|
|
104.3
|
|
||
Income tax receivable
|
75.5
|
|
|
75.9
|
|
||
Fair value of derivative contracts
|
69.8
|
|
|
87.5
|
|
||
Prepaid expenses and other current assets
|
8.1
|
|
|
12.9
|
|
||
Total Current Assets
|
350.1
|
|
|
280.6
|
|
||
Property, Plant and Equipment (successful efforts method for oil and gas properties)
|
|
|
|
||||
Proved properties
|
9,416.9
|
|
|
9,096.9
|
|
||
Unproved properties
|
698.3
|
|
|
705.5
|
|
||
Gathering and other
|
162.7
|
|
|
167.7
|
|
||
Materials and supplies
|
19.3
|
|
|
29.9
|
|
||
Total Property, Plant and Equipment
|
10,297.2
|
|
|
10,000.0
|
|
||
Less Accumulated Depreciation, Depletion and Amortization
|
|
|
|
||||
Exploration and production
|
5,153.3
|
|
|
4,882.4
|
|
||
Gathering and other
|
58.5
|
|
|
58.1
|
|
||
Total Accumulated Depreciation, Depletion and Amortization
|
5,211.8
|
|
|
4,940.5
|
|
||
Net Property, Plant and Equipment
|
5,085.4
|
|
|
5,059.5
|
|
||
Fair value of derivative contracts
|
23.2
|
|
|
35.4
|
|
||
Operating lease right-of-use assets, net
|
57.4
|
|
|
—
|
|
||
Other noncurrent assets
|
54.5
|
|
|
49.6
|
|
||
Noncurrent assets held for sale
|
—
|
|
|
692.7
|
|
||
TOTAL ASSETS
|
$
|
5,570.6
|
|
|
$
|
6,117.8
|
|
LIABILITIES AND EQUITY
|
|
|
|
|
|||
Current Liabilities
|
|
|
|
||||
Checks outstanding in excess of cash balances
|
$
|
0.7
|
|
|
$
|
14.6
|
|
Accounts payable and accrued expenses
|
206.2
|
|
|
258.1
|
|
||
Production and property taxes
|
17.7
|
|
|
24.1
|
|
||
Current portion of long term debt
|
51.7
|
|
|
—
|
|
||
Interest payable
|
33.0
|
|
|
32.4
|
|
||
Fair value of derivative contracts
|
0.8
|
|
|
—
|
|
||
Current operating lease liabilities
|
18.4
|
|
|
—
|
|
||
Asset retirement obligations
|
6.7
|
|
|
5.1
|
|
||
Total Current Liabilities
|
335.2
|
|
|
334.3
|
|
||
Long-term debt
|
2,029.4
|
|
|
2,507.1
|
|
||
Deferred income taxes
|
208.0
|
|
|
269.2
|
|
||
Asset retirement obligations
|
95.5
|
|
|
96.9
|
|
||
Fair value of derivative contracts
|
0.4
|
|
|
0.7
|
|
||
Operating lease liabilities
|
45.3
|
|
|
—
|
|
||
Other long-term liabilities
|
86.8
|
|
|
97.4
|
|
||
Other long-term liabilities held for sale
|
—
|
|
|
61.3
|
|
||
Commitments and contingencies (Note 11)
|
|
|
|
|
|
||
EQUITY
|
|
|
|
||||
Common stock – par value $0.01 per share; 500.0 million shares authorized; 242.1 million and 239.8 million shares issued, respectively
|
2.4
|
|
|
2.4
|
|
||
Treasury stock – 4.3 million and 3.1 million shares, respectively
|
(54.8
|
)
|
|
(45.6
|
)
|
||
Additional paid-in capital
|
1,451.9
|
|
|
1,431.9
|
|
||
Retained earnings
|
1,384.8
|
|
|
1,376.5
|
|
||
Accumulated other comprehensive income (loss)
|
(14.3
|
)
|
|
(14.3
|
)
|
||
Total Common Shareholders' Equity
|
2,770.0
|
|
|
2,750.9
|
|
||
TOTAL LIABILITIES AND EQUITY
|
$
|
5,570.6
|
|
|
$
|
6,117.8
|
|
|
Common Stock
|
|
Treasury Stock
|
|
Additional Paid-in Capital
|
|
Retained Earnings
|
|
Accumulated Other Comprehensive Income(Loss)
|
|
Total
|
||||||||||||||||||
|
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
|
|
|
|
||||||||||||||||||
|
(in millions)
|
||||||||||||||||||||||||||||
Balance at June 30, 2019
|
242.0
|
|
|
$
|
2.4
|
|
|
(4.1
|
)
|
|
$
|
(53.6
|
)
|
|
$
|
1,446.3
|
|
|
$
|
1,308.6
|
|
|
$
|
(14.4
|
)
|
|
$
|
2,689.3
|
|
Net income (loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
81.0
|
|
|
—
|
|
|
81.0
|
|
||||||
Cash dividends declared, $0.02 per share
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4.8
|
)
|
|
—
|
|
|
(4.8
|
)
|
||||||
Share-based compensation
|
0.1
|
|
|
—
|
|
|
(0.2
|
)
|
|
(1.2
|
)
|
|
5.6
|
|
|
—
|
|
|
—
|
|
|
4.4
|
|
||||||
Change in pension and postretirement liability, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.1
|
|
|
0.1
|
|
||||||
Balance at September 30, 2019
|
242.1
|
|
|
$
|
2.4
|
|
|
(4.3
|
)
|
|
$
|
(54.8
|
)
|
|
$
|
1,451.9
|
|
|
$
|
1,384.8
|
|
|
$
|
(14.3
|
)
|
|
$
|
2,770.0
|
|
Balance at December 31, 2018
|
239.8
|
|
|
$
|
2.4
|
|
|
(3.1
|
)
|
|
$
|
(45.6
|
)
|
|
$
|
1,431.9
|
|
|
$
|
1,376.5
|
|
|
$
|
(14.3
|
)
|
|
$
|
2,750.9
|
|
Net income (loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
13.1
|
|
|
—
|
|
|
13.1
|
|
||||||
Cash dividends declared, $0.02 per share
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4.8
|
)
|
|
—
|
|
|
(4.8
|
)
|
||||||
Share-based compensation
|
2.3
|
|
|
—
|
|
|
(1.2
|
)
|
|
(9.2
|
)
|
|
20.0
|
|
|
—
|
|
|
—
|
|
|
10.8
|
|
||||||
Change in pension and postretirement liability, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Balance at September 30, 2019
|
242.1
|
|
|
$
|
2.4
|
|
|
(4.3
|
)
|
|
$
|
(54.8
|
)
|
|
$
|
1,451.9
|
|
|
$
|
1,384.8
|
|
|
$
|
(14.3
|
)
|
|
$
|
2,770.0
|
|
Balance at June 30, 2018
|
239.7
|
|
|
$
|
2.4
|
|
|
(2.7
|
)
|
|
$
|
(41.2
|
)
|
|
$
|
1,415.7
|
|
|
$
|
1,994.7
|
|
|
$
|
(10.2
|
)
|
|
$
|
3,361.4
|
|
Net income (loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7.3
|
|
|
—
|
|
|
7.3
|
|
||||||
Common stock repurchased and retired
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Share-based compensation
|
0.1
|
|
|
—
|
|
|
(0.3
|
)
|
|
(3.0
|
)
|
|
8.9
|
|
|
—
|
|
|
—
|
|
|
5.9
|
|
||||||
Change in pension and postretirement liability, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.3
|
|
|
0.3
|
|
||||||
Balance at September 30, 2018
|
239.8
|
|
|
$
|
2.4
|
|
|
(3.0
|
)
|
|
$
|
(44.2
|
)
|
|
$
|
1,424.6
|
|
|
$
|
2,002.0
|
|
|
$
|
(9.9
|
)
|
|
$
|
3,374.9
|
|
Balance at December 31, 2017
|
243.0
|
|
|
$
|
2.4
|
|
|
(2.0
|
)
|
|
$
|
(34.2
|
)
|
|
$
|
1,398.2
|
|
|
$
|
2,442.6
|
|
|
$
|
(11.1
|
)
|
|
$
|
3,797.9
|
|
Net income (loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(382.3
|
)
|
|
—
|
|
|
(382.3
|
)
|
||||||
Common stock repurchased and retired
|
(6.2
|
)
|
|
(0.1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(58.3
|
)
|
|
—
|
|
|
(58.4
|
)
|
||||||
Share-based compensation
|
3.0
|
|
|
0.1
|
|
|
(1.0
|
)
|
|
(10.0
|
)
|
|
26.4
|
|
|
—
|
|
|
—
|
|
|
16.5
|
|
||||||
Change in pension and postretirement liability, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1.2
|
|
|
1.2
|
|
||||||
Balance at September 30, 2018
|
239.8
|
|
|
$
|
2.4
|
|
|
(3.0
|
)
|
|
$
|
(44.2
|
)
|
|
$
|
1,424.6
|
|
|
$
|
2,002.0
|
|
|
$
|
(9.9
|
)
|
|
$
|
3,374.9
|
|
(1)
|
Refer to Cash, Cash Equivalents and Restricted Cash in Note 1 – Basis of Presentation.
|
|
September 30,
|
||||||
|
2019
|
|
2018
|
||||
|
(in millions)
|
||||||
Cash and cash equivalents
|
$
|
92.4
|
|
|
$
|
—
|
|
Restricted cash(1)
|
29.7
|
|
|
27.2
|
|
||
Total cash, cash equivalents and restricted cash shown in the Condensed Consolidated Statements of Cash Flows
|
$
|
122.1
|
|
|
$
|
27.2
|
|
|
Oil and condensate sales
|
|
Gas sales
|
|
NGL sales
|
|
Transportation and processing costs included in revenue
|
|
Oil and condensate, gas and NGL sales, as reported
|
||||||||||
|
(in millions)
|
||||||||||||||||||
|
Three Months Ended September 30, 2019
|
||||||||||||||||||
Northern Region
|
|
||||||||||||||||||
Williston Basin
|
$
|
88.9
|
|
|
$
|
5.5
|
|
|
$
|
2.4
|
|
|
$
|
(7.0
|
)
|
|
$
|
89.8
|
|
Other Northern
|
—
|
|
|
0.1
|
|
|
0.1
|
|
|
—
|
|
|
0.2
|
|
|||||
Southern Region
|
|
|
|
|
|
|
|
|
|
||||||||||
Permian Basin
|
209.9
|
|
|
3.4
|
|
|
9.4
|
|
|
(7.2
|
)
|
|
215.5
|
|
|||||
Other Southern
|
—
|
|
|
0.1
|
|
|
—
|
|
|
—
|
|
|
0.1
|
|
|||||
Total oil and condensate, gas and NGL sales
|
$
|
298.8
|
|
|
$
|
9.1
|
|
|
$
|
11.9
|
|
|
$
|
(14.2
|
)
|
|
$
|
305.6
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Three Months Ended September 30, 2018
|
||||||||||||||||||
Northern Region
|
|
||||||||||||||||||
Williston Basin
|
$
|
203.4
|
|
|
$
|
12.0
|
|
|
$
|
19.2
|
|
|
$
|
(12.3
|
)
|
|
$
|
222.3
|
|
Uinta Basin
|
7.3
|
|
|
6.8
|
|
|
1.4
|
|
|
—
|
|
|
15.5
|
|
|||||
Other Northern
|
1.1
|
|
|
0.5
|
|
|
0.1
|
|
|
—
|
|
|
1.7
|
|
|||||
Southern Region
|
|
|
|
|
|
|
|
|
|
||||||||||
Permian Basin
|
204.0
|
|
|
5.4
|
|
|
21.3
|
|
|
(3.5
|
)
|
|
227.2
|
|
|||||
Haynesville/Cotton Valley
|
0.2
|
|
|
76.9
|
|
|
—
|
|
|
—
|
|
|
77.1
|
|
|||||
Other Southern
|
0.1
|
|
|
0.1
|
|
|
—
|
|
|
—
|
|
|
0.2
|
|
|||||
Total oil and condensate, gas and NGL sales
|
$
|
416.1
|
|
|
$
|
101.7
|
|
|
$
|
42.0
|
|
|
$
|
(15.8
|
)
|
|
$
|
544.0
|
|
|
Oil and condensate sales
|
|
Gas sales
|
|
NGL sales
|
|
Transportation and processing costs included in revenue
|
|
Oil and condensate, gas and NGL sales, as reported
|
||||||||||
|
(in millions)
|
||||||||||||||||||
|
Nine Months Ended September 30, 2019
|
||||||||||||||||||
Northern Region
|
|
||||||||||||||||||
Williston Basin
|
$
|
306.3
|
|
|
$
|
25.5
|
|
|
$
|
15.6
|
|
|
$
|
(26.0
|
)
|
|
$
|
321.4
|
|
Other Northern
|
0.9
|
|
|
0.4
|
|
|
0.1
|
|
|
—
|
|
|
1.4
|
|
|||||
Southern Region
|
|
|
|
|
|
|
|
|
|
||||||||||
Permian Basin
|
526.7
|
|
|
7.4
|
|
|
27.4
|
|
|
(14.7
|
)
|
|
546.8
|
|
|||||
Other Southern
|
0.1
|
|
|
6.1
|
|
|
—
|
|
|
—
|
|
|
6.2
|
|
|||||
Total oil and condensate, gas and NGL sales
|
$
|
834.0
|
|
|
$
|
39.4
|
|
|
$
|
43.1
|
|
|
$
|
(40.7
|
)
|
|
$
|
875.8
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Nine Months Ended September 30, 2018
|
||||||||||||||||||
Northern Region
|
|
||||||||||||||||||
Williston Basin
|
$
|
571.5
|
|
|
$
|
30.2
|
|
|
$
|
45.7
|
|
|
$
|
(32.9
|
)
|
|
$
|
614.5
|
|
Uinta Basin
|
25.2
|
|
|
24.8
|
|
|
4.8
|
|
|
—
|
|
|
54.8
|
|
|||||
Other Northern
|
3.9
|
|
|
1.7
|
|
|
—
|
|
|
—
|
|
|
5.6
|
|
|||||
Southern Region
|
|
|
|
|
|
|
|
|
|
||||||||||
Permian Basin
|
524.1
|
|
|
13.2
|
|
|
37.7
|
|
|
(8.0
|
)
|
|
567.0
|
|
|||||
Haynesville/Cotton Valley
|
0.8
|
|
|
231.2
|
|
|
—
|
|
|
—
|
|
|
232.0
|
|
|||||
Other Southern
|
(0.2
|
)
|
|
0.4
|
|
|
—
|
|
|
—
|
|
|
0.2
|
|
|||||
Total oil and condensate, gas and NGL sales
|
$
|
1,125.3
|
|
|
$
|
301.5
|
|
|
$
|
88.2
|
|
|
$
|
(40.9
|
)
|
|
$
|
1,474.1
|
|
|
December 31, 2018(1)
|
||
|
(in millions)
|
||
Assets
|
|
||
Current assets, total
|
$
|
1.2
|
|
Net Property, Plant and Equipment
|
683.7
|
|
|
Other noncurrent assets
|
7.8
|
|
|
Noncurrent assets held for sale
|
$
|
692.7
|
|
Liabilities
|
|
||
Current liabilities, total
|
$
|
3.4
|
|
Asset retirement obligations, current
|
0.7
|
|
|
Asset retirement obligations, long-term
|
56.9
|
|
|
Other long-term liabilities
|
0.3
|
|
|
Other long-term liabilities held for sale
|
$
|
61.3
|
|
(1)
|
The Haynesville Divestiture closed in January 2019, therefore there are no assets and liabilities held for sale as of September 30, 2019.
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||
|
September 30,
|
|
September 30,
|
||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||
|
(in millions)
|
||||||||||
Weighted-average basic common shares outstanding
|
237.9
|
|
|
236.9
|
|
|
237.7
|
|
|
238.3
|
|
Potential number of shares issuable upon exercise of in-the-money stock options under the Long-Term Stock Incentive Plan
|
—
|
|
|
0.1
|
|
|
—
|
|
|
—
|
|
Average diluted common shares outstanding
|
237.9
|
|
|
237.0
|
|
|
237.7
|
|
|
238.3
|
|
|
Asset Retirement Obligations
|
||||||
|
September 30,
|
|
December 31,
|
||||
|
2019
|
|
2018
|
||||
Balance Sheet line item
|
(in millions)
|
||||||
Current:
|
|
|
|
||||
Asset retirement obligations, current liability
|
$
|
6.7
|
|
|
$
|
5.1
|
|
Long-term:
|
|
|
|
||||
Asset retirement obligations
|
95.5
|
|
|
96.9
|
|
||
Other long-term liabilities held for sale
|
—
|
|
|
57.6
|
|
||
Total ARO Liability
|
$
|
102.2
|
|
|
$
|
159.6
|
|
|
Asset Retirement Obligations
|
||
|
(in millions)
|
||
ARO liability at January 1, 2019
|
$
|
159.6
|
|
Accretion
|
4.1
|
|
|
Additions
|
0.8
|
|
|
Revisions
|
(0.3
|
)
|
|
Liabilities related to assets sold(1)
|
(60.7
|
)
|
|
Liabilities settled
|
(1.3
|
)
|
|
ARO liability at September 30, 2019
|
$
|
102.2
|
|
(1)
|
Liabilities related to assets sold during the nine months ended September 30, 2019, includes $57.6 million related to the Haynesville Divestiture (refer to Note 3 – Acquisitions and Divestitures for more information).
|
|
Fair Value Measurements
|
||||||||||||||||||
|
Gross Amounts of Assets and Liabilities
|
|
Netting Adjustments(1)
|
|
Net Amounts Presented on the Condensed Consolidated Balance Sheets
|
||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
|
||||||||||||
|
(in millions)
|
||||||||||||||||||
Financial Assets
|
September 30, 2019
|
||||||||||||||||||
Fair value of derivative contracts – short-term
|
$
|
—
|
|
|
$
|
69.8
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
69.8
|
|
Fair value of derivative contracts – long-term
|
—
|
|
|
23.2
|
|
|
—
|
|
|
—
|
|
|
23.2
|
|
|||||
Total financial assets
|
$
|
—
|
|
|
$
|
93.0
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
93.0
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Financial Liabilities
|
|
|
|
|
|
|
|
|
|
||||||||||
Fair value of derivative contracts – short-term
|
$
|
—
|
|
|
$
|
0.8
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
0.8
|
|
Fair value of derivative contracts – long-term
|
—
|
|
|
0.4
|
|
|
—
|
|
|
—
|
|
|
0.4
|
|
|||||
Total financial liabilities
|
$
|
—
|
|
|
$
|
1.2
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1.2
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
December 31, 2018
|
||||||||||||||||||
Financial Assets
|
|
|
|
|
|
|
|
|
|
||||||||||
Fair value of derivative contracts – short-term(2)
|
$
|
—
|
|
|
$
|
88.2
|
|
|
$
|
—
|
|
|
$
|
(0.4
|
)
|
|
$
|
87.8
|
|
Fair value of derivative contracts – long-term
|
—
|
|
|
35.4
|
|
|
—
|
|
|
—
|
|
|
35.4
|
|
|||||
Total financial assets
|
$
|
—
|
|
|
$
|
123.6
|
|
|
$
|
—
|
|
|
$
|
(0.4
|
)
|
|
$
|
123.2
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Financial Liabilities
|
|
|
|
|
|
|
|
|
|
||||||||||
Fair value of derivative contracts – short-term
|
$
|
—
|
|
|
$
|
0.4
|
|
|
$
|
—
|
|
|
$
|
(0.4
|
)
|
|
$
|
—
|
|
Fair value of derivative contracts – long-term
|
—
|
|
|
0.7
|
|
|
—
|
|
|
—
|
|
|
0.7
|
|
|||||
Total financial liabilities
|
$
|
—
|
|
|
$
|
1.1
|
|
|
$
|
—
|
|
|
$
|
(0.4
|
)
|
|
$
|
0.7
|
|
(1)
|
The Company nets its derivative contract assets and liabilities outstanding with the same counterparty on the Condensed Consolidated Balance Sheets for the contracts that contain netting provisions. Refer to Note 7 – Derivative Contracts for additional information regarding the Company's derivative contracts.
|
(2)
|
Includes fair value of derivative contracts classified as "Noncurrent assets held for sale" of $0.3 million as of December 31, 2018 on the Condensed Consolidated Balance Sheets related to the Haynesville Divestiture.
|
|
Carrying Amount
|
|
Level 1 Fair Value
|
|
Carrying Amount
|
|
Level 1 Fair Value
|
||||||||
|
September 30, 2019
|
|
December 31, 2018
|
||||||||||||
Financial Assets
|
(in millions)
|
||||||||||||||
Cash and cash equivalents
|
$
|
92.4
|
|
|
$
|
92.4
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Financial Liabilities
|
|
|
|
|
|
|
|
||||||||
Checks outstanding in excess of cash balances
|
$
|
0.7
|
|
|
$
|
0.7
|
|
|
$
|
14.6
|
|
|
$
|
14.6
|
|
Total debt outstanding
|
$
|
2,081.1
|
|
|
$
|
1,959.1
|
|
|
$
|
2,507.1
|
|
|
$
|
2,350.5
|
|
Year
|
|
Index
|
|
Total Volumes
|
|
Average Swap Price per Unit
|
|||
|
|
|
|
(in millions)
|
|
|
|||
Oil sales
|
|
|
|
(bbls)
|
|
|
($/bbl)
|
|
|
2019
|
|
NYMEX WTI
|
|
3.6
|
|
|
$
|
55.44
|
|
2019
|
|
ICE Brent
|
|
0.5
|
|
|
$
|
66.73
|
|
2019
|
|
Argus WTI Midland
|
|
0.2
|
|
|
$
|
54.60
|
|
2019
|
|
Argus WTI Houston
|
|
0.1
|
|
|
$
|
65.70
|
|
2020
|
|
NYMEX WTI
|
|
11.3
|
|
|
$
|
58.29
|
|
2020
|
|
Argus WTI Midland
|
|
1.5
|
|
|
$
|
57.30
|
|
2020 (January - June)
|
|
Argus WTI Houston
|
|
1.0
|
|
|
$
|
60.06
|
|
Year
|
|
Index
|
|
Basis
|
|
Total Volumes
|
|
Weighted-Average Differential
|
|||
|
|
|
|
|
|
(in millions)
|
|
|
|||
Oil sales
|
|
|
|
|
|
(bbls)
|
|
|
($/bbl)
|
|
|
2019
|
|
NYMEX WTI
|
|
Argus WTI Midland
|
|
1.7
|
|
|
$
|
(2.22
|
)
|
2019
|
|
NYMEX WTI
|
|
Argus WTI Houston
|
|
0.5
|
|
|
$
|
3.69
|
|
2020
|
|
NYMEX WTI
|
|
Argus WTI Midland
|
|
6.2
|
|
|
$
|
0.13
|
|
2020 (January - June)
|
|
NYMEX WTI
|
|
Argus WTI Houston
|
|
0.4
|
|
|
$
|
3.75
|
|
(1)
|
Includes fair value of derivative contracts classified as "Noncurrent assets held for sale" of $0.3 million as of December 31, 2018 on the Condensed Consolidated Balance Sheet related to the Haynesville Divestiture.
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
Derivative contracts
|
September 30,
|
|
September 30,
|
||||||||||||
2019
|
|
2018(2)
|
|
2019(1)
|
|
2018(2)
|
|||||||||
Realized gains (losses) on commodity derivative contracts
|
(in millions)
|
||||||||||||||
Production
|
|
|
|
|
|
|
|
||||||||
Oil derivative contracts
|
$
|
(4.9
|
)
|
|
$
|
(41.7
|
)
|
|
$
|
(23.9
|
)
|
|
$
|
(138.0
|
)
|
Gas derivative contracts
|
—
|
|
|
3.3
|
|
|
(2.9
|
)
|
|
10.6
|
|
||||
Gas Storage
|
|
|
|
|
|
|
|
||||||||
Gas derivative contracts
|
—
|
|
|
—
|
|
|
—
|
|
|
0.3
|
|
||||
Realized gains (losses) on commodity derivative contracts
|
(4.9
|
)
|
|
(38.4
|
)
|
|
(26.8
|
)
|
|
(127.1
|
)
|
||||
Unrealized gains (losses) on commodity derivative contracts
|
|
|
|
|
|
|
|
||||||||
Production
|
|
|
|
|
|
|
|
||||||||
Oil derivative contracts
|
92.3
|
|
|
(60.6
|
)
|
|
(30.5
|
)
|
|
(88.1
|
)
|
||||
Gas derivative contracts
|
—
|
|
|
(3.1
|
)
|
|
(0.3
|
)
|
|
(18.9
|
)
|
||||
Gas Storage
|
|
|
|
|
|
|
|
||||||||
Gas derivative contracts
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.3
|
)
|
||||
Unrealized gains (losses) on commodity derivative contracts
|
92.3
|
|
|
(63.7
|
)
|
|
(30.8
|
)
|
|
(107.3
|
)
|
||||
Total realized and unrealized gains (losses) on commodity derivative contracts related to production and storage
|
$
|
87.4
|
|
|
$
|
(102.1
|
)
|
|
$
|
(57.6
|
)
|
|
$
|
(234.4
|
)
|
|
|
|
|
|
|
|
|
||||||||
Derivatives associated with divestitures
|
|
|
|
|
|
|
|
||||||||
Unrealized gains (losses) on commodity derivative contracts
|
|
|
|
|
|
|
|
||||||||
Production
|
|
|
|
|
|
|
|
||||||||
Oil derivative contracts
|
$
|
—
|
|
|
$
|
(2.7
|
)
|
|
$
|
—
|
|
|
$
|
(2.7
|
)
|
Gas derivative contracts
|
—
|
|
|
—
|
|
|
1.8
|
|
|
—
|
|
||||
NGL derivative contracts
|
—
|
|
|
(3.2
|
)
|
|
—
|
|
|
(3.2
|
)
|
||||
Unrealized gains (losses) on commodity derivative contracts related to divestitures
|
$
|
—
|
|
|
$
|
(5.9
|
)
|
|
$
|
1.8
|
|
|
$
|
(5.9
|
)
|
|
|
|
|
|
|
|
|
||||||||
Total realized and unrealized gains (losses) on commodity derivative contracts
|
$
|
87.4
|
|
|
$
|
(108.0
|
)
|
|
$
|
(55.8
|
)
|
|
$
|
(240.3
|
)
|
(1)
|
During the nine months ended September 30, 2019, the unrealized gains (losses) on commodity derivative contracts related to the Haynesville Divestiture were comprised of derivatives included as part of the Haynesville/Cotton Valley purchase and sale agreement, which were subsequently novated to the buyer upon the closing of the sale in January 2019. Refer to Note 3 – Acquisitions and Divestitures for more information. The unrealized gains (losses) on commodity derivatives associated with the Haynesville Divestiture are offset by an equal amount recorded within "Net gain (loss) from asset sales, inclusive of restructuring costs" on the Condensed Consolidated Statements of Operations.
|
(2)
|
During the three and nine months ended September 30, 2018, the unrealized gains (losses) on commodity derivative contracts related to the Uinta Basin Divestiture were comprised of derivatives included as a part of the Uinta Basin purchase and sale agreement, which were subsequently novated to the buyer upon the closing of the sale in September 2018. Refer to Note 3 – Acquisitions and Divestitures for more information. The unrealized gains (losses) on commodity derivatives associated with the Uinta Basin Divestiture are offset by an equal amount recorded within "Net gain (loss) from asset sales, inclusive of restructuring costs" on the Condensed Consolidated Statements of Operations.
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||
|
September 30, 2019(1)
|
|
September 30, 2019(1)
|
||||
Lease Cost included in the Condensed Consolidated Balance Sheets
|
(in millions)
|
||||||
Property, Plant and Equipment acquisitions(2)
|
$
|
2.5
|
|
|
$
|
11.3
|
|
|
|
|
|
||||
|
Three Months Ended
|
|
Nine Months Ended
|
||||
|
September 30, 2019(1)
|
|
September 30, 2019(1)
|
||||
Lease Cost included in the Condensed Consolidated Statement of Operations
|
(in millions)
|
||||||
Lease operating expense
|
$
|
2.9
|
|
|
$
|
9.0
|
|
Gathering and other expense
|
2.0
|
|
|
5.8
|
|
||
General and administrative
|
1.3
|
|
|
4.5
|
|
||
|
|
|
|
||||
Total lease cost
|
$
|
8.7
|
|
|
$
|
30.6
|
|
(1)
|
Prior periods are not presented as prior period amounts have not been adjusted under the modified retrospective method for the new lease recognition rule. Refer to Note 1 – Basis of Presentation for additional information.
|
(2)
|
Represents short-term lease capital expenditures related to drilling rigs for the three and nine months ended September 30, 2019. These costs are capitalized as a part of "Proved properties" on the Condensed Consolidated Balance Sheets.
|
|
September 30, 2019(1)
|
|
Weighted-average remaining lease term (years)
|
3.4
|
|
Weighted-average discount rate
|
7.7
|
%
|
(1)
|
Prior periods are not presented as prior period amounts have not been adjusted under the modified retrospective method for the new lease recognition rule. Refer to Note 1 – Basis of Presentation for additional information.
|
|
Total recognized
|
|
Recognized in "General and administrative"
|
|
Recognized in "Net gain (loss) from asset sales, inclusive of restructuring costs"
|
|
Recognized in "Interest and other income (expense)"
|
||||||||
|
Three Months Ended September 30, 2019
|
||||||||||||||
|
(in millions)
|
||||||||||||||
Termination benefits
|
$
|
4.3
|
|
|
$
|
4.3
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Accelerated share-based compensation(1)
|
1.6
|
|
|
1.6
|
|
|
—
|
|
|
—
|
|
||||
Retention expense (including share-based compensation)
|
4.5
|
|
|
4.5
|
|
|
—
|
|
|
—
|
|
||||
Total restructuring costs
|
$
|
10.4
|
|
|
$
|
10.4
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
||||||||
|
Nine Months Ended September 30, 2019
|
||||||||||||||
|
|
|
|
|
|
|
|
||||||||
Termination benefits
|
$
|
11.0
|
|
|
$
|
10.9
|
|
|
$
|
0.1
|
|
|
$
|
—
|
|
Office lease termination costs
|
0.6
|
|
|
0.6
|
|
|
—
|
|
|
—
|
|
||||
Accelerated share-based compensation(1)
|
11.3
|
|
|
9.8
|
|
|
1.5
|
|
|
—
|
|
||||
Retention expense (including share-based compensation)
|
15.4
|
|
|
15.4
|
|
|
—
|
|
|
—
|
|
||||
Pension and Medical Plan curtailment
|
(0.4
|
)
|
|
—
|
|
|
(0.2
|
)
|
|
(0.2
|
)
|
||||
Total restructuring costs
|
$
|
37.9
|
|
|
$
|
36.7
|
|
|
$
|
1.4
|
|
|
$
|
(0.2
|
)
|
|
|
|
|
|
|
|
|
||||||||
|
Three Months Ended September 30, 2018
|
||||||||||||||
Termination benefits
|
$
|
6.7
|
|
|
$
|
5.3
|
|
|
$
|
1.4
|
|
|
—
|
|
|
Office lease termination costs
|
0.7
|
|
|
0.7
|
|
|
—
|
|
|
—
|
|
||||
Accelerated share-based compensation
|
3.2
|
|
|
1.0
|
|
|
2.2
|
|
|
—
|
|
||||
Retention expense (including share-based compensation)
|
5.8
|
|
|
5.8
|
|
|
—
|
|
|
—
|
|
||||
Pension and Medical Plan curtailment
|
0.3
|
|
|
—
|
|
|
—
|
|
|
0.3
|
|
||||
Total restructuring costs
|
$
|
16.7
|
|
|
$
|
12.8
|
|
|
$
|
3.6
|
|
|
$
|
0.3
|
|
|
|
|
|
|
|
|
|
||||||||
|
Nine Months Ended September 30, 2018
|
||||||||||||||
Termination benefits
|
$
|
13.7
|
|
|
$
|
10.4
|
|
|
$
|
3.3
|
|
|
—
|
|
|
Office lease termination costs
|
1.0
|
|
|
1.0
|
|
|
—
|
|
|
—
|
|
||||
Accelerated share-based compensation
|
7.2
|
|
|
5.0
|
|
|
2.2
|
|
|
—
|
|
||||
Retention expense (including share-based compensation)
|
13.8
|
|
|
13.8
|
|
|
—
|
|
|
—
|
|
||||
Pension and Medical Plan curtailment
|
0.3
|
|
|
—
|
|
|
—
|
|
|
0.3
|
|
||||
Total restructuring costs
|
$
|
36.0
|
|
|
$
|
30.2
|
|
|
$
|
5.5
|
|
|
$
|
0.3
|
|
(1)
|
Accelerated share-based compensation represents the additional expense or loss recognized in the Condensed Consolidated Statement of Operations for the three and nine months ended September 30, 2019. Total accelerated share based compensation was $3.5 million and $25.2 million for the three and nine months ended September 30, 2019, respectively, and was determined based on the contractual vesting date, with $1.6 million and $11.3 million recognized during the three and nine months ended September 30, 2019, respectively, as shown above, and the remaining amount recognized in prior periods.
|
|
Costs recognized from inception through September 30, 2019(1)
|
|
Total remaining costs expected to be incurred
|
|
||||
|
(in millions)
|
|
||||||
Termination benefits
|
$
|
43.2
|
|
|
$
|
—
|
|
(2)
|
Office lease termination costs
|
1.6
|
|
|
—
|
|
(2)
|
||
Accelerated share-based compensation
|
22.6
|
|
|
—
|
|
(2)
|
||
Retention expense (including share-based compensation)
|
34.2
|
|
|
5.0
|
|
|
||
Pension and Medical Plan curtailment
|
(0.2
|
)
|
|
—
|
|
(2)
|
||
Total restructuring costs
|
$
|
101.4
|
|
|
$
|
5.0
|
|
|
(1)
|
Represents costs incurred since February 2018 when QEP's Board of Directors approved certain strategic and financial initiatives.
|
(2)
|
Due to the nature of the strategic initiatives, as of September 30, 2019, the Company is not able to reasonably estimate the total cost to be incurred in connection with these restructurings.
|
|
Restructuring liability
|
||||||||||||||||||||||
|
Termination benefits
|
|
Office lease termination costs
|
|
Accelerated share-based compensation
|
|
Retention expense
|
|
Pension curtailment
|
|
Total
|
||||||||||||
|
(in millions)
|
||||||||||||||||||||||
Balance at December 31, 2018
|
$
|
19.5
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
10.8
|
|
|
$
|
—
|
|
|
$
|
30.3
|
|
Costs incurred and charged to expense
|
11.0
|
|
|
0.6
|
|
|
11.3
|
|
|
15.4
|
|
|
(0.4
|
)
|
|
37.9
|
|
||||||
Costs paid or otherwise settled
|
(28.3
|
)
|
|
(0.6
|
)
|
|
(11.3
|
)
|
|
(23.6
|
)
|
|
0.4
|
|
|
(63.4
|
)
|
||||||
Balance at September 30, 2019
|
$
|
2.2
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2.6
|
|
|
$
|
—
|
|
|
$
|
4.8
|
|
|
September 30,
2019 |
|
December 31,
2018 |
||||
|
(in millions)
|
||||||
Revolving Credit Facility due 2022
|
$
|
—
|
|
|
$
|
430.0
|
|
6.80% Senior Notes due 2020
|
51.7
|
|
|
51.7
|
|
||
6.875% Senior Notes due 2021
|
397.6
|
|
|
397.6
|
|
||
5.375% Senior Notes due 2022
|
500.0
|
|
|
500.0
|
|
||
5.25% Senior Notes due 2023
|
650.0
|
|
|
650.0
|
|
||
5.625% Senior Notes due 2026
|
500.0
|
|
|
500.0
|
|
||
Less: unamortized discount and unamortized debt issuance costs
|
(18.2
|
)
|
|
(22.2
|
)
|
||
Total principal amount of debt (including current portion)
|
2,081.1
|
|
|
2,507.1
|
|
||
Less: current portion of long-term debt
|
(51.7
|
)
|
|
—
|
|
||
Total long-term debt outstanding
|
$
|
2,029.4
|
|
|
$
|
2,507.1
|
|
Year
|
Amount
|
||
|
(in millions)
|
||
2019
|
$
|
6.2
|
|
2020
|
$
|
21.7
|
|
2021
|
$
|
19.9
|
|
2022
|
$
|
15.4
|
|
2023
|
$
|
9.8
|
|
After 2023
|
$
|
0.7
|
|
Less: Interest(1)
|
$
|
(10.0
|
)
|
Present value of lease liabilities(2)
|
$
|
63.7
|
|
(1)
|
Calculated using the estimated or stated interest rate for each lease.
|
(2)
|
Of the total present value of lease liabilities, $18.4 million was recorded in "Current operating lease liabilities" and $45.3 million was recorded in "Operating lease liabilities" on the Condensed Consolidated Balance Sheets.
|
Year
|
Amount
|
||
|
(in millions)
|
||
2019
|
$
|
17.4
|
|
2020
|
$
|
13.8
|
|
2021
|
$
|
9.1
|
|
2022
|
$
|
7.4
|
|
2023
|
$
|
4.5
|
|
After 2023
|
$
|
—
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
September 30,
|
|
September 30,
|
||||||||||||
|
2019(1)
|
|
2018(2)
|
|
2019(1)
|
|
2018(2)
|
||||||||
|
(in millions)
|
||||||||||||||
Stock options
|
$
|
—
|
|
|
$
|
0.2
|
|
|
$
|
0.3
|
|
|
$
|
0.9
|
|
Restricted share awards
|
5.0
|
|
|
5.3
|
|
|
15.9
|
|
|
20.9
|
|
||||
Performance share units
|
(0.9
|
)
|
|
(2.9
|
)
|
|
4.6
|
|
|
4.1
|
|
||||
Restricted share units
|
—
|
|
|
0.1
|
|
|
0.2
|
|
|
0.2
|
|
||||
Total share-based compensation expense
|
$
|
4.1
|
|
|
$
|
2.7
|
|
|
$
|
21.0
|
|
|
$
|
26.1
|
|
(1)
|
During the three and nine months ended September 30, 2019, the Company recorded an additional $1.6 million and $11.3 million, respectively, of share-based compensation expense related to the acceleration of vesting that occurred as part of the restructuring program, of which $1.5 million was recorded in "Net gain (loss) from asset sales, inclusive of restructuring costs" on the Condensed Consolidated Statement of Operations during the nine months ended September 30, 2019 and the remaining $1.6 million and $9.8 million, respectively, is included in the table above. Refer to Note 9 – Restructuring for additional information.
|
(2)
|
During the three and nine months ended September 30, 2018, the Company recorded an additional $3.2 million and $7.2 million, respectively of share-based compensation expense, related to the acceleration of vesting that occurred as part of the restructuring program, of which $2.2 million was recorded in "Net gain (loss) from asset sales, inclusive of restructuring costs" on the Condensed Consolidated Statement of Operations during the three and nine months ended September 30, 2018 and the remaining $1.0 million and $5.0 million, respectively, is included in the table above. Refer to Note 9 – Restructuring for additional information.
|
|
Options Outstanding
|
|
Weighted-Average Exercise Price
|
|
Weighted-Average Remaining Contractual Term
|
|
Aggregate Intrinsic Value
|
|||||
|
|
|
(per share)
|
|
(in years)
|
|
(in millions)
|
|||||
Outstanding at December 31, 2018
|
2,098,933
|
|
|
$
|
22.27
|
|
|
|
|
|
||
Cancelled
|
(292,921
|
)
|
|
30.82
|
|
|
|
|
|
|||
Outstanding at September 30, 2019
|
1,806,012
|
|
|
$
|
20.88
|
|
|
2.56
|
|
$
|
—
|
|
Options Exercisable at September 30, 2019
|
1,761,836
|
|
|
$
|
21.00
|
|
|
2.52
|
|
$
|
—
|
|
Unvested Options at September 30, 2019
|
44,176
|
|
|
$
|
16.32
|
|
|
4.41
|
|
$
|
—
|
|
|
Restricted Share Awards Outstanding
|
|
Weighted-Average Grant Date Fair Value
|
|||
|
|
|
(per share)
|
|||
Unvested balance at December 31, 2018
|
3,822,133
|
|
|
$
|
10.76
|
|
Granted
|
2,330,254
|
|
|
7.79
|
|
|
Vested
|
(2,780,285
|
)
|
|
10.66
|
|
|
Forfeited
|
(239,489
|
)
|
|
9.15
|
|
|
Unvested balance at September 30, 2019
|
3,132,613
|
|
|
$
|
8.76
|
|
|
Performance Share Units Outstanding
|
|
Weighted-Average Grant Date Fair Value
|
|||
|
|
|
(per share)
|
|||
Unvested balance at December 31, 2018
|
1,559,312
|
|
|
$
|
11.47
|
|
Granted
|
614,633
|
|
|
7.93
|
|
|
Vested and paid
|
(1,206,165
|
)
|
|
10.68
|
|
|
Unvested balance at September 30, 2019
|
967,780
|
|
|
$
|
9.50
|
|
|
Restricted Share Units Outstanding
|
|
Weighted-Average Grant Date Fair Value
|
|||
|
|
|
(per share)
|
|||
Unvested balance at December 31, 2018
|
42,675
|
|
|
$
|
10.47
|
|
Granted
|
37,498
|
|
|
7.90
|
|
|
Vested and paid
|
(47,807
|
)
|
|
10.04
|
|
|
Unvested balance at September 30, 2019
|
32,366
|
|
|
$
|
8.13
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
September 30,
|
|
September 30,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Pension Plan and SERP benefits
|
(in millions)
|
||||||||||||||
Service cost
|
$
|
0.1
|
|
|
$
|
0.2
|
|
|
$
|
0.2
|
|
|
$
|
0.6
|
|
Interest cost
|
1.2
|
|
|
1.2
|
|
|
3.6
|
|
|
3.4
|
|
||||
Expected return on plan assets
|
(1.5
|
)
|
|
(1.4
|
)
|
|
(4.4
|
)
|
|
(4.3
|
)
|
||||
Amortization of prior service costs(1)
|
—
|
|
|
0.2
|
|
|
0.2
|
|
|
0.6
|
|
||||
Amortization of actuarial losses(1)
|
—
|
|
|
—
|
|
|
0.1
|
|
|
0.6
|
|
||||
Curtailment (gain) loss(2)
|
—
|
|
|
0.3
|
|
|
0.4
|
|
|
0.3
|
|
||||
Periodic expense
|
$
|
(0.2
|
)
|
|
$
|
0.5
|
|
|
$
|
0.1
|
|
|
$
|
1.2
|
|
|
|
|
|
|
|
|
|
||||||||
Medical Plan benefits
|
|
|
|
|
|
|
|
||||||||
Interest cost
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
0.1
|
|
|
$
|
0.1
|
|
Amortization of prior service costs(1)
|
—
|
|
|
(0.1
|
)
|
|
—
|
|
|
(0.2
|
)
|
||||
Curtailment (gain) loss(2)
|
—
|
|
|
—
|
|
|
(0.8
|
)
|
|
—
|
|
||||
Periodic expense
|
$
|
—
|
|
|
$
|
(0.1
|
)
|
|
$
|
(0.7
|
)
|
|
$
|
(0.1
|
)
|
(1)
|
Amortization of prior service costs and actuarial losses out of accumulated other comprehensive income (loss) are recognized on the Condensed Consolidated Statements of Operations within "Interest and other income (expense)".
|
(2)
|
A curtailment is recognized when there is a significant reduction in, or an elimination of, defined benefit accruals for current employees' future services. The net curtailment gain between the SERP and Medical Plan of $0.4 million is related to the Haynesville Divestiture and corporate restructuring activities. Of the $0.4 million curtailment gain recognized, $0.2 million was recognized on the Condensed Consolidated Statements of Operations within "Interest and other income (expense)" and $0.2 million was recognized on the Condensed Consolidated Statements of Operations within "Net gain (loss) from asset sales, inclusive of restructuring costs" for the nine months ended September 30, 2019.
|
•
|
Generated net income of $81.0 million, or $0.34 per diluted share;
|
•
|
Reported Adjusted EBITDA (a non-GAAP financial measure defined and reconciled below) of $193.5 million;
|
•
|
Reported record oil and condensate production of 4.0 MMbbls in the Permian Basin, an increase of 12% compared to the third quarter 2018;
|
•
|
Reduced capital expenditures by $120.8 million compared to the third quarter 2018
|
•
|
Reinstated a quarterly cash dividend of $0.02 per share of common stock, which was paid in September 2019; and
|
•
|
Reduced general and administrative expenses by 39% compared to the third quarter 2018.
|
•
|
Generated net income of $13.1 million, or $0.06 per diluted share;
|
•
|
Reported Adjusted EBITDA (a non-GAAP financial measure defined and reconciled below) of $479.8 million;
|
•
|
Closed the Haynesville Divestiture for a total purchase price of $633.9 million;
|
•
|
Increased oil and condensate production in the Permian Basin by 14% to 10.1 MMbbls compared to the first three quarters of 2018;
|
•
|
Reduced capital expenditures by $611.6 million compared to the first three quarters of 2018; and
|
•
|
Reduced general and administrative expenses by 24% compared to the first three quarters of 2018.
|
|
|
|
Operated
|
|
Non-operated
|
|||||||||||||||||||||
|
Drilling
|
|
Drilling
|
|
Waiting on completion
|
|
Drilling
|
|
Waiting on completion
|
|||||||||||||||||
|
Rigs
|
|
Gross
|
|
Net
|
|
Gross
|
|
Net
|
|
Gross
|
|
Net
|
|
Gross
|
|
Net
|
|||||||||
Northern Region
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Williston Basin
|
—
|
|
|
—
|
|
|
—
|
|
|
4
|
|
|
3.4
|
|
|
—
|
|
|
—
|
|
|
12
|
|
|
0.8
|
|
Southern Region
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Permian Basin(1)
|
2
|
|
|
7
|
|
|
7.0
|
|
|
31
|
|
|
31.0
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
(1)
|
Five of the seven gross operated drilling wells in the Permian Basin represent wells for which surface casing had been set as of September 30, 2019.
|
|
Operated Put on Production
|
|
Non-operated Put on Production
|
||||||||||||||||||||
|
Three Months Ended
|
|
Nine Months Ended
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||||||
|
September 30, 2019
|
|
September 30, 2019
|
|
September 30, 2019
|
|
September 30, 2019
|
||||||||||||||||
|
Gross
|
|
Net
|
|
Gross
|
|
Net
|
|
Gross
|
|
Net
|
|
Gross
|
|
Net
|
||||||||
Northern Region
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Williston Basin
|
3
|
|
|
3.0
|
|
|
3
|
|
|
3.0
|
|
|
3
|
|
|
1.0
|
|
|
8
|
|
|
1.1
|
|
Southern Region
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Permian Basin
|
24
|
|
|
24.0
|
|
|
59
|
|
|
58.9
|
|
|
—
|
|
|
—
|
|
|
5
|
|
|
0.4
|
|
|
Permian Basin
|
|
Williston Basin
|
||||||||
|
As of September 30, 2019
|
||||||||||
|
Gross
|
|
Net
|
|
Gross
|
|
Net
|
||||
Well Progress
|
|
|
|
|
|
|
|
||||
Drilling
|
7
|
|
|
7.0
|
|
|
—
|
|
|
—
|
|
|
|
|
|
|
|
|
|
||||
At total depth - under drilling rig
|
6
|
|
|
6.0
|
|
|
—
|
|
|
—
|
|
Waiting to be completed
|
25
|
|
|
25.0
|
|
|
—
|
|
|
—
|
|
Completed, awaiting production
|
—
|
|
|
—
|
|
|
4
|
|
|
3.4
|
|
Waiting on completion
|
31
|
|
|
31.0
|
|
|
4
|
|
|
3.4
|
|
|
|
|
|
|
|
|
|
||||
Put on production
|
59
|
|
|
58.9
|
|
|
3
|
|
|
3.0
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
|
(in millions)
|
||||||||||||||
Net income (loss)
|
$
|
81.0
|
|
|
$
|
7.3
|
|
|
$
|
13.1
|
|
|
$
|
(382.3
|
)
|
Interest expense
|
32.8
|
|
|
38.7
|
|
|
100.0
|
|
|
111.9
|
|
||||
Interest and other (income) expense
|
(0.9
|
)
|
|
0.3
|
|
|
(4.6
|
)
|
|
4.1
|
|
||||
Income tax provision (benefit)
|
26.6
|
|
|
2.5
|
|
|
(55.7
|
)
|
|
(117.6
|
)
|
||||
Depreciation, depletion and amortization
|
144.2
|
|
|
234.9
|
|
|
395.5
|
|
|
673.6
|
|
||||
Unrealized (gains) losses on derivative contracts
|
(92.3
|
)
|
|
69.6
|
|
|
29.0
|
|
|
113.2
|
|
||||
Exploration expenses
|
—
|
|
|
—
|
|
|
—
|
|
|
0.1
|
|
||||
Net (gain) loss from asset sales, inclusive of restructuring costs
|
2.1
|
|
|
(27.1
|
)
|
|
(2.5
|
)
|
|
(26.7
|
)
|
||||
Impairment
|
—
|
|
|
—
|
|
|
5.0
|
|
|
404.4
|
|
||||
Adjusted EBITDA
|
$
|
193.5
|
|
|
$
|
326.2
|
|
|
$
|
479.8
|
|
|
$
|
780.7
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||||||||||
|
September 30,
|
|
September 30,
|
||||||||||||||||||||
|
2019
|
|
2018
|
|
Change
|
|
2019
|
|
2018
|
|
Change
|
||||||||||||
|
(in millions)
|
||||||||||||||||||||||
Oil and condensate, gas and NGL sales, as presented
|
$
|
305.6
|
|
|
$
|
544.0
|
|
|
$
|
(238.4
|
)
|
|
$
|
875.8
|
|
|
$
|
1,474.1
|
|
|
$
|
(598.3
|
)
|
Transportation and processing costs included in revenue(1)
|
14.2
|
|
|
15.8
|
|
|
(1.6
|
)
|
|
40.7
|
|
|
40.9
|
|
|
(0.2
|
)
|
||||||
Oil and condensate, gas and NGL sales, as adjusted(2)
|
319.8
|
|
|
$
|
559.8
|
|
|
$
|
(240.0
|
)
|
|
$
|
916.5
|
|
|
$
|
1,515.0
|
|
|
$
|
(598.5
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Oil and condensate sales
|
$
|
298.8
|
|
|
$
|
416.1
|
|
|
$
|
(117.3
|
)
|
|
$
|
834.0
|
|
|
$
|
1,125.3
|
|
|
$
|
(291.3
|
)
|
Gas sales
|
9.1
|
|
|
101.7
|
|
|
(92.6
|
)
|
|
39.4
|
|
|
301.5
|
|
|
(262.1
|
)
|
||||||
NGL sales
|
11.9
|
|
|
42.0
|
|
|
(30.1
|
)
|
|
43.1
|
|
|
88.2
|
|
|
(45.1
|
)
|
||||||
Oil and condensate, gas and NGL sales, as adjusted(2)
|
$
|
319.8
|
|
|
559.8
|
|
|
$
|
(240.0
|
)
|
|
$
|
916.5
|
|
|
$
|
1,515.0
|
|
|
$
|
(598.5
|
)
|
(1)
|
Depending on the terms of the contract, a portion of the total transportation and processing costs incurred by the Company are deducted from revenue. Refer to the Operating Expenses section below for a reconciliation of total transportation and processing costs.
|
(2)
|
Oil and condensate, gas and NGL sales (the most comparable GAAP measure) as presented on the Condensed Consolidated Statements of Operations is reconciled to Oil and condensate, gas and NGL sales, as adjusted (a non-GAAP measure). Management excludes costs deducted from revenue to reflect total revenue associated with its production prior to deducting any expenses. Management believes that this non-GAAP measure is useful supplemental information for investors as it is reflective of the total revenue generated from its wells for the period. This non-GAAP measure should be considered by the reader in addition to, but not instead of, the financial measure prepared in accordance with GAAP. Refer to Note 2 – Revenue in Part 1, Item I of this Quarterly Report on Form 10-Q.
|
|
Oil and condensate
|
|
Gas
|
|
NGL
|
|
Total
|
||||||||
|
(in millions)
|
||||||||||||||
Oil and condensate, gas and NGL sales, as adjusted
|
|
|
|
|
|
|
|
||||||||
Three months ended September 30, 2018
|
$
|
416.1
|
|
|
$
|
101.7
|
|
|
$
|
42.0
|
|
|
$
|
559.8
|
|
Changes associated with volumes(1)
|
(60.9
|
)
|
|
(80.0
|
)
|
|
(1.0
|
)
|
|
(141.9
|
)
|
||||
Changes associated with prices(2)
|
(56.4
|
)
|
|
(12.6
|
)
|
|
(29.1
|
)
|
|
(98.1
|
)
|
||||
Three months ended September 30, 2019
|
$
|
298.8
|
|
|
$
|
9.1
|
|
|
$
|
11.9
|
|
|
$
|
319.8
|
|
|
|
|
|
|
|
|
|
||||||||
Oil and condensate, gas and NGL sales, as adjusted
|
|
|
|
|
|
|
|
||||||||
Nine months ended September 30, 2018
|
$
|
1,125.3
|
|
|
$
|
301.5
|
|
|
$
|
88.2
|
|
|
$
|
1,515.0
|
|
Changes associated with volumes(1)
|
(141.0
|
)
|
|
(235.0
|
)
|
|
7.0
|
|
|
(369.0
|
)
|
||||
Changes associated with prices(2)
|
(150.3
|
)
|
|
(27.1
|
)
|
|
(52.1
|
)
|
|
(229.5
|
)
|
||||
Nine months ended September 30, 2019
|
$
|
834.0
|
|
|
$
|
39.4
|
|
|
$
|
43.1
|
|
|
$
|
916.5
|
|
(1)
|
The revenue variance attributed to the change in volume is calculated by multiplying the change in volume from the three and nine months ended September 30, 2019, as compared to the three and nine months ended September 30, 2018, by the average field-level price for the three and nine months ended September 30, 2018.
|
(2)
|
The revenue variance attributed to the change in price is calculated by multiplying the change in average field-level price from the three and nine months ended September 30, 2019, as compared to the three and nine months ended September 30, 2018, by the respective volumes for the three and nine months ended September 30, 2019. Pricing changes are driven by changes in commodity average field-level prices, excluding the impact from commodity derivatives.
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||||||||||
|
2019
|
|
2018
|
|
Change
|
|
2019
|
|
2018
|
|
Change
|
||||||||||||
Total production volumes (Mboe)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Northern Region
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Williston Basin
|
2,722.5
|
|
|
4,381.1
|
|
|
(1,658.6
|
)
|
|
9,061.9
|
|
|
12,570.5
|
|
|
(3,508.6
|
)
|
||||||
Uinta Basin
|
—
|
|
|
606.0
|
|
|
(606.0
|
)
|
|
—
|
|
|
2,232.2
|
|
|
(2,232.2
|
)
|
||||||
Other Northern
|
19.4
|
|
|
63.1
|
|
|
(43.7
|
)
|
|
65.1
|
|
|
211.4
|
|
|
(146.3
|
)
|
||||||
Southern Region
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Permian Basin
|
5,658.5
|
|
|
4,792.5
|
|
|
866.0
|
|
|
14,293.2
|
|
|
11,591.6
|
|
|
2,701.6
|
|
||||||
Haynesville/Cotton Valley
|
(0.4
|
)
|
|
4,552.8
|
|
|
(4,553.2
|
)
|
|
310.5
|
|
|
13,604.6
|
|
|
(13,294.1
|
)
|
||||||
Other Southern
|
4.0
|
|
|
4.5
|
|
|
(0.5
|
)
|
|
14.3
|
|
|
20.4
|
|
|
(6.1
|
)
|
||||||
Total production
|
8,404.0
|
|
|
14,400.0
|
|
|
(5,996.0
|
)
|
|
23,745.0
|
|
|
40,230.7
|
|
|
(16,485.7
|
)
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Total equivalent prices (per Boe)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Average field-level equivalent price
|
$
|
38.06
|
|
|
$
|
38.87
|
|
|
$
|
(0.81
|
)
|
|
$
|
38.60
|
|
|
$
|
37.66
|
|
|
$
|
0.94
|
|
Commodity derivative impact
|
(0.59
|
)
|
|
(2.66
|
)
|
|
2.07
|
|
|
(1.13
|
)
|
|
(3.16
|
)
|
|
2.03
|
|
||||||
Net realized equivalent price
|
$
|
37.47
|
|
|
$
|
36.21
|
|
|
$
|
1.26
|
|
|
$
|
37.47
|
|
|
$
|
34.50
|
|
|
$
|
2.97
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||||||||||
|
2019
|
|
2018
|
|
Change
|
|
2019
|
|
2018
|
|
Change
|
||||||||||||
Oil and condensate production volumes (Mbbl)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Northern Region
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Williston Basin
|
1,700.3
|
|
|
2,968.6
|
|
|
(1,268.3
|
)
|
|
5,719.7
|
|
|
8,747.6
|
|
|
(3,027.9
|
)
|
||||||
Uinta Basin
|
—
|
|
|
124.7
|
|
|
(124.7
|
)
|
|
—
|
|
|
445.0
|
|
|
(445.0
|
)
|
||||||
Other Northern
|
12.1
|
|
|
19.8
|
|
|
(7.7
|
)
|
|
36.1
|
|
|
76.8
|
|
|
(40.7
|
)
|
||||||
Southern Region
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Permian Basin
|
3,956.5
|
|
|
3,525.7
|
|
|
430.8
|
|
|
10,144.9
|
|
|
8,892.0
|
|
|
1,252.9
|
|
||||||
Haynesville/Cotton Valley
|
—
|
|
|
1.9
|
|
|
(1.9
|
)
|
|
—
|
|
|
12.2
|
|
|
(12.2
|
)
|
||||||
Other Southern
|
1.6
|
|
|
(0.2
|
)
|
|
1.8
|
|
|
3.7
|
|
|
8.5
|
|
|
(4.8
|
)
|
||||||
Total production
|
5,670.5
|
|
|
6,640.5
|
|
|
(970.0
|
)
|
|
15,904.4
|
|
|
18,182.1
|
|
|
(2,277.7
|
)
|
||||||
Average field-level oil prices (per bbl)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Northern Region
|
$
|
51.92
|
|
|
$
|
68.06
|
|
|
$
|
(16.14
|
)
|
|
$
|
53.38
|
|
|
$
|
64.80
|
|
|
$
|
(11.42
|
)
|
Southern Region
|
$
|
53.03
|
|
|
$
|
57.88
|
|
|
$
|
(4.85
|
)
|
|
$
|
51.91
|
|
|
$
|
58.87
|
|
|
$
|
(6.96
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Average field-level price
|
$
|
52.70
|
|
|
$
|
62.65
|
|
|
$
|
(9.95
|
)
|
|
$
|
52.44
|
|
|
$
|
61.89
|
|
|
$
|
(9.45
|
)
|
Commodity derivative impact
|
(0.87
|
)
|
|
(6.27
|
)
|
|
5.40
|
|
|
(1.50
|
)
|
|
(7.59
|
)
|
|
6.09
|
|
||||||
Net realized price
|
$
|
51.83
|
|
|
$
|
56.38
|
|
|
$
|
(4.55
|
)
|
|
$
|
50.94
|
|
|
$
|
54.30
|
|
|
$
|
(3.36
|
)
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||||||||||
|
2019
|
|
2018
|
|
Change
|
|
2019
|
|
2018
|
|
Change
|
||||||||||||
Gas production volumes (Bcf)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Northern Region
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Williston Basin
|
3.3
|
|
|
4.4
|
|
|
(1.1
|
)
|
|
10.6
|
|
|
11.6
|
|
|
(1.0
|
)
|
||||||
Uinta Basin
|
—
|
|
|
2.7
|
|
|
(2.7
|
)
|
|
—
|
|
|
10.1
|
|
|
(10.1
|
)
|
||||||
Other Northern
|
—
|
|
|
0.3
|
|
|
(0.3
|
)
|
|
0.1
|
|
|
0.8
|
|
|
(0.7
|
)
|
||||||
Southern Region
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Permian Basin
|
4.8
|
|
|
3.3
|
|
|
1.5
|
|
|
11.9
|
|
|
7.3
|
|
|
4.6
|
|
||||||
Haynesville/Cotton Valley
|
—
|
|
|
27.4
|
|
|
(27.4
|
)
|
|
1.9
|
|
|
81.6
|
|
|
(79.7
|
)
|
||||||
Other Southern
|
0.1
|
|
|
—
|
|
|
0.1
|
|
|
0.1
|
|
|
0.1
|
|
|
—
|
|
||||||
Total production
|
8.2
|
|
|
38.1
|
|
|
(29.9
|
)
|
|
24.6
|
|
|
111.5
|
|
|
(86.9
|
)
|
||||||
Average field-level gas prices (per Mcf)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Northern Region
|
$
|
1.72
|
|
|
$
|
2.59
|
|
|
$
|
(0.87
|
)
|
|
$
|
2.41
|
|
|
$
|
2.52
|
|
|
$
|
(0.11
|
)
|
Southern Region
|
$
|
0.71
|
|
|
$
|
2.69
|
|
|
$
|
(1.98
|
)
|
|
$
|
0.98
|
|
|
$
|
2.75
|
|
|
$
|
(1.77
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Average field-level price
|
$
|
1.13
|
|
|
$
|
2.67
|
|
|
$
|
(1.54
|
)
|
|
$
|
1.61
|
|
|
$
|
2.71
|
|
|
$
|
(1.10
|
)
|
Commodity derivative impact
|
—
|
|
|
0.09
|
|
|
(0.09
|
)
|
|
(0.12
|
)
|
|
0.10
|
|
|
(0.22
|
)
|
||||||
Net realized price
|
$
|
1.13
|
|
|
$
|
2.76
|
|
|
$
|
(1.63
|
)
|
|
$
|
1.49
|
|
|
$
|
2.81
|
|
|
$
|
(1.32
|
)
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||||||||||
|
2019
|
|
2018
|
|
Change
|
|
2019
|
|
2018
|
|
Change
|
||||||||||||
NGL production volumes (Mbbl)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Northern Region
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Williston Basin
|
472.1
|
|
|
667.6
|
|
|
(195.5
|
)
|
|
1,577.5
|
|
|
1,885.7
|
|
|
(308.2
|
)
|
||||||
Uinta Basin
|
—
|
|
|
25.7
|
|
|
(25.7
|
)
|
|
—
|
|
|
96.9
|
|
|
(96.9
|
)
|
||||||
Other Northern
|
0.7
|
|
|
3.7
|
|
|
(3.0
|
)
|
|
1.1
|
|
|
9.4
|
|
|
(8.3
|
)
|
||||||
Southern Region
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Permian Basin
|
909.9
|
|
|
717.9
|
|
|
192.0
|
|
|
2,168.4
|
|
|
1,479.2
|
|
|
689.2
|
|
||||||
Haynesville/Cotton Valley
|
—
|
|
|
0.1
|
|
|
(0.1
|
)
|
|
—
|
|
|
0.4
|
|
|
(0.4
|
)
|
||||||
Other Southern
|
0.3
|
|
|
0.3
|
|
|
—
|
|
|
0.8
|
|
|
0.9
|
|
|
(0.1
|
)
|
||||||
Total production
|
1,383.0
|
|
|
1,415.3
|
|
|
(32.3
|
)
|
|
3,747.8
|
|
|
3,472.5
|
|
|
275.3
|
|
||||||
Average field-level NGL prices (per bbl)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Northern Region
|
$
|
5.26
|
|
|
$
|
29.55
|
|
|
$
|
(24.29
|
)
|
|
$
|
9.92
|
|
|
$
|
25.32
|
|
|
$
|
(15.40
|
)
|
Southern Region
|
$
|
10.38
|
|
|
$
|
29.74
|
|
|
$
|
(19.36
|
)
|
|
$
|
12.65
|
|
|
$
|
25.49
|
|
|
$
|
(12.84
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Average field-level price
|
$
|
8.63
|
|
|
$
|
29.65
|
|
|
$
|
(21.02
|
)
|
|
$
|
11.50
|
|
|
$
|
25.39
|
|
|
$
|
(13.89
|
)
|
Commodity derivative impact
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Net realized price
|
$
|
8.63
|
|
|
$
|
29.65
|
|
|
$
|
(21.02
|
)
|
|
$
|
11.50
|
|
|
$
|
25.39
|
|
|
$
|
(13.89
|
)
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||||||||||
|
2019
|
|
2018
|
|
Change
|
|
2019
|
|
2018
|
|
Change
|
||||||||||||
|
(in millions)
|
||||||||||||||||||||||
Purchased oil and gas sales
|
$
|
0.1
|
|
|
$
|
13.0
|
|
|
$
|
(12.9
|
)
|
|
$
|
1.4
|
|
|
$
|
36.2
|
|
|
$
|
(34.8
|
)
|
Purchased oil and gas expense
|
(0.1
|
)
|
|
(13.3
|
)
|
|
13.2
|
|
|
(1.5
|
)
|
|
(38.6
|
)
|
|
37.1
|
|
||||||
Realized gains (losses) on gas storage derivative contracts
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.3
|
|
|
(0.3
|
)
|
||||||
Resale margin
|
$
|
—
|
|
|
$
|
(0.3
|
)
|
|
$
|
0.3
|
|
|
$
|
(0.1
|
)
|
|
$
|
(2.1
|
)
|
|
$
|
2.0
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||||||||||
|
2019
|
|
2018
|
|
Change
|
|
2019
|
|
2018
|
|
Change
|
||||||||||||
|
(in millions)
|
||||||||||||||||||||||
Lease operating expense
|
$
|
38.3
|
|
|
$
|
64.6
|
|
|
$
|
(26.3
|
)
|
|
$
|
135.5
|
|
|
$
|
203.6
|
|
|
$
|
(68.1
|
)
|
Adjusted transportation and processing costs(1)
|
32.2
|
|
|
43.8
|
|
|
(11.6
|
)
|
|
79.5
|
|
|
134.1
|
|
|
(54.6
|
)
|
||||||
Production and property taxes
|
20.0
|
|
|
37.4
|
|
|
(17.4
|
)
|
|
67.6
|
|
|
103.9
|
|
|
(36.3
|
)
|
||||||
Total production costs
|
$
|
90.5
|
|
|
$
|
145.8
|
|
|
$
|
(55.3
|
)
|
|
$
|
282.6
|
|
|
$
|
441.6
|
|
|
$
|
(159.0
|
)
|
|
(per Boe)
|
||||||||||||||||||||||
Lease operating expense
|
$
|
4.56
|
|
|
$
|
4.49
|
|
|
$
|
0.07
|
|
|
$
|
5.71
|
|
|
$
|
5.06
|
|
|
$
|
0.65
|
|
Adjusted transportation and processing costs(1)
|
3.83
|
|
|
3.04
|
|
|
0.79
|
|
|
3.34
|
|
|
3.34
|
|
|
—
|
|
||||||
Production and property taxes
|
2.38
|
|
|
2.60
|
|
|
(0.22
|
)
|
|
2.85
|
|
|
2.58
|
|
|
0.27
|
|
||||||
Total production costs
|
$
|
10.77
|
|
|
$
|
10.13
|
|
|
$
|
0.64
|
|
|
$
|
11.90
|
|
|
$
|
10.98
|
|
|
$
|
0.92
|
|
(1)
|
Below are reconciliations of transportation and processing costs (the most comparable GAAP measure) as presented on the Condensed Consolidated Statements of Operations and on a unit of production basis to adjusted transportation and processing costs. Adjusted transportation and processing costs includes transportation and processing costs that are reflected as part of "Oil and condensate, gas and NGL sales" on the Condensed Consolidated Statements of Operations. Management adds these costs together to reflect the total operating costs associated with its production. Management believes that this non-GAAP measure is useful supplemental information for investors as it is reflective of the total production costs required to operate the wells for the period. This non-GAAP measure should be considered by the reader in addition to, but not instead of, the financial measure prepared in accordance with GAAP. Refer to Note 2 – Revenue in Part 1, Item I of this Quarterly Report on Form 10-Q.
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||||||||||
|
2019
|
|
2018
|
|
Change
|
|
2019
|
|
2018
|
|
Change
|
||||||||||||
|
(in millions)
|
||||||||||||||||||||||
Transportation and processing costs, as presented
|
$
|
18.0
|
|
|
$
|
28.0
|
|
|
$
|
(10.0
|
)
|
|
$
|
38.8
|
|
|
$
|
93.2
|
|
|
$
|
(54.4
|
)
|
Transportation and processing costs deducted from oil and condensate, gas and NGL sales
|
14.2
|
|
|
15.8
|
|
|
(1.6
|
)
|
|
40.7
|
|
|
40.9
|
|
|
(0.2
|
)
|
||||||
Adjusted transportation and processing costs
|
$
|
32.2
|
|
|
$
|
43.8
|
|
|
$
|
(11.6
|
)
|
|
$
|
79.5
|
|
|
$
|
134.1
|
|
|
$
|
(54.6
|
)
|
|
(per Boe)
|
||||||||||||||||||||||
Transportation and processing costs, as presented
|
$
|
2.14
|
|
|
$
|
1.94
|
|
|
$
|
0.20
|
|
|
$
|
1.63
|
|
|
$
|
2.32
|
|
|
$
|
(0.69
|
)
|
Transportation and processing costs deducted from oil and condensate, gas and NGL sales
|
1.69
|
|
|
1.10
|
|
|
0.59
|
|
|
1.71
|
|
|
1.02
|
|
|
0.69
|
|
||||||
Adjusted transportation and processing costs
|
$
|
3.83
|
|
|
$
|
3.04
|
|
|
$
|
0.79
|
|
|
$
|
3.34
|
|
|
$
|
3.34
|
|
|
$
|
—
|
|
•
|
$51.7 million 6.80% Senior Notes due March 2020;
|
•
|
$397.6 million 6.875% Senior Notes due March 2021;
|
•
|
$500.0 million 5.375% Senior Notes due October 2022;
|
•
|
$650.0 million 5.25% Senior Notes due May 2023; and
|
•
|
$500.0 million 5.625% Senior Notes due March 2026.
|
|
Nine Months Ended September 30,
|
||||||||||
|
2019
|
|
2018
|
|
Change
|
||||||
|
(in millions)
|
||||||||||
Net income (loss)
|
$
|
13.1
|
|
|
$
|
(382.3
|
)
|
|
$
|
395.4
|
|
Non-cash adjustments to net income (loss)
|
383.2
|
|
|
1,071.8
|
|
|
(688.6
|
)
|
|||
Changes in operating assets and liabilities
|
(54.3
|
)
|
|
(14.6
|
)
|
|
(39.7
|
)
|
|||
Net cash provided by (used in) operating activities
|
$
|
342.0
|
|
|
$
|
674.9
|
|
|
$
|
(332.9
|
)
|
|
Nine Months Ended September 30,
|
||||||||||
|
2019
|
|
2018
|
|
Change
|
||||||
|
(in millions)
|
||||||||||
Property acquisitions
|
$
|
3.6
|
|
|
$
|
48.3
|
|
|
$
|
(44.7
|
)
|
Property, plant and equipment capital expenditures
|
466.0
|
|
|
988.2
|
|
|
(522.2
|
)
|
|||
Total accrued capital expenditures
|
469.6
|
|
|
1,036.5
|
|
|
(566.9
|
)
|
|||
Change in accruals and other non-cash adjustments
|
(0.8
|
)
|
|
43.9
|
|
|
(44.7
|
)
|
|||
Total cash capital expenditures
|
$
|
468.8
|
|
|
$
|
1,080.4
|
|
|
$
|
(611.6
|
)
|
Production Commodity Derivative Swaps
|
|||||||||
Year
|
|
Index
|
|
Total Volumes
|
|
Average Swap Price per Unit
|
|||
|
|
|
|
(in millions)
|
|
|
|||
Oil sales
|
|
|
|
(bbls)
|
|
|
($/bbl)
|
|
|
2019
|
|
NYMEX WTI
|
|
3.6
|
|
|
$
|
55.44
|
|
2019
|
|
ICE Brent
|
|
0.5
|
|
|
$
|
66.73
|
|
2019
|
|
Argus WTI Midland
|
|
0.2
|
|
|
$
|
54.60
|
|
2019
|
|
Argus WTI Houston
|
|
0.1
|
|
|
$
|
65.70
|
|
2020
|
|
NYMEX WTI
|
|
11.3
|
|
|
$
|
58.29
|
|
2020
|
|
Argus WTI Midland
|
|
1.5
|
|
|
$
|
57.30
|
|
2020 (January - June)
|
|
Argus WTI Houston
|
|
1.0
|
|
|
$
|
60.06
|
|
Production Commodity Derivative Basis Swaps
|
|||||||||||
Year
|
|
Index
|
|
Basis
|
|
Total Volumes
|
|
Weighted-Average Differential
|
|||
|
|
|
|
|
|
(in millions)
|
|
|
|||
Oil sales
|
|
|
|
|
|
(bbls)
|
|
|
($/bbl)
|
|
|
2019
|
|
NYMEX WTI
|
|
Argus WTI Midland
|
|
1.7
|
|
|
$
|
(2.22
|
)
|
2019
|
|
NYMEX WTI
|
|
Argus WTI Houston
|
|
0.5
|
|
|
$
|
3.69
|
|
2020
|
|
NYMEX WTI
|
|
Argus WTI Midland
|
|
6.6
|
|
|
$
|
0.17
|
|
2020 (January - June)
|
|
NYMEX WTI
|
|
Argus WTI Houston
|
|
0.4
|
|
|
$
|
3.75
|
|
|
September 30, 2019
|
||
|
(in millions)
|
||
Net fair value – asset (liability)
|
$
|
91.8
|
|
Fair value if market prices of oil and basis differentials decline by 10%
|
$
|
82.6
|
|
Fair value if market prices of oil and basis differentials increase by 10%
|
$
|
100.9
|
|
•
|
our comprehensive review of strategic alternatives to maximize shareholder value, resulting in our decision to move forward as an independent company;
|
•
|
our strategy to continue to focus on high-return investments in our business with disciplined production growth;
|
•
|
our commitment to strengthening our balance sheet, reducing leverage and returning capital to shareholders;
|
•
|
improved performance and deliverability of our asset base;
|
•
|
plans to reduce general and administrative expense significantly;
|
•
|
timing of the implementation of organizational changes;
|
•
|
expected costs associated with contractual termination benefits, including severance and accelerated vesting of share-based compensations, as part of the strategic initiatives;
|
•
|
plans to reduce operating and drilling, completion and facility costs and managing liquidity;
|
•
|
plans to grow oil and condensate production;
|
•
|
drilling and completion plans and strategies;
|
•
|
adding additional acreage in our operating areas;
|
•
|
adequacy of procedures implemented to protect against credit-related losses;
|
•
|
expectations and assumptions regarding oil, gas and NGL prices, including volatility and effects on our business;
|
•
|
our ability to meet delivery and sales commitments;
|
•
|
impact of potential activist shareholders to our operations, personnel retention, strategies and costs;
|
•
|
the unfunded status of our pension plan;
|
•
|
the conditions impacting the timing and amount of share repurchases under our share repurchase program;
|
•
|
the adjustments made to GAAP measures to arrive at non-GAAP measures and the usefulness of non-GAAP financial measures;
|
•
|
solid base for growth in production and reserves provided by our inventory of drilling locations;
|
•
|
adjustments to our capital investment program based on a variety of factors; including an evaluation of drilling and completion activities and drilling results;
|
•
|
amount and allocation of forecasted capital expenditures (excluding property acquisitions) and plans and sources for funding operations and capital investments;
|
•
|
impact of lower or higher commodity prices and interest rates;
|
•
|
potential for asset impairments and factors impacting impairment amounts;
|
•
|
fair value estimates and related assumptions and assessment of the sensitivity of changes in assumptions and critical accounting estimates, including estimated asset retirement obligations;
|
•
|
critical accounting estimates, including assets retirement obligations;
|
•
|
impact of global geopolitical and macroeconomic events and monitoring of such events;
|
•
|
plans regarding derivative contracts, including the volumes utilized, and the anticipated benefits derived there from;
|
•
|
outcome and impact of various claims;
|
•
|
expected cost savings and other efficiencies from multi-well pad drilling, including "tank-style" development;
|
•
|
delays in completion of wells, well shut-ins and volatility to operating results caused by multi-well pad drilling, including the effect of such delays on quarterly operating results and planned conversion of PUD reserves;
|
•
|
maintaining a sufficient liquidity position to ensure financial flexibility, withstand commodity price volatility, and fund our development projects, operations, capital expenditures, debt maturities, interest expense and dividends;
|
•
|
estimates of the amount of additional indebtedness we may incur under our revolving credit facility;
|
•
|
factors impacting ability to incur additional indebtedness;
|
•
|
off-balance sheet arrangements;
|
•
|
redemption of senior notes;
|
•
|
assumptions regarding share-based compensation;
|
•
|
settlement of performance share units and restricted share units in cash;
|
•
|
expiration of statute of limitations related to uncertain tax position and associated recognition of tax benefit and reduction in interest and general and administrative expenses;
|
•
|
AMT credits amount and timing; and
|
•
|
our plans regarding contributions to the nonqualified retirement plan (SERP), medical plan and 401(k) plan.
|
•
|
the risk factors discussed in Item 1A of Part I of the 2018 Form 10-K and Item 1A of Part II of this Quarterly Report on Form 10-Q;
|
•
|
any potential impact from the announcement that the Board of Directors of the Company completed its comprehensive review of strategic alternatives and is moving forward as an independent company;
|
•
|
changes in oil, gas and NGL prices;
|
•
|
global geopolitical and macroeconomic factors;
|
•
|
general economic conditions, including the performance of financial markets and interest rates;
|
•
|
the risks and liabilities associated with acquired assets;
|
•
|
asset impairments;
|
•
|
liquidity constraints, including those resulting from the cost and availability of debt and equity financing;
|
•
|
drilling and completion strategies, methods and results;
|
•
|
assumptions around well density/spacing and recoverable reserves per well prove to be inaccurate;
|
•
|
changes in estimated reserve quantities;
|
•
|
changes in management's assessments as to where QEP's capital can be most profitably deployed;
|
•
|
shortages and costs of oilfield equipment, services and personnel;
|
•
|
changes in development plans;
|
•
|
lack of available pipeline, processing and refining capacity;
|
•
|
processing volumes and pipeline throughput;
|
•
|
risks associated with hydraulic fracturing;
|
•
|
the outcome of contingencies such as legal proceedings;
|
•
|
delays in obtaining permits and governmental approvals;
|
•
|
operating risks such as unexpected drilling conditions and risks inherent in the production of oil and gas;
|
•
|
weather conditions;
|
•
|
changes in, adoption of and compliance with laws and regulations, including decisions and policies concerning: the environment, climate change, greenhouse gas or other emissions, renewable energy mandates, natural resources, fish and wildlife, hydraulic fracturing, water use and drilling and completion techniques, as well as the risk of legal proceedings arising from such matters, whether involving public or private claimants or regulatory investigative or enforcement measures;
|
•
|
derivative activities;
|
•
|
potential losses or earnings reductions from our commodity price risk management programs;
|
•
|
volatility in the commodity-futures market;
|
•
|
failure of internal controls and procedures;
|
•
|
failure of our information technology infrastructure or applications to prevent a cyberattack;
|
•
|
elimination of federal income tax deductions for oil and gas exploration and development costs;
|
•
|
production, severance and property taxation rates;
|
•
|
the amount of AMT credit refunds realized;
|
•
|
tariffs on products we use in our operations on products we sell;
|
•
|
discount rates;
|
•
|
regulatory approvals and compliance with contractual obligations;
|
•
|
actions of, or inaction by federal, state, local or tribal governments, foreign countries and the Organization of Petroleum Exporting Countries;
|
•
|
lack of, or disruptions in, adequate and reliable transportation for our production;
|
•
|
competitive conditions;
|
•
|
production and sales volumes;
|
•
|
actions of operators on properties in which we own an interest but do not operate;
|
•
|
estimates of oil and gas reserve quantities;
|
•
|
reservoir performance;
|
•
|
operating costs;
|
•
|
inflation;
|
•
|
capital costs;
|
•
|
creditworthiness and performance of the Company's counterparties, including financial institutions, operating partners and other parties;
|
•
|
volatility in the securities, capital and credit markets;
|
•
|
actions by credit rating agencies and their impact on the Company;
|
•
|
changes in guidance issued related to tax reform legislation;
|
•
|
actions of activist shareholders; and
|
•
|
other factors, most of which are beyond the Company's control.
|
•
|
responding to actions by activist shareholders could be costly and time-consuming, disrupting our operations and diverting the attention of our management and employees; and
|
•
|
such activities could interfere with our ability to execute our strategic plan or realize short- or long-term value from our assets.
|
Period
|
|
Total shares purchased(1)
|
|
Weighted-average price paid per share
|
|
Total shares purchased as part of publicly announced plans or programs
|
|
Remaining dollar amount that may be purchased under the plans or programs
|
|||||
|
|
|
|
|
|
|
|
(in millions)
|
|||||
July 1, 2019 - July 31, 2019
|
|
6,170
|
|
|
$
|
5.36
|
|
|
—
|
|
|
1,191.6
|
|
August 1, 2019 - August 31, 2019
|
|
35,261
|
|
|
$
|
3.53
|
|
|
—
|
|
|
1,191.6
|
|
September 1, 2019 - September 30, 2019
|
|
131,522
|
|
|
$
|
4.06
|
|
|
—
|
|
|
1,191.6
|
|
Total
|
|
172,953
|
|
|
|
|
—
|
|
|
|
(1)
|
During the three months ended September 30, 2019, QEP purchased 172,953 shares from employees in connection with the settlement of income tax and related benefit withholding obligations arising from the vesting of restricted share grants.
|
+
|
Indicates a management contract or compensatory plan or arrangement.
|
*
|
Filed herewith.
|
**
|
Furnished herewith.
|
|
QEP RESOURCES, INC.
|
|
(Registrant)
|
|
|
October 23, 2019
|
/s/ Timothy J. Cutt
|
|
Timothy J. Cutt,
|
|
President and Chief Executive Officer
|
|
|
October 23, 2019
|
/s/ Richard J. Doleshek
|
|
Richard J. Doleshek,
|
|
Executive Vice President and Chief Financial Officer
|
1 Year Qep Resources Chart |
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