COMMON AND PREFERRED STOCK

12 Months Ended

Dec. 31, 2019

Equity [Abstract]

COMMON AND PREFERRED STOCK

COMMON AND PREFERRED STOCK

Common Stock

The Company is authorized to issue up to 675,000,000 shares of common stock, par value $0.001 per share. As of December 31, 2019 and 2018, the Company had 406,085,183 and 378,333,070 shares of common stock issued and outstanding, respectively.

Preferred Stock

The Company is authorized to issue up to 5,000,000 shares of preferred stock, par value $0.001 per share, with such designations, voting and other rights and preferences as may be determined from time to time by the Board of Directors. As of December 31, 2019 and 2018, the Company had 1,500,000 and zero shares of preferred stock issued and outstanding, respectively, all of which were shares of 6.500% Series A Perpetual Cumulative Convertible Preferred Stock (the “Series A Preferred Stock”).

The terms of the Series A Preferred Stock are set forth in the Certificate of Designations for the Series A Preferred Stock (the “Certificate of Designations”), as originally filed with the Delaware Secretary of State on November 22, 2019, and as amended thereafter. The Series A Preferred Stock ranks senior to the Company’s common stock with respect to the payment of dividends and distribution of assets upon liquidation, dissolution or winding-up. Holders of the Series A Preferred Stock are entitled to receive, when, as and if declared by the board of directors of the Company, cumulative dividends in cash, at a rate of 6.500% per annum on the sum of (i) the $100 liquidation preference per share of Series A Preferred Stock (the “Liquidation Preference”) and (ii) all accumulated and unpaid dividends (if any), payable semi-annually in arrears on May 15 and November 15 of each year, commencing on May 15, 2020. As of December 31, 2019, there were $1.0 million of undeclared accumulated dividends on the Series A Preferred Stock.

The Series A Preferred Stock is convertible at the holders’ option (an “Optional Conversion”) into common stock at a conversion rate set forth in the Certificate of Designations, subject to customary adjustments as provided for therein. As of December 31, 2019, the conversion rate was 43.63 shares of common stock for each share of Series A Preferred Stock (which is equivalent to a conversion price of approximately $2.292 per share of Common Stock). Holders may be entitled to additional shares of common stock or cash in connection with a conversion that occurs in connection with a Fundamental Change (as defined in the Certificate of Designations). The Series A Preferred Stock is convertible at the Company’s option (a “Mandatory Conversion”) if the closing sale price of the Company’s common stock equals or exceeds 145% of the conversion price for at least 20 trading days (whether or not consecutive) in a period of 30 consecutive trading days. A Mandatory Conversion would also entitle the holder to a cash payment equal to eight semi-annual dividend payments, less an amount equal to all cash dividend payments made in respect of such holder’s shares of Series A Preferred Stock prior to such Mandatory Conversion. The occurrence of any Optional Conversion or Mandatory Conversion is subject to various terms and limitations set forth in the Certificate of Designations.

The Certificate of Designations also sets forth additional information relating to the payment of dividends, voting, conversion rights, consent rights, liquidation rights, the ranking of the Series A Preferred Stock in comparison with the Company’s other securities, and other matters.

2019 Activity

Preferred Stock

In November 2019, the Company issued an aggregate of 1,500,000 shares of Series A Preferred Stock. Of these shares, 750,000 shares of Series A Preferred Stock were issued in exchange for $70.8 million in aggregate principal amount of Second Lien Notes, and 750,000 shares of Series A Preferred Stock were issued for an aggregate cash purchase price of $75.0 million (before fees and expenses).

Common Stock

In July 2019, the Company issued 5.6 million shares of common stock as a part of the consideration for the VEN Bakken Acquisition (see Note 3).

In 2019, the Company elected to issue 10.2 million shares of common stock to satisfy contingent consideration owed in connection with the Pivotal Acquisition (see Note 3).

In 2019, the Company elected to issue 7.6 million shares of common stock to satisfy contingent consideration owed in connection with the W Energy Acquisition (see Note 3).

In 2019, the Company elected to issue 7.2 million shares of common stock to satisfy obligations owed in connection with the debt exchange derivative liabilities (see Note 11) related to the Additional 2018 Exchanges (see Note 4).

2018 Activity

Exchange Transactions

In May 2018, the Company issued 103.2 million shares of common stock at closing of the May 2018 Exchange (see Note 4).

In 2018, the Company issued 32.8 million shares of common stock as consideration in connection with the Additional 2018 Exchanges (see Note 4).

Equity Offerings

On April 10, 2018, the Company completed an underwritten public offering of common stock (the “Public Offering”) pursuant to which it issued 58.7 million shares of common stock and received net proceeds of $84.5 million after underwriting discounts, commissions, and offering expenses. On April 16, 2018, the underwriters exercised their option to purchase an additional 3.6 million shares and the Company received additional net proceeds of $5.2 million after underwriting discounts.

In May 2018, the Company issued 34.7 million shares to various investors through subscription agreements for net proceeds of $52.0 million.

Acquisitions

In June 2018, the Company issued 6.0 million shares of common stock as a part of the consideration for the Salt Creek Acquisition (see Note 3).

In September 2018, the Company issued 25.8 million shares of common stock as a part of the consideration for the Pivotal Acquisition (see Note 3).

In October 2018, the Company issued 51.5 million shares of common stock as a part of the consideration for the W Energy Acquisition (see Note 3).

Stock Repurchase Program

In May 2011, the Company’s board of directors approved a stock repurchase program to acquire up to $150.0 million of the Company’s outstanding common stock.  The stock repurchase program allows the Company to repurchase its shares from time to time in the open market, block transactions and in negotiated transactions.

In 2019, the Company repurchased 5.6 million shares of its common stock under the stock repurchase program at a total cost of $16.3 million. Of the shares repurchased in 2019, 3.7 million were repurchased from W Energy at a total cost of approximately $11.1 million, of which $1.2 million was recorded as a settlement of contingent consideration liabilities. In 2018, the Company repurchased 7.4 million shares of its common stock under the stock repurchase program from the Pivotal Entities and W Energy at a cost of approximately $23.9 million, of which $1.7 million was recorded as a settlement of contingent consideration liabilities. In 2017, the Company did not repurchase shares of its common stock under the stock repurchase program.

The Company’s accounting policy upon the repurchase of shares is to deduct its par value from common stock and to reflect any excess of cost over par value as a deduction from Additional Paid-in Capital. All repurchased shares are now included in the Company’s pool of authorized but unissued shares.