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Fresh Start Accounting (Schedule of Fresh-Start Adjustments) (Details) - USD ($)
$ in Thousands
1 Months Ended 8 Months Ended 9 Months Ended
Sep. 30, 2020
Aug. 31, 2020
Sep. 30, 2019
Sep. 01, 2020
Fresh-Start Adjustment [Line Items]        
Predecessor, Cash and cash equivalents   $ 32,280    
Predecessor, Restricted cash   0    
Predecessor, Accounts receivable, net   50,621    
Predecessor, Materials and supplies   64    
Predecessor, Current income tax receivable   850    
Predecessor, Prepaid expenses and other   13,692    
Predecessor, Total current assets   97,507    
Predecessor, Proved properties   6,539,816    
Predecessor, Unproved properties not being amortized   30,205    
Predecessor, Drilling equipment   1,285,024    
Predecessor, Gas gathering and processing equipment   833,788    
Predecessor, Saltwater disposal systems   43,541    
Predecessor, Land and building   59,080    
Predecessor, Transportation equipment   15,577    
Predecessor, Other   57,427    
Predecessor, Property, plant and equipment, gross   8,864,458    
Predecessor, Less accumulated depreciation, depletion, amortization, and impairment   7,923,868    
Predecessor, Net property and equipment   940,590    
Predecessor, Right of use asset   7,476    
Predecessor, Other assets   24,666    
Predecessor, Total assets   1,070,239    
Predecessor, Accounts Payable   27,354    
Predecessor, Accrued Liabilities   36,990    
Predecessor, Current operating lease liability   4,643    
Predecessor, Current portion of long-term debt   124,000    
Predecessor Current derivative liabilities   5,089    
Predecessor Warrant liability   0    
Predecessor, Current portion of other long-term liabilities   11,201    
Predecessor, Total current liabilities   209,277    
Predecessor, Long-term Debt   16,000    
Predecessor, Non-current derivative liabilities   766    
Predecessor, Operating lease liability   2,760    
Predecessor, Other long-term liabilities   61,393    
Predecessor, Liabilities Subject to Compromise   762,215    
Predecessor, Deferred income taxes   4,466    
Predecessor, Preferred Stock   0    
Predecessor, Common Stock   10,704    
Predecessor, capital in excess of par value   650,153    
Predecessor, Retained Earnings (Deficit)   (818,679)    
Predecessor, Total shareholders' equity attributable to Unit Corporation   (157,822)    
Predecessor, Non-controlling interests in consolidated subsidiaries   171,184    
Predecessor, Total shareholders' equity   13,362    
Predecessor, Total liabilities and shareholders' equity   $ 1,070,239    
Successor, Cash and cash equivalents       $ 25,482
Successor, Restricted cash       7,458
Successor, Accounts receivables, net       50,621
Successor, Materials and supplies       0
Successor, Current income tax receivable       850
Successor, Prepaid expenses and other       19,084
Successor, Total current assets       103,495
Successor, Proved properties       238,284
Successor, Unproved Properties       0
Successor, Drilling equipment       63,458
Successor, Gas gathering and processing equipment       250,098
Successor, Saltwater disposal systems       0
Successor, Land and building       32,635
Successor, Transportation equipment       3,314
Successor, Other       9,958
Successor, Property, plant, and equipment, gross       597,747
Successor, Less accumulated depreciation, depletion, amortization, and impairment       0
Successor, Net Property and Equipment       597,747
Successor, Right-of-use asset       6,817
Successor, Other Assets       18,284
Successor, Total assets       726,343
Successor, Accounts Payable       33,736
Successor, Accrued Liabilities       32,875
Successor, Current operating lease liability       3,974
Successor, current portion of long-term debt       400
Successor, Current derivative liabilities       5,089
Successor, Warrant liability       885
Successor, Current portion of other long-term liabilities       14,960
Successor, Total current liabilities       91,919
Successor, Long-term debt       147,600
Successor, Non-current derivative liability       766
Successor, Operating lease liability       2,771
Successor, Other long-term liabilities       43,764
Successor, Liabilities Subject to Compromise       0
Successor, Deferred income taxes       0
Successor, Preferred Stock       0
Successor, Common Stock       120
Successor capital in excess of par value       197,203
Successor, Retained Earnings (Deficit)       0
Successor, Total shareholders' equity attributable to Unit Corporation       197,323
Successor, Non-controlling interests in consolidated subsidiaries       242,200
Successor, Total shareholders' equity       439,523
Successor, Total liabilities and shareholders' equity       726,343
Operating Loss Carryforwards       726,400
Deferred Tax Assets, Operating Loss Carryforwards, Subject to Expiration       584,200
Deferred Tax Assets, Operating Loss Carryforwards, Not Subject to Expiration       142,200
Effective Income Tax Rate Reconciliation, Percent 0.00% 1.62% 19.57%  
Reorganization Adjustments [Member]        
Fresh-Start Adjustment [Line Items]        
Predecessor, Preferred Stock       0
Predecessor, Common Stock [1]       (10,704)
Predecessor, capital in excess of par value [1]       (650,153)
Increase (Decrease), Cash and cash equivalents [2]       (6,798)
Increase (Decrease), Restricted Cash [3]       7,458
Increase (Decrease), Accounts receivable, net       0
Increase (Decrease), Materials and supplies       0
Increase (Decrease), Current income tax receivable       0
Increase (Decrease), Prepaid expenses and other [4]       6,382
Increase (Decrease), Total current assets       7,042
Increase (Decrease), Proved properties       0
Increase (Decrease) Unproved Properties       0
Increase (Decrease) Drilling equipment       0
Increase (Decrease) Gas gathering and processing equipment       0
Increase (Decrease) Saltwater disposal systems       0
Increase (Decrease), Land and building       0
Increase (Decrease), Transportation equipment       0
Increase (Decrease), Other       0
Increase (Decrease) Property, plant, and equipment, gross       0
Increase (Decrease), Accumulated depreciation, depletion, amortization, and impairment       0
Increase (Decrease), Net Property and equipment       0
Increase (Decrease) Right of use asset       0
Increase (Decrease), Other Assets [4]       (6,382)
Increase (Decrease), Total assets       660
Increase (Decrease), Accounts Payable [4]       6,382
Increase (Decrease), Accrued Liabilities [5]       (4,115)
Increase/(Decrease), Current operating lease liability       0
Increase (Decrease), Current portion of long-term debt [6]       (123,600)
Increase (Decrease), Current derivative liability       0
Increase (Decrease) Warrant liability       0
Increase (Decrease), Current portion of other long-term liabilities [7]       3,743
Increase (Decrease), Total current liabilities       (117,590)
Increase (Decrease), Long-term debt [6]       131,600
Increase (Decrease), Non-current derivative liabilities       0
Increase (Decrease) Operating lease liability       0
Increase (Decrease), Other long-term liabilities [4],[7]       (3,220)
Increase (Decrease), Liabilities Subject to Compromise [8]       (762,215)
Increase (Decrease), Deferred income taxes       0
Increase (Decrease), Preferred Stock       0
Increase (Decrease), Common Stock [8]       120
Increase (Decrease), Capital in excess of par value [8]       197,203
Increase (Decrease), Retained Earnings (Deficit) [9]       1,215,619
Increase (Decrease) Total shareholders' equity attributable to Unit Corporation       752,085
Increase (Decrease)Non-Controlling interests in consolidated subsidiaries       0
Increase (Decrease), Total shareholders' equity       752,085
Increase (Decrease), Total Liabilities and Shareholders' Equity       660
Fresh start adjustments [Member]        
Fresh-Start Adjustment [Line Items]        
Predecessor, Preferred Stock       0
Predecessor, Common Stock       0
Predecessor, capital in excess of par value       0
Increase (Decrease), Cash and cash equivalents       0
Increase (Decrease), Restricted Cash       0
Increase (Decrease), Accounts receivable, net       0
Increase (Decrease), Materials and supplies [10]       (64)
Increase (Decrease), Current income tax receivable       0
Increase (Decrease), Prepaid expenses and other [11]       (990)
Increase (Decrease), Total current assets       (1,054)
Increase (Decrease), Proved properties [12]       (6,301,532)
Increase (Decrease) Unproved Properties [12]       (30,205)
Increase (Decrease) Drilling equipment [13]       (1,221,566)
Increase (Decrease) Gas gathering and processing equipment [13]       (583,690)
Increase (Decrease) Saltwater disposal systems [13]       (43,541)
Increase (Decrease), Land and building [13]       (26,445)
Increase (Decrease), Transportation equipment [13]       (12,263)
Increase (Decrease), Other [13]       (47,469)
Increase (Decrease) Property, plant, and equipment, gross       (8,266,711)
Increase (Decrease), Accumulated depreciation, depletion, amortization, and impairment [12],[13]       (7,923,868)
Increase (Decrease), Net Property and equipment       (342,843)
Increase (Decrease) Right of use asset [14]       (659)
Increase (Decrease), Other Assets       0
Increase (Decrease), Total assets       (344,556)
Increase (Decrease), Accounts Payable       0
Increase (Decrease), Accrued Liabilities       0
Increase/(Decrease), Current operating lease liability [14]       (669)
Increase (Decrease), Current portion of long-term debt       0
Increase (Decrease), Current derivative liability       0
Increase (Decrease) Warrant liability [15]       885
Increase (Decrease), Current portion of other long-term liabilities [16]       16
Increase (Decrease), Total current liabilities       232
Increase (Decrease), Long-term debt       0
Increase (Decrease), Non-current derivative liabilities       0
Increase (Decrease) Operating lease liability [14]       11
Increase (Decrease), Other long-term liabilities [16]       (14,409)
Increase (Decrease), Liabilities Subject to Compromise       0
Increase (Decrease), Deferred income taxes [17]       (4,466)
Increase (Decrease), Preferred Stock       0
Increase (Decrease), Common Stock       0
Increase (Decrease), Capital in excess of par value [18]       0
Increase (Decrease), Retained Earnings (Deficit) [18]       (396,940)
Increase (Decrease) Total shareholders' equity attributable to Unit Corporation       (396,940)
Increase (Decrease)Non-Controlling interests in consolidated subsidiaries [19]       71,016
Increase (Decrease), Total shareholders' equity       (325,924)
Increase (Decrease), Total Liabilities and Shareholders' Equity       $ (344,556)
[1] Represents the cancellation of Predecessor Common Stock.
[2] The table below details the company’s uses of cash, under the terms of the Plan described in Note 2 – Emergence From Voluntary Reorganization Under Chapter 11 (in thousands):
Funding of the professional fees escrow account$(7,458)
Proceeds from Exit credit facility8,000 
Payment of debt issuance costs on the Exit credit facility(3,225)
Payment of professional fees(3,943)
Payment of accrued interest payable under the Predecessor credit facility(172)
Changes in cash and cash equivalents$(6,798)
[3] Represents the reserve for Professional Fee Escrow of $7.5 million.
[4] Represents the reclassification of other long-term assets related to deferred compensation to prepaid expenses and other assets as the deferred compensation payout is required to be paid within 12 months from the date of emergence in accordance with the Plan. Simultaneously, the current portion of deferred compensation liability was reclassified from other long-term liabilities to accounts payable.
[5] Represents the payment of the DIP Facility interest of $0.2 million and professional fees for $3.9 million.
[6] Represents the transition of the DIP credit agreement and the Predecessor credit agreement of $124.0 million into the Exit Facility and the issuance of an additional $8.0 million under the Exit Facility.
[7] Represents the reclassification of the short-term portion of the separation benefit liabilities from non-current to current liabilities which was offset by the increase in non-current portion of liabilities.
[8] Settlement of liabilities subject to compromise and the resulting net gain were determined as follows (in thousands):
Liabilities subject to compromise before the Effective Date:
6.625% senior subordinated notes due 2021 (including accrued interest as of the Petition Date)$672,369 
Accounts payable1,179 
Employee separation benefit plan obligations23,394 
Litigation settlements45,000 
Royalty suspense accounts payable20,273 
Total liabilities subject to compromise762,215 
Separation settlement treatment(6,905)
Successor Common Stock and APIC(1) issued to allowed claim holders
(175,521)
Successor Common Stock and APIC for disputed claims reserve(11,936)
Gain on settlement of liabilities subject to compromise$567,853 
(1)    Balance excludes the Successor Common Stock and APIC of $9.9 million to the 5% Equity Facility which was not a liability subject to compromise.
[9] Represents the cumulative impact to Predecessor retained earnings of the reorganization adjustments described above.
[10] Represents the reclassification of materials and supplies to proved properties.
[11] Represents the write off of the Predecessor's unamortized debt fees related to the DIP Facility.
[12] Reflects a decrease of oil and natural gas properties, net, based on the methodology discussed above, and the elimination of accumulated depletion and amortization. The following table summarizes the components of oil and natural gas properties as of the Effective Date:
SuccessorPredecessor
Fair ValueHistorical Book Value
(In thousands)
Proved properties$238,284 $6,539,816 
Unproved properties— 30,205 
238,284 6,570,021 
Less accumulated depletion, amortization, and impairment— (6,305,113)
$238,284 $264,908 
[13] Reflects a decrease in fair value of drilling equipment, gas gathering and processing equipment, saltwater disposal systems, land and building, transportation equipment and other property and equipment and the elimination of accumulated depreciation, based upon the methodologies discussed above. The following table summarizes the components of other property and equipment as of the Effective Date:
SuccessorPredecessor
Fair ValueHistorical Book Value
(In thousands)
Drilling equipment$63,458 $1,285,024 
Gas gathering and processing equipment250,098 833,788 
Saltwater disposal systems— 43,541 
Land and building32,635 59,080 
Transportation equipment3,314 15,577 
Other9,958 57,427 
359,463 2,294,437 
Less accumulated depreciation and impairment— (1,618,754)
$359,463 $675,683 
[14] Reflects the valuation adjustments to the company’s ROU assets, current operating lease liability, and operating lease liability, adjusted for fair value of favorable and unfavorable lease terms, and the revised incremental borrowing rates of the Successor. (17)Represents the liability for the warrants estimated using a Black-Scholes-Merton model which utilizes various market-based inputs including: stock prices, strike price, time to maturity, risk-free rate, annual volatility rate, and annual dividend yield.
[15] Represents the liability for the warrants estimated using a Black-Scholes-Merton model which utilizes various market-based inputs including: stock prices, strike price, time to maturity, risk-free rate, annual volatility rate, and annual dividend yield.
[16] Represents the reclassification of the short-term portion of Asset Retirement Obligation from non-current liabilities to current as well as the fair value adjustment, which was determined using our fresh start updates to these obligations, including the application of the Successor's credit adjusted risk free rate, which now incorporates a term structure based on the estimated timing of well plugging activity, and resetting all Asset Retirement Obligations to a single layer.
[17] Represents the adjustments to deferred tax liability as a result of the cumulative tax impact of the fresh start adjustments. The significant revisions to the carrying value of our assets and liabilities as a result of applying fresh start accounting has resulted in the company increasing its overall net deferred tax asset position upon emergence from bankruptcy. In addition to the changes in book value, the company has approximately $726.4 million of net operating losses (NOLs) carried forward to offset taxable income in future years as of the Effective Date of emergence. Approximately $584.2 million of this NOL will expire commencing in fiscal 2021 through 2037. The NOLs of approximately
$142.2 million from years ended subsequent to December 31, 2017 have an indefinite carryforward period. The amount of these NOLs which is actually available to offset future income may be severely limited due to change-in-control tax provisions.
Due to our history of operating losses and the uncertainty surrounding the realization of the deferred tax assets in future years, our management has determined that it is more likely than not that the deferred tax assets will not be realized in future periods. Accordingly, the company has recorded a 100% valuation allowance against its net deferred tax assets.
Our blended effective tax rate was 1.62% for the Predecessor period ending August 31, 2020 and 0.00% for the Successor period ending September 30, 2020 compared to 19.57% for the first nine months of 2019. The rate change was primarily due to the increase in the valuation allowance against our income tax benefit.
[18] Represents the cumulative impact of the fresh-start accounting adjustments discussed above.
[19] The valuation of the non-controlling interest was calculated by taking an income-based approach in valuing Superior as a whole. The value of the non-controlling interest was then determined based on a market-based approach for similar type investments, given the contractual rights of the related parties.