(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |||||||
(Address of principal executive offices) | (Zip Code) |
Title of Each Class | Trading Symbol* | Name of Exchange on Which Registered | ||||||
par value $0.001 per share |
Large accelerated filer | ☐ | Accelerated filer | ☐ | |||||||||||
ý | Smaller reporting company | |||||||||||||
Emerging growth company |
Page | ||||||||
PART I. | ||||||||
Item 1. | ||||||||
Item 2. | ||||||||
Item 3. | ||||||||
Item 4. | ||||||||
PART II. | ||||||||
Item 1. | ||||||||
Item 1A. | ||||||||
Item 2. | ||||||||
Item 3. | ||||||||
Item 5. | ||||||||
Item 6. | ||||||||
September 30, 2020 | December 31, 2019 | ||||||||||
Assets | |||||||||||
Current assets | |||||||||||
Cash and cash equivalents | $ | $ | |||||||||
Accounts receivable | |||||||||||
Oil, natural gas liquid and natural gas sales | |||||||||||
Joint interest owners and others, net | |||||||||||
Derivative financial instruments | |||||||||||
Prepaid expenses and other | |||||||||||
Total current assets | |||||||||||
Property and equipment | |||||||||||
Oil and gas properties, using the successful efforts method of accounting | |||||||||||
Proved properties | |||||||||||
Unproved properties | |||||||||||
Other property and equipment | |||||||||||
Less accumulated depreciation, depletion, amortization and impairment | ( | ( | |||||||||
Property and equipment, net | |||||||||||
Accounts receivable – related party | |||||||||||
Derivative financial instruments | |||||||||||
Other non-current assets | |||||||||||
Total assets | $ | $ | |||||||||
Liabilities and Stockholders' (Deficit) Equity | |||||||||||
Current liabilities | |||||||||||
Accounts payable | $ | $ | |||||||||
Accounts payable – related party | |||||||||||
Oil, natural gas liquid and natural gas sales payable | |||||||||||
Accrued liabilities | |||||||||||
Derivative financial instruments | |||||||||||
Current maturities of long-term debt | |||||||||||
Total current liabilities | |||||||||||
Long-term liabilities | |||||||||||
Long-term debt | |||||||||||
Asset retirement obligations | |||||||||||
Deferred tax liabilities, net | |||||||||||
Warrant liability | |||||||||||
Warrant liability – related party | |||||||||||
Derivative financial instruments | |||||||||||
Other non-current liabilities | |||||||||||
Total long-term liabilities | |||||||||||
Liabilities subject to compromise | |||||||||||
Total liabilities | |||||||||||
Commitments and contingencies (Note 11) | |||||||||||
Stockholders' (deficit) equity | |||||||||||
Class A voting common stock, $ | |||||||||||
Series A-1 convertible participating preferred stock, $ | |||||||||||
Additional paid-in capital | |||||||||||
Accumulated deficit | ( | ( | |||||||||
Total stockholders' (deficit) equity | ( | ||||||||||
Total liabilities and stockholders' (deficit) equity | $ | $ |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
Revenues | |||||||||||||||||||||||
Oil sales | $ | $ | $ | $ | |||||||||||||||||||
Natural gas liquid sales | |||||||||||||||||||||||
Natural gas sales | |||||||||||||||||||||||
Total revenues | |||||||||||||||||||||||
Expenses | |||||||||||||||||||||||
Lease operating | |||||||||||||||||||||||
Gas gathering, processing and transportation | |||||||||||||||||||||||
Production and ad valorem taxes | |||||||||||||||||||||||
Depreciation, depletion and amortization | |||||||||||||||||||||||
Loss on sale and disposal of oil and gas properties | |||||||||||||||||||||||
Impairment of oil and gas properties | |||||||||||||||||||||||
General and administrative | |||||||||||||||||||||||
Other expense (income) | ( | ( | ( | ||||||||||||||||||||
Total expenses | |||||||||||||||||||||||
(Loss) income from operations | ( | ( | |||||||||||||||||||||
Other (expense) income | |||||||||||||||||||||||
Interest expense | ( | ( | ( | ( | |||||||||||||||||||
Change in fair value of warrants | ( | ||||||||||||||||||||||
(Loss) gain on derivative financial instruments | ( | ( | |||||||||||||||||||||
Reorganization items, net | ( | ( | |||||||||||||||||||||
Total other (expense) income | ( | ( | |||||||||||||||||||||
(Loss) income before income taxes | ( | ( | ( | ||||||||||||||||||||
Income tax benefit (expense) | ( | ||||||||||||||||||||||
Net (loss) income | ( | ( | ( | ||||||||||||||||||||
Preferred stock dividends | ( | ( | ( | ||||||||||||||||||||
Undeclared cumulative preferred stock dividends | ( | ( | |||||||||||||||||||||
Net (loss) income attributable to common stockholders | $ | ( | $ | $ | ( | $ | ( | ||||||||||||||||
Net (loss) income per common share | |||||||||||||||||||||||
Basic | $ | ( | $ | $ | ( | $ | ( | ||||||||||||||||
Diluted | $ | ( | $ | $ | ( | $ | ( | ||||||||||||||||
Weighted average common shares outstanding | |||||||||||||||||||||||
Basic | |||||||||||||||||||||||
Diluted |
Class A Voting Common Stock | Series A-1 Preferred Stock | Additional Paid-in Capital | Accumulated Deficit | Total Stockholders' (Deficit) Equity | |||||||||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | ||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2019 | $ | $ | — | $ | $ | ( | $ | ||||||||||||||||||||||||||||||||||
Preferred stock dividends | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | |||||||||||||||||||||||||||||||||||||
Net loss | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||
Balance at March 31, 2020 | — | ( | |||||||||||||||||||||||||||||||||||||||
Preferred stock dividends | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | |||||||||||||||||||||||||||||||||||||
Net loss | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||
Balance at June 30, 2020 | — | ( | ( | ||||||||||||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | — | $ | |||||||||||||||||||||||||||||||||||
Net loss | — | — | — | — | — | ( | $ | ( | |||||||||||||||||||||||||||||||||
Balance at September 30, 2020 | $ | $ | — | $ | $ | ( | $ | ( | |||||||||||||||||||||||||||||||||
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 | $ | $ | — | $ | $ | ( | $ | ||||||||||||||||||||||||||||||||||
Preferred stock dividends | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | |||||||||||||||||||||||||||||||||||||
Net loss | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||
Balance at March 31, 2019 | — | ( | |||||||||||||||||||||||||||||||||||||||
Preferred stock dividends | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | |||||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Balance at June 30, 2019 | $ | — | ( | ||||||||||||||||||||||||||||||||||||||
Preferred stock dividends | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Balance at September 30, 2019 | $ | $ | — | $ | $ | ( | $ |
Nine Months Ended September 30, | |||||||||||
2020 | 2019 | ||||||||||
Cash flows from operating activities | |||||||||||
Net loss | $ | ( | $ | ( | |||||||
Adjustments to reconcile net loss to net cash provided by operating activities: | |||||||||||
Depreciation, depletion and amortization | |||||||||||
Stock-based compensation | ( | ||||||||||
Deferred taxes | ( | ( | |||||||||
(Gain) loss on derivative financial instruments | ( | ||||||||||
Settlements of derivative financial instruments | ( | ||||||||||
Non-cash reorganization items | |||||||||||
Impairment of oil and natural gas properties | |||||||||||
Loss (gain) on disposal of property and equipment | ( | ||||||||||
Loss on sale of oil and gas properties | |||||||||||
Non-cash interest expense | |||||||||||
Change in fair value of warrants | ( | ( | |||||||||
Changes in operating assets and liabilities: | |||||||||||
Accounts receivable | ( | ( | |||||||||
Prepaid expenses and other assets | ( | ( | |||||||||
Accounts payable and accrued expenses | ( | ||||||||||
Net cash provided by operating activities | |||||||||||
Cash flows from investing activities | |||||||||||
Acquisition of oil and gas properties | ( | ( | |||||||||
Development of oil and gas properties | ( | ( | |||||||||
Proceeds from sale of oil and gas properties | |||||||||||
Purchases of other property and equipment | ( | ( | |||||||||
Net cash used in investing activities | ( | ( | |||||||||
Cash flows from financing activities | |||||||||||
Proceeds from borrowings | |||||||||||
Payments on borrowings | ( | ( | |||||||||
Net cash provided by financing activities | |||||||||||
Net increase (decrease) in cash and cash equivalents | ( | ||||||||||
Cash and cash equivalents, beginning of the period | |||||||||||
Cash and cash equivalents, end of the period | $ | $ | |||||||||
Supplemental information: | |||||||||||
Cash paid for interest | $ | $ | |||||||||
Non-cash investing and financing activities: | |||||||||||
Undeclared cumulative dividends on preferred stock | $ | $ | |||||||||
Change in asset retirement obligation | ( | ||||||||||
Change in liabilities for capital expenditures | ( |
(in thousands) | September 30, 2020 | |||||||
Accounts payable | $ | |||||||
Accounts payable — related parties | ||||||||
Oil, natural gas liquid and natural gas sales | ||||||||
Accrued liabilities | ||||||||
Current maturities of long-term debt | ||||||||
Long-term debt | ||||||||
Equity warrant liability — related parties | ||||||||
Other non-current liabilities | ||||||||
Total liabilities subject to compromise | $ |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||
In thousands, except shares and per-share data | 2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||||
Numerator — Basic | ||||||||||||||||||||||||||
Total net (loss) income attributable to common stockholders | $ | ( | $ | $ | ( | $ | ( | |||||||||||||||||||
Less: allocation to participating securities | ( | |||||||||||||||||||||||||
Net (loss) income attributable to common stockholders | $ | ( | $ | $ | ( | $ | ( | |||||||||||||||||||
Numerator — Diluted | ||||||||||||||||||||||||||
Net income (loss) allocated to common stockholders - basic | $ | ( | $ | $ | ( | $ | ( | |||||||||||||||||||
Restricted stock unit compensation gain, net of tax | $ | $ | ( | $ | $ | |||||||||||||||||||||
Net income (loss) allocated to common stockholders - diluted | $ | ( | $ | $ | ( | $ | ( | |||||||||||||||||||
Denominator | ||||||||||||||||||||||||||
Weighted average number of common shares — Basic | ||||||||||||||||||||||||||
Restricted stock units converted under the treasury method | ||||||||||||||||||||||||||
Weighted average number of common shares — Diluted | ||||||||||||||||||||||||||
Earnings per share | ||||||||||||||||||||||||||
Basic | $ | ( | $ | $ | ( | $ | ( | |||||||||||||||||||
Diluted | $ | ( | $ | $ | ( | $ | ( |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||||||||||||||
Preferred stock | ||||||||||||||||||||||||||
Warrants | ||||||||||||||||||||||||||
Stock appreciation rights | ||||||||||||||||||||||||||
Restricted stock units |
In thousands | Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||||||||||||||
Oil | $ | $ | $ | $ | ||||||||||||||||||||||
NGLs | ||||||||||||||||||||||||||
Natural gas | ||||||||||||||||||||||||||
Total revenues | $ | $ | $ | $ |
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, 2020 | ||||||||||||||||||||||||||
Liabilities: | ||||||||||||||||||||||||||
Warrant | ( | ( | ||||||||||||||||||||||||
Stock-based compensation | ( | ( | ( | |||||||||||||||||||||||
Total | $ | ( | $ | $ | ( | $ | ( | |||||||||||||||||||
December 31, 2019 | ||||||||||||||||||||||||||
Assets: | ||||||||||||||||||||||||||
Derivative financial instruments | $ | $ | $ | $ | ||||||||||||||||||||||
Liabilities: | ||||||||||||||||||||||||||
Derivative financial instruments | ( | ( | ||||||||||||||||||||||||
Warrant | ( | ( | ||||||||||||||||||||||||
Stock-based compensation | ( | ( | ( | |||||||||||||||||||||||
Total | $ | ( | $ | ( | $ | ( | $ | ( |
In thousands | Warrant | Stock-Based Compensation | Total | |||||||||||||||||
Balance as of December 31, 2019 | $ | ( | $ | ( | $ | ( | ||||||||||||||
Unrealized gains | ||||||||||||||||||||
Balance as of September 30, 2020 | $ | ( | $ | ( | $ | ( |
In thousands | September 30, 2020 | December 31, 2019 | ||||||||||||
Accrued interest – | $ | $ | ||||||||||||
Accrued well costs | ||||||||||||||
Bonus payable | ||||||||||||||
Other | ||||||||||||||
Total accrued liabilities, prior to reclassification to liabilities subject to compromise | ||||||||||||||
Less amounts reclassified to liabilities subject to compromise (1) | ( | |||||||||||||
Total accrued liabilities | $ | $ |
In thousands | September 30, 2020 | December 31, 2019 | ||||||||||||
Senior Secured Credit Facility | $ | $ | ||||||||||||
Mortgage debt (1) | ||||||||||||||
PPP loan | ||||||||||||||
Other | ||||||||||||||
Total principal | ||||||||||||||
Unamortized discount (2) | ( | |||||||||||||
Unamortized debt issuance costs (2) | ( | |||||||||||||
Total debt, prior to reclassification to liabilities subject to compromise | ||||||||||||||
Less amounts reclassified to liabilities subject to compromise (3) | ( | |||||||||||||
Total debt not subject to compromise (4) | ||||||||||||||
Less current obligations (5) | ( | ( | ||||||||||||
Total long-term debt (6) | $ | $ |
Shares | Weighted Average Fair Value per Share | ||||||||||
Non-vested RSUs at December 31, 2019 | $ | ||||||||||
Granted | |||||||||||
Vested | ( | ||||||||||
Forfeited | ( | ||||||||||
Non-vested RSUs at September 30, 2020 | $ |
Shares | Weighted Average Exercise Price Per Share | Weighted Average Remaining Contractual Term (in years) | |||||||||||||||
Outstanding at December 31, 2019 | $ | ||||||||||||||||
SARs vested and exercisable at December 31, 2019 | |||||||||||||||||
Granted | — | ||||||||||||||||
Exercised | — | ||||||||||||||||
Expired/forfeited | — | ||||||||||||||||
Outstanding at September 30, 2020 | $ | ||||||||||||||||
SARs vested and exercisable at September 30, 2020 | $ |
In thousands, except per share and unit data | Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||||||||||||||
Operating Results | ||||||||||||||||||||||||||
Net loss attributable to common stockholders | $ | (38,473) | $ | 14,058 | $ | (194,423) | $ | (35,394) | ||||||||||||||||||
Net loss per common share – basic(1) | (1.52) | 0.34 | (7.70) | (1.42) | ||||||||||||||||||||||
Net loss per common share – diluted(1) | (1.52) | 0.33 | (7.70) | (1.42) | ||||||||||||||||||||||
Net cash provided by operating activities | 52,320 | 14,686 | 82,731 | 52,873 | ||||||||||||||||||||||
Revenues | ||||||||||||||||||||||||||
Oil | $ | 24,524 | $ | 42,187 | $ | 66,510 | $ | 120,496 | ||||||||||||||||||
NGLs | 3,202 | 3,439 | 7,565 | 10,381 | ||||||||||||||||||||||
Natural gas | 4,383 | 7,519 | 12,285 | 15,224 | ||||||||||||||||||||||
Total revenues | $ | 32,109 | $ | 53,145 | $ | 86,360 | $ | 146,101 | ||||||||||||||||||
Total production volumes by product | ||||||||||||||||||||||||||
Oil (Bbls) | 661,465 | 725,405 | 1,899,145 | 2,024,862 | ||||||||||||||||||||||
NGLs (Bbls) | 305,920 | 387,256 | 876,853 | 868,811 | ||||||||||||||||||||||
Natural gas (Mcf) | 2,154,969 | 3,313,757 | 6,468,594 | 6,210,617 | ||||||||||||||||||||||
Total barrels of oil equivalent (6:1) | 1,326,547 | 1,664,954 | 3,854,097 | 3,928,776 | ||||||||||||||||||||||
Daily production volumes by product | ||||||||||||||||||||||||||
Oil (Bbls/d) | 7,190 | 7,885 | 6,931 | 7,417 | ||||||||||||||||||||||
NGLs (Bbls/d) | 3,325 | 4,209 | 3,200 | 3,182 | ||||||||||||||||||||||
Natural gas (Mcf/d) | 23,424 | 36,019 | 23,608 | 22,750 | ||||||||||||||||||||||
Total barrels of oil equivalent (BOE/d) | 14,419 | 18,097 | 14,066 | 14,391 | ||||||||||||||||||||||
Average realized prices | ||||||||||||||||||||||||||
Oil ($ per Bbl) | $ | 37.08 | $ | 58.16 | $ | 35.02 | $ | 59.51 | ||||||||||||||||||
NGLs ($ per Bbl) | 10.47 | 8.88 | 8.63 | 11.95 | ||||||||||||||||||||||
Natural gas ($ per Mcf) | 2.03 | 2.27 | 1.90 | 2.45 | ||||||||||||||||||||||
Total oil equivalent, excluding the effect from commodity derivatives ($ per BOE) | 24.20 | 31.92 | 22.41 | 37.19 | ||||||||||||||||||||||
Oil equivalent price impact of settled hedges ($ per BOE) | 33.23 | (0.33) | 19.04 | (1.41) | ||||||||||||||||||||||
Total oil equivalent, including the effect from commodity derivatives ($ per BOE) | 57.43 | 31.59 | 41.45 | 35.78 | ||||||||||||||||||||||
Operating and other expenses | ||||||||||||||||||||||||||
Lease operating | $ | 4,763 | $ | 8,948 | $ | 16,430 | $ | 23,472 | ||||||||||||||||||
Gas gathering, processing and transportation | 1,891 | 1,107 | 4,916 | 3,223 | ||||||||||||||||||||||
Production and ad valorem taxes | 1,994 | 3,017 | 6,084 | 8,126 | ||||||||||||||||||||||
Depreciation, depletion and amortization | 18,256 | 24,635 | 59,184 | 64,120 | ||||||||||||||||||||||
General and administrative | 15,808 | 4,124 | 24,664 | 12,345 | ||||||||||||||||||||||
Interest expense | 11,399 | 11,295 | 33,521 | 32,730 | ||||||||||||||||||||||
Operating and other expenses per BOE | ||||||||||||||||||||||||||
Lease operating | $ | 3.59 | $ | 5.37 | $ | 4.26 | $ | 5.97 | ||||||||||||||||||
Gas gathering, processing and transportation | 1.43 | 0.66 | 1.28 | 0.82 | ||||||||||||||||||||||
Production and ad valorem taxes | 1.50 | 1.81 | 1.58 | 2.07 | ||||||||||||||||||||||
Depreciation, depletion and amortization | 13.76 | 14.80 | 15.36 | 16.32 | ||||||||||||||||||||||
General and administrative | 11.92 | 2.48 | 6.40 | 3.14 | ||||||||||||||||||||||
Interest expense | 8.59 | 6.78 | 8.70 | 8.33 |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||||||||||||||
2020 | 2019 | Change | 2020 | 2019 | Change | |||||||||||||||||||||||||||||||||
Oil (Bbls/d) | 7,190 | 7,885 | (9) | % | 6,931 | 7,417 | (7) | % | ||||||||||||||||||||||||||||||
NGLs (Bbls/d) | 3,325 | 4,209 | (21) | % | 3,200 | 3,182 | 1 | % | ||||||||||||||||||||||||||||||
Natural gas (Mcf/d) | 23,424 | 36,019 | (35) | % | 23,608 | 22,750 | 4 | % | ||||||||||||||||||||||||||||||
Total (BOE/d) | 14,419 | 18,097 | (20) | % | 14,066 | 14,391 | (2) | % |
In thousands | Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||||||||||
2020 | 2019 | Change | 2020 | 2019 | Change | |||||||||||||||||||||||||||||||||
Oil | $ | 24,524 | $ | 42,187 | (42) | % | $ | 66,510 | $ | 120,496 | (45) | % | ||||||||||||||||||||||||||
NGLs | 3,202 | 3,439 | (7) | % | 7,565 | 10,381 | (27) | % | ||||||||||||||||||||||||||||||
Natural gas | 4,383 | 7,519 | (42) | % | 12,285 | 15,224 | (19) | % | ||||||||||||||||||||||||||||||
Total revenues | $ | 32,109 | $ | 53,145 | (40) | % | $ | 86,360 | $ | 146,101 | (41) | % |
In thousands | Three Months Ended September 30, 2020 vs 2019 | Nine Months Ended September 30, 2020 vs 2019 | ||||||||||||||||||||||||
Decrease in Revenues | Percentage Decrease in Revenues | Decrease in Revenues | Percentage Decrease in Revenues | |||||||||||||||||||||||
Change in oil, NGL and natural gas revenues due to: | ||||||||||||||||||||||||||
Decrease in production | $ | (10,802) | (20) | % | $ | (2,777) | (2) | % | ||||||||||||||||||
Decrease in commodity prices | (10,234) | (20) | % | (56,964) | (39) | % | ||||||||||||||||||||
Total change in oil, NGL and natural gas revenues | $ | (21,036) | (40) | % | $ | (59,741) | (41) | % |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||||||||
2020 | 2019 | Change | 2020 | 2019 | Change | ||||||||||||||||||||||||||||||
Average net realized price | |||||||||||||||||||||||||||||||||||
Oil ($/Bbl) | $ | 37.08 | $ | 58.16 | (36) | % | $ | 35.02 | $ | 59.51 | (41) | % | |||||||||||||||||||||||
NGLs ($/Bbls) | 10.47 | 8.88 | 18 | % | 8.63 | 11.95 | (28) | % | |||||||||||||||||||||||||||
Natural gas ($/Mcf) | 2.03 | 2.27 | (10) | % | 1.90 | 2.45 | (23) | % | |||||||||||||||||||||||||||
Total ($/BOE) | 24.20 | 31.92 | (24) | % | 22.41 | 37.19 | (40) | % | |||||||||||||||||||||||||||
Average NYMEX differentials | |||||||||||||||||||||||||||||||||||
Oil per Bbl | $ | (3.86) | $ | 1.71 | (326) | % | $ | (3.31) | $ | 2.69 | (223) | % | |||||||||||||||||||||||
Natural gas per Mcf | 0.03 | (0.11) | (127) | % | 0.03 | (0.16) | (119) | % |
Three Months Ended June 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||||||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||||||||||||||||||||||||||||||||||||||
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 | ||||||||||||||||||||||||||||||||||||||||||
Receipts (payments) on settlements of oil derivatives | $ | 51,319 | $ | 77.58 | $ | (1,022) | $ | (1.41) | $ | 72,580 | $ | 38.22 | $ | (5,627) | $ | (2.78) | ||||||||||||||||||||||||||||||||||
(Payments) receipts on settlements of natural gas derivatives | (5,644) | (2.62) | 178 | 0.05 | (3,189) | (0.49) | 1,769 | 0.28 | ||||||||||||||||||||||||||||||||||||||||||
Total net commodity derivative settlements | $ | 45,675 | $ | (844) | $ | 69,391 | $ | (3,858) |
In thousands, except expense per BOE | Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||||||||||
2020 | 2019 | Change | 2020 | 2019 | Change | |||||||||||||||||||||||||||||||||
Production expenses | ||||||||||||||||||||||||||||||||||||||
Lease operating | $ | 4,763 | $ | 8,948 | (47) | % | $ | 16,430 | $ | 23,472 | (30) | % | ||||||||||||||||||||||||||
Gas gathering, processing and transportation | 1,891 | 1,107 | 71 | % | 4,916 | 3,223 | 53 | % | ||||||||||||||||||||||||||||||
Production and ad valorem taxes | 1,994 | 3,017 | (34) | % | 6,084 | 8,126 | (25) | % | ||||||||||||||||||||||||||||||
Depreciation, depletion and amortization | 18,256 | 24,635 | (26) | % | 59,184 | 64,120 | (8) | % | ||||||||||||||||||||||||||||||
Production expenses per BOE | ||||||||||||||||||||||||||||||||||||||
Lease operating | $ | 3.59 | $ | 5.37 | (33) | % | $ | 4.26 | $ | 5.97 | (29) | % | ||||||||||||||||||||||||||
Gas gathering, processing and transportation | 1.43 | 0.66 | 114 | % | 1.28 | 0.82 | 55 | % | ||||||||||||||||||||||||||||||
Production and ad valorem taxes | 1.50 | 1.81 | (17) | % | 1.58 | 2.07 | (24) | % | ||||||||||||||||||||||||||||||
Depreciation, depletion and amortization | 13.76 | 14.80 | (7) | % | 15.36 | 16.32 | (6) | % |
In thousands | Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||||||||||
2020 | 2019 | Change | 2020 | 2019 | Change | |||||||||||||||||||||||||||||||||
Lease operating | $ | 4,763 | $ | 8,948 | (47) | % | $ | 16,430 | $ | 23,472 | (30) | % | ||||||||||||||||||||||||||
Gas gathering, processing and transportation | 1,891 | 1,107 | 71 | % | 4,916 | 3,223 | 53 | % | ||||||||||||||||||||||||||||||
Total lease operating and gas gathering, processing and transportation expenses | $ | 6,654 | $ | 10,055 | (34) | % | $ | 21,346 | $ | 26,695 | (20) | % |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||||||||||||||
In thousands | 2020 | 2019 | Change | 2020 | 2019 | Change | ||||||||||||||||||||||||||||||||
Production taxes | $ | 1,343 | $ | 1,860 | (28) | % | $ | 3,398 | $ | 5,958 | (43) | % | ||||||||||||||||||||||||||
Ad valorem taxes | 651 | 1,157 | (44) | % | 2,687 | 2,168 | 24 | % | ||||||||||||||||||||||||||||||
Total production and ad valorem tax expense | $ | 1,994 | $ | 3,017 | (34) | % | $ | 6,084 | $ | 8,126 | (25) | % |
In thousands | Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||||||||||
2020 | 2019 | Change | 2020 | 2019 | Change | |||||||||||||||||||||||||||||||||
Depletion of proved oil and gas properties | $ | 17,512 | $ | 24,178 | (28) | % | $ | 57,113 | $ | 62,813 | (9) | % | ||||||||||||||||||||||||||
Depreciation of other property and equipment | 425 | 378 | 12 | % | 1,171 | 1,071 | 9 | % | ||||||||||||||||||||||||||||||
Accretion of asset retirement obligations | 319 | 79 | 304 | % | 900 | 236 | 281 | % | ||||||||||||||||||||||||||||||
Total DD&A expense | $ | 18,256 | $ | 24,635 | (26) | % | $ | 59,184 | $ | 64,120 | (8) | % |
In thousands | Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||||||||||
2020 | 2019 | Change | 2020 | 2019 | Change | |||||||||||||||||||||||||||||||||
Interest expense on 11.25% Senior Notes | $ | 7,032 | $ | 7,032 | — | % | $ | 21,094 | $ | 21,094 | — | % | ||||||||||||||||||||||||||
Interest expense on Credit Facility | 3,642 | 3,494 | 4 | % | 10,234 | 9,317 | 10 | % | ||||||||||||||||||||||||||||||
Other interest expense | 98 | 136 | (28) | % | 191 | 368 | (48) | % | ||||||||||||||||||||||||||||||
Total cash interest expense (1) | $ | 10,772 | $ | 10,662 | 1 | % | $ | 31,519 | $ | 30,779 | 2 | % | ||||||||||||||||||||||||||
Amortization of debt issuance costs and discounts | 627 | 633 | (1) | % | 2,002 | 1,950 | 3 | % | ||||||||||||||||||||||||||||||
Total interest expense | $ | 11,399 | $ | 11,295 | 1 | % | $ | 33,521 | $ | 32,729 | 2 | % | ||||||||||||||||||||||||||
Per BOE: | ||||||||||||||||||||||||||||||||||||||
Total cash interest expense | $ | 8.12 | $ | 6.40 | 27 | % | $ | 8.18 | $ | 7.83 | 4 | % | ||||||||||||||||||||||||||
Total interest expense | 8.59 | 6.78 | 27 | % | 8.70 | 8.33 | 4 | % |
In thousands, except per-BOE amounts and tax rates | Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||||||||||||||
Current income tax benefit (expense) | $ | 49 | $ | (18) | $ | 4,999 | $ | 26 | ||||||||||||||||||
Deferred income tax benefit (expense) | — | (4,749) | 737 | 6,940 | ||||||||||||||||||||||
Total income tax benefit (expense) | $ | 49 | $ | (4,767) | $ | 5,736 | $ | 6,966 | ||||||||||||||||||
Average income tax benefit (expense) per BOE | $ | 0.04 | $ | (2.86) | $ | 1.49 | $ | 1.77 | ||||||||||||||||||
Effective tax rate | 0.1 | % | 22.7 | % | 3.0 | % | 19.3 | % | ||||||||||||||||||
Total net deferred tax liability on balance sheet at period end | $ | — | $ | 5,387 |
In thousands | Nine Months Ended June 30, | |||||||||||||
2020 | 2019 | |||||||||||||
Net cash provided by (used in): | ||||||||||||||
Operating activities | $ | 82,731 | $ | 52,873 | ||||||||||
Investing activities | (89,260) | (116,569) | ||||||||||||
Financing activities | 40,003 | 61,782 | ||||||||||||
Net change in cash | $ | 33,474 | $ | (1,914) |
In thousands | Three Months Ended September 30, 2020 | Nine Months Ended September 30, 2020 | ||||||||||||
Acquisition of oil and gas properties | $ | 472 | $ | 2,186 | ||||||||||
Development of oil and gas properties (1) | 25,149 | 97,973 | ||||||||||||
Purchases of other property and equipment | 378 | 1,014 | ||||||||||||
Total capital expenditures | $ | 25,999 | $ | 101,173 |
Total number of Shares Purchased | Average Price Paid per Share | Total Number of Shares that May Yet Be Purchased as Part of Publicly Announced Plans or Programs | Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs | |||||||||||||||||||||||
July 2020 | 1,877 | $ | 0.47 | — | — | |||||||||||||||||||||
August 2020 | — | — | — | — | ||||||||||||||||||||||
September 2020 | — | — | — | — | ||||||||||||||||||||||
Total | 1,877 | — |
Exhibit Number | Description | Incorporated by Reference | Filing Date | Filed/ Furnished Herewith | ||||||||||||||||||||||||||||||||||
Form | File No. | Exhibit | ||||||||||||||||||||||||||||||||||||
10.1 | 8-K | 001-37670 | 10.1 | 5/11/20 | ||||||||||||||||||||||||||||||||||
10.2 | 8-K | 001-37670 | 10.1 | 6/17/20 | ||||||||||||||||||||||||||||||||||
10.3 | 10-Q | 001-37670 | 10.3 | 7/2/20 | ||||||||||||||||||||||||||||||||||
10.4† | 10-Q | 001-37670 | 10.4 | 7/2/20 | ||||||||||||||||||||||||||||||||||
10.5† | 10-Q | 001-37670 | 10.5 | 7/2/20 | ||||||||||||||||||||||||||||||||||
10.6 | 8-K | 001-37670 | 10.1 | 8/3/20 | ||||||||||||||||||||||||||||||||||
10.7 | 8-K | 001-37670 | 10.2 | 8/3/20 | ||||||||||||||||||||||||||||||||||
10.8 | 8-K | 001-37670 | 10.1 | 8/21/20 | ||||||||||||||||||||||||||||||||||
10.9 | 8-K | 001-37670 | 10.1 | 9/14/20 | ||||||||||||||||||||||||||||||||||
0.0101 | 8-K | 001-37670 | 10.1 | 11/12/20 | ||||||||||||||||||||||||||||||||||
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 | * |
LONESTAR RESOURCES US INC. | ||||||||
November 19, 2020 | /s/ Frank D. Bracken, III | |||||||
Frank D. Bracken, III Chief Executive Officer | ||||||||
November 19, 2020 | /s/ Jason N. Werth | |||||||
Jason N. Werth Chief Accounting Officer |
November 19, 2020 | /s/ Frank D. Bracken, III | ||||
Frank D. Bracken, III Chief Executive Officer (Principal Executive Officer) |
November 19, 2020 | /s/ Jason N. Werth | ||||
Jason N. Werth Chief Accounting Officer (Principal Financial Officer) |
November 19, 2020 | /s/ Frank D. Bracken, III | ||||
Frank D. Bracken, III Chief Executive Officer |
November 19, 2020 | /s/ Jason N. Werth | ||||
Jason N. Werth Chief Accounting Officer |
Unaudited Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares |
Sep. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
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) | 25,375,314 | 24,945,594 |
Common stock, shares outstanding (in shares) | 25,375,314 | 24,945,594 |
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares issued (in shares) | 104,893 | 100,328 |
Preferred stock, shares outstanding (in shares) | 104,893 | 100,328 |
Unaudited Condensed Consolidated Statements Of Operations - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
Sep. 30, 2020 |
Sep. 30, 2019 |
|
Revenues | ||||
Revenues | $ 32,109 | $ 53,145 | $ 86,360 | $ 146,101 |
Expenses | ||||
Lease operating | 4,763 | 8,948 | 16,430 | 23,472 |
Production and ad valorem taxes | 1,994 | 3,017 | 6,084 | 8,126 |
Depreciation, depletion and amortization | 18,256 | 24,635 | 59,184 | 64,120 |
Loss on sale and disposal of oil and gas properties | 0 | 483 | 1,254 | 33,530 |
Impairment of oil and gas properties | 0 | 0 | 199,908 | 0 |
General and administrative | 15,808 | 4,124 | 24,664 | 12,345 |
Other expense (income) | 121 | (2) | (15) | (4) |
Total expenses | 42,833 | 42,312 | 312,425 | 144,812 |
(Loss) income from operations | (10,724) | 10,833 | (226,065) | 1,289 |
Other (expense) income | ||||
Interest expense | (11,399) | (11,295) | (33,521) | (32,730) |
Change in fair value of warrants | 0 | (100) | 363 | 594 |
(Loss) gain on derivative financial instruments | (9,656) | 21,546 | 70,373 | (5,177) |
Reorganization items, net | (3,072) | 0 | (3,072) | 0 |
Total other (expense) income | (24,127) | 10,151 | 34,143 | (37,313) |
(Loss) income before income taxes | (34,851) | 20,984 | (191,922) | (36,024) |
Income tax benefit (expense) | 49 | (4,767) | 5,736 | 6,966 |
Net (loss) income | (34,802) | 16,217 | (186,186) | (29,058) |
Preferred stock dividends | 0 | (2,159) | (4,566) | (6,336) |
Undeclared cumulative preferred stock dividends | (3,671) | 0 | (3,671) | 0 |
Total net (loss) income attributable to common stockholders | $ (38,473) | $ 14,058 | $ (194,423) | $ (35,394) |
Net (loss) income per common share | ||||
Basic (in dollars per share) | $ (1.52) | $ 0.34 | $ (7.70) | $ (1.42) |
Diluted (in dollars per share) | $ (1.52) | $ 0.33 | $ (7.70) | $ (1.42) |
Weighted average common shares outstanding | ||||
Basic (in shares) | 25,361,361 | 24,933,853 | 25,238,972 | 24,852,994 |
Diluted (in shares) | 25,361,361 | 25,331,810 | 25,238,972 | 24,852,994 |
Oil sales | ||||
Revenues | ||||
Revenues | $ 24,524 | $ 42,187 | $ 66,510 | $ 120,496 |
Natural gas liquid sales | ||||
Revenues | ||||
Revenues | 3,202 | 3,439 | 7,565 | 10,381 |
Natural gas sales | ||||
Revenues | ||||
Revenues | 4,383 | 7,519 | 12,285 | 15,224 |
Gas gathering, processing and transportation | ||||
Expenses | ||||
Gas gathering, processing and transportation | $ 1,891 | $ 1,107 | $ 4,916 | $ 3,223 |
Basis of Presentation |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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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 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. Voluntary Reorganization under Chapter 11 of the Bankruptcy Code On September 30, 2020 (the “Petition Date”), Lonestar Resources US Inc., along with certain of its wholly-owned subsidiaries Lonestar Resources Intermediate Inc., LNR America Inc., Lonestar Resources America Inc., Amadeus Petroleum Inc., Albany Services, L.L.C., T-N-T Engineering, Inc., Lonestar Resources Inc., Lonestar Operating, LLC, Poplar Energy, LLC, Eagleford Gas, LLC, Eagleford Gas 2, LLC, Eagleford Gas 3, LLC, Eagleford Gas 4, LLC, Eagleford Gas 5, LLC, Eagleford Gas 6, LLC, Eagleford Gas 7, LLC, Eagleford Gas 8, LLC, Eagleford Gas 10, LLC, Eagleford Gas 11, LLC, Lonestar BR Disposal LLC, and La Salle Eagle Ford Gathering Line LLC (collectively, the “Debtors”) commenced voluntary cases (the “Chapter 11 Cases”) under chapter 11 of title 11 of the United States Code (the “Bankruptcy Code”) in the United States Bankruptcy Court for the Southern District of Texas (the “Bankruptcy Court”). The Chapter 11 Cases are being administered jointly under the caption In re Lonestar Resources US Inc., et al. Case No. 20-34805 (DRJ). Wholly-owned subsidiary, Boland Building, LLC, is not a Debtor and is not included in the Chapter 11 Cases. On September 30, 2020, the Debtors also filed with the Bankruptcy Court a prepackaged Chapter 11 Plan of Reorganization (the "Restructuring Plan") and an accompanying disclosure statement describing the Restructuring Plan and the process of soliciting votes to accept or reject the Restructuring Plan from certain of the Debtor's creditors and equity holders. The Restructuring Plan was confirmed by the Bankruptcy Court on November 12, 2020. The Debtors continue to operate their businesses and manage their properties as “debtors-in-possession” under the jurisdiction of the Bankruptcy Court and in accordance with the applicable provisions of the Bankruptcy Code and orders of the Bankruptcy Court. In general, as debtors-in-possession under the Bankruptcy Code, the Debtors are authorized to continue to operate as an ongoing business; however, they may not engage in transactions outside the ordinary course of business without the prior approval of the Bankruptcy Court. To that end, to ensure the Company’s ability to continue operating in the ordinary course of business during the pendency of the Chapter 11 Cases and minimize the effect of the Chapter 11 Cases on the Company’s customers and employees, the Company filed with the Bankruptcy Court, and the Bankruptcy Court approved, motions (the “First Day Motions”) on October 1, 2020 seeking a variety of relief. Pursuant to the First Day Motions, the Bankruptcy Court authorized the Company to conduct its business in the ordinary course, including to, among other things, pay employee wages and benefits, continue to operate the cash management system and honor certain pre-petition obligations related thereto, pay certain vendors and suppliers for goods and services provided both before and after the Petition Date, and other customary operational relief. The Company has applied FASB ASC Topic 852 Reorganizations (“ASC 852”) in preparing the unaudited condensed consolidated financial statements, which specifies the accounting and financial reporting requirements for entities reorganizing through chapter 11 bankruptcy proceedings. These requirements include distinguishing transactions associated with the reorganization separate from activities related to the ongoing operations of the business. Accordingly, pre-petition liabilities that may be impacted by the chapter 11 proceedings have been classified as liabilities subject to compromise on the condensed consolidated balance sheet as of September 30, 2020. Additionally, certain expenses, realized gains and losses and provisions for losses that are realized or incurred during the Chapter 11 Cases, including adjustments to the carrying value of certain indebtedness are recorded as reorganization items, net in the condensed consolidated statements of operations for the three and nine months ended September 30, 2020. As discussed above, wholly-owned subsidiary, Boland Building, LLC (“Boland”), is not a debtor in the Chapter 11 Cases. Boland holds certain of the Company’s real estate assets and corresponding mortgage obligations. Boland’s assets, liabilities and operations are not material to the Company’s condensed financial statements. Accordingly, combined financial statements of only the Debtors have not been presented. The commencement of a voluntary proceeding in bankruptcy constituted an immediate event of default under the Company's Credit Facility (as defined in Note 7. Long-Term Debt) and the indentures governing the Company’s 11.25% Senior Notes (as defined in Note 7. Long-Term Debt), resulting in the automatic and immediate acceleration of all of the debt outstanding with the exception of the building loans held by our subsidiary, Boland Building, LLC, and certain small financing loans. The Company has classified the 11.25% Senior Notes as liabilities subject to compromise on its condensed consolidated balance sheet as of September 30, 2020. The Credit Facility was not classified as liabilities subject to compromise because it is fully secured. Please refer to Liabilities Subject to Compromise below for more information. Pursuant to the Bankruptcy Code, and as further explained below, the filing of the Chapter 11 Cases automatically stayed most actions against the Debtors, including most actions to collect indebtedness incurred prior to the Petition Date or to exercise control over the Debtors’ property. Pursuant to the Restructuring Plan (see below), the dividend on the Class A-1 Preferred Stock was not declared or paid for the third quarter of 2020. Restructuring Support Agreement On September 14, 2020, the Debtors entered into a Restructuring Support Agreement (“RSA”) with certain holders of the Company’s 11.25% Senior Notes and certain lenders under the Company's Credit Facility and Citibank, N.A., as agent under the Credit Facility (such holders and lenders, collectively, the “Consenting Creditors”) to support a restructuring. Under the terms of the RSA, the Company's 11.25% Senior Notes, including accrued unpaid interest, will be converted into new equity interests of the Company (“New Equity Interests”) and extinguished. In addition, lenders under the Company’s Credit Facility who agree to accept the prepackaged plan of reorganization under chapter 11 of the Bankruptcy Code will receive their pro rata share of warrants (the “New Warrants”, as discussed further below) to purchase up to 10% of the New Equity Interests (subject to dilution only by the issuance of new equity interests under a management incentive plan (“MIP Equity”)), revolving loans under an exit revolving credit facility, and term loans under a second-out exit term facility. Holders of preferred equity interests in the Company will receive their pro rata share of 3% of the New Equity Interests (subject to dilution by the MIP Equity and the New Warrants) and holders of existing Class A Common Stock in the Company will receive their pro rata share of 1% of the New Equity Interests (subject to dilution by the MIP Equity and New Warrants). Each of the Company’s then-existing Forbearance Agreement and Notes Forbearance Agreements (each as subsequently defined) relating to the Company’s Credit Facility and 11.25% Senior Notes terminated in connection with the filing of the Chapter 11 Cases. However, the Consenting Creditors agreed to forbear from exercising certain rights and remedies while the RSA remains in full force and effect. Executory Contracts Subject to certain exceptions, under the Bankruptcy Code, the Debtors may assume, assume and assign, or reject certain executory contracts and unexpired leases subject to the approval of the Bankruptcy Court and certain other conditions. Generally, the rejection of an executory contract or unexpired lease is treated as a pre-petition breach of such executory contract or unexpired lease and, subject to certain exceptions, relieves the Debtors from performing their future obligations under such executory contract or unexpired lease but entitles the contract counterparty or lessor to a pre-petition general unsecured claim for damages caused by such deemed breach. Generally, the assumption of an executory contract or unexpired lease requires the Debtors to cure existing monetary defaults under such executory contract or unexpired lease and provide adequate assurance of future performance. The Company rejected two executory contracts, which were approved by the Bankruptcy Court. Liabilities Subject to Compromise The accompanying condensed consolidated balance sheet as of September 30, 2020 includes amounts classified as liabilities subject to compromise. These amounts represent the Debtors' estimate as of September 30, 2020 of known or potential obligations and may differ from actual future settlement amounts paid. The following table summarizes the components of liabilities subject to compromise included in the condensed consolidated balance sheets:
As noted above, on October 1, 2020 the Bankruptcy Court approved the First Day Motions seeking a variety of relief. Pursuant to the First Day Motions, the Bankruptcy Court authorized the Company to conduct its business in the ordinary course, including to, among other things, pay employee wages and benefits, continue to operate the cash management system and honor certain pre-petition obligations related thereto, pay certain vendors and suppliers for goods and services provided both before and after the Petition Date, and other customary operational relief. Subsequent to the First Day Motions hearing, the Company's liabilities subject to compromise included $250.0 million for the 11.25% Senior Notes (included in current maturities of long-term debt above) and $21.1 million of accrued interest on 11.25% Senior Notes (included in accrued liabilities above). These amounts represent the Debtors’ current estimate of known or potential obligations to be resolved in connection with the Chapter 11 Cases and may differ from actual future settlement amounts paid. Differences between liabilities estimated and claims filed, or to be filed, will be investigated and resolved in connection with the claims resolution process. The Company will continue to evaluate these liabilities throughout the chapter 11 process and adjust amounts as necessary. Such adjustments may be material. Reorganization Items, Net The Debtors have incurred and will continue to incur significant costs associated with the reorganization, primarily legal and professional fees. The amount of these costs, which since the Petition Date, are being expensed as incurred, are expected to significantly affect the Company’s results of operations. In accordance with applicable guidance, costs associated with the bankruptcy proceedings have been recorded as reorganization items within the Company's accompanying condensed consolidated statements of operations for the three and nine months ended September 30, 2020. As of September 30, 2020, reorganization items, net consist of the elimination of approximately $3.1 million of unamortized discount and issuance costs related to the 11.25% Senior Notes (as defined in Note 7. Debt), as these instruments are unsecured and, under the terms of the Reorganization Plan, the 11.25% Senior Notes will be impaired. The write-off of the 11.25% Senior Notes discount and issuance costs is a non-cash reorganization item. Exit Facilities The Restructuring Plan provides that, on the effective date of the Restructuring Plan, the Debtors shall enter into (a) a first-out senior secured revolving credit facility in an amount equal to 80% of the aggregate outstanding principal amount of loans and letter of credit exposure under the existing Credit Facility with any lender under the Credit Facility that agrees to accept the Restructuring Plan (the “Accepting Lenders”); provided that, on the Plan effective date, the aggregate principal amount of the new revolving credit facility shall not be less than $152 million, (b) a second-out-senior-secured term loan credit facility in an amount equal to 20% of the aggregate outstanding principal amount of loans and letter of credit exposure under the Company’s existing Credit Facility of the Accepting Lenders, and (c) if necessary, a last-out-senior-secured term loan credit facility in an amount equal to 100% of the aggregate outstanding principal amount of loans and letter of credit exposure of any lenders under the existing Credit Facility that do not accept the Restructuring Plan or otherwise are not Accepting Lenders. Each of the lenders under the existing Credit Facility has voted to accept the Restructuring Plan and, therefore, if the Restructuring Plan is consummated as expected, there will be no last-out-senior-secured term loan credit facility. Interim Financial Statements The accompanying unaudited condensed consolidated financial statements 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, 2019 filed on April 13, 2020 and subsequently amended (as amended, 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, 2020 and our consolidated results of operations for the three and nine months ended September 30, 2020 and September 30, 2019. Reclassifications Certain prior period amounts have been reclassified to conform to the current year presentation. Such reclassifications had no impact on our reported net (loss) income, current assets, total assets, current liabilities, total liabilities or stockholders’ equity. Ability to Continue as a Going Concern The condensed consolidated financial statements have been prepared on a going concern basis of accounting, which contemplates continuity of operations, realization of assets and satisfaction of liabilities and commitments in the normal course of business. As discussed above, the filing of the Chapter 11 Cases constituted an event of default under the Company's 11.25% Senior Notes and Credit Facility, which resulted in the automatic and immediate acceleration of all of the Company's debt outstanding with the exception of the building loans held by the subsidiary Boland Building, LLC and certain small financing loans. The Company projects that it will not have sufficient cash on hand or available liquidity to repay such debt. These conditions and events, along with uncertainties associated with the bankruptcy process, raise substantial doubt about the Company’s ability to continue as a going concern. The Company’s ability to continue as a going concern is contingent upon, among other things, its ability to implement the Restructuring Plan, successfully emerge from the Chapter 11 Cases and generate sufficient liquidity from the Restructuring to meet its obligations and operating needs on an ongoing basis. As a result of risks and uncertainties related to the effects of disruption from the Chapter 11 Cases making it more difficult to maintain business, financing and operational relationships, the Company has concluded that management’s plans do not alleviate substantial doubt regarding the Company’s ability to continue as a going concern. The condensed consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. Risks and Uncertainties The COVID-19 pandemic has caused a rapid and precipitous drop in demand for oil, which in turn has caused oil prices to plummet since the first week of March 2020, negatively affecting the Company’s cash flow, liquidity and financial position. These events have worsened an already deteriorated oil market that resulted from the early-March 2020 failure by the group of oil producing nations known as OPEC+ to reach an agreement over proposed oil production cuts. Moreover, the uncertainty about the duration of the COVID-19 pandemic has caused storage constraints in the United States resulting from over-supply of produced oil, which has significantly decreased our realized oil prices in the second and third quarters of 2020 and potentially beyond. Oil prices are expected to continue to be volatile as a result of these events and the ongoing COVID-19 outbreak, and as changes in oil inventories, oil demand and economic performance are reported. Although some market stabilization occurred in the third quarter of 2020, activity levels for the remainder of 2020 are expected to remain low and the long-term outlook is uncertain. The current pandemic and uncertainty about its length and depth in future periods has caused the realized oil prices the Company has received since February 2020 to be significantly reduced, adversely affecting its operating cash flow and liquidity. Although the Company has reduced its 2020 capital expenditures budget, the lower levels of cash flow may require it to shut-in production that has become uneconomic in addition to shut-ins of production that the Company performed during the second quarter of 2020 (see below). The COVID-19 pandemic is rapidly evolving, and the ultimate impact of this pandemic is highly uncertain and subject to change. The extent of the impact of the COVID-19 pandemic on the Company's operational and financial performance will depend on future developments, including the duration and spread of the pandemic, its severity, the actions to contain the disease or mitigate its impact, related restrictions on travel, and the duration, timing and severity of the impact on domestic and global oil demand. In response to these developments, the Company has implemented the following operational and financial measures: 1.Reduced budgeted 2020 capital spending from $80-$85 million to approximately $65 million, almost all of which had been incurred by the end of September 2020; 2.Deferred the remainder of its 2020 drilling program; 3.Implemented cost-reduction measures including negotiations reducing rates for water disposal, chemicals, rentals, and workovers; 4.Shut in or stored a significant amount of production during late-April and all of May 2020, primarily in the Company's Central Eagle Ford Area. These shut-in wells came back online during the first week of June; and 5.Entered into new natural gas swaps in October 2020 for January 2021 through December 2021, which hedge 10,000 MMBtu per day at an average price of $3.04 per MMBtu, and also entered into natural gas swaps for January 2022 through December 2022, which hedge 5,000 MMBtu per day at an average price of $2.70 per MMBtu. In November 2020, the Company entered into new crude oil swaps for December 2020, which hedge 4,000 barrels per day at an average price of $41.08 per barrel. The Company also entered into new crude oil swaps for January 2021 through December 2021, which hedge 1,000 barrels per day at an average price of $42.20 per barrel. Prior to the Chapter 11 Cases, the Company terminated and monetized its existing hedge portfolio in September 2020. Forbearance Agreements and Borrowing Base Redetermination Forbearance Agreements — Credit Facility On July 2, 2020, the Company entered into a Forbearance Agreement, Fourteenth Amendment, and Borrowing Base Agreement with Citibank, N.A., as administrative agent and the lenders party thereto (the “Forbearance Agreement”) with respect to the Credit Facility. Pursuant to the Forbearance Agreement, among other things, (i) the lenders under the Credit Facility agreed to refrain from exercising their rights and remedies under the Credit Facility and related loan documents with respect to certain defaults until July 31, 2020, (ii) the borrowing base was redetermined to $225 million from $286 million, (iii) all proceeds of dispositions and terminations or liquidations of swap agreements were to be used to repay the Credit Facility and automatically reduced the borrowing base by the amount of the repayment and (iv) certain exceptions to the covenant restriction on investments were no longer available. On July 31, 2020, the Company and certain of its subsidiaries entered into an amendment with respect to the Forbearance Agreement with the Lenders, pursuant to which the Lenders agreed to extend the stated term of the Forbearance Agreement until August 21, 2020. The ability of the Credit Facility lenders to exercise rights and remedies resulted from the Company's failure to comply with the current ratio with respect to the quarters ended March 31, 2020 and June 30, 2020, the leverage ratio covenant with respect to the quarter ended June 30, 2020, and the default with respect to the failure to make the interest payment due on July 1, 2020, under the 11.25% Senior Notes. The Forbearance Agreement terminated in connection with the filing of the Chapter 11 Cases. However, pursuant to the RSA, certain lenders under the Credit Facility agreed to forbear from exercising certain rights and remedies while the RSA remains in full force and effect. Forbearance Agreement – 11.25% Senior Notes On July 31, 2020, the Company entered into a Forbearance Agreement with certain holders holding over 50% of the 11.25% Senior Notes (the “Notes Forbearance Agreement”). Pursuant to the Notes Forbearance Agreement, among other things, those certain holders of the 11.25% Senior Notes (i) agreed to refrain from exercising their rights and remedies with respect to the Payment Default and (ii) request that the trustee under the Indenture not take any remedial action as a result of the Payment Default. The Notes Forbearance Agreement terminated in connection with the filing of the Chapter 11 Cases. However, pursuant to the RSA, certain holders of the 11.25% Senior Notes agreed to forbear from exercising certain rights and remedies while the RSA remains in full force and effect. Borrowing Base Redetermination As of March 31, 2020, the borrowing base and lender commitments for the Credit Facility were $290 million. The borrowing base was lowered to $286 million on June 11, 2020 as part of the Thirteenth Amendment (see Note 7. Long-Term Debt), and the borrowing base was later redetermined to $225 million from $286 million pursuant to the Forbearance Agreement on July 2, 2020, which created a deficiency between the outstanding amount borrowed under the Company's revolving credit facility and the borrowing base. The outstanding balance under the Credit Facility was $285 million as of July 2, 2020 which represents a borrowing deficiency of $60.4 million. The Company was obligated to pay the deficiency within 60 days after July 2, 2020 due to the Credit Facility being in a state of default at the time of the deficiency, which was relieved by the Forbearance Agreement (see above) . Pursuant to the Restructuring Plan and as a result of the Company’s filing of the Chapter 11 Cases, the Company did not have the obligation to pay such deficiency within that time period, and the Credit Facility will be amended and restated in connection with the Company’s exit from bankruptcy. Impairment of Long-Lived Assets The carrying value of long-lived assets and certain identifiable intangibles are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. When it is determined that the estimated future net cash flows of an asset will not be sufficient to recover its carrying amount, an impairment loss must be recorded to reduce the carrying amount to its estimated fair value. Judgments and assumptions are inherent in management’s estimate of undiscounted future cash flows and an asset’s fair value. These judgments and assumptions include such matters as the estimation of oil and gas reserve quantities, risks associated with the different categories of oil and gas reserves, the timing of development and production, expected future commodity prices, capital expenditures, production costs, and appropriate discount rates. The Company evaluates impairment of proved and unproved oil and gas properties on a region basis. On this basis, certain regions may be impaired because they are not expected to recover their entire carrying value from future net cash flows. As a result of this evaluation, the Company recorded impairment oil and gas properties of $199.9 million for the three months ended March 31, 2020, of which $199.0 million was proved and $0.9 million was unproved. The impairment was the result of removing development of PUD and probable reserves from future net cash flows as the Company cannot assure that they will be developed going forward in light of continued depressed commodity prices and uncertainty regarding the Company's liquidity situation. There were no events or changes in circumstances during the three months ended September 30, 2020 that indicate the carrying value may not be recoverable. However, if pricing remains depressed, it is reasonably possible that the Company may have to record impairment of its oil and gas properties in the future. CARES Act On March 27, 2020, Congress enacted the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) to provide certain taxpayer relief as a result of the COVID-19 pandemic. The CARES Act included several favorable provisions that impacted income taxes, primarily the modified rules on the deductibility of business interest expense for 2019 and 2020, a five-year carryback period for net operating losses generated after 2017 and before 2021, and the acceleration of refundable alternative minimum tax credits. The CARES Act did not materially impact the Company's effective tax rates for the three and nine months ended September 30, 2020. The Company applied for, and received, a loan under the Paycheck Protection Program ("PPP") during the second quarter of 2020 in the amount of $2.2 million. The application for this loan required the Company to, in good faith, certify that the current economic uncertainty made the loan request necessary to support the ongoing operations of the Company. This certification further required the Company to take into account our current business activity and our ability to access other sources of liquidity sufficient to support ongoing operations in a manner that is not significantly detrimental to the business. The receipt of this loan, and the forgiveness of the loan, is dependent on the Company having initially qualified for the loan and qualifying for the forgiveness of such loan based on our future adherence to the forgiveness criteria. Pursuant to the Restructuring Plan, to the extent any portion of the PPP loan is not forgiven in accordance with the terms of the PPP and Cares Act, such portion of the PPP loan (if any) will be paid in full in cash. The PPP loan bears interest of 1% and, if not forgiven, has a maturity date of May 8, 2022. Net (Loss) Income 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 (loss) income 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 securities were excluded from the computation of diluted net loss per share, as their effect would have been antidilutive:
Recent Accounting Pronouncements Income Taxes. In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740) – Simplifying the Accounting for Income Taxes (“ASU 2019-12”). The objective of ASU 2019-12 is to simplify the accounting for income taxes by removing certain exceptions to the general principles in Topic 740 and to provide more consistent application to improve the comparability of financial statements. The amendments in this ASU are effective for fiscal years beginning after December 15, 2020, and early adoption is permitted. The Company is currently evaluating the impact this guidance may have on its consolidated financial statements and related footnote disclosures. Financial Instruments — Credit Losses. In June 2016, the Financial Accounting Standards Board (“FASB”) issued ASU 2016-13, Financial Instruments – Credit Losses (“ASU 2016-13”). ASU 2016-13 changes the impairment model for most financial assets and certain other instruments, including trade and other receivables, and requires the use of a new forward-looking expected loss model that will result in the earlier recognition of allowances for losses. The amendments in this ASU are effective for fiscal years beginning after December 15, 2022 for Smaller Reporting Companies, which the Company currently is classified as, and interim periods within those fiscal years, and early adoption is permitted. Entities must adopt the amendment using a modified retrospective approach to the first reporting period in which the guidance is effective. The adoption of ASU 2016-13 is currently not expected to have a material effect on the Company's consolidated financial statements
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Acquisitions and Divestitures |
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Business Combinations [Abstract] | |
Acquisitions and Divestitures | Acquisitions and Divestitures Pirate Divestiture In March 2019, Lonestar completed the divestiture of its Pirate assets in Wilson County for an adjusted cash purchase price of $11.5 million, after closing adjustments, to a private third-party. The assets were comprised of 3,400 net undeveloped acres, six producing wells, held seven proved undeveloped locations as of the closing date, and were producing approximately 200 BOE/d. The Company recognized a loss of $33.5 million during the first quarter of 2019 in conjunction with the sale of the assets.
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Derivative Instruments and Hedging Activities |
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Sep. 30, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Instruments and Hedging Activities | Derivative Instruments and Hedging 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. The Company also used interest rate swap contracts to manage its net exposure to rate changes attributable to its Credit Facility borrowings. In September 2020, the Company terminated and monetized all of its open commodity and interest rate swaps prior to its Chapter 11 bankruptcy filing (see Note 1. above), which resulted in a net realized gain of $30.5 million (comprised of $39.9 million for oil swaps, offset by negative $6.7 million for natural gas swaps and negative $2.7 million for interest rate swaps). In October 2020, the Company entered into new natural gas swaps for January 2021 through December 2021, which hedge 10,000 MMBtu per day at an average price of $3.04 per MMBtu. The Company also entered into natural gas swaps for January 2022 through December 2022, which hedge 5,000 MMBtu per day at an average price of $2.70 per MMBtu. In November 2020, the Company entered into new crude oil swaps for December 2020, which hedge 4,000 barrels per day at an average price of $41.08 per barrel. The Company also entered into new crude oil swaps for January 2021 through December 2021, which hedge 1,000 barrels per day at an average price of $42.20 per barrel. Company’s economic derivative hedge positions are 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.
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Revenue Recognition |
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Revenue Recognition | Revenue Recognition The Company recognizes revenue when control of the promised goods or services is transferred to customers at an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Disaggregation of Revenue Operating revenues are comprised of sales of crude oil, NGLs and natural gas. 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. The following table summarizes our revenues by product type for the three and nine months ended September 30, 2020 and 2019:
As of September 30, 2020 and December 31, 2019 the accounts receivable balance representing amounts due or billable under the terms of contracts with purchasers was $14.3 million and $16.0 million, respectively.
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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: •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. The following table presents the Company’s assets and liabilities that are measured at fair value on a recurring basis as of September 30, 2020 and December 31, 2019, for each fair value hierarchy level:
Level 3 Fair Value Measurements 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, 2020:
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 7. 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 $17.2 million as of September 30, 2020 and is considered a Level 3 fair value measurement, as it is based on market transactions that occur infrequently as well as internally generated inputs.
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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:
(1) See Note 1. Basis of Presentation for more information.
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Long-Term Debt |
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Long-Term Debt | Long-Term Debt The following long-term debt obligations were outstanding as of the dates indicated:
(1) Mortgage debt is not held by the Debtor entities and is not included the debt subject to the Chapter 11 Cases. (2) As a result of the Chapter 11 Cases and the adoption of ASC 852, the Company wrote off the unamortized discount and issuance cost balances related to the 11.25% Senior Notes to reorganization items, net in the condensed consolidated statements of operations for the three and nine months ended September 30, 2020. See Note 1. Basis of Presentation for more information. (3) As of September 30, 2020 and prior to the First-Day Motions approved by the Bankruptcy Court on October 1, 2020, all long-term debt, except for the mortgage debt noted above, was subject to compromise. (4) Debt not subject to compromise includes all borrowings outstanding under the Credit Facility, which are secured by the Company's oil and natural gas properties. See Note 1. Basis of Presentation for more information. (5) Due to uncertainties regarding the Chapter 11 Cases, the Company has classified the borrowings outstanding under the Credit Facility loan as current as of September 30, 2020. See Note 1. Basis of Presentation for more information. (6) Total long-term debt includes the Boland Building mortgage debt, as noted above. Chapter 11 Cases and Effect of Automatic Stay On September 30, 2020, the Debtors filed for relief under chapter 11 of the Bankruptcy Code. The commencement of a voluntary proceeding in bankruptcy constituted an immediate event of default under the Credit Facility (as defined below) and the indentures governing the Company’s 11.25% Senior Notes (as defined below), resulting in the automatic and immediate acceleration of the debt. Any efforts to enforce payment obligations related to the acceleration of the Company’s debt have been automatically stayed as a result of the filing of the Chapter 11 Cases, and the creditors’ rights of enforcement are subject to the applicable provisions of the Bankruptcy Code. See Note 1. Basis of Presentation for more information on the Chapter 11 Cases. Senior Secured Credit Facility In July 2015, through its subsidiary, Lonestar Resources America, Inc. ("LRAI"), the Company entered into a $500 million Senior Secured Credit Facility with Citibank, N.A., as administrative agent, and other lenders party thereto (as amended, supplemented or modified from time to time, the “Credit Facility”). As of September 30, 2020, $285.0 million was borrowed under the Credit Facility, and the weighted average interest rate on borrowings under the Credit Facility for the quarter was 4.98%. Prior to default, the borrowing availability was $0.6 million, which reflected $0.4 million of letters of credit outstanding. As a result of the commencement of the Chapter 11 Cases, the Company is not in compliance with the covenants under the Credit Facility and the lenders’ commitments under the Credit Facility have been terminated. The Company is therefore unable to make additional borrowings or issue additional letters of credit under the Credit Facility. Prior to default, the Credit Facility could be used for loans and, subject to a $2.5 million sub-limit, letters of credit, and provided for a commitment fee of 0.375% to 0.5% (0.5% following the Thirteenth Amendment (as defined below)) based on the unused portion of the borrowing base under the Credit Facility. As of March 31, 2020, the borrowing base and lender commitments for the Credit Facility was $290 million. The borrowing base was lowered to $286 million on June 11, 2020 as part of the Thirteenth Amendment. The borrowing base was further lowered to $225 million pursuant to the Forbearance Agreement on July 2, 2020, creating a deficiency between the outstanding amount borrowed under the Company's Credit Facility and the borrowing base. The outstanding balance under the Credit Facility was $285 million as of September 30, 2020 which represents a borrowing deficiency of $60.4 million. Borrowings under the Credit Facility, at the Company's election, bear interest at either: (i) an alternate base rate (“ABR”) equal to the higher of (a) the Prime Rate, (b) the Federal Funds Effective Rate plus 0.5% per annum, and (c) the adjusted LIBO rate of a three-month interest period on such day plus 1.0%; or (ii) the adjusted LIBO rate, which is the rate stated on Reuters screen LIBOR1 page, for one, two, three, six or twelve months, as adjusted for statutory reserve requirements for Eurocurrency liabilities, plus, in each of the cases described in clauses (i) and (ii) above, an applicable margin ranging from 1.0% to 2.0% (2.0% to 3.5% following the Thirteenth Amendment) for ABR loans and from 2.0% to 3.0% (3.0% to 4.5% following the Thirteenth Amendment) for adjusted LIBO rate loans. Subject to certain permitted liens, the Company's obligations under the Credit Facility are required to be secured by the grant of a first priority lien on no less than 80% of the value of the proved oil and gas properties of the Company and its subsidiaries (currently 100% following the Thirteenth Amendment). The Credit Facility contains certain financial performance covenants, as defined in the Credit Facility, including the following: •A maximum debt to EBITDAX ratio of 4.0 to 1.0, and •A current ratio of not less than 1.0 to 1.0. The Company also was not in compliance with the terms of the Credit Facility as of December 31, 2019 because it did not satisfy the consolidated current ratio at those times and the audit report prepared by its auditors with respect to the 2019 financial statements included an explanatory paragraph expressing uncertainty as to the Company's ability to continue as a "going concern." The lenders waived the current ratio default with respect to December 31, 2019. The Company received a forbearance until July 31, 2020 for the defaults in the consolidated current ratio covenant as of the March 31, 2020, and June 30, 2020, measurement dates, the leverage ratio covenant as of the June 30, 2020, measurement date and the missed interest payment under the 11.25% Senior Notes pursuant to the Forbearance Agreement. The Company was not in compliance with the terms of the Credit Facility as of May 15, 2020, because it did not timely deliver its financial statements with respect to the fiscal quarter ended March 31, 2020. Such failure represented a default under the Credit Facility which the lenders waived pursuant to the Thirteenth Amendment. As noted above, the borrowing base was redetermined to $225 million from $286 million pursuant to the Forbearance Agreement on July 2, 2020, which created a deficiency between the outstanding amount borrowed under the Credit Facility and the borrowing base. Waiver and Eleventh Amendment Effective April 7, 2020, the Company entered into the Waiver and Eleventh Amendment (the "Waiver") to waive events of default arising from its failure to comply with the consolidated current ratio as of December 31, 2019, to timely provide audited financial statements and to provide financial statements that are not subject to any “going concern” or like qualification or exception for the fiscal year ended December 31, 2019. As there was no guarantee that the Company's lenders would agree to waive events of default or potential events of default in the future, the amounts outstanding under the Credit Facility as of December 31, 2019 are classified as current in the accompanying 2019 Condensed Consolidated Balance Sheet. Twelfth Amendment Effective May 8, 2020, the Company entered into the Twelfth Amendment to Credit Agreement (the “Twelfth Amendment”), to allow the Company to accept proceeds of up to $2.2 million from an unsecured loan applied for under the CARES Act (as discussed further in Note 1. Basis of Presentation). Waiver and Thirteenth Amendment Effective June 11, 2020, the Company entered into the Waiver and Thirteenth Amendment to Credit Agreement (the "Thirteenth Amendment") which, among other things, (i) waived any default or event of default arising from its failure to provide timely quarterly financial statements for the three months ended March 31, 2020; (ii) redetermined the borrowing base to $286 million from $290 million; (iii) set the next borrowing base redetermination to be on or around July 1, 2020 (and in any event, no later than July 31, 2020), (iv) amended the borrowing base utilization grid used in the applicable margin, as noted above and (v) until the July 1, 2020 redetermination, restricted the Company and its subsidiaries’ ability to incur debt with respect to, among other items, capital leases and permitted senior debt, grant liens to secure other obligations, pay dividends on LRAI’s preferred stock and make certain investments. Forbearance Agreement and Fourteenth Amendment On July 2, 2020, the Company entered into a Forbearance Agreement, Fourteenth Amendment, and Borrowing Base Agreement with Citibank, N.A., as administrative agent and the lenders party thereto (the “Forbearance Agreement”) with respect to the Credit Facility. Pursuant to the Forbearance Agreement, among other things, (i) the lenders under the Credit Facility agreed to refrain from exercising their rights and remedies under the Credit Facility and related loan documents with respect to certain defaults until July 31, 2020, (ii) the borrowing base was redetermined to $225 million from $286 million, (iii) all proceeds of dispositions and terminations or liquidations of swap agreements were to be used to repay the Credit Facility and automatically reduced the borrowing base by the amount of the repayment and (iv) certain exceptions to the covenant restriction on investments were no longer available. The rights of the lenders to exercise rights and remedies resulted from the Company's failure to comply with the current ratio with respect to the quarter ended March 31, 2020 and the defaults expected with respect to the quarter ending June 30, 2020, under the current ratio and the leverage ratio covenants, and the default with respect to the failure to make the interest payment due on July 1, 2020, under the 11.25% Senior Notes. On July 31, 2020 the Company and certain of its subsidiaries entered into an amendment with respect to the Forbearance Agreement with the Lenders, pursuant to which the Lenders agreed to extend the stated term of the Forbearance Agreement until August 21, 2020. On August 21, 2020, these parties agreed to further extend the stated term of the Forbearance Agreement until September 11, 2020. The filing of the Chapter 11 Cases resulted in the acceleration of the Credit Facility and the termination of the Forbearance Agreement. However, pursuant to the RSA, the lenders under the Credit Facility agreed to forbear from exercising certain rights and remedies while the RSA remains in full force and effect. 11.25% Senior Notes In January 2018, the Company issued $250 million of 11.25% Senior Notes to U.S.-based institutional investors. The net proceeds of $244.4 million were used to fully retire the Company’s 8.75% Senior Notes, which included principal, interest and a prepayment premium of approximately $162 million. The remaining net proceeds were used to reduce borrowings under the Credit Facility. Prior to default, the 11.25% Senior Notes matured on January 1, 2023, and bore interest at the rate of 11.25% per year, payable on January 1 and July of each year. At any time prior to January 1, 2021, the Company could, on any one or more occasions, redeem up to 35% of the aggregate principal amount of the 11.25% Senior Notes with an amount of cash not greater than the net cash proceeds of certain equity offerings at a redemption price equal to 111.25% of the principal amounts redeemed, plus accrued and unpaid interest, provided that at least 65% of the aggregate principal amount of 11.25% Senior Notes originally issued remained outstanding immediately after such redemption and the redemption occurred within 180 days of the closing date of such equity offering. The indenture contains certain restrictions on the Company’s ability to incur additional debt, pay dividends on the Company’s common stock, make investments, create liens on the Company’s assets, engage in transactions with affiliates, transfer or sell assets, consolidate or merge, or sell substantially all of the Company’s assets. The indenture also contains cross-default provisions for defaults of the Company's other debt instruments, including the Credit Facility, caused by payment default or events which cause the acceleration of repayment prior to the stated maturity of such instrument. The Company did not make its interest payment on the 11.25% Senior Notes that was due on July 1, 2020 of approximately $14.1 million (the “Payment Default”). Such failure to pay represented a default under the 11.25% Senior Notes and represented an event of default when the Company did not cure within 30 days. The Payment Default was a current event of default under the Credit Facility. The Company entered into the Forbearance Agreement which provided that, among other things, the lenders under the Credit Facility have agreed to forbear the Company’s default of the interest payment until August 21, 2020. On July 31, 2020, the Company entered into the Notes Forbearance Agreement pursuant to which, among other things, certain holders holding greater than 50% of the 11.25% Senior Notes (i) agreed to refrain from exercising their rights and remedies with respect to the Payment Default and (ii) requested that the trustee not take any remedial action as a result of the Payment Default. The filing of the Chapter 11 Cases resulted in the termination of the Notes Forbearance Agreement and an event of default and acceleration of the maturity of the 11.25% Senior Notes. However, pursuant to the RSA, certain holders of the 11.25% Senior Notes agreed to forbear from exercising certain rights and remedies while the RSA is in full force and effect.
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Stockholders’ Equity |
9 Months Ended |
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Sep. 30, 2020 | |
Equity [Abstract] | |
Stockholders’ Equity | Stockholders’ Equity Series A Preferred Stock Dividends 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 twelve 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 twelve PIK Quarters (the last of which was the second quarter of 2020), 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. Starting with the third quarter of 2017 and through the fourth quarter of 2019, the Company elected the PIK Option for the Class A-1 Preferred Stock dividend payment, which resulted in the issuance of 20,328 additional shares of Series A-1 Preferred Stock. During the first and second quarter of 2020, the Company also elected the PIK Option, which resulted in the issuance of 4,565 additional shares of Series A-1 Preferred Stock. The Company did not declare a cash dividend for the third quarter of 2020. An amount of $3.7 million, which includes, in addition to the initial quarterly rate of 9% per annum, another 5% due to the failure to declare dividends after the twelve PIK quarters, is included on the condensed consolidated statement of loss for the three and nine months ended September 30, 2020 for undeclared cumulative preferred stock dividends.
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Stock-Based Compensation |
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Share-based Payment Arrangement [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. For the nine months ended September 30, 2020 and 2019, the Company recognized $(1.2) million and $2.0 million, respectively, of stock-based compensation (benefit) expense under the liability method for RSUs. The liability for RSUs on the accompanying consolidated balance sheet as of September 30, 2020 was $0.1 million. As of September 30, 2020, there was $0.1 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 1.3 years. There were no RSU grants that vested during the three months ended September 30, 2020. A summary of the status of the Company's non-vested RSU grants issued, and the changes during the nine months ended September 30, 2020 is presented below:
Stock Appreciation Rights In the past, Lonestar has granted awards of stock appreciation rights (“SARs”) to employees and directors as part of its long-term compensation program. For the nine months ended September 30, 2020 and 2019, the Company recognized $(0.5) million and $(0.1) 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, 2020 was not material. As of September 30, 2020, the total compensation cost to be recognized in future periods related to non-vested SAR grants was not material. The cost is expected to be recognized over a weighted-average period of 0.5 year. The following is a summary of the Company's SAR activity:
Upon emergence from the Chapter 11 Cases, Company's stock-based compensation plan will be terminated and any unvested awards will be cancelled for no consideration.
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Related Party Activities |
9 Months Ended |
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Sep. 30, 2020 | |
Related Party Transactions [Abstract] | |
Related Party Activities | Related Party Activities 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 $0.4 million and $0.5 million for the three months ended September 30, 2020 and 2019, respectively and $0.7 million and $1.3 million for the nine months ended September 30, 2020 and 2019, 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.
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Commitments and Contingencies |
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Sep. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Chapter 11 Proceedings Refer to Note 1, Basis of Presentation for more information on the Chapter 11 Cases. Litigation From time to time, Lonestar is subject to legal proceedings and claims that arise in the ordinary course of business. Like other crude oil and gas producers and marketers, the Company's operations are subject to extensive and rapidly changing federal and state environmental, health and safety, and other laws and regulations governing air emissions, wastewater discharges and solid and hazardous waste management activities. The Company is not aware of any pending or overtly threatened legal action against it that could have a material impact on its business. Gonzales County AMI In February 2020, the Company announced that it had entered into a Joint Development Agreement (the "JDA") in Gonzales County with one of the largest producers in the Eagle Ford which encompass an Area of Mutual Interest (the "AMI") totaling approximately 15,000 acres. The agreement calls for Lonestar to operate a minimum of three to four Eagle Ford Shale wells annually on behalf of the two companies through 2022 that are intended to hold-by-production approximately 6,000 gross acres within the AMI. The agreement gives Lonestar's partner the option to participate in each well with a 50% working interest or to participate via a carried working interest that ranges from approximately 9 to 17%, depending on location.
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Basis of Presentation (Policies) |
9 Months Ended |
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Sep. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Interim Financial Statements | Interim Financial Statements The accompanying unaudited condensed consolidated financial statements 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, 2019 filed on April 13, 2020 and subsequently amended (as amended, 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, 2020 and our consolidated results of operations for the three and nine months ended September 30, 2020 and September 30, 2019.
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Reclassifications | Reclassifications Certain prior period amounts have been reclassified to conform to the current year presentation. Such reclassifications had no impact on our reported net (loss) income, current assets, total assets, current liabilities, total liabilities or stockholders’ equity.
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Impairment of Long-Lived Assets | Impairment of Long-Lived Assets The carrying value of long-lived assets and certain identifiable intangibles are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. When it is determined that the estimated future net cash flows of an asset will not be sufficient to recover its carrying amount, an impairment loss must be recorded to reduce the carrying amount to its estimated fair value. Judgments and assumptions are inherent in management’s estimate of undiscounted future cash flows and an asset’s fair value. These judgments and assumptions include such matters as the estimation of oil and gas reserve quantities, risks associated with the different categories of oil and gas reserves, the timing of development and production, expected future commodity prices, capital expenditures, production costs, and appropriate discount rates. The Company evaluates impairment of proved and unproved oil and gas properties on a region basis. On this basis, certain regions may be impaired because they are not expected to recover their entire carrying value from future net cash flows.
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Net Income (Loss) per Common Share | Net (Loss) Income 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 (loss) income 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 Income Taxes. In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740) – Simplifying the Accounting for Income Taxes (“ASU 2019-12”). The objective of ASU 2019-12 is to simplify the accounting for income taxes by removing certain exceptions to the general principles in Topic 740 and to provide more consistent application to improve the comparability of financial statements. The amendments in this ASU are effective for fiscal years beginning after December 15, 2020, and early adoption is permitted. The Company is currently evaluating the impact this guidance may have on its consolidated financial statements and related footnote disclosures. Financial Instruments — Credit Losses. In June 2016, the Financial Accounting Standards Board (“FASB”) issued ASU 2016-13, Financial Instruments – Credit Losses (“ASU 2016-13”). ASU 2016-13 changes the impairment model for most financial assets and certain other instruments, including trade and other receivables, and requires the use of a new forward-looking expected loss model that will result in the earlier recognition of allowances for losses. The amendments in this ASU are effective for fiscal years beginning after December 15, 2022 for Smaller Reporting Companies, which the Company currently is classified as, and interim periods within those fiscal years, and early adoption is permitted. Entities must adopt the amendment using a modified retrospective approach to the first reporting period in which the guidance is effective. The adoption of ASU 2016-13 is currently not expected to have a material effect on the Company's consolidated financial statements
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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: •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.
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Basis of Presentation (Tables) |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Liabilities Subject to Compromise | The following table summarizes the components of liabilities subject to compromise included in the condensed consolidated balance sheets:
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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 securities were excluded from the computation of diluted net loss per share, as their effect would have been antidilutive:
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Revenue Recognition (Tables) |
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Sep. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Contract with Customer, Asset and Liability | The following table summarizes our revenues by product type for the three and nine months ended September 30, 2020 and 2019:
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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, 2020 and December 31, 2019, 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, 2020:
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Accrued Liabilities (Tables) |
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Payables and Accruals [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Accrued Liabilities | Accrued liabilities consisted of the following as of the dates indicated:
(1) See Note 1. Basis of Presentation for more information.
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Long-Term Debt (Tables) |
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Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Long-Term Debt Outstanding | The following long-term debt obligations were outstanding as of the dates indicated:
(1) Mortgage debt is not held by the Debtor entities and is not included the debt subject to the Chapter 11 Cases. (2) As a result of the Chapter 11 Cases and the adoption of ASC 852, the Company wrote off the unamortized discount and issuance cost balances related to the 11.25% Senior Notes to reorganization items, net in the condensed consolidated statements of operations for the three and nine months ended September 30, 2020. See Note 1. Basis of Presentation for more information. (3) As of September 30, 2020 and prior to the First-Day Motions approved by the Bankruptcy Court on October 1, 2020, all long-term debt, except for the mortgage debt noted above, was subject to compromise. (4) Debt not subject to compromise includes all borrowings outstanding under the Credit Facility, which are secured by the Company's oil and natural gas properties. See Note 1. Basis of Presentation for more information. (5) Due to uncertainties regarding the Chapter 11 Cases, the Company has classified the borrowings outstanding under the Credit Facility loan as current as of September 30, 2020. See Note 1. Basis of Presentation for more information. (6) Total long-term debt includes the Boland Building mortgage debt, as noted above.
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Stock-Based Compensation (Tables) |
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Share-based Payment Arrangement [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, 2020 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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Basis of Presentation - Components of Liabilities Subject to Compromise (Details) - USD ($) $ in Thousands |
Oct. 01, 2020 |
Sep. 30, 2020 |
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Debt Instrument [Line Items] | ||
Accounts payable | $ 5,892 | |
Accounts payable — related parties | 139 | |
Oil, natural gas liquid and natural gas sales | 20,361 | |
Accrued liabilities | 29,229 | |
Current maturities of long-term debt | 252,157 | |
Long-term debt | 260 | |
Equity warrant liability — related parties | 1 | |
Other non-current liabilities | 1,154 | |
Total liabilities subject to compromise | $ 250,000 | $ 309,193 |
Liabilities subject to compromise, accrued interest | $ 21,100 |
Acquisitions and Divestitures - Divestiture (Details) $ in Thousands |
1 Months Ended | 3 Months Ended | 9 Months Ended | ||||
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Mar. 30, 2019
USD ($)
Boe
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Sep. 30, 2020
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Sep. 30, 2019
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Mar. 31, 2019
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well
location
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Sep. 30, 2020
USD ($)
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Sep. 30, 2019
USD ($)
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Mar. 31, 2020
a
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Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Gain (loss) on divestiture | $ 0 | $ (483) | $ (1,254) | $ (33,530) | |||
Pirate Divestiture | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Proceeds from divestiture | $ 11,500 | ||||||
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) |
Revenue Recognition - Additional Information (Details) - USD ($) $ in Thousands |
Sep. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
Disaggregation of Revenue [Abstract] | ||
Oil, natural gas liquid and natural gas sales | $ 14,304 | $ 15,991 |
Revenue Recognition - Revenue by product type (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
Sep. 30, 2020 |
Sep. 30, 2019 |
|
Revenue from External Customer [Line Items] | ||||
Revenues | $ 32,109 | $ 53,145 | $ 86,360 | $ 146,101 |
Oil | ||||
Revenue from External Customer [Line Items] | ||||
Revenues | 24,524 | 42,187 | 66,510 | 120,496 |
NGLs | ||||
Revenue from External Customer [Line Items] | ||||
Revenues | 3,202 | 3,439 | 7,565 | 10,381 |
Natural gas | ||||
Revenue from External Customer [Line Items] | ||||
Revenues | $ 4,383 | $ 7,519 | $ 12,285 | $ 15,224 |
Fair Value Measurements - Summary of Changes in Fair Value for the Level 3 Liability (Details) $ in Thousands |
9 Months Ended |
---|---|
Sep. 30, 2020
USD ($)
| |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |
Beginning balance | $ (937) |
Unrealized gains | 909 |
Ending balance | (28) |
Warrants | |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |
Beginning balance | (364) |
Unrealized gains | 363 |
Ending balance | (1) |
Stock-Based Compensation | |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |
Beginning balance | (573) |
Unrealized gains | 546 |
Ending balance | $ (27) |
Fair Value Measurements - Additional Information (Details) - 11.25% Senior Notes - USD ($) $ in Millions |
Sep. 30, 2020 |
Jan. 31, 2018 |
---|---|---|
Debt Instrument [Line Items] | ||
Debt instrument interest rate (as a percent) | 11.25% | 11.25% |
Fair value of senior notes | $ 17.2 |
Accrued Liabilities - Schedule of Accrued Liabilities (Details) - USD ($) $ in Thousands |
Sep. 30, 2020 |
Jul. 01, 2020 |
Dec. 31, 2019 |
Jan. 31, 2018 |
---|---|---|---|---|
Debt Instrument [Line Items] | ||||
Accrued interest – 11.25% Senior Notes | $ 21,094 | $ 14,100 | $ 14,063 | |
Accrued well costs | 368 | 8,932 | ||
Bonus payable | 1,827 | 2,353 | ||
Other | 6,368 | 1,557 | ||
Total accrued liabilities, prior to reclassification to liabilities subject to compromise | 29,657 | 26,905 | ||
Less amounts reclassified to liabilities subject to compromise | (29,228) | 0 | ||
Total accrued liabilities | $ 429 | $ 26,905 | ||
11.25% Senior Notes | ||||
Debt Instrument [Line Items] | ||||
Debt instrument interest rate (as a percent) | 11.25% | 11.25% |
Long-Term Debt - Schedule of Long-Term Debt Outstanding (Details) - USD ($) $ in Thousands |
Sep. 30, 2020 |
Dec. 31, 2019 |
Jan. 31, 2018 |
---|---|---|---|
Debt Instrument [Line Items] | |||
Senior Secured Credit Facility | $ 285,000 | $ 247,000 | |
Other | 260 | 271 | |
Total principal | 546,198 | 506,202 | |
Unamortized discount | 0 | (3,375) | |
Unamortized debt issuance costs | 0 | (759) | |
Total debt, prior to reclassification to liabilities subject to compromise | 546,198 | 502,068 | |
Less amounts reclassified to liabilities subject to compromise | (252,417) | 0 | |
Total debt not subject to compromise | 293,781 | 502,068 | |
Less current obligations | (285,000) | (247,000) | |
Long-term debt | 8,781 | 255,068 | |
Mortgage debt | |||
Debt Instrument [Line Items] | |||
Mortgage debt | 8,781 | 8,931 | |
11.25% Senior Notes | |||
Debt Instrument [Line Items] | |||
11.25% Senior Notes due 2023 | $ 250,000 | 250,000 | |
Debt instrument interest rate (as a percent) | 11.25% | 11.25% | |
Coronavirus Aid, Relief and Economic Security Act | PPP loan | |||
Debt Instrument [Line Items] | |||
PPP loan | $ 2,157 | $ 0 |
Long-Term Debt - Twelfth Amendment (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
May 08, 2020 |
Jun. 30, 2020 |
|
Coronavirus Aid, Relief and Economic Security Act | PPP loan | ||
Debt Instrument [Line Items] | ||
Proceeds from sssuance of unsecured debt | $ 2.2 | $ 2.2 |
Long-Term Debt - Waiver and Thirteenth Amendement (Details) - USD ($) $ in Millions |
Jul. 02, 2020 |
Jul. 01, 2020 |
Jun. 11, 2020 |
Mar. 31, 2020 |
---|---|---|---|---|
Senior Secured Credit Facility | ||||
Debt Instrument [Line Items] | ||||
Debt instrument expanded borrowing base | $ 225 | $ 286 | $ 286 | $ 290 |
Long-Term Debt - Issuance of 11.25% Senior Notes - Additional Information (Details) |
1 Months Ended | |||||
---|---|---|---|---|---|---|
Jan. 04, 2018 |
Jan. 31, 2018
USD ($)
|
Sep. 30, 2020
USD ($)
|
Jul. 31, 2020 |
Jul. 01, 2020
USD ($)
|
Dec. 31, 2019
USD ($)
|
|
Debt Instrument [Line Items] | ||||||
Accrued interest – 11.25% Senior Notes | $ 21,094,000 | $ 14,100,000 | $ 14,063,000 | |||
Percentage of loan held in agreement | 0.50 | |||||
11.25% Senior Notes | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument face amount | $ 250,000,000 | |||||
Debt instrument interest rate (as a percent) | 11.25% | 11.25% | ||||
Debt instrument proceeds net | $ 244,400,000 | |||||
Redemption price of principal amount, percentage | 65.00% | |||||
Redemption price, percentage | 111.25% | |||||
11.25% Senior Notes | Maximum | ||||||
Debt Instrument [Line Items] | ||||||
Redemption price of principal amount, percentage | 35.00% | |||||
Redemption period | 180 days | |||||
8.750% Senior Notes Due April 15, 2019 | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument interest rate (as a percent) | 8.75% | |||||
Payment of principal, interest and prepayment premium | $ 162,000,000 |
Stockholders' Equity - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 9 Months Ended | 30 Months Ended | |
---|---|---|---|---|
Sep. 30, 2020 |
Sep. 30, 2020 |
Sep. 30, 2019 |
Dec. 31, 2019 |
|
Class of Stock [Line Items] | ||||
Undeclared cumulative dividends on preferred stock | $ 3,700 | $ 3,671 | $ 0 | |
Series A Preferred Stock | ||||
Class of Stock [Line Items] | ||||
Preferred stock, dividend rate, percentage | 9.00% | |||
Shares issued, price per share (in dollars per share) | $ 975 | |||
Preferred stock, increase in dividend rate for next succeeding dividend period | 5.00% | |||
Preferred stock, additional increase in dividend rate for each successive dividend period | 1.00% | |||
Preferred stock, additional increase in dividend rate for each failing dividend period | 5.00% | |||
Series A Preferred Stock | Maximum | ||||
Class of Stock [Line Items] | ||||
Preferred stock, dividend rate, percentage | 20.00% | |||
Series A-1 Convertible Participating Preferred Stock | ||||
Class of Stock [Line Items] | ||||
Payment-in-kind dividends (in shares) | 4,565 | 20,328 |
Stock-Based Compensation - Additional Information (Details) - USD ($) $ in Millions |
9 Months Ended | |
---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
|
Restricted Stock Units (RSUs) | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock-based compensation expenses | $ (1.2) | $ 2.0 |
Stock-based compensation liability | 0.1 | |
Unrecognized compensation expense | $ 0.1 | |
Unrecognized stock-based compensation cost, recognition period | 1 year 3 months 18 days | |
Stock Appreciation Rights (SARs) | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock-based compensation expenses | $ (0.5) | $ (0.1) |
Unrecognized stock-based compensation cost, recognition period | 6 months |
Stock-Based Compensation - Schedule of Outstanding Restricted Stock Units (Details) - Restricted Stock Units (RSUs) |
9 Months Ended |
---|---|
Sep. 30, 2020
$ / shares
shares
| |
Non-vested Shares [Roll Forward] | |
Non-vested RSUs at beginning of period (in shares) | shares | 1,849,676 |
Granted (in shares) | shares | 0 |
Vested (in shares) | shares | (857,800) |
Forfeited (in shares) | shares | (102,623) |
Non-vested RSUs at end of period (in shares) | shares | 889,253 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Additional Disclosures [Abstract] | |
Non-vested RSUs, beginning of period (in dollars per share) | $ / shares | $ 4.04 |
Granted (in dollars per share) | $ / shares | 0 |
Vested (in dollars per share) | $ / shares | 0.65 |
Forfeited (in dollars per share) | $ / shares | 0 |
Non-vested RSUs, end of period (in dollars per share) | $ / shares | $ 3.41 |
Related Party Activities - Additional Information (Details) - USD ($) $ in Millions |
1 Months Ended | 3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|---|
Feb. 28, 2019 |
Sep. 30, 2020 |
Sep. 30, 2019 |
Sep. 30, 2020 |
Sep. 30, 2019 |
|
New Tech Global Ventures LLC | |||||
Related Party Transaction [Line Items] | |||||
Cost of consultancy services | $ 0.4 | $ 0.5 | $ 0.7 | $ 1.3 | |
Affiliated Entity | |||||
Related Party Transaction [Line Items] | |||||
Payments to acquire land | $ 2.0 |
Commitments and Contingencies - Additional Information (Details) - One Of Largest Producers In The Eagle Ford a in Thousands |
1 Months Ended |
---|---|
Feb. 29, 2020
a
well
| |
Other Commitments [Line Items] | |
Oil and gas agreement, area of mutual interest | a | 15 |
Oil and gas agreement, hold-by-production area | a | 6 |
Oil and gas agreement, working interest | 50.00% |
Minimum | |
Other Commitments [Line Items] | |
Number of wells to be operated | well | 3 |
Oil and gas agreement, carried working interest | 9.00% |
Maximum | |
Other Commitments [Line Items] | |
Number of wells to be operated | well | 4 |
Oil and gas agreement, carried working interest | 17.00% |
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