GOING CONCERN

12 Months Ended

Dec. 31, 2016

Debt Disclosure [Abstract]

GOING CONCERN

GOING CONCERN:

The accompanying 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 consolidated financial statements. As such, the accompanying 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 significant decline in commodity prices from mid-2014 through 2016 resulted in reduced revenue and cash flows and negatively impacted our liquidity position. Additionally, the level of our indebtedness and the depressed commodity price environment presented challenges related to our ability to comply with the covenants in the agreements governing our indebtedness. The minimum liquidity requirement and other restrictions under the Credit Facility also presented challenges with respect to our ability to meet interest payment obligations on the 2022 Notes as well as the maturity of the 2017 Convertible Notes. In order to address these issues, we worked with financial and legal advisors throughout 2016 and structured a plan of reorganization to address our liquidity and capital structure. In connection with our restructuring efforts, we entered into the Tug Hill PSA to sell all of our Appalachia Properties, and on December 14, 2016, the Debtors filed Bankruptcy Petitions seeking relief under the provisions of Chapter 11 of the Bankruptcy Code. Pursuant to Bankruptcy Court orders, we conducted an auction for the sale of the Appalachia Properties on February 8, 2017 and upon conclusion, selected the final bid submitted by EQT. On February 9, 2017, we entered into the EQT PSA and on February 10, 2017, the Bankruptcy Court entered a sale order approving the sale of the Appalachia Properties to EQT. We expect to close on the sale of the Appalachia Properties by February 28, 2017. On February 15, 2017, the Bankruptcy Court entered an order confirming the Plan. See Note 2 – Chapter 11 Proceedings. We expect the Plan to become effective on February 28, 2017, at which point we would emerge from bankruptcy. Upon emergence from bankruptcy, we expect that we will eliminate approximately $1,191,500 in principal amount of outstanding debt, resulting in remaining debt outstanding of approximately $236,284, consisting of $225,000 of Second Lien Notes and $11,284 outstanding under the Building Loan (see Note 11 – Debt).

While we expect the Plan to become effective on February 28, 2017, there can be no assurance that the effectiveness of the Plan will occur on such date, or at all. The uncertainty surrounding our Chapter 11 proceedings raises substantial doubt about our ability to continue as a going concern.

NEW YORK STOCK EXCHANGE COMPLIANCE:

On April 29, 2016, we were notified by the New York Stock Exchange ("NYSE") that we were not in compliance with the NYSE's continued listing requirements, as the average closing price of our shares of common stock had fallen below $1.00 per share over a period of 30 consecutive trading days, which is the minimum average share price for continued listing on the NYSE under Section 802.01C of the NYSE Listed Company Manual. On May 17, 2016, we were notified by the NYSE that our average global market capitalization had been less than $50,000 over a consecutive 30 trading-day period at the same time that our stockholders' equity was less than $50,000, which is non-compliant with Section 802.01B of the NYSE Listed Company Manual.

At the close of business on June 10, 2016, we effected a 1-for-10 reverse stock split (see Note 1 – Organization and Summary of Significant Accounting Policies) in order to increase the market price per share of our common stock in order to regain compliance with the NYSE's minimum share price requirement. We were notified on July 1, 2016 that we cured the minimum share price deficiency and that we were no longer considered non-compliant with the $1.00 per share average closing price requirement. We remain non-compliant with the $50,000 market capitalization and stockholders' equity requirements

On June 30, 2016, we submitted our 18-month business plan for curing the average market capitalization and stockholders' equity deficiencies to the NYSE. The NYSE accepted the plan on August 4, 2016 and will continue to review the Company on a quarterly basis for compliance with the plan. Upon acceptance of the plan by the NYSE, and after two consecutive quarters of sustained market capitalization above $50,000, we would no longer be non-compliant with the market capitalization and stockholders' equity requirements. During the 18-month cure period, our shares of common stock will continue to be listed and traded on the NYSE, unless we experience other circumstances that subject us to delisting, including an abnormally low market capitalization. If we fail to meet the material aspects of the plan or any of the quarterly milestones, the NYSE will review the circumstances causing the variance and determine whether such variance warrants commencement of suspension and delisting procedures. Additionally, under Section 802.01D of the NYSE Listed Company Manual, if a company that is below a continued listing standard files or announces an intent to file for relief under Chapter 11 of the Bankruptcy Code, the company is subject to immediate suspension and delisting. However, if we are profitable or have positive cash flow, or if we are demonstrably in sound financial health despite the bankruptcy proceedings, the NYSE may evaluate our plan in light of the filing without immediate suspension and delisting of our common stock. To date, and throughout the Chapter 11 filing period, we have continued to trade on the NYSE.

On September 20, 2016, we submitted our quarterly update to the business plan for the second quarter of 2016, and the NYSE notified us that it accepted the quarterly update on September 22, 2016. On December 22, 2016, we submitted our quarterly update to the business plan for the third quarter of 2016, and the NYSE notified us that it accepted the quarterly update on January 5, 2017. We expect to submit our fourth quarter 2016 plan update to the NYSE by mid-March 2017.