(State of Incorporation) | (I.R.S. Employer Identification Number) | ||||
(Address of Principal Executive Offices) | (Zip Code) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
Accelerated filer | Non-accelerated filer | Smaller reporting company | Emerging growth company | |||||
☒ | ☐ | ☐ |
Page | |||
• | our business strategy and future drilling plans; |
• | our reserves and our ability to replace the reserves we produce through drilling and property acquisitions; |
• | our drilling prospects, inventories, projects and programs; |
• | our financial strategy, liquidity and capital required for our development program; |
• | our realized oil, natural gas and NGL prices; |
• | the timing and amount of our future production of oil, natural gas and NGLs; |
• | our hedging strategy and results; |
• | our competition and government regulations; |
• | our ability to obtain permits and governmental approvals; |
• | our pending legal or environmental matters; |
• | the marketing and transportation of our oil, natural gas and NGLs; |
• | our leasehold or business acquisitions; |
• | cost of developing our properties; |
• | our anticipated rate of return; |
• | general economic conditions; |
• | credit markets; |
• | uncertainty regarding our future operating results; and |
• | our plans, objectives, expectations and intentions contained in this Quarterly Report that are not historical. |
June 30, 2019 | December 31, 2018 | ||||||
ASSETS | |||||||
Current assets | |||||||
Cash and cash equivalents | $ | $ | |||||
Accounts receivable, net | |||||||
Derivative instruments | |||||||
Prepaid and other current assets | |||||||
Total current assets | |||||||
Property and Equipment | |||||||
Oil and natural gas properties, successful efforts method | |||||||
Unproved properties | |||||||
Proved properties | |||||||
Accumulated depreciation, depletion and amortization | ( | ) | ( | ||||
Total oil and natural gas properties, net | |||||||
Other property and equipment, net | |||||||
Total property and equipment, net | |||||||
Noncurrent assets | |||||||
Operating lease right-of-use assets | — | ||||||
Other noncurrent assets | |||||||
TOTAL ASSETS | $ | $ | |||||
LIABILITIES AND EQUITY | |||||||
Current liabilities | |||||||
Accounts payable and accrued expenses | $ | $ | |||||
Derivative instruments | |||||||
Operating lease liabilities | — | ||||||
Other current liabilities | |||||||
Total current liabilities | |||||||
Noncurrent liabilities | |||||||
Long-term debt, net | |||||||
Asset retirement obligations | |||||||
Deferred income taxes | |||||||
Operating lease liabilities | — | ||||||
Other long-term liabilities | |||||||
Total liabilities | |||||||
Commitments and contingencies (Note 10) | |||||||
Shareholders’ equity | |||||||
Preferred stock, $0.0001 par value, 1,000,000 shares authorized: | |||||||
Series A: 1 share issued and outstanding | |||||||
Common stock, $0.0001 par value, 620,000,000 shares authorized: | |||||||
Class A: 266,254,971 shares issued and 264,431,567 shares outstanding at June 30, 2019 and 265,859,273 shares issued and 264,323,328 shares outstanding at December 31, 2018 | |||||||
Class C (Convertible): 12,003,183 shares issued and outstanding at June 30, 2019 and December 31, 2018 | |||||||
Additional paid-in capital | |||||||
Retained earnings | |||||||
Total shareholders’ equity | |||||||
Noncontrolling interest | |||||||
Total equity | |||||||
TOTAL LIABILITIES AND EQUITY | $ | $ |
For the Three Months Ended June 30, | For the Six Months Ended June 30, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Operating revenues | |||||||||||||||
Oil and gas sales | $ | $ | $ | $ | |||||||||||
Operating expenses | |||||||||||||||
Lease operating expenses | |||||||||||||||
Severance and ad valorem taxes | |||||||||||||||
Gathering, processing and transportation expenses | |||||||||||||||
Depreciation, depletion and amortization | |||||||||||||||
Impairment and abandonment expense | |||||||||||||||
Exploration expense | |||||||||||||||
General and administrative expenses | |||||||||||||||
Total operating expenses | |||||||||||||||
Net gain (loss) on sale of long-lived assets | ( | ) | ( | ) | |||||||||||
Income from operations | |||||||||||||||
Other income (expense) | |||||||||||||||
Interest expense | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
Net gain (loss) on derivative instruments | ( | ) | |||||||||||||
Other income (expense) | ( | ) | ( | ) | |||||||||||
Total other income (expense) | ( | ) | ( | ) | |||||||||||
Income before income taxes | |||||||||||||||
Income tax expense | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
Net income | |||||||||||||||
Less: Net income attributable to noncontrolling interest | |||||||||||||||
Net income attributable to Class A Common Stock | $ | $ | $ | $ | |||||||||||
Income per share of Class A Common Stock: | |||||||||||||||
Basic | $ | $ | $ | $ | |||||||||||
Diluted | $ | $ | $ | $ |
For the Six Months Ended June 30, | |||||||
2019 | 2018 | ||||||
Cash flows from operating activities: | |||||||
Net income | $ | $ | |||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Depreciation, depletion and amortization | |||||||
Stock-based compensation expense | |||||||
Impairment and abandonment expense | |||||||
Exploratory dry hole costs | |||||||
Deferred tax expense | |||||||
Net (gain) loss on sale of long-lived assets | ( | ) | |||||
Non-cash portion of derivative (gain) loss | ( | ) | |||||
Amortization of debt issuance costs and discount | |||||||
Changes in operating assets and liabilities: | |||||||
(Increase) decrease in accounts receivable | ( | ) | ( | ) | |||
(Increase) decrease in prepaid and other assets | ( | ) | |||||
Increase (decrease) in accounts payable and other liabilities | |||||||
Net cash provided by operating activities | |||||||
Cash flows from investing activities: | |||||||
Acquisition of oil and natural gas properties | ( | ) | ( | ) | |||
Drilling and development capital expenditures | ( | ) | ( | ) | |||
Purchases of other property and equipment | ( | ) | ( | ) | |||
Proceeds from sales of oil and natural gas properties | |||||||
Net cash used in investing activities | ( | ) | ( | ) | |||
Cash flows from financing activities: | |||||||
Proceeds from borrowings under revolving credit facility | |||||||
Repayment of borrowings under revolving credit facility | ( | ) | ( | ) | |||
Proceeds from issuance of 2027 Senior Notes | |||||||
Debt issuance costs | ( | ) | ( | ) | |||
Proceeds from stock options exercised | |||||||
Restricted stock used for tax withholdings | ( | ) | ( | ) | |||
Net cash provided by financing activities | |||||||
Net increase (decrease) in cash, cash equivalents and restricted cash | ( | ) | |||||
Cash, cash equivalents and restricted cash, beginning of period | |||||||
Cash, cash equivalents and restricted cash, end of period | $ | $ |
For the Six Months Ended June 30, | |||||||
2019 | 2018 | ||||||
Supplemental cash flow information | |||||||
Cash paid for interest | $ | $ | |||||
Cash paid for amounts included in the measurement of lease liabilities: | |||||||
Operating cash flows from operating leases | — | ||||||
Investing cash flows from operating leases | — | ||||||
Supplemental non-cash activity | |||||||
Accrued capital expenditures included in accounts payable and accrued expenses | $ | $ | |||||
Asset retirement obligations incurred, including revisions to estimates | |||||||
Right-of-use assets obtained in exchange for operating lease liabilities | — |
For the Six Months Ended June 30, | |||||||
2019 | 2018 | ||||||
Cash and cash equivalents | $ | $ | |||||
Restricted cash(1) | |||||||
Total cash, cash equivalents and restricted cash | $ | $ |
(1) | Included in Prepaid and other current assets line item on the Consolidated Balance Sheets |
Common Stock | Preferred Stock | |||||||||||||||||||||||||||||||||||||||
Class A | Class C | Series A | Additional Paid-In Capital | Retained Earnings | Total Shareholder's Equity | Non-controlling Interest | Total Equity | |||||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Shares | Amount | |||||||||||||||||||||||||||||||||||
Balance at December 31, 2018 | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
Restricted stock issued | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||
Restricted stock used for tax withholding | ( | ) | — | — | — | — | — | ( | ) | — | ( | ) | — | ( | ) | |||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||
Net income (loss) | — | — | — | — | — | — | — | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||||||
Balance at March 31, 2019 | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
Restricted stock issued | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||
Restricted stock forfeited | ( | ) | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||
Restricted stock used for tax withholding | ( | ) | — | — | — | — | — | ( | ) | — | ( | ) | — | ( | ) | |||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||
Net income (loss) | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||
Balance at June 30, 2019 | $ | $ | $ | $ | $ | $ | $ | $ |
Common Stock | Preferred Stock | |||||||||||||||||||||||||||||||||||||||
Class A | Class C | Series A | Additional Paid-In Capital | Retained Earnings | Total Shareholder's Equity | Non-controlling Interest | Total Equity | |||||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Shares | Amount | |||||||||||||||||||||||||||||||||||
Balance at December 31, 2017 | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
Restricted stock issued | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||
Restricted stock forfeited | ( | ) | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||
Restricted stock used for tax withholding | ( | ) | — | — | — | — | — | ( | ) | — | ( | ) | — | ( | ) | |||||||||||||||||||||||||
Option exercises | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||
Conversion of common shares from Class C to Class A, net of tax | ( | ) | ( | ) | — | — | — | ( | ) | |||||||||||||||||||||||||||||||
Net income (loss) | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||
Balance at March 31, 2018 | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
Restricted stock issued | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||
Restricted stock forfeited | ( | ) | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||
Restricted stock used for tax withholding | ( | ) | — | — | — | — | — | ( | ) | — | ( | ) | — | ( | ) | |||||||||||||||||||||||||
Option exercises | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||
Net income (loss) | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||
Balance at June 30, 2018 | $ | $ | $ | $ | $ | $ | $ | $ |
(in thousands) | June 30, 2019 | December 31, 2018 | |||||
Accrued oil and gas sales receivable, net | $ | $ | |||||
Joint interest billings, net | |||||||
Other | |||||||
Accounts receivable, net | $ | $ |
(in thousands) | June 30, 2019 | December 31, 2018 | |||||
Accounts payable | $ | $ | |||||
Accrued capital expenditures | |||||||
Revenues payable | |||||||
Accrued interest | |||||||
Accrued employee compensation and benefits | |||||||
Accrued expenses and other | |||||||
Accounts payable and accrued expenses | $ | $ |
(in thousands) | June 30, 2019 | December 31, 2018 | |||||
Credit Facility due 2023 | $ | $ | |||||
5.375% Senior Notes due 2026 | |||||||
6.875% Senior Notes due 2027 | |||||||
Unamortized debt discount | ( | ) | |||||
Unamortized debt issuance costs on Senior Notes | ( | ) | ( | ) | |||
Senior Notes, net | |||||||
Total long-term debt, net | $ | $ |
(in thousands) | |||
Asset retirement obligations as of January 1, 2019 | $ | ||
Liabilities acquired | |||
Liabilities incurred | |||
Liabilities divested and settled | ( | ) | |
Accretion expense | |||
Asset retirement obligations as of June 30, 2019 | $ |
For the Three Months Ended June 30, | For the Six Months Ended June 30, | ||||||||||||||
(in thousands) | 2019 | 2018 | 2019 | 2018 | |||||||||||
Restricted stock awards | $ | $ | $ | $ | |||||||||||
Stock option awards | |||||||||||||||
Performance stock units | |||||||||||||||
Total stock-based compensation expense | $ | $ | $ | $ |
Awards | Weighted Average Grant Date Fair Value | |||||
Unvested balance as of December 31, 2018 | $ | |||||
Granted | ||||||
Vested | ( | ) | ||||
Forfeited | ( | ) | ||||
Unvested balance as of June 30, 2019 |
For the Six Months Ended June 30, | |||||||
2019 | 2018 | ||||||
Weighted average grant-date fair value per share | $ | $ | |||||
Expected term (in years) | |||||||
Expected stock volatility | % | % | |||||
Dividend yield | % | % | |||||
Risk-free interest rate | % | % |
Options | Weighted Average Exercise Price | Weighted Average Remaining Term (in years) | Aggregate Intrinsic Value (in thousands) | |||||||||
Outstanding as of December 31, 2018 | $ | |||||||||||
Granted | ||||||||||||
Exercised | ||||||||||||
Forfeited | ( | ) | ||||||||||
Expired | ( | ) | ||||||||||
Outstanding as of June 30, 2019 | $ | |||||||||||
Exercisable as of June 30, 2019 | $ |
Period | Volume (Bbls) | Volume (Bbls/d) | Weighted Average Differential ($/Bbl)(1) | ||||||||
Crude oil basis swaps | July 2019 - September 2019 | $ | ( | ) | |||||||
October 2019 - December 2019 | ( | ) |
(1) | These oil basis swap transactions are settled based on the difference between the arithmetic average of ARGUS MIDLAND WTI and ARGUS WTI CUSHING indices, during each applicable settlement period. |
Period | Volume (MMBtu) | Volume (MMBtu/d) | Weighted Average Fixed Price ($/MMBtu)(1) | ||||||||
Natural Gas Swaps - Henry Hub | July 2019 - December 2019 | $ | |||||||||
Natural Gas Swaps - West Texas WAHA | July 2019 - December 2019 | ||||||||||
Period | Volume (MMBtu) | Volume (MMBtu/d) | Weighted Average Differential ($/MMBtu)(2) | ||||||||
Natural gas basis swaps | July 2019 - December 2019 | $ | ( | ) |
(1) | These natural gas swap contracts are settled based on either i) the NYMEX Henry Hub price or ii) the Inside FERC West Texas WAHA price of natural gas, as applicable, as of the specified settlement date. |
(2) | These natural gas basis swap contracts are settled based on the difference between the Inside FERC’s West Texas WAHA price and the NYMEX price of natural gas during each applicable settlement period. |
For the Three Months Ended June 30, | For the Six Months Ended June 30, | ||||||||||||||
(in thousands) | 2019 | 2018 | 2019 | 2018 | |||||||||||
Net gain (loss) on derivative instruments | $ | $ | $ | ( | ) | $ |
Balance Sheet Classification | Gross Fair Value Asset/Liability Amounts | Gross Amounts Offset(1) | Net Recognized Fair Value Assets/Liabilities | ||||||||||
(in thousands) | June 30, 2019 | ||||||||||||
Derivative Assets | |||||||||||||
Commodity contracts | Current assets - Derivative instruments | $ | $ | ( | ) | $ | |||||||
Derivative Liabilities | |||||||||||||
Commodity contracts | Current liabilities - Derivative instruments | ( | ) | ||||||||||
December 31, 2018 | |||||||||||||
Derivative Assets | |||||||||||||
Commodity contracts | Current assets - Derivative instruments | $ | $ | ( | ) | $ | |||||||
Derivative Liabilities | |||||||||||||
Commodity contracts | Current liabilities - Derivative instruments | ( | ) |
(1) | The Company has agreements in place with all of its counterparties that allow for the financial right of offset for derivative assets and derivative liabilities at settlement or in the event of a default under the agreements or contract termination. |
• | Level 1: Quoted Prices in Active Markets for Identical Assets – inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets. |
• | Level 2: Significant Other Observable Inputs – inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument. |
• | Level 3: Significant Unobservable Inputs – inputs to the valuation methodology are unobservable and significant to the fair value measurement. |
(in thousands) | Level 1 | Level 2 | Level 3 | ||||||||
June 30, 2019 | |||||||||||
Total assets | $ | $ | $ | ||||||||
Total liabilities | |||||||||||
December 31, 2018 | |||||||||||
Total assets | $ | $ | $ | ||||||||
Total liabilities |
June 30, 2019 | December 31, 2018 | |||||||||||||||
Carrying Value | Fair Value | Carrying Value | Fair value | |||||||||||||
Credit facility due 2023(1) | $ | $ | $ | $ | ||||||||||||
5.375% Senior Notes due 2026(2) | ||||||||||||||||
6.875% Senior Notes due 2027(2) |
(1) | The carrying values of the amounts outstanding under CRP’s credit agreement approximate fair value because its variable interest rates are tied to current market rates and the applicable credit spreads represent current market rates for the credit risk profile of the Company. |
(2) |
For the Three Months Ended June 30, | For the Six Months Ended June 30, | ||||||||||||||
(in thousands, except per share data) | 2019 | 2018 | 2019 | 2018 | |||||||||||
Net income attributable to Class A Common Stock | $ | $ | $ | $ | |||||||||||
Add: Income from conversion of Class C Common Stock | |||||||||||||||
Adjusted net income attributable to Class A Common Stock | $ | $ | $ | $ | |||||||||||
Basic net earnings per share of Class A Common Stock | $ | $ | $ | $ | |||||||||||
Diluted net earnings per share of Class A Common Stock | $ | $ | $ | $ | |||||||||||
Basic weighted average shares of Class A Common Stock outstanding | |||||||||||||||
Add: Dilutive effect of potential common shares | |||||||||||||||
Add: Dilutive effects of conversion of Class C Common Stock | |||||||||||||||
Diluted weighted average shares of Class A Common Stock outstanding |
For the Three Months Ended June 30, | For the Six Months Ended June 30, | ||||||||||
(in thousands) | 2019 | 2018 | 2019 | 2018 | |||||||
Out-of-the-money stock options | |||||||||||
Warrants | |||||||||||
Restricted stock | |||||||||||
Weighted average shares of Class C Common Stock | |||||||||||
Performance stock units |
For the Three Months Ended June 30, | For the Six Months Ended June 30, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Operating revenues (in thousands): | |||||||||||||||
Oil sales | $ | $ | $ | $ | |||||||||||
Natural gas sales | |||||||||||||||
NGL sales | |||||||||||||||
Oil and gas sales | $ | $ | $ | $ |
As of June 30, 2019 | |||
Weighted-average discount rate | % | ||
Weighted-average remaining lease term (years) |
(in thousands) | For the Three Months Ended June 30, 2019 | For the Six Months Ended June 30, 2019 | ||||||
Lease costs(1) | ||||||||
Operating lease cost | $ | $ | ||||||
Variable lease cost | ||||||||
Short-term lease cost | ||||||||
Total Lease Cost | $ | $ |
(1) | The majority of the Company’s operating leases relate to the operations or completion of the Company’s wells. Therefore, the lease costs presented in the above table represent the total gross costs the Company incurs, which are not comparable to the Company’s net costs recorded to the Consolidated Statements of Operations, Consolidated Statements of Cash Flows or capitalized in the Consolidated Balance Sheets, as amounts therein are reflected net of amounts billed to working interest partners. |
(in thousands) | Total | ||
2019(1)(2) | $ | ||
2020 | |||
2021 | |||
2022 | |||
Total lease payments | |||
Less: imputed interest | ( | ) | |
Present value of lease liabilities (3) | $ |
(1) | Excludes payments made during the six months ended June 30, 2019. |
(2) | Includes drilling rigs as of June 30, 2019 with an initial term greater than one year. |
(3) | Of the total present value of lease liabilities, $ |
(in thousands) | Drilling Rigs | Office Leases | |||||
2019 | $ | $ | |||||
2020 | |||||||
2021 | |||||||
2022 | |||||||
Total lease payments | $ | $ |
2017 | 2018 | 2019 | |||||||||||||||||||||||||||||||||||||
Q1 | Q2 | Q3 | Q4 | Q1 | Q2 | Q3 | Q4 | Q1 | Q2 | ||||||||||||||||||||||||||||||
Crude oil (per Bbl) | $ | 51.82 | $ | 48.32 | $ | 48.17 | $ | 55.31 | $ | 62.91 | $ | 68.07 | $ | 69.50 | $ | 58.81 | $ | 54.90 | $ | 59.81 | |||||||||||||||||||
Natural gas (per MMBtu) | $ | 3.06 | $ | 3.14 | $ | 2.95 | $ | 2.91 | $ | 3.08 | $ | 2.85 | $ | 2.93 | $ | 3.77 | $ | 2.88 | $ | 2.51 |
For the Three Months Ended June 30, | Increase/(Decrease) | |||||||||||||
2019 | 2018 | $ | % | |||||||||||
Net revenues (in thousands): | ||||||||||||||
Oil sales | $ | 214,305 | $ | 174,156 | $ | 40,149 | 23 | % | ||||||
Natural gas sales | 8,088 | 13,721 | (5,633 | ) | (41 | )% | ||||||||
NGL sales | 21,846 | 29,886 | (8,040 | ) | (27 | )% | ||||||||
Oil and gas sales | $ | 244,239 | $ | 217,763 | $ | 26,476 | 12 | % | ||||||
Average sales prices: | ||||||||||||||
Oil (per Bbl) | $ | 54.63 | $ | 61.21 | $ | (6.58 | ) | (11 | )% | |||||
Effect of derivative settlements on average price (per Bbl) | (0.18 | ) | 1.69 | (1.87 | ) | (111 | )% | |||||||
Oil net of hedging (per Bbl) | $ | 54.45 | $ | 62.90 | $ | (8.45 | ) | (13 | )% | |||||
Average NYMEX price for oil (per Bbl) | $ | 59.81 | $ | 68.07 | $ | (8.26 | ) | (12 | )% | |||||
Oil differential from NYMEX | (5.18 | ) | (6.86 | ) | 1.68 | 24 | % | |||||||
Natural gas (per Mcf) | $ | 0.81 | $ | 1.81 | $ | (1.00 | ) | (55 | )% | |||||
Effect of derivative settlements on average price (per Mcf) | 0.71 | 0.05 | 0.66 | 1,320 | % | |||||||||
Natural gas net of hedging (per Mcf) | $ | 1.52 | $ | 1.86 | $ | (0.34 | ) | (18 | )% | |||||
Average NYMEX price for natural gas (per Mcf) | $ | 2.51 | $ | 2.85 | $ | (0.34 | ) | (12 | )% | |||||
Natural gas differential from NYMEX | (1.70 | ) | (1.04 | ) | (0.66 | ) | (63 | )% | ||||||
NGL (per Bbl) | $ | 16.24 | $ | 26.52 | $ | (10.28 | ) | (39 | )% | |||||
Net production: | ||||||||||||||
Oil (MBbls) | 3,922 | 2,845 | 1,077 | 38 | % | |||||||||
Natural gas (MMcf) | 9,954 | 7,572 | 2,382 | 31 | % | |||||||||
NGL (MBbls) | 1,346 | 1,127 | 219 | 19 | % | |||||||||
Total (MBoe)(1) | 6,927 | 5,235 | 1,692 | 32 | % | |||||||||
Average daily net production volume: | ||||||||||||||
Oil (Bbls/d) | 43,105 | 31,271 | 11,834 | 38 | % | |||||||||
Natural gas (Mcf/d) | 109,392 | 83,205 | 26,187 | 31 | % | |||||||||
NGL (Bbls/d) | 14,785 | 12,389 | 2,396 | 19 | % | |||||||||
Total (Boe/d)(1) | 76,122 | 57,528 | 18,594 | 32 | % |
(1) | Calculated by converting natural gas to oil equivalent barrels at a ratio of six Mcf of natural gas to one Bbl of oil. |
For the Three Months Ended June 30, | Increase/(Decrease) | |||||||||||||
2019 | 2018 | $ | % | |||||||||||
Operating costs (in thousands): | ||||||||||||||
Lease operating expenses | $ | 34,885 | $ | 19,182 | $ | 15,703 | 82 | % | ||||||
Severance and ad valorem taxes | 17,186 | 14,208 | 2,978 | 21 | % | |||||||||
Gathering, processing and transportation expenses | 16,243 | 15,296 | 947 | 6 | % | |||||||||
Operating costs per Boe: | ||||||||||||||
Lease operating expenses | $ | 5.04 | $ | 3.66 | $ | 1.38 | 38 | % | ||||||
Severance and ad valorem taxes | 2.48 | 2.71 | (0.23 | ) | (8 | )% | ||||||||
Gathering, processing and transportation expenses | 2.34 | 2.92 | (0.58 | ) | (20 | )% |
For the Three Months Ended June 30, | |||||||
(in thousands, except per Boe data) | 2019 | 2018 | |||||
Depreciation, depletion and amortization | $ | 112,114 | $ | 74,946 | |||
Depreciation, depletion and amortization per Boe | $ | 16.18 | $ | 14.32 |
For the Three Months Ended June 30, | |||||||
(in thousands) | 2019 | 2018 | |||||
Geological and geophysical costs | $ | 3,179 | $ | 1,204 | |||
Stock-based compensation | 682 | 489 | |||||
Exploratory dry hole costs | — | 174 | |||||
Exploration expense | $ | 3,861 | $ | 1,867 |
For the Three Months Ended June 30, | |||||||
(in thousands) | 2019 | 2018 | |||||
Cash general and administrative expenses | $ | 12,359 | $ | 9,643 | |||
Stock-based compensation | 6,076 | 4,166 | |||||
General and administrative expenses | $ | 18,435 | $ | 13,809 |
For the Three Months Ended June 30, | |||||||
(in thousands) | 2019 | 2018 | |||||
Credit facility | $ | 879 | $ | 687 | |||
5.375% Senior Notes due 2026 | 5,375 | 5,375 | |||||
6.875% Senior Notes due 2027 | 8,594 | — | |||||
Amortization of debt issuance costs and debt discount | 775 | 427 | |||||
Interest capitalized | (1,186 | ) | (698 | ) | |||
Total | $ | 14,437 | $ | 5,791 |
For the Three Months Ended June 30, | |||||||
(in thousands) | 2019 | 2018 | |||||
Cash settlement gains (losses) | $ | 6,388 | $ | 5,163 | |||
Non-cash mark-to-market derivative gain (loss) | (4,260 | ) | 11,534 | ||||
Total | $ | 2,128 | $ | 16,697 |
For the Six Months Ended June 30, | Increase/(Decrease) | |||||||||||||
2019 | 2018 | $ | % | |||||||||||
Net revenues (in thousands): | ||||||||||||||
Oil sales | $ | 389,859 | $ | 348,997 | $ | 40,862 | 12 | % | ||||||
Natural gas sales | 20,585 | 32,301 | (11,716 | ) | (36 | )% | ||||||||
NGL sales | 48,364 | 52,363 | (3,999 | ) | (8 | )% | ||||||||
Oil and gas sales | $ | 458,808 | $ | 433,661 | $ | 25,147 | 6 | % | ||||||
Average sales prices: | ||||||||||||||
Oil (per Bbl) | $ | 51.51 | $ | 61.37 | $ | (9.86 | ) | (16 | )% | |||||
Effect of derivative settlements on average price (per Bbl) | (0.20 | ) | 0.89 | (1.09 | ) | (122 | )% | |||||||
Oil net of hedging (per Bbl) | $ | 51.31 | $ | 62.26 | $ | (10.95 | ) | (18 | )% | |||||
Average NYMEX price for oil (per Bbl) | $ | 57.36 | $ | 65.55 | $ | (8.19 | ) | (12 | )% | |||||
Oil differential from NYMEX | (5.85 | ) | (4.18 | ) | (1.67 | ) | (40 | )% | ||||||
Natural gas (per Mcf) | $ | 1.09 | $ | 2.12 | $ | (1.03 | ) | (49 | )% | |||||
Effect of derivative settlements on average price (per Mcf) | 0.40 | 0.03 | 0.37 | 1,233 | % | |||||||||
Natural gas net of hedging (per Mcf) | $ | 1.49 | $ | 2.15 | $ | (0.66 | ) | (31 | )% | |||||
Average NYMEX price for natural gas (per Mcf) | $ | 2.69 | $ | 2.96 | $ | (0.27 | ) | (9 | )% | |||||
Natural gas differential from NYMEX | (1.60 | ) | (0.84 | ) | (0.76 | ) | (90 | )% | ||||||
NGL (per Bbl) | $ | 17.99 | $ | 27.99 | $ | (10.00 | ) | (36 | )% | |||||
Net production: | ||||||||||||||
Oil (MBbls) | 7,568 | 5,687 | 1,881 | 33 | % | |||||||||
Natural gas (MMcf) | 18,918 | 15,255 | 3,663 | 24 | % | |||||||||
NGLs (MBbls) | 2,689 | 1,871 | 818 | 44 | % | |||||||||
Total (MBoe)(1) | 13,410 | 10,101 | 3,309 | 33 | % | |||||||||
Average daily net production volume: | ||||||||||||||
Oil (Bbls/d) | 41,814 | 31,421 | 10,393 | 33 | % | |||||||||
Natural gas (Mcf/d) | 104,521 | 84,283 | 20,238 | 24 | % | |||||||||
NGLs (Bbls/d) | 14,856 | 10,340 | 4,516 | 44 | % | |||||||||
Total (Boe/d)(1) | 74,089 | 55,808 | 18,281 | 33 | % |
(1) | Calculated by converting natural gas to oil equivalent barrels at a ratio of six Mcf of natural gas to one Bbl of oil. |
For the Six Months Ended June 30, | Increase/(Decrease) | |||||||||||||
2019 | 2018 | $ | % | |||||||||||
Operating costs (in thousands): | ||||||||||||||
Lease operating expenses | $ | 64,747 | $ | 35,458 | $ | 29,289 | 83 | % | ||||||
Severance and ad valorem taxes | 33,306 | 28,381 | 4,925 | 17 | % | |||||||||
Gathering, processing and transportation expenses | 31,267 | 29,124 | 2,143 | 7 | % | |||||||||
Operating costs per Boe: | ||||||||||||||
Lease operating expenses | $ | 4.83 | $ | 3.51 | $ | 1.32 | 38 | % | ||||||
Severance and ad valorem taxes | 2.48 | 2.81 | (0.33 | ) | (12 | )% | ||||||||
Gathering, processing and transportation expenses | 2.33 | 2.88 | (0.55 | ) | (19 | )% |
For the Six Months Ended June 30, | |||||||
(in thousands, except per Boe data) | 2019 | 2018 | |||||
Depreciation, depletion and amortization | $ | 208,672 | $ | 140,956 | |||
Depreciation, depletion and amortization per Boe | $ | 15.56 | $ | 13.95 |
For the Six Months Ended June 30, | |||||||
(in thousands) | 2019 | 2018 | |||||
Geological and geophysical costs | $ | 5,095 | $ | 4,049 | |||
Stock-based compensation | 1,282 | 870 | |||||
Exploratory dry hole costs | — | 395 | |||||
Exploration expense | $ | 6,377 | $ | 5,314 |
For the Six Months Ended June 30, | |||||||
(in thousands) | 2019 | 2018 | |||||
Cash general and administrative expenses | $ | 24,594 | $ | 19,988 | |||
Stock-based compensation | 11,959 | 8,118 | |||||
General and administrative expenses | $ | 36,553 | $ | 28,106 |
For the Six Months Ended June 30, | |||||||
(in thousands) | 2019 | 2018 | |||||
Credit facility | $ | 4,611 | $ | 1,470 | |||
5.375% Senior Notes due 2026 | 10,750 | 10,750 | |||||
6.875% Senior Notes due 2027 | 10,122 | — | |||||
Amortization of debt issuance costs and debt discount | 1,287 | 806 | |||||
Interest capitalized | (2,173 | ) | (1,422 | ) | |||
Total | $ | 24,597 | $ | 11,604 |
For the Six Months Ended June 30, | |||||||
(in thousands) | 2019 | 2018 | |||||
Cash settlement gains (losses) | $ | 6,011 | $ | 5,524 | |||
Non-cash mark-to-market derivative gain (loss) | (9,754 | ) | 19,016 | ||||
Total | $ | (3,743 | ) | $ | 24,540 |
(in millions) | For the Six Months Ended June 30, 2019 | ||
Drilling and completion capital expenditures | $ | 368.2 | |
Facilities, infrastructure and other | 90.2 | ||
Land | 24.2 | ||
Total capital expenditures | $ | 482.6 |
For the Six Months Ended June 30, | |||||||
(in thousands) | 2019 | 2018 | |||||
Net cash provided by operating activities | $ | 280,194 | $ | 323,902 | |||
Net cash used in investing activities | (458,520 | ) | (433,371 | ) | |||
Net cash provided by financing activities | 188,643 | 26,274 |
Period | Volume (Bbls) | Volume (Bbls/d) | Weighted Average Differential ($/Bbl)(1) | ||||||||
Crude oil basis swaps | July 2019 - September 2019 | 1,380,000 | 15,000 | $ | (9.03 | ) | |||||
October 2019 - December 2019 | 920,000 | 10,000 | (4.24 | ) |
(1) | These oil basis swap transactions are settled based on the difference between the arithmetic average of the ARGUS MIDLAND WTI and ARGUS WTI CUSHING indices, during each applicable settlement period. |
Period | Volume (MMBtu) | Volume (MMBtu/d) | Weighted Average Fixed Price ($/MMBtu)(1) | ||||||||
Natural Gas Swaps - Henry Hub | July 2019 - December 2019 | 5,520,000 | 30,000 | $ | 2.78 | ||||||
Natural Gas Swaps - West Texas WAHA | July 2019 - December 2019 | 2,760,000 | 15,000 | 1.61 | |||||||
Period | Volume (MMBtu) | Volume (MMBtu/d) | Weighted Average Differential ($/MMBtu)(2) | ||||||||
Natural gas basis swaps | July 2019 - December 2019 | 6,440,000 | 35,000 | $ | (1.31 | ) |
(1) | These natural gas swap contracts are settled based on either i) the NYMEX Henry Hub price or ii) the Inside FERC West Texas WAHA price of natural gas, as applicable, as of the specified settlement date. |
(2) | These natural gas basis swap contracts are settled based on the difference between the Inside FERC’s West Texas WAHA price and the NYMEX price of natural gas during each applicable settlement period. |
(in thousands) | Commodity derivative asset (liability) | |||
Net fair value of oil and gas derivative contracts outstanding as of December 31, 2018 | $ | (4,419 | ) | |
Contracts settled | (6,011 | ) | ||
Change in the futures curve of forecasted commodity prices(1) | (3,743 | ) | ||
Net fair value of oil and gas derivative contracts outstanding as of June 30, 2019 | $ | (14,173 | ) |
(1) | At inception, new derivative contracts entered into by us have no intrinsic value. |
Exhibit Number | Description of Exhibit | |
3.1 | ||
3.2 | ||
3.3 | ||
3.4 | ||
3.5 | ||
3.6 | ||
4.1 | ||
10.1# | ||
10.2*# | ||
10.3*# | ||
31.1* | ||
31.2* | ||
32.1* | ||
32.2* | ||
101.INS* | Inline XBRL Instance Document - The instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. | |
101.SCH* | Inline XBRL Taxonomy Extension Schema Document. | |
101.CAL* | Inline XBRL Taxonomy Extension Calculation Linkbase Document. | |
101.DEF* | Inline XBRL Taxonomy Extension Definition Linkbase Document. | |
101.LAB* | Inline XBRL Taxonomy Extension Label Linkbase Document. | |
101.PRE* | Inline XBRL Taxonomy Extension Presentation Linkbase Document. |
CENTENNIAL RESOURCE DEVELOPMENT, INC. | ||
By: | /s/ GEORGE S. GLYPHIS | |
George S. Glyphis Vice President, Chief Financial Officer and Assistant Secretary | ||
Date: | August 5, 2019 |
I. | CASH COMPENSATION |
II. | EQUITY COMPENSATION |
III. | COMPENSATION LIMITS |
CENTENNIAL RESOURCE DEVELOPMENT, INC. 2016 LONG TERM INCENTIVE PLAN |
Participant: | [__________] |
Grant Date: | July 30, 2019 |
Performance Period: | July 1, 2019 through June 30, 2022 |
Target Number of PSUs: | [__________] |
CENTENNIAL RESOURCE DEVELOPMENT, INC. | PARTICIPANT | ||
By: | |||
Name: | [Participant Name] | ||
Title: |
Callon Petroleum Company | Oasis Petroleum Inc. |
Cimarex Energy Co. | Parsley Energy, Inc. |
Jagged Peak Energy Inc. | PDC Energy, Inc. |
Laredo Petroleum, Inc. | SM Energy Company |
Matador Resources Company | WPX Energy, Inc. |
Relative TSR Performance Plan | ||
Performance Rank | TSR Percentile Ranking | Payout as % of Target Number of PSUs |
1 | 100% | 200% |
2 | 90% | 180% |
3 | 80% | 160% |
4 | 70% | 140% |
5 | 60% | 120% |
6 | 50% | 100% |
7 | 40% | 75% |
8 | 30% | 50% |
9 | 20% | 0% |
10 | 10% | 0% |
11 | 0% | 0% |
1. | I have reviewed this Quarterly Report on Form 10-Q (this “report”) of Centennial Resource Development, Inc. (the “registrant”); |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have: |
a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c. | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d. | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
CENTENNIAL RESOURCE DEVELOPMENT, INC. | ||
By: | /s/ MARK G. PAPA | |
Mark G. Papa Chief Executive Officer (Principal Executive Officer) |
1. | I have reviewed this Quarterly Report on Form 10-Q (this “report”) of Centennial Resource Development, Inc. (the “registrant”); |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have: |
a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c. | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d. | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
CENTENNIAL RESOURCE DEVELOPMENT, INC. | ||
By: | /s/ GEORGE S. GLYPHIS | |
George S. Glyphis Vice President, Chief Financial Officer and Assistant Secretary (Principal Financial Officer) |
CENTENNIAL RESOURCE DEVELOPMENT, INC. | ||
By: | /s/ MARK G. PAPA | |
Mark G. Papa Chief Executive Officer (Principal Executive Officer) |
CENTENNIAL RESOURCE DEVELOPMENT, INC. | ||
By: | /s/ GEORGE S. GLYPHIS | |
George S. Glyphis Vice President, Chief Financial Officer and Assistant Secretary (Principal Financial Officer) |
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares |
Jun. 30, 2019 |
Dec. 31, 2018 |
---|---|---|
Preferred stock, par value (USD per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized (shares) | 1,000,000 | 1,000,000 |
Common stock, par value (USD per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized (shares) | 620,000,000 | 620,000,000 |
Series A Preferred Stock | ||
Preferred stock, shares issued (shares) | 1 | 1 |
Preferred stock, shares outstanding (shares) | 1 | 1 |
Class A | ||
Common stock, shares issued (shares) | 266,254,971 | 265,859,273 |
Common stock, shares outstanding (shares) | 264,431,567 | 264,323,328 |
Convertible Class C | ||
Common stock, shares issued (shares) | 12,003,183 | 12,003,183 |
Common stock, shares outstanding (shares) | 12,003,183 | 12,003,183 |
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|
Operating revenues | ||||
Oil and gas sales | $ 244,239 | $ 217,763 | $ 458,808 | $ 433,661 |
Operating expenses | ||||
Lease operating expenses | 34,885 | 19,182 | 64,747 | 35,458 |
Severance and ad valorem taxes | 17,186 | 14,208 | 33,306 | 28,381 |
Gathering, processing and transportation expenses | 16,243 | 15,296 | 31,267 | 29,124 |
Depreciation, depletion and amortization | 112,114 | 74,946 | 208,672 | 140,956 |
Impairment and abandonment expense | 4,418 | 1,784 | 35,682 | 1,784 |
Exploration expense | 3,861 | 1,867 | 6,377 | 5,314 |
General and administrative expenses | 18,435 | 13,809 | 36,553 | 28,106 |
Total operating expenses | 207,142 | 141,092 | 416,604 | 269,123 |
Net gain (loss) on sale of long-lived assets | 9 | (141) | 7 | (126) |
Income from operations | 37,106 | 76,530 | 42,211 | 164,412 |
Other income (expense) | ||||
Interest expense | (14,437) | (5,791) | (24,597) | (11,604) |
Net gain (loss) on derivative instruments | 2,128 | 16,697 | (3,743) | 24,540 |
Other income (expense) | 133 | (14) | 259 | (17) |
Total other income (expense) | (12,176) | 10,892 | (28,081) | 12,919 |
Income before income taxes | 24,930 | 87,422 | 14,130 | 177,331 |
Income tax expense | (5,928) | (19,940) | (3,665) | (39,077) |
Net income | 19,002 | 67,482 | 10,465 | 138,254 |
Less: Net income attributable to noncontrolling interest | 1,125 | 3,941 | 700 | 8,623 |
Net income attributable to Class A Common Stock | $ 17,877 | $ 63,541 | $ 9,765 | $ 129,631 |
Income per share of Class A Common Stock: | ||||
Basic (USD per share) | $ 0.07 | $ 0.24 | $ 0.04 | $ 0.49 |
Diluted (USD per share) | $ 0.07 | $ 0.24 | $ 0.04 | $ 0.49 |
Basis of Presentation |
6 Months Ended |
---|---|
Jun. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Note 1—Basis of Presentation Description of Business Centennial Resource Development, Inc. is an independent oil and natural gas company focused on the development of unconventional oil and associated liquids-rich natural gas reserves in the Permian Basin. All of the Company’s assets are concentrated exclusively in the Delaware Basin, a sub-basin of the Permian Basin, and its properties consist of large, contiguous acreage blocks primarily in Reeves County in West Texas and Lea County in New Mexico. Unless otherwise specified or the context otherwise requires, all references in these notes to “Centennial” or the “Company” are to Centennial Resource Development, Inc. and its consolidated subsidiary, Centennial Resource Production, LLC (“CRP”). Principles of Consolidation and Basis of Presentation The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) and the rules and regulations of the United States Securities and Exchange Commission (“SEC”) for interim financial reporting. Accordingly, certain disclosures normally included in an Annual Report on Form 10-K have been omitted. The consolidated financial statements and related notes included in this Quarterly Report should be read in conjunction with the Company’s consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K for the period ended December 31, 2018 (the “2018 Annual Report”). Except as disclosed herein, there have been no material changes to the information disclosed in the notes to the consolidated financial statements included in the Company’s 2018 Annual Report. In the opinion of management, all normal, recurring adjustments and accruals considered necessary to present fairly, in all material respects, the Company’s interim financial results have been included. Operating results for the periods presented are not necessarily indicative of expected results for the full year. The consolidated financial statements include the accounts of the Company and its majority owned subsidiary CRP, and CRP’s wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. Noncontrolling interest represents third-party ownership in CRP, and is presented as a component of equity. As of June 30, 2019 and December 31, 2018, the noncontrolling interest ownership of CRP was 4.3%. Use of Estimates The preparation of the Company’s consolidated financial statements requires the Company’s management to make various assumptions, judgments and estimates to determine the reported amounts of assets, liabilities, revenues and expenses, and the disclosures of commitments and contingencies. Changes in these assumptions, judgments and estimates will occur as a result of the passage of time and the occurrence of future events and, accordingly, actual results could differ from amounts previously established. The more significant areas requiring the use of assumptions, judgments and estimates include: (i) oil and natural gas reserves; (ii) cash flow estimates used in impairment tests of long-lived assets; (iii) depreciation, depletion and amortization; (iv) asset retirement obligations; (v) determining fair value and allocating purchase price in connection with business combinations and asset acquisitions; (vi) accrued revenues and related receivables; (vii) accrued liabilities; (viii) valuation of derivatives; and (ix) deferred income taxes. Income Taxes Income tax expense during interim periods is based on applying an estimated annual effective income tax rate to the Company’s year-to-date income, plus any significant unusual or infrequently occurring items which are recorded in the interim period. The computation of the annual estimated effective tax rate at each interim period requires certain estimates and significant judgment including, but not limited to, the expected operating income for the year, projections of the proportion of income earned and taxed in various state jurisdictions, permanent and temporary differences and the likelihood of recovering deferred tax assets generated. The accounting estimates used to compute the provision for income taxes may change as new events occur, more historical trend data becomes available, additional information becomes known or as the tax environment changes. Recently Issued Accounting Standards In August 2018, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2018-13, Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement, which updates the disclosure requirements for fair value measurements in Accounting Standard Codification (“ASC”) Topic 820, Fair Value Measurement (“ASC Topic 820”). Certain disclosure requirements under ASC Topic 820 were removed, modified or added in order to improve the effectiveness of the fair value note included in the financial statements. This update will be effective for financial statements issued for fiscal years beginning after December 31, 2019, including interim periods within those fiscal years. An entity is permitted to early adopt any removed or modified disclosures and delay adoption of the additional disclosures until the effective date. The Company is currently assessing the impact of this update on the Company's consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, Leases, which created ASC Topic 842, Leases (“ASC Topic 842”), superseding current lease requirements under ASC Topic 840, Leases. Subsequently in 2018, the FASB issued various ASUs which provide a practical expedient for the evaluation of existing land easement agreements, optionality in the adoption transition method, and additional implementation guidance. ASC Topic 842 and its related amendments apply to any entity that enters into a lease, with some specified scope exemptions. Under ASC Topic 842, a lessee should recognize in its consolidated balance sheet a liability to make lease payments (the lease liability) and a right-of-use asset, representing its right to use the underlying asset for the lease term. While there were no major changes to lessor accounting, changes were made to align key aspects with revenue recognition guidance. ASC Topic 842 was effective for public entities for fiscal years, beginning after December 15, 2018, including interim periods within those fiscal years, with early adoption permitted. The standard permits retrospective application using either of the following methodologies: (i) application of the new standard at the earliest presented period or (ii) application of the new standard at the adoption date with a cumulative-effect adjustment recognized to retained earnings. The Company has adopted this guidance as of January 1, 2019, the effective date, and elected to recognize a cumulative-effect adjustment at the time of adoption. The Company has elected the following practical expedients that allows an entity to carry forward historical accounting treatment relating to (i) lease identification and classification for existing leases upon adoption and (ii) existing land easements. The adoption of ASC 842 resulted in the recognition of Operating lease right-of-use assets and Operating lease liabilities in the Company’s Consolidated Balance Sheets for existing operating leases including drilling rig contracts, office rental agreements, and other wellhead equipment. This adoption did not have a significant impact on the Company’s Consolidated Statements of Operations or Consolidated Statements of Cash Flows. Refer to Note 12—Leases for additional information.
|
Accounts Receivable, Accounts Payable and Accrued Expenses |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounts Receivable, Accounts Payable and Accrued Expenses | Note 2—Accounts Receivable, Accounts Payable and Accrued Expenses Accounts receivable are comprised of the following:
Accounts payable and accrued expenses are comprised of the following:
|
Long-Term Debt |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Long-Term Debt | Note 3—Long-Term Debt The following table provides information about the Company’s long-term debt as of the dates indicated:
Credit Agreement On May 4, 2018, CRP, the Company’s consolidated subsidiary, entered into an amended and restated credit agreement with a syndicate of banks that as of June 30, 2019, had a borrowing base of $1.2 billion and elected commitments of $800.0 million. The credit agreement provides for a five-year secured revolving credit facility, maturing on May 4, 2023. As of June 30, 2019, the Company had no borrowings outstanding and $799.2 million in available borrowing capacity, which was net of $0.8 million in letters of credit outstanding. The amount available to be borrowed under the Company’s credit agreement is equal to the lesser of (i) the borrowing base, (ii) aggregate elected commitments, or (iii) $1.5 billion. The borrowing base is redetermined semi-annually in the spring and fall by the lenders in their sole discretion. It also allows for two optional borrowing base redeterminations on January 1 and July 1. The borrowing base depends on, among other things, the quantities of CRP’s proved oil and natural gas reserves, estimated cash flows from these reserves, and the Company’s commodity hedge positions. Upon a redetermination of the borrowing base, if actual borrowings exceed the revised borrowing capacity, CRP could be required to immediately repay a portion of its debt outstanding under the credit agreement. Borrowings under CRP’s revolving credit facility are guaranteed by certain of its subsidiaries. Borrowings under CRP’s revolving credit facility may be base rate loans or LIBOR loans. Interest is payable quarterly for base rate loans and at the end of the applicable interest period for LIBOR loans. LIBOR loans bear interest at LIBOR (adjusted for statutory reserve requirements) plus an applicable margin, which ranged from 125 to 225 basis points as of June 30, 2019, depending on the percentage of the borrowing base utilized. Base rate loans bear interest at a rate per annum equal to the greatest of: (i) the agent bank’s prime rate; (ii) the federal funds effective rate plus 50 basis points; and (iii) the adjusted LIBOR rate for a one-month interest period plus 100 basis points, plus an applicable margin, which ranged from 25 to 125 basis points as of June 30, 2019, depending on the percentage of the borrowing base utilized. CRP also pays a commitment fee on unused amounts under its facility of a range of 37.5 to 50 basis points. The applicable margins for the LIBOR loans and base rate loans referenced above reflect interest rate reductions that became effective on April 26, 2019 and are applicable as long as CRP’s total leverage ratio (as described below) is less than or equal to 3.0 to 1.0. If CRP’s total leverage ratio exceeds 3.0 to 1.0 in the future, the original applicable margins under the credit agreement would revert to the range from 150 to 250 basis points for LIBOR loans and 50 to 150 basis points for base rate loans, in each case depending on the percentage of the borrowing base utilized. CRP’s credit agreement contains restrictive covenants that limit its ability to, among other things: (i) incur additional indebtedness; (ii) make investments and loans; (iii) enter into mergers; (iv) make or declare dividends; (v) enter into commodity hedges exceeding a specified percentage of the Company’s expected production; (vi) enter into interest rate hedges exceeding a specified percentage of its outstanding indebtedness; (vii) incur liens; (viii) sell assets; and (ix) engage in transactions with affiliates. CRP’s credit agreement also requires it to maintain compliance with the following financial ratios: (i) a current ratio, which is the ratio of CRP’s consolidated current assets (including unused commitments under its revolving credit facility and excluding non-cash derivative assets and certain restricted cash) to its consolidated current liabilities (excluding the current portion of long-term debt under the credit agreement and non-cash derivative liabilities), of not less than 1.0 to 1.0; and (ii) a leverage ratio, which is the ratio of Total Funded Debt (as defined in CRP’s credit agreement) to consolidated EBITDAX (as defined in CRP’s credit agreement) for the rolling four fiscal quarter period ending on such day, of not greater than 4.0 to 1.0. CRP was in compliance with the covenants and the financial ratios described above as of June 30, 2019 and through the filing of this Quarterly Report. Senior Unsecured Notes On March 15, 2019, CRP issued $500.0 million of 6.875% senior notes due 2027 (the “2027 Senior Notes”) in a 144A private placement at a price equal to 99.235% of par that resulted in net proceeds to CRP of $489.0 million, after deducting the original issuance discount of $3.8 million and debt issuance costs of $7.2 million. Interest is payable on the 2027 Senior Notes semi-annually in arrears on each April 1 and October 1, commencing October 1, 2019. On November 30, 2017, CRP issued at par $400.0 million of 5.375% senior notes due 2026 (the “2026 Senior Notes” and collectively with the 2027 Senior Notes, the “Senior Notes”) in a 144A private placement that resulted in net proceeds to CRP of $391.0 million, after deducting $9.0 million in debt issuance costs. Interest is payable on the 2026 Senior Notes semi-annually in arrears on each January 15 and July 15, which commenced on July 15, 2018. The Senior Notes are fully and unconditionally guaranteed on a senior unsecured basis by each of CRP’s current subsidiaries that guarantee CRP’s revolving credit facility. The Senior Notes are not guaranteed by the Company, nor is the Company subject to the terms of the indentures governing the Senior Notes. At any time prior to January 15, 2021 (for the 2026 Senior Notes) and April 1, 2022 (for the 2027 Senior Notes), the “Optional Redemption Dates,” CRP may, on any one or more occasions, redeem up to 35% of the aggregate principal amount of either series of Senior Notes with an amount of cash not greater than the net cash proceeds of certain equity offerings at a redemption price equal to 105.375% (for the 2026 Senior Notes) and 106.875% (for the 2027 Senior Notes) of the principal amount of the Senior Notes of the applicable series redeemed, plus any accrued and unpaid interest to the date of redemption; provided that at least 65% of the aggregate principal amount of such series of Senior Notes issued under the indenture governing such series remains outstanding immediately after such redemption, and the redemption occurs within 180 days of the closing date of such equity offering. At any time prior to Optional Redemption Dates, CRP may, on any one or more occasions, redeem all or a part of the Senior Notes at a redemption price equal to 100% of the principal amount of the Senior Notes redeemed, plus a “make-whole” premium, and any accrued and unpaid interest as of the date of redemption. On and after the Optional Redemption Dates, CRP may redeem the Senior Notes, in whole or in part, at redemption prices expressed as percentages of principal amount plus accrued and unpaid interest to the redemption date. If CRP experiences certain defined changes of control (and, in some cases, followed by a ratings decline), each holder of the Senior Notes may require CRP to repurchase all or a portion of its Senior Notes for cash at a price equal to 101% of the aggregate principal amount of such Senior Notes, plus any accrued but unpaid interest to the date of repurchase. The indentures governing the Senior Notes contains covenants that, among other things and subject to certain exceptions and qualifications, limit CRP’s ability and the ability of CRP’s restricted subsidiaries to: (i) incur or guarantee additional indebtedness or issue certain types of preferred stock; (ii) pay dividends on capital stock or redeem, repurchase or retire capital stock or subordinated indebtedness; (iii) transfer or sell assets; (iv) make investments; (v) create certain liens; (vi) enter into agreements that restrict dividends or other payments from their subsidiaries to them; (vii) consolidate, merge or transfer all or substantially all of their assets; (viii) engage in transactions with affiliates; and (ix) create unrestricted subsidiaries. CRP was in compliance with these covenants as of June 30, 2019 and through the filing of this Quarterly Report. Upon an Event of Default (as defined in the indentures governing the Senior Notes), the trustee or the holders of at least 25% of the aggregate principal amount of then outstanding Senior Notes may declare the Senior Notes immediately due and payable. In addition, a default resulting from certain events of bankruptcy or insolvency with respect to CRP, any restricted subsidiary of CRP that is a significant subsidiary, or any group of restricted subsidiaries that, taken together, would constitute a significant subsidiary, will automatically cause all outstanding Senior Notes to become due and payable.
|
Asset Retirement Obligations |
6 Months Ended | ||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||
Asset Retirement Obligation Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||
Asset Retirement Obligations | Note 4—Asset Retirement Obligations The following table summarizes the changes in the Company’s asset retirement obligations (“ARO”) associated with our working interests in oil and gas properties for the six months ended June 30, 2019:
ARO reflect the present value of the estimated future costs associated with the plugging and abandonment of oil and natural gas wells, removal of equipment and facilities from leased acreage and land restoration in accordance with applicable local, state and federal laws. Inherent in the fair value calculation of ARO are numerous assumptions and judgments including the ultimate plug and abandonment settlement amounts, inflation factors, credit adjusted discount rates and timing of settlement. To the extent future revisions to these assumptions impact the value of the existing ARO liability, a corresponding offsetting adjustment is made to the oil and gas property balance. Changes in the liability due to the passage of time are recognized as an increase in the carrying amount of the liability and as accretion expense.
|
Stock-Based Compensation |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-Based Compensation | Note 5—Stock-Based Compensation Long Term Incentive Plan On October 7, 2016, the stockholders of the Company approved the Centennial Resource Development, Inc. 2016 Long Term Incentive Plan (the “LTIP”). An aggregate of 16,500,000 shares of Class A Common Stock were authorized for issuance under the LTIP, and as of June 30, 2019, the Company had 8,907,729 shares of Class A Common Stock available for future grants. The LTIP provides for grants of stock options (including incentive stock options and nonqualified stock options), stock appreciation rights, restricted stock, dividend equivalents, restricted stock units and other stock or cash-based awards. Stock-based compensation expense is recognized within both General and administrative expenses and Exploration expense in the Consolidated Statements of Operations. The expense amounts in the table below may not be representative of future expense amounts to be recognized as the value of future awards may vary from historical award amounts. The Company accounts for forfeitures of awards granted under the LTIP as they occur in determining compensation expense. The following table summarizes stock-based compensation expense recognized for the periods presented:
Restricted Stock The following table provides information about restricted stock activity during the six months ended June 30, 2019:
The Company grants service-based restricted stock awards to executive officers and employees, which vest ratably over a three-year service period, and to directors, which vest over a one-year service period. Compensation cost for the service-based restricted stock awards is based on the market price of the Company’s Class A common stock on the grant date, and such costs are recognized ratably over the applicable vesting period. The weighted average grant-date fair value for restricted stock awards granted was $12.48 and $18.87 per share for the six months ended June 30, 2019 and 2018, respectively. The total fair value of restricted stock awards that vested during the six months ended June 30, 2019 and 2018 was $1.5 million and $1.4 million, respectively. Unrecognized compensation cost related to restricted shares that were unvested as of June 30, 2019 was $20.8 million, which the Company expects to recognize over a weighted average period of 1.9 years. Stock Options Stock options that have been granted under the LTIP expire ten years from the grant date and vest ratably over a three-year service period. The exercise price for an option granted under the LTIP is the closing price of the Company’s Class A Common Stock as reported on the NASDAQ on the date of grant. Compensation cost for stock options is based on the grant-date fair value of the award which is then recognized ratably over the vesting period of three years. The Company estimates the fair value using the Black-Scholes option-pricing model. Expected volatilities are based on the weighted average asset volatility of the Company and identified set of comparable companies. Expected term is based on the simplified method and is estimated as the mid-point between the weighted average vesting term and the time to expiration as of the grant date. The Company uses U.S. Treasury bond rates in effect at the grant date for its risk-free interest rates. The following table summarizes the assumptions and related information used to determine the grant-date fair value of stock options awarded during the six months ended June 30, 2019 and 2018:
The following table provides information about stock option awards outstanding during the six months ended June 30, 2019:
The total fair value of stock options that vested during the six months ended June 30, 2019 and 2018 was $4.1 million and $3.7 million, respectively. The intrinsic value of stock options exercised was approximately $0.2 million for the six months ended June 30, 2018 and there were no stock options exercised for the six months ended June 30, 2019. As of June 30, 2019, there was $8.7 million of unrecognized compensation cost related to unvested stock options, which the Company expects to recognize on a pro-rata basis over a weighted average period of 1.4 years. Performance Stock Units During the six months ended June 30, 2019 and 2018, there was no significant performance stock units activity. As of June 30, 2019, there was $4.4 million of unrecognized compensation cost related to performance stock units that were unvested, which the Company expects to recognize on a pro-rata basis over a weighted average period of 1.7 years.
|
Derivative Instruments |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments | Note 6—Derivative Instruments The Company is exposed to certain risks relating to its ongoing business operations and may use derivative instruments to manage its exposure to commodity price risk from time to time. Commodity Derivative Contracts Historically, prices received for crude oil and natural gas production have been volatile because of supply and demand factors, worldwide political factors, general economic conditions and seasonal weather patterns. The Company may periodically use derivative instruments, such as swaps, costless collars and basis swaps, to mitigate its exposure to declines in commodity prices and to the corresponding negative impacts such declines can have on its cash flow from operations, returns on capital and other financial results. While the use of these instruments limits the downside risk of adverse price changes, their use may also limit future revenues from favorable price changes. The Company does not enter into derivative contracts for speculative or trading purposes. Commodity Swap Contracts. The Company may opportunistically use commodity derivative instruments known as fixed price swaps to realize a known price for a specific volume of production as well as basis swaps to hedge the difference between the index price and a local index price. All transactions are settled in cash with one party paying the other for the resulting difference in price multiplied by the contract volume. The following table summarizes the approximate volumes and average contract prices of swap contracts the Company had in place as of June 30, 2019:
Derivative Instrument Reporting. The Company’s oil and natural gas derivative instruments have not been designated as hedges for accounting purposes; therefore, all gains and losses are recognized in the Company’s Consolidated Statements of Operations. All derivative instruments are recorded at fair value in the Consolidated Balance Sheets, other than derivative instruments that meet the “normal purchase normal sale” exclusion, and any fair value gains and losses are recognized in current period earnings. The following table presents the impact of our derivative instruments in our Consolidated Statements of Operations for the periods presented:
Offsetting of Derivative Assets and Liabilities. The Company’s commodity derivatives are included in the accompanying Consolidated Balance Sheets as derivative assets and liabilities. The Company nets its financial derivative instrument fair value amounts executed with the same counterparty pursuant to ISDA master netting agreements, which provide for net settlement over the term of the contract and in the event of default or termination of the contract. The table below summarizes the fair value amounts and the classification in the Consolidated Balance Sheets of the Company’s derivative contracts outstanding at the respective balance dates, as well as the gross recognized derivative assets, liabilities and offset amounts:
Contingent Features in Financial Derivative Instruments. None of the Company’s derivative instruments contain credit-risk-related contingent features. Counterparties to the Company’s financial derivative contracts are high credit-quality financial institutions that are lenders under CRP’s credit agreement. The Company uses only credit agreement participants to hedge with, since these institutions are secured equally with the holders of any CRP bank debt, which eliminates the potential need to post collateral when Centennial is in a derivative liability position. As a result, the Company is not required to post letters of credit or corporate guarantees for its derivative counterparties in order to secure contract performance obligations. In addition, the Company is exposed to credit risk associated with its derivative contracts from non-performance by its counterparties. The Company mitigates its exposure to any single counterparty by contracting with a number of financial institutions, each of which has a high credit rating and is a member under CRP’s credit facility as referenced above.
|
Fair Value Measurements |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements | Note 7—Fair Value Measurements Recurring Fair Value Measurements The Company follows FASB ASC Topic 820, Fair Value Measurement and Disclosure, which establishes a three-level valuation hierarchy for disclosure of fair value measurements. The valuation hierarchy categorizes assets and liabilities measured at fair value into one of three different levels depending on the observability of the inputs employed in the measurement. The three levels are defined as follows:
The following table presents, for each applicable level within the fair value hierarchy, our net derivative assets and liabilities, including both current and noncurrent portions, measured at fair value on a recurring basis:
Both financial and non-financial assets and liabilities are categorized within the above fair value hierarchy based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgement and considers factors specific to the asset or liability. The following is a description of the valuation methodologies used by the Company as well as the general classification of such instruments pursuant to the above fair value hierarchy. There were no transfers between any of the fair value levels during any period presented. Derivatives The Company uses Level 2 inputs to measure the fair value of oil and natural gas commodity derivatives. The Company uses industry-standard models that consider various assumptions including current market and contractual prices for the underlying instruments, implied market volatility, time value, nonperformance risk, as well as other relevant economic measures. Substantially all of these inputs are observable in the marketplace throughout the full term of the instrument and can be supported by observable data. The Company utilizes its counterparties’ valuations to assess the reasonableness of its own valuations. Refer to Note 6—Derivative Instruments for details of the gross and net derivatives assets, liabilities and offset amounts presented in the Consolidated Balance Sheets. Nonrecurring Fair Value Measurements The fair value measurements of assets acquired and liabilities assumed are measured on a nonrecurring basis on the acquisition date using an income valuation technique based on inputs that are not observable in the market and therefore represent Level 3 inputs. Significant inputs to the valuation of acquired oil and natural gas properties include estimates of: (i) reserves; (ii) production rates; (iii) future operating and development costs; (iv) future commodity prices, including price differentials; (v) future cash flows; and (vi) a market participant-based weighted average cost of capital rate. These inputs require significant judgments and estimates by the Company’s management at the time of the valuation. The initial measurement of ARO at fair value is calculated using discounted cash flow techniques and is based on internal estimates of future retirement costs associated with property, plant and equipment. Significant Level 3 inputs used in the calculation of ARO include plugging costs and reserve lives. Refer to Note 4—Asset Retirement Obligations for additional information on the Company’s ARO. Other Financial Instruments The carrying amounts of the Company’s cash, cash equivalents, accounts receivable, accounts payable, and accrued liabilities approximate their fair values because of the short-term maturities and/or liquid nature of these assets and liabilities. The Company’s Senior Notes and borrowings under its credit agreement are recorded at cost. The following table summarizes the fair values and carrying values of these instruments as of June 30, 2019 and December 31, 2018:
(2) The Senior Notes’ carrying values include associated unamortized debt issuance costs and any discounts. The Senior Notes’ fair values were determined using quoted market prices for these debt securities, a Level 1 classification in the fair value hierarchy.
|
Earnings Per Share |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share | Note 8—Earnings Per Share Basic earnings per share (“EPS”) is calculated by dividing net income available to Class A Common Stock by the weighted average shares of Class A Common Stock outstanding during each period. Diluted EPS is calculated by dividing adjusted net income available to Class A Common Stock by the weighted average shares of diluted Class A Common Stock outstanding, which includes the effect of potentially dilutive securities. Potentially dilutive securities for the diluted EPS calculation consists of (i) unvested restricted stock and performance stock units, outstanding stock options and warrants using the treasury stock method, and (ii) the Company’s Class C Common Stock using the “if-converted” method, which is net of tax. When a loss from continuing operations exists, all dilutive securities and potentially dilutive securities are anti-dilutive and are therefore excluded from the computation of diluted earnings per share. The following table reflects the allocation of net income to common shareholders and EPS computations for the periods indicated based on a weighted average number of common stock outstanding for the period:
For the three and six months ended June 30, 2019 and 2018, the following shares were excluded from the diluted earnings per share calculation as their impacts were anti-dilutive:
|
Transactions with Related Parties |
6 Months Ended |
---|---|
Jun. 30, 2019 | |
Related Party Transactions [Abstract] | |
Transactions with Related Parties | Note 9—Transactions with Related Parties Riverstone and its affiliates, beneficially own more than 10% equity interest in the Company and are therefore considered related parties. The Company has a marketing agreement with Lucid Energy Delaware, LLC (“Lucid”), an affiliate of Riverstone. The Company believes that the terms of the marketing agreement with Lucid are no less favorable to either party than those held with unaffiliated parties. For the three and six months ended June 30, 2019, the Company recognized revenues net of processing fees from this marketing agreement amounting to $0.8 million and $1.0 million, respectively, and $0.2 million and $0.3 million for the three and six months ended June 30, 2018, respectively. These revenues are recognized within Oil and gas sales and the associated processing fees are recognized within Gathering, processing and transportation expenses in the Consolidated Statements of Operations. Included in Accounts Receivable, net was $0.9 million and $0.7 million in receivables due from Lucid as of June 30, 2019 and December 31, 2018, respectively.
|
Commitments and Contingencies |
6 Months Ended |
---|---|
Jun. 30, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 10—Commitments and Contingencies Commitments The Company routinely enters into or extends operating agreements, office and equipment leases, drilling and completion rig contracts, among others, in the ordinary course of business. There has been no material, non-routine changes in commitments during the six months ended June 30, 2019. Please refer to Note 14—Commitments and Contingencies included in Part II, Item 8 in the Company’s 2018 Annual Report. Contingencies The Company may at times be subject to various commercial or regulatory claims, litigation or other legal proceedings that arise in the ordinary course of business. While the outcome of these lawsuits and claims cannot be predicted with certainty, management believes it is remote that the impact of such matters that are reasonably possible to occur will have a material adverse effect on the Company’s financial position, results of operations, or cash flows. Management is unaware of any pending litigation brought against the Company requiring a contingent liability to be recognized as of the date of these consolidated financial statements.
|
Revenues |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenues | Note 11—Revenues Revenue from Contracts with Customers Crude oil, natural gas and NGL sales are recognized at the point that control of the product is transferred to the customer and collectability is reasonably assured. Virtually all of the Company’s contract pricing provisions are tied to a market index, with certain adjustments based on, among other factors, transportation costs to an active spot market and quality differentials. As a result, the Company’s realized price of oil, natural gas, and NGLs fluctuates to remain competitive with other available oil, natural gas, and NGLs supplies both globally (in the case of crude oil) and locally. Oil and gas revenues presented within the Consolidated Statements of Operations relate to the sale of oil, natural gas and NGLs as shown below:
Oil sales The Company’s crude oil sales contracts are generally structured whereby oil is delivered to the purchaser at a contractually agreed-upon delivery point at which the purchaser takes title of the product. This delivery point is usually at the wellhead or at the inlet of a transportation pipeline. Revenue is recognized when control transfers to the purchaser at the delivery point based on the net price received from the purchaser. Any downstream transportation costs incurred by crude purchasers are reflected as a net reduction to oil sales revenues. Natural gas and NGL sales Under certain natural gas processing contracts, liquids rich natural gas is delivered to a midstream processing entity at the inlet of the gas plant processing system. The midstream processing entity gathers and processes the natural gas and remits proceeds to Centennial for the resulting sales of NGLs and residue gas. For these contracts, the Company evaluates when control is transferred and revenue should be recognized. Where the Company has concluded that control transfers at the tailgate of the processing facility, fees incurred prior to transfer of control are presented as gathering, processing and transportation expenses (“GP&T”) within the Consolidated Statements of Operations, rather than as a net reduction to natural gas and NGL sales. In the Company’s other natural gas processing agreements, it has the election to take its residue gas “in-kind” at the tailgate of the midstream processing plant and then subsequently market the product. For these contracts, the Company recognizes revenue when control transfers to purchasers at delivery points downstream of the processing plant. The gathering, processing and compression fees are presented as GP&T, and any transportation and fractionation costs incurred subsequent to the point of transfer of control are reflected as a net reduction to natural gas and NGL sales revenues presented in the table above. Performance obligations For all commodity products, the Company records revenue in the month production is delivered to the purchaser. Settlement statements for certain natural gas and NGL sales may not be received for 30 to 90 days after the date production volumes are delivered and for crude oil, generally within 30 days after delivery has occurred. However, payment is unconditional once the performance obligations have been satisfied. At this time, the volume and price can be reasonably estimated and amounts due from customers are accrued in Accounts Receivable, net in the Consolidated Balance Sheets. As of June 30, 2019 and December 31, 2018, such receivable balances were $68.7 million and $67.0 million, respectively. The Company records any differences between its estimates and the actual amounts received for product sales in the month that payment is received from the purchaser. Historically, any identified differences between revenue estimates and actual revenue received have not been significant. For both the six months ended June 30, 2019 and 2018, revenue recognized in the reporting period related to performance obligations satisfied in prior reporting periods were not material. Transaction price allocated to remaining performance obligations For the Company’s product sales that have a contract term greater than one year, the Company has utilized the practical expedient in ASC Topic 606 which states the Company is not required to disclose the transaction price allocated to the remaining performance obligations if the variable consideration is allocated entirely to a wholly unsatisfied performance obligation. Under these sales contracts, monthly sales of a product generally represent a separate performance obligation; therefore, future commodity volumes to be delivered and sold are wholly unsatisfied and disclosure of the transaction price allocated to such unsatisfied performance obligations is not required.
|
Leases |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases | Note 12—Leases At contract inception, the Company determines whether or not an arrangement contains a lease. However, in connection with the implementation of ASC 842, this assessment was made as of the adoption date. Upon determination of a lease, a lease right-of-use (ROU) asset and related liability are recorded based on the present value of the future lease payments over the lease term. ROU assets represent the Company’s right to use an underlying asset for the lease term, and lease liabilities represent the obligation to make future lease payments arising from the lease. Currently, the Company has operating leases for drilling rig contracts, office rental agreements, and other wellhead equipment. As of June 30, 2019, these leases have remaining lease terms ranging from one month to three years, some of which include options to extend the lease term for up to five years, and some of which include options to early terminate. These options are considered in determining the lease term and are included in the present value of future payments that are recorded for leases when the Company is reasonably certain to exercise the option. Leases with an initial term of one year or less are not recorded in the Consolidated Balance Sheets. Additionally, none of the Company’s lease agreements contain any material residual value guarantees or material restrictive covenants. The present value of future lease payments is determined at the lease commencement date based upon the Company’s incremental borrowing rate. The incremental borrowing rate is calculated using a risk-free interest rate adjusted for the Company’s specific risk. The table below summarizes our discount rate and remaining lease term as of the period presented.
The Company’s drilling rig contracts, office rental agreements, and wellhead equipment contain both lease and non-lease components, which are combined and accounted for as a single lease component. Variable lease payments are recognized in the period in which they are incurred. Expenses related to short-term leases are recognized on a straight-line basis over the lease term. The following table presents the components of the Company’s lease expenses for the periods presented.
Maturities of the Company’s long-term operating lease liabilities by fiscal year as of June 30, 2019 are as follows:
The following is a schedule of the Company’s future contractual payments for operating leases under the scope of ASC 840 that had initial contractual terms greater than one year as of December 31, 2018:
|
Basis of Presentation (Policies) |
6 Months Ended |
---|---|
Jun. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) and the rules and regulations of the United States Securities and Exchange Commission (“SEC”) for interim financial reporting. Accordingly, certain disclosures normally included in an Annual Report on Form 10-K have been omitted. The consolidated financial statements and related notes included in this Quarterly Report should be read in conjunction with the Company’s consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K for the period ended December 31, 2018 (the “2018 Annual Report”). Except as disclosed herein, there have been no material changes to the information disclosed in the notes to the consolidated financial statements included in the Company’s 2018 Annual Report. In the opinion of management, all normal, recurring adjustments and accruals considered necessary to present fairly, in all material respects, the Company’s interim financial results have been included. Operating results for the periods presented are not necessarily indicative of expected results for the full year.
|
Principles of Consolidation | The consolidated financial statements include the accounts of the Company and its majority owned subsidiary CRP, and CRP’s wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. Noncontrolling interest represents third-party ownership in CRP, and is presented as a component of equity. |
Use of Estimates | The preparation of the Company’s consolidated financial statements requires the Company’s management to make various assumptions, judgments and estimates to determine the reported amounts of assets, liabilities, revenues and expenses, and the disclosures of commitments and contingencies. Changes in these assumptions, judgments and estimates will occur as a result of the passage of time and the occurrence of future events and, accordingly, actual results could differ from amounts previously established. The more significant areas requiring the use of assumptions, judgments and estimates include: (i) oil and natural gas reserves; (ii) cash flow estimates used in impairment tests of long-lived assets; (iii) depreciation, depletion and amortization; (iv) asset retirement obligations; (v) determining fair value and allocating purchase price in connection with business combinations and asset acquisitions; (vi) accrued revenues and related receivables; (vii) accrued liabilities; (viii) valuation of derivatives; and (ix) deferred income taxes.
|
Income Taxes | Income tax expense during interim periods is based on applying an estimated annual effective income tax rate to the Company’s year-to-date income, plus any significant unusual or infrequently occurring items which are recorded in the interim period. The computation of the annual estimated effective tax rate at each interim period requires certain estimates and significant judgment including, but not limited to, the expected operating income for the year, projections of the proportion of income earned and taxed in various state jurisdictions, permanent and temporary differences and the likelihood of recovering deferred tax assets generated. The accounting estimates used to compute the provision for income taxes may change as new events occur, more historical trend data becomes available, additional information becomes known or as the tax environment changes. |
Recently Issued Accounting Standards | In August 2018, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2018-13, Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement, which updates the disclosure requirements for fair value measurements in Accounting Standard Codification (“ASC”) Topic 820, Fair Value Measurement (“ASC Topic 820”). Certain disclosure requirements under ASC Topic 820 were removed, modified or added in order to improve the effectiveness of the fair value note included in the financial statements. This update will be effective for financial statements issued for fiscal years beginning after December 31, 2019, including interim periods within those fiscal years. An entity is permitted to early adopt any removed or modified disclosures and delay adoption of the additional disclosures until the effective date. The Company is currently assessing the impact of this update on the Company's consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, Leases, which created ASC Topic 842, Leases (“ASC Topic 842”), superseding current lease requirements under ASC Topic 840, Leases. Subsequently in 2018, the FASB issued various ASUs which provide a practical expedient for the evaluation of existing land easement agreements, optionality in the adoption transition method, and additional implementation guidance. ASC Topic 842 and its related amendments apply to any entity that enters into a lease, with some specified scope exemptions. Under ASC Topic 842, a lessee should recognize in its consolidated balance sheet a liability to make lease payments (the lease liability) and a right-of-use asset, representing its right to use the underlying asset for the lease term. While there were no major changes to lessor accounting, changes were made to align key aspects with revenue recognition guidance. ASC Topic 842 was effective for public entities for fiscal years, beginning after December 15, 2018, including interim periods within those fiscal years, with early adoption permitted. The standard permits retrospective application using either of the following methodologies: (i) application of the new standard at the earliest presented period or (ii) application of the new standard at the adoption date with a cumulative-effect adjustment recognized to retained earnings. The Company has adopted this guidance as of January 1, 2019, the effective date, and elected to recognize a cumulative-effect adjustment at the time of adoption. The Company has elected the following practical expedients that allows an entity to carry forward historical accounting treatment relating to (i) lease identification and classification for existing leases upon adoption and (ii) existing land easements. The adoption of ASC 842 resulted in the recognition of Operating lease right-of-use assets and Operating lease liabilities in the Company’s Consolidated Balance Sheets for existing operating leases including drilling rig contracts, office rental agreements, and other wellhead equipment. This adoption did not have a significant impact on the Company’s Consolidated Statements of Operations or Consolidated Statements of Cash Flows. Refer to Note 12—Leases for additional information.
|
Accounts Receivable, Accounts Payable and Accrued Expenses (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Accounts Receivable | Accounts receivable are comprised of the following:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Accounts Payable and Accrued Expenses | Accounts payable and accrued expenses are comprised of the following:
|
Long-Term Debt (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Long-term Debt | The following table provides information about the Company’s long-term debt as of the dates indicated:
|
Asset Retirement Obligations (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||
Asset Retirement Obligation Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||
Schedule of Asset Retirement Obligations | The following table summarizes the changes in the Company’s asset retirement obligations (“ARO”) associated with our working interests in oil and gas properties for the six months ended June 30, 2019:
|
Stock-Based Compensation (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Stock-based Compensation Expense | The following table summarizes stock-based compensation expense recognized for the periods presented:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Restricted Stock Activity | The following table provides information about restricted stock activity during the six months ended June 30, 2019:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Stock Option Valuation Inputs | The following table summarizes the assumptions and related information used to determine the grant-date fair value of stock options awarded during the six months ended June 30, 2019 and 2018:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Stock Option Activity | The following table provides information about stock option awards outstanding during the six months ended June 30, 2019:
|
Derivative Instruments (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Derivative Instruments | The following table summarizes the approximate volumes and average contract prices of swap contracts the Company had in place as of June 30, 2019:
(2) These natural gas basis swap contracts are settled based on the difference between the Inside FERC’s West Texas WAHA price and the NYMEX price of natural gas during each applicable settlement period.
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Gains and Losses from Derivative Instruments | The following table presents the impact of our derivative instruments in our Consolidated Statements of Operations for the periods presented:
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Derivative Instruments in Statement of Financial Position, Fair Value | The table below summarizes the fair value amounts and the classification in the Consolidated Balance Sheets of the Company’s derivative contracts outstanding at the respective balance dates, as well as the gross recognized derivative assets, liabilities and offset amounts:
(1) The Company has agreements in place with all of its counterparties that allow for the financial right of offset for derivative assets and derivative liabilities at settlement or in the event of a default under the agreements or contract termination.
|
Fair Value Measurements (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Fair Value Measurement of Financial Instruments | The following table presents, for each applicable level within the fair value hierarchy, our net derivative assets and liabilities, including both current and noncurrent portions, measured at fair value on a recurring basis:
The Company’s Senior Notes and borrowings under its credit agreement are recorded at cost. The following table summarizes the fair values and carrying values of these instruments as of June 30, 2019 and December 31, 2018:
(2) The Senior Notes’ carrying values include associated unamortized debt issuance costs and any discounts. The Senior Notes’ fair values were determined using quoted market prices for these debt securities, a Level 1 classification in the fair value hierarchy.
|
Earnings Per Share (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Earnings Per Share, Basic and Diluted | The following table reflects the allocation of net income to common shareholders and EPS computations for the periods indicated based on a weighted average number of common stock outstanding for the period:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Shares Excluded from Diluted Earnings Per Share Calculation | For the three and six months ended June 30, 2019 and 2018, the following shares were excluded from the diluted earnings per share calculation as their impacts were anti-dilutive:
|
Revenues (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Oil and Gas Revenues | Oil and gas revenues presented within the Consolidated Statements of Operations relate to the sale of oil, natural gas and NGLs as shown below:
|
Leases (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Discount Rate and Remaining Lease Term, Components of Lease Expenses, and Other Information | The table below summarizes our discount rate and remaining lease term as of the period presented.
The following table presents the components of the Company’s lease expenses for the periods presented.
(1) The majority of the Company’s operating leases relate to the operations or completion of the Company’s wells. Therefore, the lease costs presented in the above table represent the total gross costs the Company incurs, which are not comparable to the Company’s net costs recorded to the Consolidated Statements of Operations, Consolidated Statements of Cash Flows or capitalized in the Consolidated Balance Sheets, as amounts therein are reflected net of amounts billed to working interest partners.
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Maturities of Operating Lease Liabilities | Maturities of the Company’s long-term operating lease liabilities by fiscal year as of June 30, 2019 are as follows:
(3) Of the total present value of lease liabilities, $18.9 million was recorded to current Operating lease liabilities and $5.2 million was recorded in noncurrent Operating lease liabilities in the Consolidated Balance Sheets as of June 30, 2019.
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Future Contractual Payments For Leases Under ASC 840 | The following is a schedule of the Company’s future contractual payments for operating leases under the scope of ASC 840 that had initial contractual terms greater than one year as of December 31, 2018:
|
Basis of Presentation - Additional Information (Details) |
Jun. 30, 2019 |
Dec. 31, 2018 |
---|---|---|
Centennial Contributors | Centennial Resource Production, LLC | ||
Noncontrolling Interest [Line Items] | ||
Ownership interest of non-controlling interest | 4.30% | 4.30% |
Accounts Receivable, Accounts Payable and Accrued Expenses - Schedule of Accounts Receivable (Details) - USD ($) $ in Thousands |
Jun. 30, 2019 |
Dec. 31, 2018 |
---|---|---|
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Accrued oil and gas sales receivable, net | $ 68,737 | $ 66,997 |
Joint interest billings, net | 52,686 | 31,658 |
Other | 123 | 1,968 |
Accounts receivable, net | $ 121,546 | $ 100,623 |
Accounts Receivable, Accounts Payable and Accrued Expenses - Schedule of Accounts Payable and Accrued Expenses (Details) - USD ($) $ in Thousands |
Jun. 30, 2019 |
Dec. 31, 2018 |
---|---|---|
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Accounts payable | $ 54,656 | $ 55,984 |
Accrued capital expenditures | 90,917 | 75,791 |
Revenues payable | 80,671 | 63,399 |
Accrued interest | 20,813 | 11,129 |
Accrued employee compensation and benefits | 6,840 | 9,757 |
Accrued expenses and other | 13,540 | 24,515 |
Accounts payable and accrued expenses | $ 267,437 | $ 240,575 |
Long-Term Debt - Schedule of Long-Term Debt (Details) - USD ($) $ in Thousands |
Jun. 30, 2019 |
Mar. 15, 2019 |
Dec. 31, 2018 |
Nov. 30, 2017 |
---|---|---|---|---|
Debt Instrument [Line Items] | ||||
Total long-term debt, net | $ 881,353 | $ 691,630 | ||
Senior Notes | ||||
Debt Instrument [Line Items] | ||||
Unamortized debt discount | (3,735) | 0 | ||
Unamortized debt issuance costs on Senior Notes | (14,912) | (8,370) | ||
Total long-term debt, net | 881,353 | 391,630 | ||
Senior Notes | Senior Notes Due 2026 | ||||
Debt Instrument [Line Items] | ||||
Gross amount of long-term debt | $ 400,000 | 400,000 | ||
Interest rate, stated percentage | 5.375% | 5.375% | ||
Senior Notes | Senior Notes Due 2027 | ||||
Debt Instrument [Line Items] | ||||
Gross amount of long-term debt | $ 500,000 | 0 | ||
Unamortized debt discount | $ (3,800) | |||
Interest rate, stated percentage | 6.875% | 6.875% | ||
Revolving Credit Facility | Line of Credit | ||||
Debt Instrument [Line Items] | ||||
Gross amount of long-term debt | $ 0 | $ 300,000 |
Asset Retirement Obligations (Details) $ in Thousands |
6 Months Ended |
---|---|
Jun. 30, 2019
USD ($)
| |
Asset Retirement Obligation, Roll Forward Analysis [Roll Forward] | |
Asset retirement obligations as of January 1, 2019 | $ 13,895 |
Liabilities acquired | 80 |
Liabilities incurred | 714 |
Liabilities divested and settled | (1,014) |
Accretion expense | 438 |
Asset retirement obligations as of June 30, 2019 | $ 14,113 |
Stock-Based Compensation - Compensation Expense (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Total equity based compensation expense | $ 6,758 | $ 4,655 | $ 13,241 | $ 8,988 |
Restricted stock awards | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Total equity based compensation expense | 3,408 | 1,989 | 6,590 | 3,764 |
Stock option awards | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Total equity based compensation expense | 2,625 | 2,310 | 5,209 | 4,516 |
Performance stock units | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Total equity based compensation expense | $ 725 | $ 356 | $ 1,442 | $ 708 |
Stock-Based Compensation - Restricted Stock (Details) - Restricted stock awards - $ / shares |
6 Months Ended | |
---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
|
Awards | ||
Unvested balance, beginning of period (in shares) | 1,535,945 | |
Granted (in shares) | 440,143 | |
Vested (in shares) | (137,031) | |
Forfeited (in shares) | (15,652) | |
Unvested balance, end of period (in shares) | 1,823,405 | |
Weighted Average Grant Date Fair Value | ||
Beginning of period (in dollars per share) | $ 17.88 | |
Granted (in dollars per share) | 12.48 | $ 18.87 |
Vested (in dollars per share) | 18.57 | |
Forfeited (in dollar per share) | 16.97 | |
End of period (in dollars per share) | $ 16.53 |
Stock-Based Compensation - Assumptions Used For Stock Options (Details) - Stock option awards - $ / shares |
6 Months Ended | |
---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Weighted average grant-date fair value per share (in dollars per share) | $ 4.77 | $ 7.82 |
Expected term (in years) | 6 years | 6 years |
Expected stock volatility | 46.00% | 41.00% |
Dividend yield | 0.00% | 0.00% |
Risk-free interest rate | 2.40% | 2.50% |
Derivative Instruments - Gains and Losses from Derivative Instruments (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||||
Net gain (loss) on derivative instruments | $ 2,128 | $ 16,697 | $ (3,743) | $ 24,540 |
Derivative Instruments - Fair Value of Derivative Instruments Balance Sheet Classification (Details) - Not Designated as Hedging Instrument - USD ($) $ in Thousands |
Jun. 30, 2019 |
Dec. 31, 2018 |
---|---|---|
Current assets - Derivative instruments | ||
Derivative Assets | ||
Gross Fair Value Asset/Liability Amounts | $ 5,146 | $ 7,708 |
Gross Amounts Offset | (4,972) | (6,076) |
Net Recognized Fair Value Assets/Liabilities | 174 | 1,632 |
Current liabilities - Derivative instruments | ||
Derivative Liabilities | ||
Gross Fair Value Asset/Liability Amounts | 19,319 | 12,127 |
Gross Amounts Offset | (4,972) | (6,076) |
Net Recognized Fair Value Assets/Liabilities | $ 14,347 | $ 6,051 |
Fair Value Measurements - Schedule of Fair Value of Derivative Assets and Liabilities (Details) - Fair Value, Measurements, Recurring - USD ($) $ in Thousands |
Jun. 30, 2019 |
Dec. 31, 2018 |
---|---|---|
Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative assets | $ 0 | $ 0 |
Derivative liabilities | 0 | 0 |
Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative assets | 174 | 1,632 |
Derivative liabilities | 14,347 | 6,051 |
Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative assets | 0 | 0 |
Derivative liabilities | $ 0 | $ 0 |
Transactions with Related Parties - Additional Information (Details) - Lucid Energy Delaware, LLC - Affiliated Entity - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
Dec. 31, 2018 |
|
Related Party Transaction [Line Items] | |||||
Revenue from related parties | $ 0.8 | $ 0.2 | $ 1.0 | $ 0.3 | |
Receivables from related parties | $ 0.9 | $ 0.9 | $ 0.7 |
Revenues - Schedule of Disaggregated Revenues (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|
Disaggregation of Revenue [Line Items] | ||||
Oil and gas sales | $ 244,239 | $ 217,763 | $ 458,808 | $ 433,661 |
Oil sales | ||||
Disaggregation of Revenue [Line Items] | ||||
Oil and gas sales | 214,305 | 174,156 | 389,859 | 348,997 |
Natural gas sales | ||||
Disaggregation of Revenue [Line Items] | ||||
Oil and gas sales | 8,088 | 13,721 | 20,585 | 32,301 |
NGL sales | ||||
Disaggregation of Revenue [Line Items] | ||||
Oil and gas sales | $ 21,846 | $ 29,886 | $ 48,364 | $ 52,363 |
Revenues - Additional Information (Details) - USD ($) $ in Millions |
6 Months Ended | |
---|---|---|
Jun. 30, 2019 |
Dec. 31, 2018 |
|
Disaggregation of Revenue [Line Items] | ||
Accrued oil and gas sales receivable, net | $ 68.7 | $ 67.0 |
Natural Gas and NGL sales | Minimum | ||
Disaggregation of Revenue [Line Items] | ||
Performance obligations billing cycle | 30 days | |
Natural Gas and NGL sales | Maximum | ||
Disaggregation of Revenue [Line Items] | ||
Performance obligations billing cycle | 90 days | |
Oil sales | ||
Disaggregation of Revenue [Line Items] | ||
Performance obligations billing cycle | 30 days |
Leases - Additional Information (Details) |
6 Months Ended |
---|---|
Jun. 30, 2019 | |
Minimum | |
Lessee, Lease, Description [Line Items] | |
Remaining lease term | 1 month |
Maximum | |
Lessee, Lease, Description [Line Items] | |
Remaining lease term | 3 years |
Renewal term (up to) | 5 years |
Leases - Schedule of Lease Expenses and Other Information (Details) $ in Thousands |
3 Months Ended | 6 Months Ended |
---|---|---|
Jun. 30, 2019
USD ($)
|
Jun. 30, 2019
USD ($)
|
|
Leases [Abstract] | ||
Weighted-average discount rate | 4.45% | 4.45% |
Weighted-average remaining lease term (years) | 1 year 3 months 3 days | 1 year 3 months 3 days |
Lease costs | ||
Operating lease cost | $ 10,806 | $ 21,393 |
Variable lease cost | 703 | 1,504 |
Short-term lease cost | 16,684 | 28,908 |
Total Lease Cost | $ 28,193 | $ 51,805 |
Leases - Schedule of Maturities of Operating Lease Liabilities (Details) - USD ($) $ in Thousands |
Jun. 30, 2019 |
Dec. 31, 2018 |
---|---|---|
Operating Lease Liabilities, Payments Due After Adoption of 842 [Abstract] | ||
2019 | $ 12,948 | |
2020 | 8,713 | |
2021 | 2,855 | |
2022 | 425 | |
Total | 24,941 | |
Less: Imputed Interest | (863) | |
Present value of lease liabilities | 24,078 | |
Operating lease liability, current | 18,875 | |
Operating lease liability, noncurrent | $ 5,203 | |
Drilling Rigs | ||
Operating Leases, Future Contractual Payments Before Adoption of 842 | ||
2019 | $ 43,036 | |
2020 | 4,124 | |
2021 | 0 | |
2022 | 0 | |
Total lease payments | 47,160 | |
Office Leases | ||
Operating Leases, Future Contractual Payments Before Adoption of 842 | ||
2019 | 3,057 | |
2020 | 2,830 | |
2021 | 2,761 | |
2022 | 404 | |
Total lease payments | $ 9,052 |
Label | Element | Value | ||
---|---|---|---|---|
Restricted Cash | us-gaap_RestrictedCash | $ 0 | ||
Restricted Cash | us-gaap_RestrictedCash | $ 3,295,000 | ||
|
#[U,_%!C ^L-:XDK0G Q1=TYA+@>.
M986Z O&!0?+TT[4
M\ /ED8/]K> ]EA'>>Q#'65=GT_R?KMZ:M]H.5Z,J^^'K^W!WZS]/Y&ZN&;KB#
M'#K(2X
IVF3-NG4:>WG'!B(FA":A*/[]W,"1UF'^H78QN_YV7'2P=AG
MUP!X\JI5ZS+:>-_M&7-% UJX*]-!BW\J8[7PZ-J:N
&PO=V]R:W-H965T
H?=6
M\/1#QFY!:,:<)PQ?878+@J'Z$H)OA3CS5W2^3=]O9KB/]/V:?DBV!=)-@30*
MI&^6N($Y_%\D6_54@VWB-#E2FJ&+D[SR+@-[S^.;_(-/T_Y-V$9VCER-QY>-
M_:^-\8"I)'
\IJ:$1
M@PI/=OP
"[S!KXX'WG8N.$B9]ZR%G^!^]2?C
M+3*SU%R"LEPK9* I\.WF<-R%^!CPF\-H%V<4*CEK_12,[W6!LR (!%0N,#"_
M7> .A A$7L:?Q(GGE &X/+^R?XVU^UK.S,*=%H^\=EV!]QC5T+!!N <]?H-4
MSS5&J?@?< 'APX,2GZ/2PL8558-U6B86+T6RYVGG*NYCNMDGV#J )@"= ?N8
MATR)HO(OS+$R-WI$9NI]S\(3;P[4]Z8*SMB*>.?%6^^]E/1ZGY-+($HQQRF&
M+F(V;^G.LW==R$1:>4/YJ2]=D]$!)"97H
MI7O!X0M,]>PIF8K_!E>0'AXR\3$*E#:NI.BM0S6I^%24>!_W5L=]&&_V-]HZ
M@4\$/A,.D<#&0#'SS\*)/#4X$#/VOA/AB3='[GM3!&=L1;SSR5OOO>;\X5/*
MKD%HPIQ%]@-C.">?4Y!%\+<>+_T?DZ?;N:X3;2MTOZ=K\NL%L5V$6!W5+@
MD'PH<0WSL4BVZ*D"4\=ILJ3 7L=)7GCG@7WD\4W^P<=I_RY,W6I++NC\R\;^
M5X@.?"K)G1^AQG^PV9!0N7!\\&YV:^I7/@]!@?(%O^ O5?4$L#!!0 (
M (&(!4]$?80V_@$ 'D% 9 >&PO=V]R:W-H965T
0FR
M.WSM,'BD$R6Q[:L+ I-\8OGJ@E(\L;Z;E:=[+?I((LJUHO%CD2"$D0)8;RU2,2<6M