Guarantor Financial Statements (Tables)

6 Months Ended

Jun. 30, 2016

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Condensed Consolidating Balance Sheet

CONDENSED CONSOLIDATING BALANCE SHEET

JUNE 30, 2016

(In thousands)

	Parent			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			Consolidated
Assets
Current assets:
Cash and cash equivalents	$	169,193		$	1		$	—		$	—		$	169,194
Accounts receivable	25,410			31,171			883			(19,188		)	38,276
Fair value of derivative contracts	—			11,887			—			—			11,887
Current income tax receivable	46,174			—			—			—			46,174
Other current assets	12,080			—			—			—			12,080
Total current assets	252,857			43,059			883			(19,188		)	277,611
Oil and gas properties, full cost method:
Proved	1,907,347			7,565,003			45,895			—			9,518,245
Less: accumulated DD&A	(1,907,326		)	(7,007,219		)	(45,895		)	—			(8,960,440		)
Net proved oil and gas properties	21			557,784			—			—			557,805
Unevaluated	261,971			163,233			—			—			425,204
Other property and equipment, net	27,968			—			—			—			27,968
Other assets, net	27,445			738			—			—			28,183
Investment in subsidiary	503,738			—			—			(503,738		)	—
Total assets	$	1,074,000		$	764,814		$	883		$	(522,926	)	$	1,316,771
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable to vendors	$	23,153		$	24,950		$	—		$	(19,189	)	$	28,914
Undistributed oil and gas proceeds	4,379			692			—			—			5,071
Accrued interest	9,773			—			—			—			9,773
Fair value of derivative contracts	—			37			—			—			37
Asset retirement obligations	—			33,695			—			—			33,695
Current portion of long-term debt	288,336			—			—			—			288,336
Other current liabilities	34,513			280			—			—			34,793
Total current liabilities	360,154			59,654			—			(19,189		)	400,619
Long-term debt	1,122,901			—			—			—			1,122,901
Asset retirement obligations	1,355			202,306			—			—			203,661
Other long-term liabilities	18,446						—			—			18,446
Total liabilities	1,502,856			261,960			—			(19,189		)	1,745,627
Commitments and contingencies
Stockholders’ equity:
Common stock	56			—			—			—			56
Treasury stock	(860		)	—			—			—			(860		)
Additional paid-in capital	1,654,731			1,344,577			109,078			(1,453,655		)	1,654,731
Accumulated deficit	(2,090,168		)	(849,108		)	(108,195		)	957,303			(2,090,168		)
Accumulated other comprehensive income	7,385			7,385			—			(7,385		)	7,385
Total stockholders’ equity	(428,856		)	502,854			883			(503,737		)	(428,856		)
Total liabilities and stockholders’ equity	$	1,074,000		$	764,814		$	883		$	(522,926	)	$	1,316,771

CONDENSED CONSOLIDATING BALANCE SHEET

DECEMBER 31, 2015

(In thousands)

	Parent			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			Consolidated
Assets
Current assets:
Cash and cash equivalents	$	9,681		$	2		$	1,076		$	—		$	10,759
Accounts receivable	10,597			39,190			—			(1,756		)	48,031
Fair value of derivative contracts	—			38,576			—			—			38,576
Current income tax receivable	46,174			—			—			—			46,174
Other current assets	6,848			—			33			—			6,881
Total current assets	73,300			77,768			1,109			(1,756		)	150,421
Oil and gas properties, full cost method:
Proved	1,875,152			7,458,262			42,484			—			9,375,898
Less: accumulated DD&A	(1,874,622		)	(6,686,849		)	(42,484		)	—			(8,603,955		)
Net proved oil and gas properties	530			771,413			—			—			771,943
Unevaluated	253,308			186,735			—			—			440,043
Other property and equipment, net	29,289			—			—			—			29,289
Other assets, net	16,612			826			1,035			—			18,473
Investment in subsidiary	745,033			—			1,088			(746,121		)	—
Total assets	$	1,118,072		$	1,036,742		$	3,232		$	(747,877	)	$	1,410,169
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable to vendors	$	16,063		$	67,901		$	—		$	(1,757	)	$	82,207
Undistributed oil and gas proceeds	5,216			776			—			—			5,992
Accrued interest	9,022			—			—			—			9,022
Asset retirement obligations	—			20,400			891			—			21,291
Other current liabilities	40,161			551			—			—			40,712
Total current liabilities	70,462			89,628			891			(1,757		)	159,224
Long-term debt	1,060,955			—			—			—			1,060,955
Asset retirement obligations	1,240			203,335			—			—			204,575
Other long-term liabilities	25,204			—			—			—			25,204
Total liabilities	1,157,861			292,963			891			(1,757		)	1,449,958
Commitments and contingencies
Stockholders’ equity:
Common stock	55			—			—			—			55
Treasury stock	(860		)	—			—			—			(860		)
Additional paid-in capital	1,648,687			1,344,577			109,795			(1,454,372		)	1,648,687
Accumulated deficit	(1,705,623		)	(624,824		)	(95,306		)	720,130			(1,705,623		)
Accumulated other comprehensive income (loss)	17,952			24,026			(12,148		)	(11,878		)	17,952
Total stockholders’ equity	(39,789		)	743,779			2,341			(746,120		)	(39,789		)
Total liabilities and stockholders’ equity	$	1,118,072		$	1,036,742		$	3,232		$	(747,877	)	$	1,410,169

Condensed Consolidating Statement of Operations

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

THREE MONTHS ENDED JUNE 30, 2016

(In thousands)

	Parent			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			Consolidated
Operating revenue:
Oil production	$	1,323		$	71,388		$	—		$	—		$	72,711
Natural gas production	3,959			8,594			—			—			12,553
Natural gas liquids production	2,375			1,343			—			—			3,718
Other operational income	337			—			—			—			337
Total operating revenue	7,994			81,325			—			—			89,319
Operating expenses:
Lease operating expenses	3,814			15,012			—			—			18,826
Transportation, processing and gathering expenses	6,021			1,162			—			—			7,183
Production taxes	383			195			—			—			578
Depreciation, depletion and amortization	10,470			35,761			—			—			46,231
Write-down of oil and gas properties	6,534			112,114			1			—			118,649
Accretion expense	58			10,024			—			—			10,082
Salaries, general and administrative expenses	20,013			1			—			—			20,014
Incentive compensation expense	4,670			—			—			—			4,670
Restructuring fees	9,436			—			—			—			9,436
Other operational expenses	27,736			(57		)	1			—			27,680
Derivative expense, net	—			626			—			—			626
Total operating expenses	89,135			174,838			2			—			263,975
Loss from operations	(81,141		)	(93,513		)	(2		)	—			(174,656		)
Other (income) expenses:
Interest expense	17,599			—			—			—			17,599
Interest income	(302		)	—			—			—			(302		)
Other income	(20		)	(250		)	—			—			(270		)
Other expense	9			—			—			—			9
Loss from investment in subsidiaries	99,447			—			1			(99,448		)	—
Total other (income) expenses	116,733			(250		)	1			(99,448		)	17,036
Loss before taxes	(197,874		)	(93,263		)	(3		)	99,448			(191,692		)
Provision (benefit) for income taxes:
Current	(2,113		)	—			—			—			(2,113		)
Deferred	—			6,182			—			—			6,182
Total income taxes	(2,113		)	6,182			—			—			4,069
Net loss	$	(195,761	)	$	(99,445	)	$	(3	)	$	99,448		$	(195,761	)
Comprehensive loss	$	(207,117	)	$	(99,445	)	$	(3	)	$	99,448		$	(207,117	)

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

THREE MONTHS ENDED JUNE 30, 2015

(In thousands)

	Parent			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			Consolidated
Operating revenue:
Oil production	$	6,504		$	105,081		$	—		$	—		$	111,585
Natural gas production	15,647			11,260			—			—			26,907
Natural gas liquids production	8,077			2,956			—			—			11,033
Total operating revenue	30,228			119,297			—			—			149,525
Operating expenses:
Lease operating expenses	5,111			22,318			—			—			27,429
Transportation, processing and gathering expenses	17,974			1,966			—			—			19,940
Production taxes	1,436			391			—			—			1,827
Depreciation, depletion and amortization	44,052			33,899			—			—			77,951
Write-down of oil and gas properties	179,125			—			45,169			—			224,294
Accretion expense	91			6,317			—			—			6,408
Salaries, general and administrative expenses	16,398			—			20			—			16,418
Incentive compensation expense	1,264			—			—			—			1,264
Other operational expenses	1,454			—			—			—			1,454
Derivative expense, net	—			701			—			—			701
Total operating expenses	266,905			65,592			45,189			—			377,686
Income (loss) from operations	(236,677		)	53,705			(45,189		)	—			(228,161		)
Other (income) expenses:
Interest expense	10,472			—			—			—			10,472
Interest income	(46		)	(19		)	(1		)	—			(66		)
Other income	(187		)	(423		)	(3		)	—			(613		)
(Income) loss from investment in subsidiaries	(16,147		)	—			28,918			(12,771		)	—
Total other (income) expenses	(5,908		)	(442		)	28,914			(12,771		)	9,793
Income (loss) before taxes	(230,769		)	54,147			(74,103		)	12,771			(237,954		)
Provision (benefit) for income taxes:
Deferred	(77,863		)	9,082			(16,267		)	—			(85,048		)
Total income taxes	(77,863		)	9,082			(16,267		)	—			(85,048		)
Net income (loss)	$	(152,906	)	$	45,065		$	(57,836	)	$	12,771		$	(152,906	)
Comprehensive income (loss)	$	(183,062	)	$	45,065		$	(57,836	)	$	12,771		$	(183,062	)

Condensed Consolidating Statement of Cash Flows

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

SIX MONTHS ENDED JUNE 30, 2016

(In thousands)

	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Cash flows from operating activities:
Net loss	$	(384,545	)	$	(224,284	)	$	(12,889	)	$	237,173		$	(384,545	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation, depletion and amortization	19,064			88,725			—			—			107,789
Write-down of oil and gas properties	15,858			231,645			350			—			247,853
Accretion expense	116			19,949			—			—			20,065
Deferred income tax provision	—			9,059			—			—			9,059
Settlement of asset retirement obligations	—			(9,807		)	(899		)	—			(10,706		)
Non-cash stock compensation expense	4,682			—			—			—			4,682
Non-cash derivative expense	—			1,025			—			—			1,025
Non-cash interest expense	9,403			—			—			—			9,403
Other non-cash expense	—			—			6,081			—			6,081
Change in current income taxes	(3,187		)	—			—			—			(3,187		)
Non-cash loss from investment in subsidiaries	230,729			—			6,444			(237,173		)	—
Change in intercompany receivables/payables	(1,658		)	1,658			—			—			—
(Increase) decrease in accounts receivable	(8,471		)	19,109			(883		)	—			9,755
(Increase) decrease in other current assets	(5,316		)	—			33			—			(5,283		)
Increase (decrease) in accounts payable	2,226			(2,547		)	—			—			(321		)
Decrease in other current liabilities	(5,565		)	(355		)	—			—			(5,920		)
Other	(7,372		)	(508		)	—			—			(7,880		)
Net cash (used in) provided by operating activities	(134,036		)	133,669			(1,763		)	—			(2,130		)
Cash flows from investing activities:
Investment in oil and gas properties	(45,292		)	(133,670		)	(349		)	—			(179,311		)
Investment in fixed and other assets	(898		)	—			—			—			(898		)
Change in restricted funds	—			—			1,045			—			1,045
Investment in subsidiaries	—			—			717			(717		)	—
Net cash (used in) provided by investing activities	(46,190		)	(133,670		)	1,413			(717		)	(179,164		)
Cash flows from financing activities:
Proceeds from bank borrowings	477,000			—			—			—			477,000
Repayments of bank borrowings	(135,500		)	—			—			—			(135,500		)
Repayments of building loan	(189		)	—			—			—			(189		)
Deferred financing costs	(900		)	—			—			—			(900		)
Equity proceeds from parent	—			—			(717		)	717			—
Net payments for share-based compensation	(673		)	—			—			—			(673		)
Net cash provided by (used in) financing activities	339,738			—			(717		)	717			339,738
Effect of exchange rate changes on cash	—			—			(9		)	—			(9		)
Net change in cash and cash equivalents	159,512			(1		)	(1,076		)	—			158,435
Cash and cash equivalents, beginning of period	9,681			2			1,076			—			10,759
Cash and cash equivalents, end of period	$	169,193		$	1		$	—		$	—		$	169,194

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

SIX MONTHS ENDED JUNE 30, 2015

(In thousands)

	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Cash flows from operating activities:
Net income (loss)	$	(480,294	)	$	74,092		$	(57,836	)	$	(16,256	)	$	(480,294	)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation, depletion and amortization	86,164			78,209			—			—			164,373
Write-down of oil and gas properties	670,537			—			45,169			—			715,706
Accretion expense	182			12,635			—			—			12,817
Deferred income tax (benefit) provision	(274,097		)	25,410			(16,267		)	—			(264,954		)
Settlement of asset retirement obligations	(14		)	(35,909		)	—			—			(35,923		)
Non-cash stock compensation expense	6,028			—			—			—			6,028
Non-cash derivative expense	—			7,931			—			—			7,931
Non-cash interest expense	8,737			—			—			—			8,737
Change in current income taxes	7,206			—			—			—			7,206
Non-cash (income) expense from investment in subsidiaries	(45,174		)	—			28,918			16,256			—
Change in intercompany receivables/payables	15,070			(24,802		)	9,732			—			—
Decrease in accounts receivable	16,968			6,079			—			—			23,047
Increase in other current assets	(1,895		)	—			(64		)	—			(1,959		)
(Increase) decrease in inventory	(2,415		)	2,415			—			—			—
Decrease in accounts payable	(500		)	(7,326		)	—			—			(7,826		)
Decrease in other current liabilities	(8,409		)	(311		)	—			—			(8,720		)
Other	(71		)	(433		)	—			—			(504		)
Net cash (used in) provided by operating activities	(1,977		)	137,990			9,652			—			145,665
Cash flows from investing activities:
Investment in oil and gas properties	(128,333		)	(124,506		)	(11,516		)	—			(264,355		)
Proceeds from sale of oil and gas properties, net of expenses	—			10,100			—			—			10,100
Investment in fixed and other assets	(727		)	—			—			—			(727		)
Change in restricted funds	177,647			—			1,828			—			179,475
Investment in subsidiaries	—			—			(9,684		)	9,684			—
Net cash provided by (used in) investing activities	48,587			(114,406		)	(19,372		)	9,684			(75,507		)
Cash flows from financing activities:
Proceeds from bank borrowings	5,000			—			—			—			5,000
Repayments of bank borrowings	(5,000		)	—			—			—			(5,000		)
Equity proceeds from parent	—			—			9,684			(9,684		)	—
Net payments for share-based compensation	(3,069		)	—			—			—			(3,069		)
Net cash (used in) provided by financing activities	(3,069		)	—			9,684			(9,684		)	(3,069		)
Effect of exchange rate changes on cash	—			—			78			—			78
Net change in cash and cash equivalents	43,541			23,584			42			—			67,167
Cash and cash equivalents, beginning of period	72,886			1,450			152			—			74,488
Cash and cash equivalents, end of period	$	116,427		$	25,034		$	194		$	—		$	141,655