ý | QUARTERL Y REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Delaware | 81-0874035 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |
111 Boland Street, Suite 301, Fort Worth, TX | 76107 | |
(Address of principal executive offices) | (Zip Code) |
Large accelerated filer | ☐ | Accelerated filer | ý | |
Non-accelerated filer | ☐ | Smaller reporting company | ý | |
Emerging growth company | ý |
Page | ||
PART I. | ||
Item 1. | ||
Item 2. | ||
Item 3. | ||
Item 4. | ||
PART II. | ||
Item 1. | ||
Item 1A. | ||
Item 2. | ||
Item 6. | ||
September 30, 2019 | December 31, 2018 | ||||||
Assets | |||||||
Current assets | |||||||
Cash and cash equivalents | $ | 3,441 | $ | 5,355 | |||
Accounts receivable | |||||||
Oil, natural gas liquid and natural gas sales | 16,594 | 15,103 | |||||
Joint interest owners and others, net | 5,159 | 4,541 | |||||
Related parties | 5,213 | 301 | |||||
Derivative financial instruments | 15,798 | 15,841 | |||||
Prepaid expenses and other | 2,844 | 1,966 | |||||
Total current assets | 49,049 | 43,107 | |||||
Property and equipment | |||||||
Oil and gas properties, using the successful efforts method of accounting | |||||||
Proved properties | 1,009,545 | 960,711 | |||||
Unproved properties | 80,565 | 81,850 | |||||
Other property and equipment | 21,344 | 17,727 | |||||
Less accumulated depreciation, depletion and amortization | (392,604 | ) | (369,529 | ) | |||
Property and equipment, net | 718,850 | 690,759 | |||||
Derivative financial instruments | 9,857 | 7,302 | |||||
Other non-current assets | 2,457 | 2,944 | |||||
Total assets | $ | 780,213 | $ | 744,112 | |||
Liabilities and Stockholders' Equity | |||||||
Current liabilities | |||||||
Accounts payable | $ | 34,363 | $ | 18,260 | |||
Accounts payable – related parties | 251 | 181 | |||||
Oil, natural gas liquid and natural gas sales payable | 15,286 | 13,022 | |||||
Accrued liabilities | 16,100 | 28,128 | |||||
Derivative financial instruments | 3,271 | 430 | |||||
Total current liabilities | 69,271 | 60,021 | |||||
Long-term liabilities | |||||||
Long-term debt | 499,772 | 436,882 | |||||
Asset retirement obligations | 7,139 | 7,195 | |||||
Deferred tax liabilities, net | 5,387 | 12,370 | |||||
Warrant liability | 162 | 366 | |||||
Warrant liability – related parties | 299 | 689 | |||||
Derivative financial instruments | 4 | 21 | |||||
Other non-current liabilities | 3,360 | 4,021 | |||||
Total long-term liabilities | 516,123 | 461,544 | |||||
Commitments and contingencies (Note 12) | |||||||
Stockholders' Equity | |||||||
Class A voting common stock, $0.001 par value, 100,000,000 shares authorized, 24,933,853 and 24,645,825 issued and outstanding, respectively | 142,655 | 142,655 | |||||
Series A-1 convertible participating preferred stock, $0.001 par value, 98,120 and 91,784 shares issued and outstanding, respectively | — | — | |||||
Additional paid-in capital | 175,709 | 174,379 | |||||
Accumulated deficit | (123,545 | ) | (94,487 | ) | |||
Total stockholders' equity | 194,819 | 222,547 | |||||
Total liabilities and stockholders' equity | $ | 780,213 | $ | 744,112 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Revenues | |||||||||||||||
Oil sales | $ | 42,187 | $ | 47,846 | $ | 120,496 | $ | 120,705 | |||||||
Natural gas liquid sales | 3,439 | 6,795 | 10,381 | 12,939 | |||||||||||
Natural gas sales | 7,519 | 4,096 | 15,224 | 9,637 | |||||||||||
Total revenues | 53,145 | 58,737 | 146,101 | 143,281 | |||||||||||
Expenses | |||||||||||||||
Lease operating and gas gathering | 10,055 | 6,687 | 26,695 | 17,761 | |||||||||||
Production and ad valorem taxes | 3,017 | 3,218 | 8,126 | 8,145 | |||||||||||
Depreciation, depletion and amortization | 24,635 | 23,775 | 64,120 | 59,937 | |||||||||||
Loss on sale of oil and gas properties | 483 | — | 33,530 | 1,568 | |||||||||||
Impairment of oil and gas properties | — | 12,169 | — | 12,169 | |||||||||||
General and administrative | 4,124 | 4,661 | 12,345 | 13,385 | |||||||||||
Acquisition costs and other | (2 | ) | 315 | (4 | ) | 302 | |||||||||
Total expenses | 42,312 | 50,825 | 144,812 | 113,267 | |||||||||||
Income from operations | 10,833 | 7,912 | 1,289 | 30,014 | |||||||||||
Other expense | |||||||||||||||
Interest expense | (11,295 | ) | (10,215 | ) | (32,730 | ) | (28,771 | ) | |||||||
Change in fair value of warrants | (100 | ) | 509 | 594 | (2,105 | ) | |||||||||
Gain (loss) on derivative financial instruments | 21,546 | (18,198 | ) | (5,177 | ) | (54,852 | ) | ||||||||
Loss on extinguishment of debt | — | — | — | (8,619 | ) | ||||||||||
Total other expense | 10,151 | (27,904 | ) | (37,313 | ) | (94,347 | ) | ||||||||
Income (loss) before income taxes | 20,984 | (19,992 | ) | (36,024 | ) | (64,333 | ) | ||||||||
Income tax (expense) benefit | (4,767 | ) | 282 | 6,966 | 6,493 | ||||||||||
Net income (loss) | 16,217 | (19,710 | ) | (29,058 | ) | (57,840 | ) | ||||||||
Preferred stock dividends | (2,159 | ) | (1,975 | ) | (6,336 | ) | (5,796 | ) | |||||||
Net income (loss) attributable to common stockholders | $ | 14,058 | $ | (21,685 | ) | $ | (35,394 | ) | $ | (63,636 | ) | ||||
Net income (loss) per common share | |||||||||||||||
Basic | $ | 0.34 | $ | (0.88 | ) | $ | (1.42 | ) | $ | (2.59 | ) | ||||
Diluted | $ | 0.33 | $ | (0.88 | ) | $ | (1.42 | ) | $ | (2.59 | ) | ||||
Weighted average common shares outstanding | |||||||||||||||
Basic | 24,933,853 | 24,599,744 | 24,852,994 | 24,598,816 | |||||||||||
Diluted | 25,331,810 | 24,599,744 | 24,852,994 | 24,598,816 |
Class A Voting Common Stock | Series A-1 Preferred Stock | Additional Paid-in Capital | Accumulated Deficit | Total Stockholders' Equity | ||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||||||||||||||||
Balance at December 31, 2018 | 24,645,825 | $ | 142,655 | 91,784 | $ | — | $ | 174,379 | $ | (94,487 | ) | $ | 222,547 | |||||||||||||||||
Payment-in-kind dividends | — | — | 2,065 | — | — | — | — | |||||||||||||||||||||||
Stock-based compensation | 127,818 | — | — | — | 627 | — | 627 | |||||||||||||||||||||||
Net loss | — | — | — | — | — | (58,564 | ) | (58,564 | ) | |||||||||||||||||||||
Balance at March 31, 2019 | 24,773,643 | — | 142,655 | — | 93,849 | — | — | 175,006 | — | (153,051 | ) | — | 164,610 | |||||||||||||||||
Payment-in-kind dividends | — | — | 2,112 | — | — | — | — | |||||||||||||||||||||||
Stock-based compensation | 160,210 | — | — | — | 703 | — | 703 | |||||||||||||||||||||||
Net income | — | — | — | — | — | 13,289 | 13,289 | |||||||||||||||||||||||
Balance at June 30, 2019 | 24,933,853 | 142,655 | 95,961 | — | 175,709 | (139,762 | ) | 178,602 | ||||||||||||||||||||||
Payment-in-kind dividends | — | — | 2,159 | — | — | — | — | |||||||||||||||||||||||
Net income | — | — | — | — | — | 16,217 | 16,217 | |||||||||||||||||||||||
Balance at September 30, 2019 | 24,933,853 | $ | 142,655 | 98,120 | $ | — | $ | 175,709 | $ | (123,545 | ) | $ | 194,819 |
Class A Voting Common Stock | Series A-1 Preferred Stock | Additional Paid-in Capital | Accumulated Deficit | Total Stockholders' Equity | |||||||||||||||||||||
Shares | Amount | Shares | Amount | ||||||||||||||||||||||
Balance at December 31, 2017 | 24,506,647 | $ | 142,655 | 83,968 | $ | — | $ | 174,871 | $ | (113,836 | ) | $ | 203,690 | ||||||||||||
Payment-in-kind dividends | — | — | 1,889 | — | — | — | — | ||||||||||||||||||
Issued pursuant to stock-based compensation plan | 127,666 | — | — | — | (610 | ) | — | (610 | ) | ||||||||||||||||
Stock-based compensation | — | — | — | — | 216 | — | 216 | ||||||||||||||||||
Net loss | — | — | — | — | — | (16,537 | ) | (16,537 | ) | ||||||||||||||||
Balance at March 31, 2018 | 24,634,313 | 142,655 | 85,857 | — | 174,477 | (130,373 | ) | 186,759 | |||||||||||||||||
Payment-in-kind dividends | — | — | 1,932 | — | — | — | — | ||||||||||||||||||
Issued pursuant to stock-based compensation plan | — | — | — | — | 9 | — | 9 | ||||||||||||||||||
Stock-based compensation | 2,814 | — | — | — | (17 | ) | — | (17 | ) | ||||||||||||||||
Net loss | — | — | — | — | — | (21,593 | ) | (21,593 | ) | ||||||||||||||||
Balance at June 30, 2018 | 24,637,127 | 142,655 | 87,789 | — | 174,469 | (151,966 | ) | 165,158 | |||||||||||||||||
Payment-in-kind dividends | — | — | 1,975 | — | — | — | — | ||||||||||||||||||
Retirement of Class B Common Stock | — | — | — | — | (10 | ) | — | (10 | ) | ||||||||||||||||
Net loss | — | — | — | — | — | (19,710 | ) | (19,710 | ) | ||||||||||||||||
Balance at September 30, 2018 | 24,637,127 | $ | 142,655 | 89,764 | $ | — | $ | 174,459 | $ | (171,676 | ) | $ | 145,438 |
Nine Months Ended September 30, | |||||||
2019 | 2018 | ||||||
Cash flows from operating activities | |||||||
Net loss | $ | (29,058 | ) | $ | (57,840 | ) | |
Adjustments to reconcile net loss to net cash provided by operating activities: | |||||||
Depreciation, depletion and amortization | 64,120 | 59,937 | |||||
Stock-based compensation | 1,294 | 3,637 | |||||
Stock-based payments | — | (601 | ) | ||||
Deferred taxes | (6,983 | ) | (7,145 | ) | |||
Loss on derivative financial instruments | 5,177 | 54,852 | |||||
Settlements of derivative financial instruments | (3,858 | ) | (16,323 | ) | |||
Impairment of oil and natural gas properties | — | 12,169 | |||||
Gain on disposal of property and equipment | (17 | ) | — | ||||
Loss on abandoned property and equipment | — | 171 | |||||
Loss on sale of oil and gas properties | 33,530 | — | |||||
Non-cash interest expense | 1,822 | 4,556 | |||||
Change in fair value of warrants | (594 | ) | 2,105 | ||||
Changes in operating assets and liabilities: | |||||||
Accounts receivable | (8,330 | ) | (4,596 | ) | |||
Prepaid expenses and other assets | (1,102 | ) | (1,835 | ) | |||
Accounts payable and accrued expenses | (3,128 | ) | 6,733 | ||||
Net cash provided by operating activities | 52,873 | 55,820 | |||||
Cash flows from investing activities | |||||||
Acquisition of oil and gas properties | (5,239 | ) | (4,762 | ) | |||
Development of oil and gas properties | (119,273 | ) | (122,691 | ) | |||
Proceeds from sale of oil and gas properties | 11,470 | — | |||||
Purchases of other property and equipment | (3,527 | ) | (1,631 | ) | |||
Net cash used in investing activities | (116,569 | ) | (129,084 | ) | |||
Cash flows from financing activities | |||||||
Proceeds from borrowings | 114,000 | 348,744 | |||||
Payments on borrowings | (52,218 | ) | (273,466 | ) | |||
Repurchase and retire Class B Common Stock | — | (10 | ) | ||||
Net cash provided by financing activities | 61,782 | 75,268 | |||||
Net (decrease) increase in cash and cash equivalents | (1,914 | ) | 2,004 | ||||
Cash and cash equivalents, beginning of the period | 5,355 | 2,538 | |||||
Cash and cash equivalents, end of the period | $ | 3,441 | $ | 4,542 | |||
Supplemental information: | |||||||
Cash paid for taxes | $ | — | $ | 1,147 | |||
Cash paid for interest | 28,125 | 22,324 | |||||
Non-cash investing and financing activities: | |||||||
Change in asset retirement obligation | $ | (292 | ) | $ | 222 | ||
Change in liabilities for capital expenditures | 9,098 | 16,988 |
In thousands, except shares and per-share data | Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||
Numerator - Basic | ||||||||||||||||
Net income (loss) attributable to common stockholders | $ | 14,058 | $ | (21,685 | ) | $ | (35,394 | ) | $ | (63,636 | ) | |||||
Less: allocation to participating securities | (5,494 | ) | — | — | — | |||||||||||
Net income (loss) allocated to common stockholders - basic | $ | 8,564 | $ | (21,685 | ) | $ | (35,394 | ) | $ | (63,636 | ) | |||||
Numerator - Diluted | ||||||||||||||||
Net income (loss) allocated to common stockholders - basic | $ | 8,564 | $ | (21,685 | ) | $ | (35,394 | ) | $ | (63,636 | ) | |||||
Restricted stock unit compensation gain, net of tax | (80 | ) | — | — | — | |||||||||||
Net income (loss) allocated to common stockholders - diluted | $ | 8,484 | $ | (21,685 | ) | $ | (35,394 | ) | $ | (63,636 | ) | |||||
Denominator | ||||||||||||||||
Weighted average number of common shares - basic | 24,933,853 | 24,599,744 | 24,852,994 | 24,598,816 | ||||||||||||
Restricted stock units converted under the treasury stock method | 397,957 | — | — | — | ||||||||||||
Weighted average number of common shares - diluted | 25,331,810 | 24,599,744 | 24,852,994 | 24,598,816 | ||||||||||||
Earnings per share | ||||||||||||||||
Basic | $ | 0.34 | $ | (0.88 | ) | $ | (1.42 | ) | $ | (2.59 | ) | |||||
Diluted | $ | 0.33 | $ | (0.88 | ) | $ | (1.42 | ) | $ | (2.59 | ) |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||
Preferred stock | 15,997,411 | 14,635,078 | 15,649,269 | 14,316,581 | ||||||||
Warrants | 760,000 | 760,000 | 760,000 | 760,000 | ||||||||
Stock appreciation rights | 1,010,000 | 1,017,500 | 1,010,000 | 901,108 | ||||||||
Restricted stock units | — | 1,037,209 | 1,457,701 | 890,744 |
Contract | Volumes | Weighted | |||||||||||
Commodity | Type | Period | Range (1) | (Bbls/Mcf per day) | Average Price | ||||||||
Oil - WTI | Swaps | Oct - Dec 2019 | $48.04 - $69.57 | 7,212 | $ | 54.54 | |||||||
Oil - Argus WTI (2) | Basis Swaps | Oct - Dec 2019 | 5.00 - 5.55 | 6,000 | 5.05 | ||||||||
Oil - WTI | Swaps | Jan - Dec 2020 | 48.90 - 65.56 | 7,480 | 56.95 | ||||||||
Oil - WTI | Swaps | Jan - Dec 2021 | 51.05 - 56.50 | 3,000 | 54.68 | ||||||||
Natural Gas - Henry Hub | Swaps | Oct - Dec 2019 | 2.76 - 2.98 | 15,000 | 2.87 | ||||||||
Natural Gas - Henry Hub | Swaps | Jan - Dec 2020 | 2.59 - 2.59 | 15,000 | 2.59 |
In thousands | Three Months Ended September 30, 2019 | Nine Months Ended September 30, 2019 | ||||||
Operating Leases | $ | 68 | $ | 205 | ||||
Short-term leases(1) | 799 | 2,058 | ||||||
Total lease expense | $ | 867 | $ | 2,263 | ||||
Short-term lease costs capitalized to oil and gas properties(2) | $ | 4,904 | $ | 9,827 |
In thousands, except lease term and discount rate data | September 30, 2019 | |||
Operating leases | ||||
Assets | ||||
Other property and equipment | $ | 112 | ||
Liabilities | ||||
Accrued liabilities | $ | 112 | ||
Weighted-average remaining lease term (years) | 0.4 | |||
Weighted-average discount rate | 5.0 | % |
In thousands | Nine Months Ended September 30, 2019 | |||
Cash paid for amounts included in the measurement of lease liabilities | ||||
Operating cash flows for operating leases | $ | 205 | ||
Right-of-use assets obtained in exchange for lease obligations: | ||||
Operating leases | $ | 205 |
In thousands | Operating Leases | |||
2019 | $ | 68 | ||
2020 | 45 | |||
Thereafter | — | |||
Total minimum lease payments | 113 | |||
Amount of lease payments representing interest | (1 | ) | ||
Present value of future minimum lease payments | $ | 112 |
In thousands | Amount | |||
2019 | $ | 174 | ||
2020 | 477 | |||
2021 | 368 | |||
Total minimum lease payments | $ | 1,019 |
• | Level 1 – Quoted prices for identical assets or liabilities in active markets. |
• | Level 2 – Quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability, and inputs derived principally from or corroborated by observable market data by correlation or other means. |
• | Level 3 – Unobservable inputs for the asset or liability. The fair value input hierarchy level to which an asset or liability measurement falls in its entirety is determined based on the lowest level input that is significant to the measurement in its entirety. |
Fair Value Measurements Using | ||||||||||||||||
In thousands | Quoted Prices in Active Markets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Total | ||||||||||||
September 30, 2019 | ||||||||||||||||
Assets | ||||||||||||||||
Commodity derivatives | $ | — | $ | 25,655 | $ | — | $ | 25,655 | ||||||||
Liabilities: | ||||||||||||||||
Commodity derivatives | — | (3,275 | ) | — | (3,275 | ) | ||||||||||
Warrant | — | — | (461 | ) | (461 | ) | ||||||||||
Stock-based compensation | (1,287 | ) | — | (579 | ) | (1,866 | ) | |||||||||
Total | $ | (1,287 | ) | $ | 22,380 | $ | (1,040 | ) | $ | 20,053 | ||||||
December 31, 2018 | ||||||||||||||||
Assets: | ||||||||||||||||
Commodity derivatives | $ | — | $ | 23,143 | $ | — | $ | 23,143 | ||||||||
Liabilities: | ||||||||||||||||
Commodity derivatives | — | (451 | ) | — | (451 | ) | ||||||||||
Warrant | — | — | (1,055 | ) | (1,055 | ) | ||||||||||
Stock-based compensation | (1,267 | ) | — | (636 | ) | (1,903 | ) | |||||||||
Total | $ | (1,267 | ) | $ | 22,692 | $ | (1,691 | ) | $ | 19,734 |
In thousands | Warrant | Stock-Based Compensation | Total | |||||||||
Balance as of December 31, 2018 | $ | (1,055 | ) | $ | (636 | ) | $ | (1,691 | ) | |||
Unrealized gains | 594 | 57 | 651 | |||||||||
Balance as of September 30, 2019 | $ | (461 | ) | $ | (579 | ) | $ | (1,040 | ) |
In thousands | September 30, 2019 | December 31, 2018 | ||||||
Bonus payable | $ | 1,744 | $ | 3,244 | ||||
Payroll payable | 51 | 773 | ||||||
Accrued interest – 11.25% Senior Notes | 7,031 | 14,063 | ||||||
Accrued interest – other | 478 | 104 | ||||||
Accrued well costs | 3,074 | 9,026 | ||||||
Third party payments for joint interest expenditures | 140 | — | ||||||
Accrued severance, property and franchise taxes | 2,356 | 96 | ||||||
Accrued federal income tax | 439 | 441 | ||||||
Current portion of operating lease liability | 112 | — | ||||||
Other | 675 | 381 | ||||||
Total accrued liabilities | $ | 16,100 | $ | 28,128 |
In thousands | September 30, 2019 | December 31, 2018 | ||||||
Senior Secured Credit Facility | $ | 245,000 | $ | 183,000 | ||||
11.25% Senior Notes due 2023 | 250,000 | 250,000 | ||||||
Mortgage debt | 8,959 | 9,151 | ||||||
Other | 266 | 275 | ||||||
Total long-term debt | 504,225 | 442,426 | ||||||
Unamortized discount | (3,656 | ) | (4,500 | ) | ||||
Unamortized debt issuance costs | (797 | ) | (1,044 | ) | ||||
Total long-term debt, net of debt issuance costs | $ | 499,772 | $ | 436,882 |
Shares | Weighted Average Fair Value per Share | |||||
Non-vested RSUs at December 31, 2018 | 1,011,045 | $ | 5.06 | |||
Granted | 1,274,750 | 3.42 | ||||
Vested | (434,900 | ) | 4.64 | |||
Forfeited | (3,450 | ) | — | |||
Non-vested RSUs at September 30, 2019 | 1,847,445 | $ | 4.04 |
Shares | Weighted Average Exercise Price Per Share | Weighted Average Remaining Contractual Term (in years) | |||||||
Outstanding at December 31, 2018 | 1,010,000 | $ | 6.30 | 3.5 | |||||
SARs vested and exercisable at December 31, 2018 | 280,000 | 7.20 | 3.2 | ||||||
Granted | — | — | — | ||||||
Exercised | — | — | — | ||||||
Expired/forfeited | — | — | — | ||||||
Outstanding at September 30, 2019 | 1,010,000 | $ | 6.30 | 2.8 | |||||
SARs vested and exercisable at September 30, 2019 | 606,250 | $ | 6.65 | 2.7 |
• | Grew production by 45% compared to the third quarter of 2018, averaging 18,097 BOE per day versus 12,471 BOE per day. Compared to the second quarter of 2019, production grew 33%, or 4,467 BOE per day, from 13,630 BOE per day. |
• | Delivered outstanding wellhead realizations during the quarter. Our wellhead crude oil price realization was $58.16 per barrel, which reflects a premium of $1.71 per barrel versus West Texas Intermediate. |
• | Continued to deliver outstanding results with the drilling program. In DeWitt County, our Buchhorn 4H-6H wells, which delivered average initial production rates of 2,475 BOE per day, are performing extremely well in spite of a variety of temporary constraints. In Brazos County, the Smith Family Ranch well has delivered initial production rate of nearly 1,258 BOE per day. |
• | Continued to lower our operating expenses on a per-BOE basis. Compared to the second quarter of 2019, lease operating and gas gathering, and production and ad valorem taxes decreased on a per-BOE basis due to the continued increase in production throughout the year and our focus on controlling costs. General and administrative expense and interest expense also continue to decrease on a per-BOE basis. |
• | Revenues decreased by $5.6 million, or 10%, between the two quarters, primarily driven by a 55% decrease in commodity prices largely offset by a 45% increase in production. |
• | Compared to the third quarter of 2018, lease operating and gas gathering expense increased $0.21, or 4%, per BOE, production and ad valorem taxes decreased $0.99, or 35%, per BOE, general and administrative expense decreased $1.58, or 39%, per BOE, and interest expense decreased $2.12, or 24%, per BOE. |
• | Derivative financial instruments had a net gain of $21.5 million in the third quarter of 2019, compared to a net loss of $18.2 million in the third quarter of 2018, due to an increase in the fair value adjustments between the periods of $30.4 million, and an increase in net derivative receipts of $9.3 million between the two periods. |
In thousands, except per share and unit data | Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||
Operating Results | ||||||||||||||||
Net income (loss) attributable to common stockholders | $ | 14,058 | $ | (21,685 | ) | $ | (35,394 | ) | $ | (63,636 | ) | |||||
Net income (loss) per common share – basic(1) | 0.34 | (0.88 | ) | (1.42 | ) | (2.59 | ) | |||||||||
Net income (loss) per common share – diluted(1) | 0.33 | (0.88 | ) | (1.42 | ) | (2.59 | ) | |||||||||
Net cash provided by operating activities | 14,686 | 17,069 | 52,873 | 55,820 | ||||||||||||
Revenues | ||||||||||||||||
Oil | $ | 42,187 | $ | 47,846 | $ | 120,496 | $ | 120,705 | ||||||||
NGLs | 3,439 | 6,795 | 10,381 | 12,939 | ||||||||||||
Natural gas | 7,519 | 4,096 | 15,224 | 9,637 | ||||||||||||
Total revenues | $ | 53,145 | $ | 58,737 | $ | 146,101 | $ | 143,281 | ||||||||
Total production volumes by product | ||||||||||||||||
Oil (Bbls) | 725,405 | 660,836 | 2,024,862 | 1,758,393 | ||||||||||||
NGLs (Bbls) | 387,256 | 262,660 | 868,811 | 571,389 | ||||||||||||
Natural gas (Mcf) | 3,313,757 | 1,343,016 | 6,210,617 | 3,190,824 | ||||||||||||
Total barrels of oil equivalent (6:1) | 1,664,954 | 1,147,332 | 3,928,776 | 2,861,586 | ||||||||||||
Daily production volumes by product | ||||||||||||||||
Oil (Bbls/d) | 7,885 | 7,183 | 7,417 | 6,441 | ||||||||||||
NGLs (Bbls/d) | 4,209 | 2,855 | 3,182 | 2,093 | ||||||||||||
Natural gas (Mcf/d) | 36,019 | 14,600 | 22,750 | 11,689 | ||||||||||||
Total barrels of oil equivalent (BOE/d) | 18,097 | 12,471 | 14,391 | 10,482 | ||||||||||||
Average realized prices | ||||||||||||||||
Oil ($ per Bbl) | $ | 58.16 | $ | 72.40 | $ | 59.51 | $ | 68.65 | ||||||||
NGLs ($ per Bbl) | 8.88 | 25.87 | 11.95 | 22.64 | ||||||||||||
Natural gas ($ per Mcf) | 2.27 | 3.05 | 2.45 | 3.02 | ||||||||||||
Total oil equivalent, excluding the effect from commodity derivatives ($ per BOE) | 31.92 | 51.19 | 37.19 | 50.07 | ||||||||||||
Total oil equivalent, including the effect from commodity derivatives ($ per BOE) | 31.59 | 43.97 | 35.78 | 43.62 | ||||||||||||
Operating and other expenses | ||||||||||||||||
Lease operating and gas gathering | $ | 10,055 | $ | 6,687 | $ | 26,695 | $ | 17,761 | ||||||||
Production and ad valorem taxes | 3,017 | 3,218 | 8,126 | 8,145 | ||||||||||||
Depreciation, depletion and amortization | 24,635 | 23,775 | 64,120 | 59,937 | ||||||||||||
General and administrative | 4,124 | 4,661 | 12,345 | 13,385 | ||||||||||||
Interest expense | 11,295 | 10,215 | 32,730 | 28,771 | ||||||||||||
Operating and other expenses per BOE | ||||||||||||||||
Lease operating and gas gathering | $ | 6.04 | $ | 5.83 | $ | 6.79 | $ | 6.21 | ||||||||
Production and ad valorem taxes | 1.81 | 2.80 | 2.07 | 2.85 | ||||||||||||
Depreciation, depletion and amortization | 14.80 | 20.72 | 16.32 | 20.95 | ||||||||||||
General and administrative | 2.48 | 4.06 | 3.14 | 4.68 | ||||||||||||
Interest expense | 6.78 | 8.90 | 8.33 | 10.05 |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||
2019 | 2018 | Change | 2019 | 2018 | Change | |||||||||||||
Oil (Bbls/d) | 7,885 | 7,183 | 10 | % | 7,417 | 6,441 | 15 | % | ||||||||||
NGLs (Bbls/d) | 4,209 | 2,855 | 47 | % | 3,182 | 2,093 | 52 | % | ||||||||||
Natural gas (Mcf/d) | 36,019 | 14,600 | 147 | % | 22,750 | 11,689 | 95 | % | ||||||||||
Total (BOE/d) | 18,097 | 12,471 | 45 | % | 14,391 | 10,482 | 37 | % |
In thousands | Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||
2019 | 2018 | Change | 2019 | 2018 | Change | |||||||||||||||||
Oil | $ | 42,187 | $ | 47,846 | (12 | )% | $ | 120,496 | $ | 120,705 | — | % | ||||||||||
NGLs | 3,439 | 6,795 | (49 | )% | 10,381 | 12,939 | (20 | )% | ||||||||||||||
Natural gas | 7,519 | 4,096 | 84 | % | 15,224 | 9,637 | 58 | % | ||||||||||||||
Total revenues | $ | 53,145 | $ | 58,737 | (10 | )% | $ | 146,101 | $ | 143,281 | 2 | % |
In thousands | Three Months Ended September 30, 2019 vs 2018 | Nine Months Ended September 30, 2019 vs 2018 | ||||||||||||
Increase (Decrease) in Revenues | Percentage Increase (Decrease) in Revenues | Increase (Decrease) in Revenues | Percentage Increase (Decrease) in Revenues | |||||||||||
Change in oil, NGL and natural gas revenues due to: | ||||||||||||||
Increase in production | $ | 26,497 | 45 | % | $ | 53,435 | 37 | % | ||||||
Decrease in commodity prices | (32,089 | ) | (55 | )% | (50,615 | ) | (35 | )% | ||||||
Total change in oil, NGL and natural gas revenues | $ | (5,592 | ) | (10 | )% | $ | 2,820 | 2 | % |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||
2019 | 2018 | Change | 2019 | 2018 | Change | ||||||||||||||||
Average net realized price | |||||||||||||||||||||
Oil ($/Bbl) | $ | 58.16 | $ | 0.07 | (20 | )% | $ | 59.51 | $ | 68.65 | (13 | )% | |||||||||
NGLs ($/Bbls) | 8.88 | 0.03 | (66 | )% | 11.95 | 22.64 | (47 | )% | |||||||||||||
Natural gas ($/Mcf) | 2.27 | 3.05 | (26 | )% | 2.45 | 3.02 | (19 | )% | |||||||||||||
Total ($/BOE) | 31.92 | 51.19 | (38 | )% | 37.19 | 50.07 | (26 | )% | |||||||||||||
Average NYMEX differentials | |||||||||||||||||||||
Oil per Bbl | $ | 1.71 | $ | 2.90 | (41 | )% | $ | 2.69 | $ | 1.88 | 43 | % | |||||||||
Natural gas per Mcf | (0.11 | ) | 0.15 | (173 | )% | (0.16 | ) | 0.08 | (300 | )% |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||||||||||||||||||
In thousands, except price impact | Net realized settlements | Price impact | Net realized settlements | Price impact | Net realized settlements | Price impact | Net realized settlements | Price impact | ||||||||||||||||||||||||
Payments on settlements of oil derivatives | $ | (1,022 | ) | $ | (1.41 | ) | $ | (7,190 | ) | $ | (10.88 | ) | $ | (5,627 | ) | $ | (2.78 | ) | $ | (16,070 | ) | $ | (9.13 | ) | ||||||||
Receipts (payments) on settlements of natural gas derivatives | 178 | 0.05 | (437 | ) | (0.33 | ) | 1,769 | 0.28 | (253 | ) | (0.08 | ) | ||||||||||||||||||||
Total net commodity derivative settlements | $ | (844 | ) | $ | (7,627 | ) | $ | (3,858 | ) | $ | (16,323 | ) |
In thousands, except expense per BOE | Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||
2019 | 2018 | Change | 2019 | 2018 | Change | |||||||||||||||||
Production expenses | ||||||||||||||||||||||
Lease operating and gas gathering | $ | 10,055 | $ | 6,687 | 50 | % | $ | 26,695 | $ | 17,761 | 50 | % | ||||||||||
Production and ad valorem taxes | 3,017 | 3,218 | (6 | )% | 8,126 | 8,145 | — | % | ||||||||||||||
Depreciation, depletion and amortization | 24,635 | 23,775 | 4 | % | 64,120 | 59,937 | 7 | % | ||||||||||||||
Production expenses per BOE | ||||||||||||||||||||||
Lease operating and gas gathering | $ | 6.04 | $ | 5.83 | 4 | % | $ | 6.79 | $ | 6.21 | 9 | % | ||||||||||
Production and ad valorem taxes | 1.81 | 2.80 | (35 | )% | 2.07 | 2.85 | (27 | )% | ||||||||||||||
Depreciation, depletion and amortization | 14.80 | 20.72 | (29 | )% | 16.32 | 20.95 | (22 | )% |
In thousands | Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||
2019 | 2018 | Change | 2019 | 2018 | Change | |||||||||||||||||
Lease operating | $ | 8,948 | $ | 5,900 | 52 | % | $ | 23,472 | $ | 15,735 | 49 | % | ||||||||||
Gas gathering, processing and transportation | 1,107 | 787 | 41 | % | 3,223 | 2,026 | 59 | % | ||||||||||||||
Total lease operating and gas gathering expense | $ | 10,055 | $ | 6,687 | 50 | % | $ | 26,695 | $ | 17,761 | 50 | % |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||
In thousands | 2019 | 2018 | Change | 2019 | 2018 | Change | ||||||||||||||||
Production taxes | $ | 1,860 | $ | 2,888 | (36 | )% | $ | 5,958 | $ | 6,920 | (14 | )% | ||||||||||
Ad valorem taxes | 1,157 | 330 | 251 | % | 2,168 | 1,225 | 77 | % | ||||||||||||||
Total production and ad valorem tax expense | $ | 3,017 | $ | 3,218 | (6 | )% | $ | 8,126 | $ | 8,145 | — | % |
In thousands | Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||
2019 | 2018 | Change | 2019 | 2018 | Change | |||||||||||||||||
Depletion of proved oil and gas properties | $ | 24,178 | $ | 23,552 | 3 | % | $ | 62,813 | $ | 59,112 | 6 | % | ||||||||||
Depreciation of other property and equipment | 378 | 178 | 112 | % | 1,071 | 693 | 55 | % | ||||||||||||||
Accretion of asset retirement obligations | 79 | 45 | 76 | % | 236 | 132 | 79 | % | ||||||||||||||
Total DD&A expense | $ | 24,635 | $ | 23,775 | 4 | % | $ | 64,120 | $ | 59,937 | 7 | % |
In thousands | Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||
2019 | 2018 | Change | 2019 | 2018 | Change | |||||||||||||||||
Interest expense on 11.25% Senior Notes | $ | 7,032 | $ | 7,031 | — | % | $ | 21,094 | $ | 20,859 | 1 | % | ||||||||||
Interest expense on Credit Facility | 3,494 | 1,895 | 84 | % | 9,317 | 4,296 | 117 | % | ||||||||||||||
Other interest expense | 136 | 253 | (46 | )% | 368 | 497 | (26 | )% | ||||||||||||||
Total cash interest expense (1) | $ | 10,662 | $ | 9,179 | 16 | % | $ | 30,779 | $ | 25,652 | 20 | % | ||||||||||
Amortization of debt issuance costs and discounts | 633 | 1,036 | (39 | )% | 1,950 | 3,119 | (37 | )% | ||||||||||||||
Total interest expense | $ | 11,295 | $ | 10,215 | 11 | % | $ | 32,729 | $ | 28,771 | 14 | % | ||||||||||
Per BOE: | ||||||||||||||||||||||
Total cash interest expense | $ | 6.40 | $ | 8.00 | (20 | )% | $ | 7.83 | $ | 8.96 | (13 | )% | ||||||||||
Total interest expense | 6.78 | 8.90 | (24 | )% | 8.33 | 10.05 | (17 | )% |
In thousands, except per-BOE amounts and tax rates | Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||
Current income tax benefit (expense) | $ | (18 | ) | $ | (432 | ) | $ | 26 | $ | (652 | ) | |||||
Deferred income tax (expense) benefit | (4,749 | ) | 714 | 6,940 | 7,145 | |||||||||||
Total income tax (expense) benefit | $ | (4,767 | ) | $ | 282 | $ | 6,966 | $ | 6,493 | |||||||
Average income tax (expense) benefit per BOE | $ | (2.86 | ) | $ | 0.25 | $ | 1.77 | $ | 2.27 | |||||||
Effective tax rate | 22.7 | % | 1.4 | % | 19.3 | % | 10.1 | % | ||||||||
Total net deferred tax liability on balance sheet at period end | $ | 5,387 | $ | 2,380 |
In thousands | Nine Months Ended September 30, | |||||||
2019 | 2018 | |||||||
Net cash provided by (used in): | ||||||||
Operating activities | $ | 52,873 | $ | 55,820 | ||||
Investing activities | (116,569 | ) | (129,084 | ) | ||||
Financing activities | 61,782 | 75,268 | ||||||
Net change in cash | $ | (1,914 | ) | $ | 2,004 |
In thousands | Nine Months Ended September 30, 2019 | |||
Acquisition of oil and gas properties | $ | 5,239 | ||
Development of oil and gas properties | 119,273 | |||
Purchases of other property and equipment | 3,527 | |||
Total capital expenditures | $ | 128,039 |
• | discovery and development of crude oil, NGLs and natural gas reserves; |
• | cash flows and liquidity; |
• | business and financial strategy, budget, projections and operating results; |
• | timing and amount of future production of crude oil, NGLs and natural gas; |
• | amount, nature and timing of capital expenditures, including future development costs; |
• | availability and terms of capital; |
• | drilling, completion, and performance of wells; |
• | timing, location and size of property acquisitions and divestitures; |
• | costs of exploiting and developing our properties and conducting other operations; |
• | general economic and business conditions; and |
• | our plans, objectives, expectations and intentions. |
• | variations in the market demand for, and prices of, crude oil, NGLs and natural gas; |
• | proved reserves or lack thereof; |
• | estimates of crude oil, NGLs and natural gas data; |
• | the adequacy of our capital resources and liquidity including, but not limited to, access to additional borrowing to fund our operations; |
• | borrowing capacity under our credit facility; |
• | general economic and business conditions; |
• | failure to realize expected value creation from property acquisitions; |
• | uncertainties about our ability to find, develop or acquire additional oil and natural gas resources; |
• | uncertainties with regard to our drilling schedules; |
• | the expiration of leases on our undeveloped leasehold assets; |
• | our dependence upon several significant customers for the sale of most of our crude oil, natural gas and NGL production; |
• | counterparty credit risks; |
• | competition within the crude oil and natural gas industry; |
• | technology risks; |
• | the concentration of our operations; |
• | drilling results; |
• | potential financial losses or earnings reductions from our commodity price risk management programs; |
• | potential adoption of new governmental regulations; |
• | our ability to satisfy future cash obligations and environmental costs; and |
• | the other factors set forth under Risk Factors in Item 1A of Part I of our 2018 10-K. |
Hypothetical Fair Value | ||||||||||||
(in thousands) | Fair Value | 10% Increase In Commodity Price | 10% Decrease In Commodity Price | |||||||||
Swaps | $ | 22,882 | $ | (2,123 | ) | $ | 47,888 |
Exhibit Number | Description | Incorporated by Reference | Filing Date | Filed/ Furnished Herewith | ||||||||
Form | File No. | Exhibit | ||||||||||
10.1† | 8-K | 001-37670 | 10.1 | 5/23/19 | ||||||||
10.2 | 8-K | 001-37670 | 10.1 | 6/17/19 | ||||||||
31.1 | * | |||||||||||
31.2 | * | |||||||||||
32.1 | ** | |||||||||||
32.2 | ** | |||||||||||
101.INS | XBRL Instance Document | * | ||||||||||
101.SCH | XBRL Taxonomy Extension Schema Document | * | ||||||||||
101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document | * | ||||||||||
101.DEF | XBRL Taxonomy Extension Definition Linkbase Document | * | ||||||||||
101.LAB | XBRL Taxonomy Extension Label Linkbase Document | * | ||||||||||
101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document | * |
* | Filed herewith. |
** | Furnished herewith |
† | Management contract or compensatory plan or arrangement |
LONESTAR RESOURCES US INC. | ||
November 12, 2019 | /s/ Frank D. Bracken, III | |
Frank D. Bracken, III Chief Executive Officer | ||
November 12, 2019 | /s/ Jason N. Werth | |
Jason N. Werth Chief Accounting Officer |
1. | I have reviewed this Quarterly Report on Form 10-Q of Lonestar Resources US Inc.; |
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(s) 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 designated 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(s) 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. |
November 12, 2019 | /s/ Frank D. Bracken, III |
Frank D. Bracken, III Chief Executive Officer (Principal Executive Officer) |
1. | I have reviewed this Quarterly Report on Form 10-Q of Lonestar Resources US Inc.; |
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(s) 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 designated 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(s) 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. |
November 12, 2019 | /s/ Jason N. Werth |
Jason N. Werth Chief Accounting Officer (Principal Financial Officer) |
(1) | The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company. |
November 12, 2019 | /s/ Frank D. Bracken, III |
Frank D. Bracken, III Chief Executive Officer |
(1) | The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company. |
November 12, 2019 | /s/ Jason N. Werth |
Jason N. Werth Chief Accounting Officer |
Basis of Presentation (Policies) |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Interim Financial Statements | Interim Financial Statements The accompanying unaudited condensed consolidated financial statements of Lonestar Resources US Inc., and its subsidiaries have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”) and do not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. These financial statements and the notes thereto should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2018 filed on March 13, 2019 (the “Form 10-K”). Unless indicated otherwise or the context requires, the terms “we,” “our,” “us,” “Company” or “Lonestar,” refer to Lonestar Resources US Inc. and its subsidiaries. The results of operations for the interim periods shown in this report are not necessarily indicative of results to be expected for the year. In management’s opinion, the accompanying unaudited condensed consolidated financial statements include all adjustments of a normal recurring nature necessary for a fair statement of our consolidated financial position as of September 30, 2019 and our consolidated results of operations for the three and nine months ended September 30, 2019 and 2018. |
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Net Income (Loss) per Common Share | Net Income (Loss) per Common Share The two-class method is utilized to compute earnings per common share as our Class A Participating Preferred Stock (the "Preferred Stock") is considered a participating security. Under the two-class method, losses are allocated only to those securities that have a contractual obligation to share in the losses of the Company. The Preferred Stock is not obligated to absorb Company losses and accordingly is not allocated losses. Net income attributable to common stockholders is allocated between common stock and participating securities based on the weighted average number of common shares and participating securities outstanding for the period. Basic earnings per share is computed by dividing the allocated net income (loss) attributable to common stockholders by the weighted-average number of shares of common stock outstanding for the period. Diluted earnings per share is computed similarly except that the denominator is increased to include dilutive potential common shares. Potential common shares consist of warrants, equity compensation awards and Preferred Stock. In certain circumstances adjustment to the numerator is also required for changes in income or loss resulting from the potential common shares. Basic weighted average common shares exclude shares of non-vested restricted stock. As these restricted shares vest, they will be included in the shares outstanding used to calculate basic earnings per share. |
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Recent Accounting Pronouncements | Recent Accounting Pronouncements Leases. In February 2016, the FASB issued Accounting Standards Update ("ASU") 2016-02, Leases ("ASU 2016-02"). The standard requires lessees to recognize a right of use asset ("ROU asset") and lease liability on the balance sheet for the rights and obligations created by leases. ASU 2016-02 also requires disclosures designed to give financial statement users information on the amount, timing, and uncertainty of cash flows arising from leases. In July 2018, the FASB issued ASU 2018-11, Leases (Topic 842): Targeted Improvements ("ASU 2018-11"), which provides for an alternative transition method by allowing entities to initially apply the new leases standard at the adoption date, January 1, 2019, and recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. Comparative periods presented in the financial statements continue to be in accordance with ASC Topic 840, Leases. In the normal course of business, the Company enters into lease agreements to support its exploration and development operations and lease assets, such as drilling rigs, field services, well equipment, office space and other assets. The Company adopted the new standard on the effective date of January 1, 2019, using a modified retrospective approach as permitted under ASU 2018-11. The new standard provides a number of optional practical expedients in transition. The Company: • elected the package of 'practical expedients', which permits the Company not to reassess, under the new standard, its prior conclusions about lease identification, lease classification and initial direct costs; • elected the practical expedient pertaining to land easements and plan to account for existing land easements under the Company's current accounting policy; • elected the short-term lease recognition exemption for all leases that qualify and, as such, no ROU asset or lease liability has been recorded on the balance sheet and no transition adjustment has been required for short-term leases; and • elected the practical expedient to not separate lease and non-lease components for all of the Company's leases. The Company did not elect the hindsight practical expedient in determining the lease term and assessing impairment of ROU assets when transitioning to ASU 2016-02. Upon adoption, the Company recognized additional operating lease liabilities of approximately $0.3 million with corresponding ROU assets. See Note 4. Leases for more information. |
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Fair Value Measurements | Fair Value Measurements Fair value measurements are based upon inputs that market participants use in pricing an asset or liability, which are classified into two categories: observable inputs and unobservable inputs. Observable inputs represent market data obtained from independent sources, whereas unobservable inputs reflect a company’s own market assumptions, which are used if observable inputs are not reasonably available without undue cost and effort. ASC 820 prioritizes the inputs used in measuring fair value into the following fair value hierarchy:
The following table presents the Company’s assets and liabilities that are measured at fair value on a recurring basis as of September 30, 2019 and December 31, 2018, for each fair value hierarchy level:
Commodity Derivatives The Company's commodity derivatives represent non-exchange-traded oil and natural gas fixed-price swaps that are based on NYMEX pricing and fixed-price basis swaps that are based on regional pricing other than NYMEX (e.g., Louisiana Light Sweet). The asset and liability measurements for the Company's commodity derivative contracts represent Level 2 inputs in the hierarchy, as they are valued based on observable inputs other than quoted prices. Warrants The fair value of the Company's warrants is based on Black-Scholes valuations. In addition to the Company's observable stock price, other significant inputs are considered unobservable, and the Company has designated these estimates as Level 3. Stock-Based Compensation The Company's stock-based compensation includes the liability associated with restricted stock units ("RSUs") and stock appreciation rights ("SARs") dependent on the fair value of Lonestar's publicly-traded common stock. The fair value of RSUs is measured based on measurable prices on a major exchange; the significant inputs to these asset exchange values represented Level 1 independent active exchange market price inputs. The Black-Scholes model used to determine the fair value of the SARs uses inputs, in addition to the Company's observable stock price, that are considered unobservable; to this end the Company has designated these estimates as Level 3. See Note 10. Stock-Based Compensation, below for more information. Level 3 Gains and Losses The table below sets forth a summary of changes in the fair value of the Company’s Level 3 liabilities for the nine months ended September 30, 2019:
Assets and liabilities measured at fair value on a nonrecurring basis Non-recurring fair value measurements include certain non-financial assets and liabilities as may be acquired in a business combination and thereby measured at fair value; impaired oil and natural gas property assessments; warrants issued in debt or equity offerings and the initial recognition of asset retirement obligations for which fair value is used. These estimates are derived from historical costs as well as management’s expectation of future cost environments. As there is no corroborating market activity to support the assumptions used, the Company has designated these estimates as Level 3. Other fair value measurements The book values of cash and cash equivalents, accounts receivable and accounts payable, approximate fair value due to the short-term nature of these instruments. The carrying value of the Credit Facility (as defined in Note 8. below) approximates fair value since it is subject to a short-term floating interest rate that approximates the rate available to the Company. The fair value of the 11.25% Senior Notes (as defined in Note 8. below) was approximately $214.8 million as of September 30, 2019 and are considered a Level 3 liability, as they are based on market transactions that occur infrequently as well as internally generated inputs. |
Fair Value Measurements (Tables) |
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Fair Value Disclosures [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Assets and Liabilities Measured at Fair Value on Recurring Basis | The following table presents the Company’s assets and liabilities that are measured at fair value on a recurring basis as of September 30, 2019 and December 31, 2018, for each fair value hierarchy level:
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Summary of Changes in Fair Value for the Level 3 Liabilities | The table below sets forth a summary of changes in the fair value of the Company’s Level 3 liabilities for the nine months ended September 30, 2019:
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Long-Term Debt Long-Term Debt - Debt Issuance Costs (Details) - USD ($) $ in Millions |
Sep. 30, 2019 |
Dec. 31, 2018 |
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Senior Secured Credit Facility | ||
Debt Instrument [Line Items] | ||
Debt issuance costs | $ 1.0 | $ 1.7 |
Long-Term Debt - Schedule of Long-Term Debt Outstanding (Details) - USD ($) $ in Thousands |
Sep. 30, 2019 |
Dec. 31, 2018 |
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Debt Instrument [Line Items] | ||
Senior Secured Credit Facility | $ 245,000 | $ 183,000 |
Other | 266 | 275 |
Total long-term debt | 504,225 | 442,426 |
Unamortized discount | (3,656) | (4,500) |
Unamortized debt issuance costs | (797) | (1,044) |
Total long-term debt, net of debt issuance costs | 499,772 | 436,882 |
Mortgages Debt | ||
Debt Instrument [Line Items] | ||
Mortgage debt | 8,959 | 9,151 |
11.25% Senior Notes | ||
Debt Instrument [Line Items] | ||
11.25% Senior Notes due 2023 | $ 250,000 | $ 250,000 |
Fair Value Measurements |
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Fair Value Disclosures [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements | Fair Value Measurements Fair value measurements are based upon inputs that market participants use in pricing an asset or liability, which are classified into two categories: observable inputs and unobservable inputs. Observable inputs represent market data obtained from independent sources, whereas unobservable inputs reflect a company’s own market assumptions, which are used if observable inputs are not reasonably available without undue cost and effort. ASC 820 prioritizes the inputs used in measuring fair value into the following fair value hierarchy:
The following table presents the Company’s assets and liabilities that are measured at fair value on a recurring basis as of September 30, 2019 and December 31, 2018, for each fair value hierarchy level:
Commodity Derivatives The Company's commodity derivatives represent non-exchange-traded oil and natural gas fixed-price swaps that are based on NYMEX pricing and fixed-price basis swaps that are based on regional pricing other than NYMEX (e.g., Louisiana Light Sweet). The asset and liability measurements for the Company's commodity derivative contracts represent Level 2 inputs in the hierarchy, as they are valued based on observable inputs other than quoted prices. Warrants The fair value of the Company's warrants is based on Black-Scholes valuations. In addition to the Company's observable stock price, other significant inputs are considered unobservable, and the Company has designated these estimates as Level 3. Stock-Based Compensation The Company's stock-based compensation includes the liability associated with restricted stock units ("RSUs") and stock appreciation rights ("SARs") dependent on the fair value of Lonestar's publicly-traded common stock. The fair value of RSUs is measured based on measurable prices on a major exchange; the significant inputs to these asset exchange values represented Level 1 independent active exchange market price inputs. The Black-Scholes model used to determine the fair value of the SARs uses inputs, in addition to the Company's observable stock price, that are considered unobservable; to this end the Company has designated these estimates as Level 3. See Note 10. Stock-Based Compensation, below for more information. Level 3 Gains and Losses The table below sets forth a summary of changes in the fair value of the Company’s Level 3 liabilities for the nine months ended September 30, 2019:
Assets and liabilities measured at fair value on a nonrecurring basis Non-recurring fair value measurements include certain non-financial assets and liabilities as may be acquired in a business combination and thereby measured at fair value; impaired oil and natural gas property assessments; warrants issued in debt or equity offerings and the initial recognition of asset retirement obligations for which fair value is used. These estimates are derived from historical costs as well as management’s expectation of future cost environments. As there is no corroborating market activity to support the assumptions used, the Company has designated these estimates as Level 3. Other fair value measurements The book values of cash and cash equivalents, accounts receivable and accounts payable, approximate fair value due to the short-term nature of these instruments. The carrying value of the Credit Facility (as defined in Note 8. below) approximates fair value since it is subject to a short-term floating interest rate that approximates the rate available to the Company. The fair value of the 11.25% Senior Notes (as defined in Note 8. below) was approximately $214.8 million as of September 30, 2019 and are considered a Level 3 liability, as they are based on market transactions that occur infrequently as well as internally generated inputs. |
Stock-Based Compensation |
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Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-Based Compensation | Stock-Based Compensation Restricted Stock Units Lonestar grants awards of restricted stock units ("RSUs") to employees and directors as part of its long-term compensation program. The awards vest over a three-year period, with specific terms of vesting determined at the time of grant. The Company determined the fair value of granted RSUs based on the market price of the Class A voting common stock of the Company on the date of grant. RSUs are paid in Class A voting common stock or cash (see below) after the vesting of the applicable RSU. Compensation expense for granted RSUs is recognized over the vesting period. For the nine months ended September 30, 2019 and 2018, the Company recognized $2.0 million and $2.1 million, respectively, of stock-based compensation expense for RSUs. During the first quarter of 2018, the Company elected to offer cash settlement to all employees for vested RSUs and, as a result of this modification, the RSU awards are classified as a liability on the Company’s balance sheet in accordance with ASC 718, Compensation – Stock Compensation, as of September 30, 2019 and December 31, 2018. As of the date of the modification, periodic compensation expense related to the awards is recognized based on the fair value of the awards, subject to a floor valuation that represents the compensation expense amount that would have otherwise been recognized had the Company not modified the terms of the award. The liability for RSUs on the accompanying consolidated balance sheet as of September 30, 2019 was $1.3 million. As of September 30, 2019, there was $3.7 million of unrecognized compensation expense related to non-vested RSU grants. This unrecognized compensation cost is expected to be recognized over a weighted-average period of 2.1 years. No RSUs vested during the three months ended September 30, 2019. A summary of the status of the Company's non-vested RSU grants issued, and the changes during the nine months ended September 30, 2019 is presented below:
Stock Appreciation Rights In the past, Lonestar has granted awards of stock appreciation rights (“SARs”) to employees and directors as part its long-term compensation program. The awards vest over a three-year period, with specific terms of vesting determined at the time of grant, and expire five-years after the date of issuance. The SARs are granted with a strike price equal to the fair market value at the time of grant, which erally defined as the closing price of the Company's common stock on the NASDAQ on the date of grant. SARs will be paid in cash or common stock at holder’s election once the SAR is vested. For the nine months ended September 30, 2019 and 2018, the Company recognized $(0.1) million and $1.5 million, respectively, of stock-based compensation (benefit) expense for SARs. The liability for SARs on the accompanying unaudited consolidated balance sheet as of September 30, 2019 was approximately $0.6 million. As of September 30, 2019, there was $0.2 million of total compensation cost to be recognized in future periods related to non-vested SAR grants. The cost is expected to be recognized over a weighted-average period of 1.0 year. The following is a summary of the Company's SAR activity:
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Leases - Maturities of Operating Leases Under Previous Accounting Standard (Details) $ in Thousands |
Sep. 30, 2019
USD ($)
|
---|---|
Leases [Abstract] | |
2019 | $ 174 |
2020 | 477 |
2021 | 368 |
Total minimum lease payments | $ 1,019 |
Leases - Additional Information (Details) - USD ($) $ in Thousands |
9 Months Ended | |
---|---|---|
Sep. 30, 2019 |
Jan. 01, 2019 |
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Lessee, Lease, Description [Line Items] | ||
Operating lease, liability | $ 112 | |
Accounting Standards Update 2016-02 | ||
Lessee, Lease, Description [Line Items] | ||
Operating lease, liability | $ 300 | |
Right-of-use asset | $ 300 | |
Minimum | ||
Lessee, Lease, Description [Line Items] | ||
Non-cancelable primary lease term | 1 year | |
Maximum | ||
Lessee, Lease, Description [Line Items] | ||
Non-cancelable primary lease term | 2 years |
Acquisitions and Divestitures Acquisitions and Divestitures - Divestiture (Details) $ in Thousands |
3 Months Ended | 9 Months Ended | ||||
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Mar. 22, 2019
USD ($)
a
Boe
well
location
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Sep. 30, 2019
USD ($)
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Mar. 31, 2019
USD ($)
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Sep. 30, 2018
USD ($)
|
Sep. 30, 2019
USD ($)
|
Sep. 30, 2018
USD ($)
|
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Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Gain (loss) on divestiture | $ (483) | $ 0 | $ (33,530) | $ (1,568) | ||
Pirate Divestiture | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Proceeds from divestiture | $ 12,300 | |||||
Net undeveloped acres (in acres) | a | 3,400 | |||||
Producing wells | well | 6 | |||||
Proved undeveloped locations | location | 7 | |||||
Production per day (in barrels of oil equivalent) | Boe | 200 | |||||
Gain (loss) on divestiture | $ (33,500) |
Stock-Based Compensation - Additional Information (Details) - USD ($) |
3 Months Ended | 9 Months Ended | |
---|---|---|---|
Sep. 30, 2019 |
Sep. 30, 2019 |
Sep. 30, 2018 |
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Restricted Stock Units (RSUs) | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock-based compensation expenses | $ 2,000,000 | $ 2,100,000 | |
Stock-based compensation liability | $ 1,300,000 | 1,300,000 | |
Unrecognized compensation expense | 3,700,000 | $ 3,700,000 | |
Unrecognized stock-based compensation cost, recognition period | 2 years 1 month 20 days | ||
Vested in period, fair value | 0 | ||
Stock Appreciation Rights (SARs) | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Award vesting period | 3 years | ||
Stock-based compensation expenses | $ (100,000) | $ 1,500,000 | |
Stock-based compensation liability | 600,000 | 600,000 | |
Unrecognized compensation expense | $ 200,000 | $ 200,000 | |
Unrecognized stock-based compensation cost, recognition period | 1 year 1 day | ||
Expiration period | 5 years |
Commitments and Contingencies - Additional Information (Details) |
1 Months Ended |
---|---|
Jul. 31, 2019
USD ($)
| |
Commitments and Contingencies Disclosure [Abstract] | |
Aggregate drilling rate | $ 22,500 |
Early termination fee amount | $ 15,000 |
Accrued Liabilities |
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Payables and Accruals [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accrued Liabilities | Accrued Liabilities Accrued liabilities consisted of the following as of the dates indicated:
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Related Party Activities |
9 Months Ended |
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Sep. 30, 2019 | |
Related Party Transactions [Abstract] | |
Related Party Activities | Related Party Activities Leucadia In August 2016, Lonestar entered into a Securities Purchase Agreement (the “Purchase Agreement”) with Juneau, as initial purchaser, Leucadia as guarantor of Juneau’s obligations, the other purchasers party thereto and Jefferies, LLC, in its capacity as the collateral agent for the purchasers, relating to the issuance and sale of (i) up to $49.9 million aggregate principal amount of the Company's 12% senior secured second lien notes due 2021 (“Second Lien Notes”) and (ii) five-year warrants to purchase up to an aggregate 998,000 shares of the Company’s Class A voting common stock at a price equal to $5.00 per share (the “Warrants”). During 2016, the Company's issued $25.0 million in aggregate principal amount of Second Lien Notes and the Company issued Warrants to purchase 500,000 shares of its Class A voting common stock to Juneau. In December 2016, LRAI repaid to Juneau $21.0 million principal of the Second Lien Notes. In connection with entering into the Purchase Agreement, the Company also entered into a registration rights agreement and an equity commitment agreement. Pursuant to the registration rights agreement, the Company had agreed to register for resale certain Class A voting common stock issued or issuable to Juneau and Leucadia, including those issuable upon exercise of the Warrants. The Form S-3 registration statement was filed with the Securities and Exchange Commission on November 7, 2017 and is effective. Leucadia agreed, pursuant to the equity commitment agreement, to purchase a certain number of Class A voting common stock in case the Company elected to pursue an equity offering prior to December 31, 2016. Pursuant to the equity commitment agreement, Leucadia purchased 3,478,261 shares of Class A voting common stock (costing $20 million) through a common stock offering, which closed in December 2016. In connection with Leucadia’s equity commitment, the Company paid Leucadia in January 2017 a $1.0 million fee, which was recorded as a reduction to additional paid-in capital. In the event Leucadia purchased not less than its commitment amount, the Company agreed to use commercially reasonable efforts to enter into arrangements to provide Leucadia with the right to appoint one director to the Board of the Company, provided that such right will terminate at such time as Leucadia and its affiliates own a number of shares of Class A voting common stock equal to less than 50% of the shares purchased by Leucadia and its affiliates in such offering. Leucadia has elected to take an observer position on the board of directors, with no voting rights. EF Realisation In October 2016, Lonestar entered into a Board Representation Agreement (the “Board Representation Agreement”) with EF Realisation Company Limited (“EF Realisation”). Under the Board Representation Agreement, for as long as EF Realisation, together with its affiliates, beneficially owns 15% or more of the issued and outstanding shares of the Company’s Class A voting common stock, it has the right to nominate up to, but no more than, two directors to serve on the Board and for as long as EF Realisation, together with its affiliates, beneficially owns at least 10% but less than 15% of the Company’s issued and outstanding shares of Class A voting common stock, it has the right to nominate up to, but no more than, one director to serve on the Board. On October 9, 2018, EF Realisation notified the Company that it had completed a voluntary liquidation and distribution of assets to certain of its shareholders, including the sale or distribution of all of EF Realisation's 4,174,259 shares of the Company's Class A Stock, representing approximately 17% of the Company's total Class A Stock outstanding at the time. Following the liquidation, EF Realisation is no longer a shareholder of the Company. Amendment of Registration Rights Agreement In connection with the Battlecat and Marquis acquisitions, in June 2017, Lonestar entered into (i) a first amendment to the registration rights agreement (the “Leucadia RRA Amendment”) with Leucadia and JETX Energy, LLC (f/k/a Juneau Energy, LLC), which amends the registration rights agreement by and among the same parties, and (ii) a first amendment to registration rights agreement (the “EF RRA Amendment” and, together with the Leucadia RRA Amendment, the “RRA Amendments”) with EF Realisation, which amends the registration rights agreement from October 2016 by and between the same parties. The RRA Amendments set forth the relative priorities, with respect to demand and piggyback registration rights, among each applicable party thereto, Battlecat, Marquis and Chambers under their respective registration rights agreements with the Company. Other Related Party Transactions New Tech Global Ventures, LLC, and New Tech Global Environmental, LLC, companies in which a director of the Company owns a limited partnership interest, have provided field engineering staff and consultancy services for the Company since 2013. The total cost for such services was approximately $0.5 million and $0.6 million for the three months ended September 30, 2019 and 2018, respectively, and $1.3 million and $1.4 million for the nine months ended September 30, 2019 and 2018, respectively. In February 2019, the Company purchased a property adjacent to its corporate office for future expansion for approximately $2.0 million. The transaction was funded with cash from operations. The seller of the property is indebted to certain trusts established in favor of the children of one of the Company's directors. The Company understands that the seller may use some of the proceeds of the sale to satisfy such outstanding indebtedness, though the Company has no interest or influence over any particular outcome. |
Basis of Presentation Basis of Presentation - Additional Information (Details) - USD ($) $ in Thousands |
Sep. 30, 2019 |
Jan. 01, 2019 |
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New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Operating lease, liability | $ 112 | |
Accounting Standards Update 2016-02 | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Right-of-use asset | $ 300 | |
Operating lease, liability | $ 300 |
Leases - Maturities of Operating Lease Liabilities (Details) |
Sep. 30, 2019
USD ($)
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Leases [Abstract] | |
2019 | $ 68,000 |
2020 | 45,000 |
Thereafter | 0 |
Total minimum lease payments | 113,000 |
Amount of lease payments representing interest | (1,000) |
Present value of future minimum lease payments | $ 112,000 |
Basis of Presentation (Tables) |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Earnings Per Share, Basic and Diluted | The following is a reconciliation of basic and diluted earnings per share:
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Schedule of Potentially Dilute Earnings Per Share in Future Were Excluded in the Computation of Diluted Net (Loss) Income Per Share as They Were Anti-dilutive | The following weighted average securities could potentially dilute earnings per share for the periods indicated, but were excluded from the computation of diluted net income (loss) per share, as their effect would have been antidilutive:
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Unaudited Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares |
Sep. 30, 2019 |
Dec. 31, 2018 |
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Statement of Financial Position [Abstract] | ||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 100,000,000 | 100,000,000 |
Common stock, shares issued (in shares) | 24,933,853 | 24,645,825 |
Common stock, shares outstanding (in shares) | 24,933,853 | 24,645,825 |
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares issued (in shares) | 98,120 | 91,784 |
Preferred stock, shares outstanding (in shares) | 98,120 | 91,784 |
Basis of Presentation |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Basis of Presentation | Basis of Presentation Organization and Nature of Operations Lonestar Resources US Inc. (“Lonestar” or the "Company") is a Delaware corporation whose common stock is listed and traded on the Nasdaq Global Select Market under the symbol “LONE”. Lonestar is an independent oil and natural gas company focused on the exploration, development and production of unconventional oil, natural gas liquids and natural gas in the Eagle Ford Shale play in South Texas. Interim Financial Statements The accompanying unaudited condensed consolidated financial statements of Lonestar Resources US Inc., and its subsidiaries have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”) and do not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. These financial statements and the notes thereto should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2018 filed on March 13, 2019 (the “Form 10-K”). Unless indicated otherwise or the context requires, the terms “we,” “our,” “us,” “Company” or “Lonestar,” refer to Lonestar Resources US Inc. and its subsidiaries. The results of operations for the interim periods shown in this report are not necessarily indicative of results to be expected for the year. In management’s opinion, the accompanying unaudited condensed consolidated financial statements include all adjustments of a normal recurring nature necessary for a fair statement of our consolidated financial position as of September 30, 2019 and our consolidated results of operations for the three and nine months ended September 30, 2019 and 2018. Net Income (Loss) per Common Share The two-class method is utilized to compute earnings per common share as our Class A Participating Preferred Stock (the "Preferred Stock") is considered a participating security. Under the two-class method, losses are allocated only to those securities that have a contractual obligation to share in the losses of the Company. The Preferred Stock is not obligated to absorb Company losses and accordingly is not allocated losses. Net income attributable to common stockholders is allocated between common stock and participating securities based on the weighted average number of common shares and participating securities outstanding for the period. Basic earnings per share is computed by dividing the allocated net income (loss) attributable to common stockholders by the weighted-average number of shares of common stock outstanding for the period. Diluted earnings per share is computed similarly except that the denominator is increased to include dilutive potential common shares. Potential common shares consist of warrants, equity compensation awards and Preferred Stock. In certain circumstances adjustment to the numerator is also required for changes in income or loss resulting from the potential common shares. Basic weighted average common shares exclude shares of non-vested restricted stock. As these restricted shares vest, they will be included in the shares outstanding used to calculate basic earnings per share. The following is a reconciliation of basic and diluted earnings per share:
The following weighted average securities could potentially dilute earnings per share for the periods indicated, but were excluded from the computation of diluted net income (loss) per share, as their effect would have been antidilutive:
Recent Accounting Pronouncements Leases. In February 2016, the FASB issued Accounting Standards Update ("ASU") 2016-02, Leases ("ASU 2016-02"). The standard requires lessees to recognize a right of use asset ("ROU asset") and lease liability on the balance sheet for the rights and obligations created by leases. ASU 2016-02 also requires disclosures designed to give financial statement users information on the amount, timing, and uncertainty of cash flows arising from leases. In July 2018, the FASB issued ASU 2018-11, Leases (Topic 842): Targeted Improvements ("ASU 2018-11"), which provides for an alternative transition method by allowing entities to initially apply the new leases standard at the adoption date, January 1, 2019, and recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. Comparative periods presented in the financial statements continue to be in accordance with ASC Topic 840, Leases. In the normal course of business, the Company enters into lease agreements to support its exploration and development operations and lease assets, such as drilling rigs, field services, well equipment, office space and other assets. The Company adopted the new standard on the effective date of January 1, 2019, using a modified retrospective approach as permitted under ASU 2018-11. The new standard provides a number of optional practical expedients in transition. The Company: • elected the package of 'practical expedients', which permits the Company not to reassess, under the new standard, its prior conclusions about lease identification, lease classification and initial direct costs; • elected the practical expedient pertaining to land easements and plan to account for existing land easements under the Company's current accounting policy; • elected the short-term lease recognition exemption for all leases that qualify and, as such, no ROU asset or lease liability has been recorded on the balance sheet and no transition adjustment has been required for short-term leases; and • elected the practical expedient to not separate lease and non-lease components for all of the Company's leases. The Company did not elect the hindsight practical expedient in determining the lease term and assessing impairment of ROU assets when transitioning to ASU 2016-02. Upon adoption, the Company recognized additional operating lease liabilities of approximately $0.3 million with corresponding ROU assets. See Note 4. Leases for more information. |
Accrued Liabilities (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Payables and Accruals [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Accrued Liabilities | Accrued liabilities consisted of the following as of the dates indicated:
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Accrued Liabilities - Schedule of Accrued Liabilities (Details) - USD ($) $ in Thousands |
Sep. 30, 2019 |
Dec. 31, 2018 |
---|---|---|
Payables and Accruals [Abstract] | ||
Bonus payable | $ 1,744 | $ 3,244 |
Payroll payable | 51 | 773 |
Accrued interest – 11.25% Senior Notes | 7,031 | 14,063 |
Accrued interest – other | 478 | 104 |
Accrued well costs | 3,074 | 9,026 |
Third party payments for joint interest expenditures | 140 | 0 |
Accrued severance, property and franchise taxes | 2,356 | 96 |
Accrued federal income tax | 439 | 441 |
Current portion of operating lease liability | 112 | 0 |
Other | 675 | 381 |
Total accrued liabilities | $ 16,100 | $ 28,128 |
Debt instrument interest rate (as a percent) | 11.25% |
Revenue Recognition - Additional Information (Details) - USD ($) |
3 Months Ended | 9 Months Ended | |
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Sep. 30, 2019 |
Sep. 30, 2019 |
Dec. 31, 2018 |
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Disaggregation of Revenue [Abstract] | |||
Bad debt expense | $ 0 | $ 0 | |
Allowance for uncollectible accounts | $ 0 | $ 0 | $ 0 |
Long-Term Debt - Retirement of 8.75% Senior Notes - Additional Information (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||||||
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Jan. 04, 2018 |
Apr. 15, 2016 |
Sep. 30, 2019 |
Sep. 30, 2018 |
Mar. 31, 2018 |
Sep. 30, 2019 |
Sep. 30, 2018 |
Jan. 31, 2018 |
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Debt Instrument [Line Items] | ||||||||
Debt instrument interest rate (as a percent) | 11.25% | 11.25% | ||||||
Loss on extinguishment of debt | $ 0 | $ 0 | $ 0 | $ (8,619) | ||||
11.25% Senior Notes | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt instrument interest rate (as a percent) | 11.25% | 11.25% | 11.25% | |||||
Redemption price, percentage | 111.25% | |||||||
8.750% Senior Notes Due April 15, 2019 | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt instrument interest rate (as a percent) | 8.75% | 8.75% | 8.75% | |||||
Redemption price, percentage | 104.375% | |||||||
Redemption price, value | $ 158,500 | |||||||
8.750% Senior Notes Due April 15, 2019 | Unsecured Debt | ||||||||
Debt Instrument [Line Items] | ||||||||
Loss on extinguishment of debt | $ (8,600) |
Leases - Components of Lease Expense and Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended |
---|---|---|
Sep. 30, 2019 |
Sep. 30, 2019 |
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Leases [Abstract] | ||
Operating Leases | $ 68 | $ 205 |
Short-term leases | 799 | 2,058 |
Total lease expense | 867 | 2,263 |
Short-Term lease costs | $ 4,904 | 9,827 |
Cash paid for amounts included in the measurement of lease liabilities | 205 | |
Right-of-use assets obtained in exchange for operating lease obligations | $ 205 |
Acquisitions and Divestitures - Acquisitions (Details) - USD ($) $ in Millions |
3 Months Ended | |||
---|---|---|---|---|
Nov. 15, 2018 |
Aug. 02, 2017 |
Mar. 31, 2018 |
Feb. 28, 2019 |
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Business Acquisition [Line Items] | ||||
Acquisition price of an office building | $ 10.0 | |||
Acquisition of property for future expansion | $ 2.0 | |||
Texas | Other Expense | ||||
Business Acquisition [Line Items] | ||||
Impairment charge | $ 1.6 | |||
Sooner Acquisition | ||||
Business Acquisition [Line Items] | ||||
Purchase consideration of oil and gas properties | $ 38.7 | |||
Transaction costs capitalized | $ 0.3 |
Revenue Recognition |
9 Months Ended |
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Sep. 30, 2019 | |
Disaggregation of Revenue [Abstract] | |
Revenue Recognition | Revenue Recognition Operating revenues are comprised of sales of crude oil, NGLs and natural gas, as presented in the accompanying unaudited consolidated statements of operations for the three and nine months ended September 30, 2019 and 2018. Accounting Policies Revenue is recognized when performance obligations under the terms of a contract with a customer are satisfied. The Company recognizes revenue when control has been transferred to the customer, generally at the time commodities reach an agreed-upon delivery point. Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring products and is generally based upon a negotiated formula, list or fixed price based on a market index. Typically, the Company sells its products directly to customers generally under agreements with payment terms less than 30 days. Oil Revenues The Company's crude oil sales contracts are generally structured such that Lonestar commits and dedicates for sale a specified volume of oil production from agreed-upon leases to a purchaser. Oil is sold at a contractually-specified index price plus or minus a differential, and title and control of the product generally transfers at the delivery point specified in the contract, at which point related revenue is recognized. For those leases in which Lonestar operates with other working interest owners, the Company recognizes oil revenue proportionate to its entitled share of volumes sold. Currently, all of Lonestar’s oil production comes from the Eagle Ford Shale play in South Texas, and direct sales to four purchasers account for the majority of its oil sales. The Company’s oil purchase contracts are generally written to provide month-to-month terms with a 30-day cancellation notice. Sales of Lonestar’s oil production are typically invoiced monthly based on actual volumes measured at the agreed-upon delivery point and stated contract pricing for the month. NGLs and Natural Gas Revenues The Company’s NGL and natural gas purchase contracts are generally structured such that Lonestar commits and dedicates for sale a specified volume of NGL and/or natural gas production per day from agreed-upon leases to a purchaser. NGLs and natural gas are sold at a percentage of index prices of each component less any stated deductions. Control transfers at the delivery point specified in the contract, which typically is stated as the inlet or tailgate of a plant where the produced NGLs and natural gas are processed for subsequent transportation and consumption. In certain situations, Lonestar takes processed natural gas in-kind from a processing plant for sale under a separate purchase agreement with a different delivery point. The stated delivery point determines whether certain conditioning, treating, transportation and fractionation fees associated with the sold NGLs and natural gas are treated as operating expenses (occurring before the delivery point) or as deductions to revenues (occurring after the delivery point). For those leases in which Lonestar operates with other working interest owners, the Company recognizes NGL and natural gas revenue proportionate to its entitled share of volumes sold. Currently, all of Lonestar’s NGL and natural gas production comes from the Eagle Ford Shale play in South Texas. Sales of Lonestar’s NGL and natural gas production is typically invoiced monthly based on actual volumes at the agreed-upon delivery point and stated contract pricing and allocations for the month. Lonestar uses a third-party broker for its NGL and natural gas marketing. In this capacity, the third-party is responsible for carrying out marketing activities such as submission of nominations, receipt of payments, submission of invoices and negotiation of contracts. In this agreement, Lonestar retains final approval of contracts and is not entitled to sales proceeds from the third-party until they are collected from the related purchasers. Commissions payable to the third-party broker for these services are treated as operating expenses in the financial statements. Production Imbalances Revenue is recorded based on the Company’s share of volumes sold, regardless of whether the Company has taken its proportional share of volumes produced. A receivable or liability is recognized only to the extent that the Company has an imbalance on a specific property greater than the expected remaining proved reserves. There were no imbalances at September 30, 2019. Significant Judgements As noted above, the Company engages in various types of transactions in which midstream entities process its gas and subsequently market resulting NGLs and residue gas to third-party customers on Lonestar’s behalf. These types of transactions require judgement to determine whether Lonestar is the principal or the agent in the contract and, as a result, whether revenues are recorded gross or net. The Company has determined that each unit of product represents a separate performance obligation under the terms of its purchase contracts, and therefore, future volumes are wholly unsatisfied. Therefore, the Company has utilized the practical expedient exempting a Company from disclosure of the transaction price allocated to remaining performance obligations if the variable consideration is allocated entirely to a wholly unsatisfied performance obligation. Prior-Period Performance Obligations The Company records revenue in the month production is delivered to the purchaser. Settlement statements for certain NGL and natural gas sales may not be received for 30 to 60 days after the date production is delivered, and as a result, Lonestar is required to estimate the amount of production that was delivered to the purchaser and the price that will be received for the sale of the product. The Company records the differences between its estimates and the actual amounts received for product sales in the month that payment is received from the purchaser. Any identified differences between its revenue estimates and actual revenue received historically have not been significant. For the nine months ended September 30, 2019, revenue recognized in the reporting period related to performance obligations satisfied in prior reporting periods was not material. Accounts Receivable and Other Accounts receivable – Oil, natural gas liquid and natural gas sales consist of amounts due from purchasers for commodity sales from our Eagle Ford fields. Payments from purchasers are typically due by the last day of the month following the month of delivery. There was no bad debt expense for any period presented, and an allowance for uncollectible accounts is unnecessary. The Company’s operations do not result in any contract assets or liabilities on the accompanying consolidated balance sheets. |
Stockholders’ Equity |
9 Months Ended |
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Sep. 30, 2019 | |
Equity [Abstract] | |
Stockholders’ Equity | Stockholders’ Equity Series A & B Preferred Stock In June 2017, the Company closed on acquisitions with Battlecat Oil & Gas, LLC ("Battlecat") and SN Marquis LLC ("Marquis"). In connection with financing the Battlecat and Marquis Acquisitions, the Company issued 5,400 shares of Series A-1 Convertible Participating Preferred Stock, par value $0.001 per share (the “Series A-1 Preferred Stock”) and 74,600 shares of Series A-2 Convertible Participating Preferred Stock, par value $0.001 per share (the “Series A-2 Preferred Stock” and, together with the Series A-1 Preferred Stock, the “Series A Preferred Stock”), to Chambers Energy Capital (“Chambers”). Also in June 2017, in connection with the Battlecat and Marquis Acquisitions, the Company issued 1,184,632 and 1,500,000 shares of Series B Preferred Stock to Battlecat and Marquis. As a result of the stockholder approval obtained in November 2017, all outstanding Series A-2 Preferred Stock was converted to Series A-1 Preferred Stock. Also, on November 3, 2017, in accordance with the terms of the Series B Certificate of Designations, all of the outstanding shares of the Company’s Series B Preferred Stock were converted on a one-for-one basis into shares of the Company’s Class A voting common stock. After the Chambers agreement closing, and for so long as the Approved Holders (as defined) beneficially own at least 10% of the total number of outstanding shares of Class A voting common stock and Class B non-voting common stock (collectively, “Common Stock”) of the Company, on an as-converted basis, or at least 15% of the number of Series A Preferred Stock issued to Chambers, the Company cannot undertake certain actions without the prior consent of holders of a majority of all shares of Common Stock, on an as-converted basis, held by the Approved Holders. Prior to June 15, 2020, Chambers and its affiliates are prohibited from directly or indirectly engaging in any short sales involving the Common Stock or securities convertible into, or exercisable or exchanged for, Common Stock. Without the prior written consent of the board, the Approved Holders are subject to customary standstill restrictions until the earlier of (i) the two-year anniversary of the date the Approved Holders are no longer entitled to designate any director to the Board and (ii) the date the Company fails to fully declare and pay all accrued dividends on either series of the Series A Preferred Stock after there are no PIK Quarters (as defined below) remaining. In connection with the closing and the issuance of shares of Series A Preferred Stock, the Company entered into a registration rights agreement with Chambers (the “Chambers RRA”). Under the Chambers RRA, the Company has agreed to provide to Chambers certain customary demand and piggyback registration rights relating to Chambers’ ownership of Company stock. The Chambers RRA contains customary terms and conditions, including certain customary indemnification obligations. The Series A-1 Preferred Stock ranks senior to Class A voting common stock with respect to dividend rights and rights upon the liquidation, winding-up or dissolution of the Company, and the series initially has a stated value of $1,000 per share. Holders of Series A-1 Preferred Stock are entitled to vote with holders of Class A voting common stock on an as-converted basis. Shares of Series A-1 Preferred Stock are convertible into shares of Class A voting common stock at the option of the holders of such Series A-1 Preferred Stock at a per share rate (the “Conversion Rate”) equal to the Stated Value of such share divided by six, subject to certain adjustments (the “Conversion Price”). The Company has the option to convert Series A-1 Preferred Stock to Class A voting common stock if the volume weighted average price of Class A voting common stock exceeds the following percentages of the Conversion Price for twenty out of thirty consecutive trading days: (i) 175%, if such mandatory conversion occurs before June 15, 2020 and (ii) 150%, if such mandatory conversion occurs after June 15, 2020. Holders of Series A-1 Preferred Stock are entitled to cumulative dividends payable quarterly initially at a rate of 9% per annum (the “Dividend Rate”) in cash and, for any 12 quarters (“PIK Quarters”), at the Company’s option, (i) in the form of additional shares of the respective series of Series A-1 Preferred Stock at a per share price equal to $975 or (ii) by increasing Stated Value, in lieu of cash (collectively, the “PIK Option”). After the 12 PIK Quarters (three of which remain as of September 30, 2019), if the Company fails to fully declare and pay dividends in cash, then the Dividend Rate for Series A Preferred Stock will automatically increase by 5% per annum for the next succeeding dividend period and then an additional 1% for each successive dividend period, up to a maximum Dividend Rate of 20% per annum, until the Company pays dividends at such increased rate fully in cash for two consecutive quarters. In addition to dividends rights described above, holders of the Series A-1 Preferred Stock are entitled to receive dividends or distributions declared or paid on Class A voting common stock on an as-converted basis. If on June 15, 2024, the Prevailing Price is less than the Conversion Price then in effect, the Dividend Rate for Series A-1 Preferred Stock will automatically increase to 20% per annum, payable only in cash, unless automatically converted as described above. However, the Company, at its option, may instead elect to exchange each share of Series A-1 Preferred Stock for senior unsecured notes of the Company with a two-year maturity, a 9% per annum coupon payable semi-annually in cash, and governed by terms substantially similar to the Company’s most recent high yield indenture at that time. After June 15, 2020, the Company may redeem shares of Series A-1 Preferred Stock in cash at a per share amount equal to (i) 110% of the Stated Value, if the redemption occurs prior to June 15, 2021, (ii) 105% of the Stated Value, if the redemption occurs on or prior to June 15, 2022, and (iii) 100% of the Stated Value, if the redemption occurs after June 15, 2022, in each case, plus any unpaid dividends. For the third and fourth quarters of 2017 and all four quarters of 2018, the Company elected the PIK Option for the Class A-1 Preferred Stock dividend payment, which resulted in the issuance of 11,784 additional shares of Series A-1 Preferred Stock. For the first three quarters of 2019, the Company also elected the PIK Option for the Class A-1 Preferred Stock dividend payment, which resulted in the issuance of 6,336 additional shares of Series A-1 Preferred Stock. Repurchase and Retirement of Class B Common Stock In connection with the EF Realisation liquidation in October 2018, the Company repurchased and retired 2,500 shares of the Class B non-voting common stock (the "Class B Stock") from Dr. Christopher Rowland at a cost of $10,000 on September 28, 2018. The Class B Stock was originally issued to Dr. Rowland in connection with the Company's reorganization in 2016. After the repurchase and retirement of the Class B Stock, there are no shares of Class B Stock issued and outstanding. |
Subsequent Events |
9 Months Ended |
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Sep. 30, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events None. |
Commodity Price Risk Activities |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commodity Price Risk Activities | Commodity Price Risk Activities Lonestar enters into certain commodity derivative instruments to mitigate commodity price risk associated with a portion of its future oil, NGL and natural gas production and related cash flows. The oil, NGL and natural gas revenues and cash flows are affected by changes in commodity product prices, which are volatile and cannot be accurately predicted. The objective for entering into these commodity derivatives is to protect the operating revenues and cash flows related to a portion of the future oil, NGL and natural gas sales from the risk of significant declines in commodity prices, which helps ensure the Company’s ability to fund the capital budget. Inherent in Lonestar's fixed price contracts are certain business risks, including market risk and credit risk. Market risk is the risk that the price of oil and natural gas will change, either favorably or unfavorably, in response to changing market conditions. Credit risk is the risk of loss from non-performance by the Company’s counterparty to a contract. The Company does not currently require cash collateral from any of its counterparties nor does its counterparties require cash collateral from the Company. As of September 30, 2019, the Company had no open physical delivery obligations.The following table summarizes Lonestar's commodity derivative contracts as of September 30, 2019:
(1) Ranges presented for fixed-price swaps and basis swaps represent the lowest and highest fixed prices of all open contracts for the period presented. (2) Basis swap contracts establish a fixed amount for the differential between Argus WTI and Argus LLS prices on a trade-month basis for the period indicated. During October 2019, the Company entered into additional oil swaps for January through December of 2021, which hedge 365,000 bbls at $51.69 per bbl. During November 2019, the Company entered into additional natural gas swaps for January through December of 2021, which hedge 1,830,000 MMcf at an average price of $2.54 per Mcf. As of September 30, 2019, all of the Company’s economic derivative hedge positions were with large financial institutions, which are not known to the Company to be in default on their derivative positions. The Company is exposed to credit risk to the extent of non-performance by the counterparties in the derivative contracts discussed above; however, the Company does not anticipate non-performance by such counterparties. None of the Company’s derivative instruments contain credit-risk related contingent features. |
Leases (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of Lease Expense and Supplemental Cash Flow Information | Supplemental cash flow information related to leases follows:
The components of our total lease expense for the three and nine months ended September 30, 2019 are as follows:
(1) Short-term leases represent expenses related to leases with a contract term of one year or less. The majority of these leases relate to field operating equipment and are included in lease operating and gas gathering expense on the unaudited condensed consolidated statement of operations. (2) Short-term lease costs represent leases with a contract term of one year or less, the majority of which are related to drilling rigs and are capitalized as part of Oil and Gas Properties on the unaudited condensed consolidated balance sheets. |
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Supplemental Balance Sheet Information | Supplemental balance sheet information related to leases follows:
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Maturities of Operating Lease Liabilities | The table below reconciles the undiscounted cash flows for each of the first five years and total of the remaining years to the operating lease liabilities recorded on the unaudited condensed consolidated balance sheet as of September 30, 2019:
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Maturities of Operating Leases Under Previous Accounting Standard | Under the previous accounting standard, future minimum lease payments for operating leases having initial or remaining noncancelable terms in excess of one year would have been as follows as of September 30, 2019:
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Document And Entity Information - shares |
9 Months Ended | |
---|---|---|
Sep. 30, 2019 |
Nov. 11, 2019 |
|
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2019 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q3 | |
Entity Registrant Name | Lonestar Resources US Inc. | |
Entity Central Index Key | 0001661920 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Accelerated Filer | |
Entity Emerging Growth Company | true | |
Entity Small Business | true | |
Entity Ex Transition Period | false | |
Entity Shell Company | false | |
Entity Current Reporting Status | Yes | |
Entity Common Stock, Shares Outstanding | 24,944,891 |
Stock-Based Compensation (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Outstanding Restricted Stock Units | A summary of the status of the Company's non-vested RSU grants issued, and the changes during the nine months ended September 30, 2019 is presented below:
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Schedule of Outstanding Stock Appreciation Rights | The following is a summary of the Company's SAR activity:
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