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Going Concern
3 Months Ended
Mar. 31, 2016
Debt Disclosure [Abstract]  
Going Concern
Going Concern
 
The accompanying condensed consolidated financial statements have been prepared assuming the company will continue as a going concern, which contemplates continuity of operations, realization of assets and the satisfaction of liabilities in the normal course of business for the twelve month period following the date of these condensed consolidated financial statements. As such, the accompanying condensed consolidated financial statements do not include any adjustments relating to the recoverability and classification of assets and their carrying amounts, or the amount and classification of liabilities that may result should the company be unable to continue as a going concern.

The level of our indebtedness of $1,544 million and the current commodity price environment have presented challenges as they relate to our ability to comply with the covenants in the agreements governing our indebtedness. At March 31, 2016, we were in compliance with all of our financial covenants under our bank credit facility and the indentures governing our outstanding notes. However, given the lower commodity prices and our reduced hedged position in 2016, we anticipate that we will exceed the Consolidated Funded Debt to consolidated EBITDA financial covenant of 3.75 to 1 set forth in our bank credit agreement at the end of the second quarter of 2016, which would require us to seek a waiver or amendment from our bank lenders. If we are unable to reach an agreement with our banks or find acceptable alternative financing, it may lead to an event of default under our bank credit facility. If following an event of default, the banks were to accelerate repayment under the bank credit facility, it would result in an event of default and may result in the acceleration of our other debt instruments. These conditions raise substantial doubt about our ability to continue as a going concern.

Additionally, on April 13, 2016, our borrowing base under our bank credit facility was reduced from $500 million to $300 million. On that date, we had $457 million of outstanding borrowings and $18.3 million of outstanding letters of credit, or $175.3 million in excess of the redetermined borrowing base (referred to as a borrowing base deficiency). Our agreement with the banks provides that within 30 days after notification of a borrowing base deficiency, we must elect to cure the borrowing base deficiency through any combination of the following actions: (1) repay amounts outstanding sufficient to cure the deficiency within 10 days after our written election to do so; (2) add additional oil and gas properties acceptable to the banks to the borrowing base and take such actions necessary to grant the banks a mortgage in the properties within 30 days after our written election to do so; and/or (3) arrange to pay the deficiency in six equal monthly installments. We have not taken any action or made an election of actions to be taken to cure the borrowing base deficiency.

We are in discussions with our banks regarding an amendment to our bank credit facility to address the potential covenant issue. We cannot provide any assurances that we will reach an agreement with the lenders under our bank credit facility on a waiver or amendment on a timely basis, or on satisfactory terms, to alleviate any non-compliance with our debt covenants. In addition to our borrowings under our bank credit facility, we have $1,075 million of senior indebtedness, including our 1¾% Senior Convertible Notes due in March 2017 (the "2017 Convertible Notes"). We are in the process of analyzing various strategic alternatives to address our liquidity and capital structure, including strategic and refinancing alternatives through a private restructuring, asset sales and a prepackaged or prearranged bankruptcy filing. We cannot provide any assurances that we will be able to complete a private restructuring or asset sales on satisfactory terms to provide the liquidity to restructure or pay down our senior indebtedness.