Guarantor Financial Statements (Tables)

3 Months Ended

Mar. 31, 2014

Guarantees [Abstract]

Condensed Consolidating Balance Sheet

CONDENSED CONSOLIDATING BALANCE SHEET

MARCH 31, 2014

(In thousands)

	Parent			Guarantor Subsidiary			Non- Guarantor Subsidiaries			Eliminations			Consolidated
Assets
Current assets:
Cash and cash equivalents	$	148,239		$	54,347		$	175		$	—		$	202,761
Accounts receivable		103,049			133,644			—			(46,120	)		190,573
Fair value of hedging contracts		—			745			—			—			745
Current income tax receivable		7,366			—			—			—			7,366
Deferred taxes *		1,493			34,605			—			—			36,098
Inventory		4,368			283			—			—			4,651
Other current assets		1,774			—			—			—			1,774
Total current assets		266,289			223,624			175			(46,120	)		443,968
Oil and gas properties, full cost method:
Proved		1,370,697			6,527,971			—			—			7,898,668
Less: accumulated DD&A		(498,058	)		(5,554,836	)		—			—			(6,052,894	)
Net proved oil and gas properties		872,639			973,135			—			—			1,845,774
Unevaluated		318,865			575,845			11,333			—			906,043
Other property and equipment, net		26,975			—			—			—			26,975
Fair value of hedging contracts		—			1,867			—			—			1,867
Other assets, net		31,058			1,348			4,748			—			37,154
Investment in subsidiary		777,728			—			16,171			(793,899	)		—
Total assets	$	2,293,554		$	1,775,819		$	32,427		($	840,019	)	$	3,261,781
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable to vendors	$	127,122		$	81,527		$	3,444		($	46,120	)	$	165,973
Undistributed oil and gas proceeds		53,140			2,536			—			—			55,676
Accrued interest		22,247			—			—			—			22,247
Fair value of hedging contracts		—			15,277			—			—			15,277
Asset retirement obligations		—			87,927			—			—			87,927
Other current liabilities		26,915			1,552			—			—			28,467
Total current liabilities		229,424			188,819			3,444			(46,120	)		375,567
Long-term debt		1,030,466			—			—			—			1,030,466
Deferred taxes *		(2,845	)		409,322			—			—			406,477
Asset retirement obligations		3,785			412,386			—			—			416,171
Fair value of hedging contracts		—			376			—			—			376
Other long-term liabilities		46,772			—			—			—			46,772
Total liabilities		1,307,602			1,010,903			3,444			(46,120	)		2,275,829
Commitments and contingencies
Stockholders’ equity:
Common stock		491			—			—			—			491
Treasury stock		(860	)		—			—			—			(860	)
Additional paid-in capital		1,394,694			1,309,562			31,359			(1,340,921	)		1,394,694
Accumulated deficit		(399,222	)		(536,662	)		(44	)		536,706			(399,222	)
Accumulated other comprehensive loss		(9,151	)		(7,984	)		(2,332	)		10,316			(9,151	)
Total stockholders’ equity		985,952			764,916			28,983			(793,899	)		985,952
Total liabilities and stockholders’ equity	$	2,293,554		$	1,775,819		$	32,427		($	840,019	)	$	3,261,781

* Deferred income taxes have been allocated to the Guarantor Subsidiary where related oil and gas properties reside.

CONDENSED CONSOLIDATING BALANCE SHEET

DECEMBER 31, 2013

(In thousands)

	Parent			Guarantor Subsidiary			Non- Guarantor Subsidiaries			Eliminations			Consolidated
Assets
Current assets:
Cash and cash equivalents	$	246,294		$	84,290		$	640		$	—		$	331,224
Accounts receivable		74,887			97,128			—			(44	)		171,971
Fair value of hedging contracts		—			4,549			—			—			4,549
Current income tax receivable		7,366			—			—			—			7,366
Deferred taxes *		8,659			23,051			—			—			31,710
Inventory		3,440			283			—			—			3,723
Other current assets		1,874			—			—			—			1,874
Total current assets		342,520			209,301			640			(44	)		552,417
Oil and gas properties, full cost method:
Proved		1,309,527			6,494,590			—			—			7,804,117
Less: accumulated DD&A		(459,932	)		(5,448,828	)		—			—			(5,908,760	)
Net proved oil and gas properties		849,595			1,045,762			—			—			1,895,357
Unevaluated		325,113			388,643			10,583			—			724,339
Other property and equipment, net		26,178			—			—			—			26,178
Fair value of hedging contracts		—			1,378			—			—			1,378
Other assets, net		45,410			1,349			2,218			—			48,887
Investment in subsidiary		747,472			—			12,711			(760,183	)		—
Total assets	$	2,336,288		$	1,646,433		$	26,062		($	760,227	)	$	3,248,556
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable to vendors	$	173,147		$	22,530		$	44		($	44	)	$	195,677
Undistributed oil and gas proceeds		34,386			2,643			—			—			37,029
Accrued interest		9,022			—			—			—			9,022
Fair value of hedging contracts		—			7,753			—			—			7,753
Asset retirement obligations		—			67,161			—			—			67,161
Other current liabilities		53,682			838			—			—			54,520
Total current liabilities		270,237			100,925			44			(44	)		371,162
Long-term debt		1,027,084			—			—			—			1,027,084
Deferred taxes *		10,227			380,466			—			—			390,693
Asset retirement obligations		4,945			430,407			—			—			435,352
Fair value of hedging contracts		—			470			—			—			470
Other long-term liabilities		53,509			—			—			—			53,509
Total liabilities		1,366,002			912,268			44			(44	)		2,278,270
Commitments and contingencies
Stockholders’ equity:
Common stock		488			—			—			—			488
Treasury stock		(860	)		—			—			—			(860	)
Additional paid-in capital		1,397,885			1,309,563			27,403			(1,336,966	)		1,397,885
Accumulated deficit		(425,165	)		(574,003	)		(52	)		574,055			(425,165	)
Accumulated other comprehensive loss		(2,062	)		(1,395	)		(1,333	)		2,728			(2,062	)
Total stockholders’ equity		970,286			734,165			26,018			(760,183	)		970,286
Total liabilities and stockholders’ equity	$	2,336,288		$	1,646,433		$	26,062		($	760,227	)	$	3,248,556

* Deferred income taxes have been allocated to the Guarantor Subsidiary where related oil and gas properties reside.

Condensed Consolidating Statement of Income

CONDENSED CONSOLIDATING STATEMENT OF INCOME

THREE MONTHS ENDED MARCH 31, 2014

(In thousands)

	Parent			Guarantor Subsidiary			Non- Guarantor Subsidiaries			Eliminations			Consolidated
Operating revenue:
Oil production	$	6,636		$	131,653		$	—		$	—		$	138,289
Gas production		28,839			27,523			—			—			56,362
Natural gas liquids production		18,254			9,716			—			—			27,970
Other operational income		1,042			167			—			—			1,209
Total operating revenue		54,771			169,059			—			—			223,830
Operating expenses:
Lease operating expenses		4,013			42,890			—			—			46,903
Transportation, processing and gathering expenses		10,317			4,309			—			—			14,626
Production taxes		1,681			1,381			—			—			3,062
Depreciation, depletion, amortization		28,055			54,591			—			—			82,646
Accretion expense		68			7,487			—			—			7,555
Salaries, general and administrative		16,325			2			2			—			16,329
Incentive compensation expense		3,134			—			—			—			3,134
Other operational expenses		394			30			—			—			424
Derivative expense, net		—			599			—			—			599
Total operating expenses		63,987			111,289			2			—			175,278
Income (loss) from operations		(9,216	)		57,770			(2	)		—			48,552
Other (income) expenses:
Interest expense		8,353			4			—			—			8,357
Interest income		(79	)		(58	)		(6	)		—			(143	)
Other income		(181	)		(526	)		—			—			(707	)
Income from investment in subsidiaries		(37,345	)		—			(4	)		37,349			—
Total other (income) expenses		(29,252	)		(580	)		(10	)		37,349			7,507
Income before taxes		20,036			58,350			8			(37,349	)		41,045
Provision (benefit) for income taxes:
Current		—			—			—			—			—
Deferred		(5,907	)		21,009			—			—			15,102
Total income taxes		(5,907	)		21,009			—			—			15,102
Net income	$	25,943		$	37,341		$	8		($	37,349	)	$	25,943
Comprehensive income	$	18,854		$	37,341		$	8		($	37,349	)	$	18,854

CONDENSED CONSOLIDATING STATEMENT OF INCOME

THREE MONTHS ENDED MARCH 31, 2013

(In thousands)

	Parent			Guarantor Subsidiary			Non- Guarantor Subsidiaries		Eliminations			Consolidated
Operating revenue:
Oil production	$	5,343		$	181,582		$	—	$	—		$	186,925
Gas production		7,198			29,624			—		—			36,822
Natural gas liquids production		2,299			6,879			—		—			9,178
Other operational income		649			158			—		—			807
Total operating revenue		15,489			218,243			—		—			233,732
Operating expenses:
Lease operating expenses		2,291			50,753			—		—			53,044
Transportation, processing and gathering expenses		2,052			3,345			—		—			5,397
Production taxes		867			1,222			—		—			2,089
Depreciation, depletion, amortization		10,191			65,244			—		—			75,435
Accretion expense		93			8,170			—		—			8,263
Salaries, general and administrative		13,948			4			—		—			13,952
Incentive compensation expense		1,431			—			—		—			1,431
Other operational expenses		50			22			—					72
Derivative expense, net		—			1,221			—		—			1,221
Total operating expenses		30,923			129,981			—		—			160,904
Income (loss) from operations		(15,434	)		88,262			—		—			72,828
Other (income) expenses:
Interest expense		9,627			8			—		—			9,635
Interest income		(80	)		(37	)		—		—			(117	)
Other income		(224	)		(502	)		—		—			(726	)
Income from investment in subsidiaries		(56,828	)		—			—		56,828			—
Total other (income) expenses		(47,505	)		(531	)		—		56,828			8,792
Income before taxes		32,071			88,793			—		(56,828	)		64,036
Provision (benefit) for income taxes:
Current		(3,746	)		—			—		—			(3,746	)
Deferred		(4,941	)		31,965			—		—			27,024
Total income taxes		(8,687	)		31,965			—		—			23,278
Net income	$	40,758		$	56,828		$	—	($	56,828	)	$	40,758
Comprehensive income	$	22,417		$	56,828		$	—	($	56,828	)	$	22,417

Condensed Consolidating Statement of Cash Flows

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

THREE MONTHS ENDED MARCH 31, 2014

(In thousands)

	Parent			Guarantor Subsidiary			Non- Guarantor Subsidiaries			Eliminations			Consolidated
Cash flows from operating activities:
Net income	$	25,943		$	37,341		$	8		($	37,349	)	$	25,943
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, depletion and amortization		28,055			54,591			—			—			82,646
Accretion expense		68			7,487			—			—			7,555
Deferred income tax provision (benefit)		(5,907	)		21,009			—			—			15,102
Settlement of asset retirement obligations		—			(9,842	)		—			—			(9,842	)
Non-cash stock compensation expense		2,247			—			—			—			2,247
Non-cash derivative expense		—			448			—			—			448
Non-cash interest expense		4,070			—			—			—			4,070
Non-cash income from investment in subsidiaries		(37,345	)		—			(4	)		37,349			—
Change in intercompany receivables/payables		(51,037	)		47,637			3,400			—			—
(Increase) decrease in accounts receivable		(24,762	)		6,160			—			—			(18,602	)
Decrease in other current assets		100			—			—			—			100
Increase in inventory		(928	)		—			—			—			(928	)
Increase (decrease) in accounts payable		1,501			(208	)		—			—			1,293
Increase in other current liabilities		5,212			608			—			—			5,820
Other		145			(525	)		—			—			(380	)
Net cash (used in) provided by operating activities		(52,638	)		164,706			3,404			—			115,472
Cash flows from investing activities:
Investment in oil and gas properties		(46,772	)		(236,903	)		(3,500	)		—			(287,175	)
Proceeds from sale of oil and gas properties, net of expenses		9,700			42,254			—			—			51,954
Investment in fixed and other assets		(1,654	)		—			—			—			(1,654	)
Change in restricted funds		—			—			(358	)		—			(358	)
Investment in subsidiaries		—			—			(3,955	)		3,955			—
Net cash used in investing activities		(38,726	)		(194,649	)		(7,813	)		3,955			(237,233	)
Cash flows from financing activities:
Deferred financing costs		(126	)		—			—			—			(126	)
Equity proceeds from parent		—			—			3,955			(3,955	)		—
Net payments for share-based compensation		(6,565	)		—			—			—			(6,565	)
Net cash (used in) provided by financing activities		(6,691	)		—			3,955			(3,955	)		(6,691	)
Effect of exchange rate changes on cash		—			—			(11	)		—			(11	)
Net change in cash and cash equivalents		(98,055	)		(29,943	)		(465	)		—			(128,463	)
Cash and cash equivalents, beginning of period		246,294			84,290			640			—			331,224
Cash and cash equivalents, end of period	$	148,239		$	54,347		$	175		$	—		$	202,761

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

THREE MONTHS ENDED MARCH 31, 2013

(In thousands)

	Parent			Guarantor Subsidiary			Non- Guarantor Subsidiaries		Eliminations			Consolidated
Cash flows from operating activities:
Net income	$	40,758		$	56,828		$	—	($	56,828	)	$	40,758
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, depletion and amortization		10,191			65,244			—		—			75,435
Accretion expense		93			8,170			—		—			8,263
Deferred income tax provision (benefit)		(4,941	)		31,965			—		—			27,024
Settlement of asset retirement obligations		—			(14,880	)		—		—			(14,880	)
Non-cash stock compensation expense		2,296			—			—		—			2,296
Excess tax benefits		(104	)		—			—		—			(104	)
Non-cash derivative expense		—			1,385			—		—			1,385
Non-cash interest expense		4,041			—			—		—			4,041
Non-cash income from investment in subsidiaries		(56,828	)		—			—		56,828			—
Change in current income taxes		(9,402	)		—			—		—			(9,402	)
Change in intercompany receivables/payables		122,912			(122,912	)		—		—			—
Decrease in accounts receivable		10,668			9,284			—		—			19,952
Decrease in other current assets		40			—			—		—			40
Decrease in inventory		158			—			—		—			158
Increase (decrease) in accounts payable		(1,890	)		3,894			—		—			2,004
Increase (decrease) in other current liabilities		(20,011	)		11,069			—		—			(8,942	)
Other		(761	)		(501	)		—		—			(1,262	)
Net cash provided by operating activities		97,220			49,546			—		—			146,766
Cash flows from investing activities:
Investment in oil and gas properties		(111,458	)		(49,510	)		—		—			(160,968	)
Investment in fixed and other assets		(599	)		—			—		—			(599	)
Net cash used in investing activities		(112,057	)		(49,510	)		—		—			(161,567	)
Cash flows from financing activities:
Deferred financing costs		(11	)		—			—		—			(11	)
Excess tax benefits		104			—			—		—			104
Net payments for share-based compensation		(3,465	)		—			—		—			(3,465	)
Net cash used in financing activities		(3,372	)		—			—		—			(3,372	)
Net change in cash and cash equivalents		(18,209	)		36			—		—			(18,173	)
Cash and cash equivalents, beginning of period		228,398			51,128			—		—			279,526
Cash and cash equivalents, end of period	$	210,189		$	51,164		$	—	$	—		$	261,353