Guarantor Financial Statements (Tables)

6 Months Ended

Jun. 30, 2015

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Condensed Consolidating Balance Sheet

CONDENSED CONSOLIDATING BALANCE SHEET

JUNE 30, 2015

(In thousands)

	Parent			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			Consolidated
Assets
Current assets:
Cash and cash equivalents	$	116,427		$	25,034		$	194		$	—		$	141,655
Accounts receivable		38,735			243,846			31			(213,906	)		68,706
Fair value of derivative contracts		—			74,319			—			—			74,319
Current income tax receivable		6			—			—			—			6
Inventory		3,426			283			—			—			3,709
Other current assets		10,007			—			69			—			10,076
Total current assets		168,601			343,482			294			(213,906	)		298,471
Oil and gas properties, full cost method:
Proved		1,778,480			7,251,498			44,447			—			9,074,425
Less: accumulated DD&A		(1,724,404	)		(6,077,492	)		(44,447	)		—			(7,846,343	)
Net proved oil and gas properties		54,076			1,174,006			—			—			1,228,082
Unevaluated		300,360			227,067			2,162			—			529,589
Other property and equipment, net		30,736			—			—			—			30,736
Fair value of derivative contracts		—			8,231			—			—			8,231
Deferred taxes *		—			—			16,266			(16,266	)		—
Other assets, net		25,149			1,385			1,548			—			28,082
Investment in subsidiary		1,057,810			—			20,083			(1,077,893	)		—
Total assets	$	1,636,732		$	1,754,171		$	40,353		($	1,308,065	)	$	2,123,191
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable to vendors	$	56,763		$	216,834		$	9,732		($	213,906	)	$	69,423
Undistributed oil and gas proceeds		16,093			907			—			—			17,000
Accrued interest		9,027			—			—			—			9,027
Deferred taxes *		298			6,767			—			—			7,065
Asset retirement obligations		—			56,176			—			—			56,176
Other current liabilities		46,724			56			—			—			46,780
Total current liabilities		128,905			280,740			9,732			(213,906	)		205,471
Long-term debt		1,048,406			—			—			—			1,048,406
Deferred taxes *		(161,285	)		189,303			—			(16,266	)		11,752
Asset retirement obligations		3,757			236,856			—			—			240,613
Other long-term liabilities		32,213			—			—			—			32,213
Total liabilities		1,051,996			706,899			9,732			(230,172	)		1,538,455
Commitments and contingencies
Stockholders’ equity:
Common stock		553			—			—			—			553
Treasury stock		(860	)		—			—			—			(860	)
Additional paid-in capital		1,639,389			1,367,434			100,023			(1,467,457	)		1,639,389
Accumulated deficit		(1,095,002	)		(366,607	)		(57,824	)		424,431			(1,095,002	)
Accumulated other comprehensive income (loss)		40,656			46,445			(11,578	)		(34,867	)		40,656
Total stockholders’ equity		584,736			1,047,272			30,621			(1,077,893	)		584,736
Total liabilities and stockholders’ equity	$	1,636,732		$	1,754,171		$	40,353		($	1,308,065	)	$	2,123,191

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

CONDENSED CONSOLIDATING BALANCE SHEET

DECEMBER 31, 2014

(In thousands)

	Parent			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			Consolidated
Assets
Current assets:
Cash and cash equivalents	$	72,886		$	1,450		$	152		$	—		$	74,488
Restricted cash		177,647			—			—			—			177,647
Accounts receivable		73,711			46,615			33			—			120,359
Fair value of derivative contracts		—			139,179			—			—			139,179
Current income tax receivable		7,212			—			—			—			7,212
Deferred taxes *		4,095			—			—			(4,095	)		—
Inventory		1,011			2,698			—			—			3,709
Other current assets		8,112			—			6			—			8,118
Total current assets		344,674			189,942			191			(4,095	)		530,712
Oil and gas properties, full cost method:
Proved		1,689,802			7,127,466			—			—			8,817,268
Less: accumulated DD&A		(970,387	)		(6,000,244	)		—			—			(6,970,631	)
Net proved oil and gas properties		719,415			1,127,222			—			—			1,846,637
Unevaluated		289,556			241,230			36,579			—			567,365
Other property and equipment, net		32,340			—			—			—			32,340
Fair value of derivative contracts		—			14,333			—			—			14,333
Other assets, net		20,857			1,360			5,007			—			27,224
Investment in subsidiary		1,050,546			—			41,638			(1,092,184	)		—
Total assets	$	2,457,388		$	1,574,087		$	83,415		($	1,096,279	)	$	3,018,611
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable to vendors	$	74,756		$	57,873		$	—		$	—		$	132,629
Undistributed oil and gas proceeds		22,158			1,074			—			—			23,232
Accrued interest		9,022			—			—			—			9,022
Deferred taxes *		—			24,214			—			(4,095	)		20,119
Asset retirement obligations		—			69,400			—			—			69,400
Other current liabilities		49,306			199			—			—			49,505
Total current liabilities		155,242			152,760			—			(4,095	)		303,907
Long-term debt		1,041,035			—			—			—			1,041,035
Deferred taxes *		117,206			169,137			—			—			286,343
Asset retirement obligations		3,588			243,421			—			—			247,009
Other long-term liabilities		38,714			—			—			—			38,714
Total liabilities		1,355,785			565,318			—			(4,095	)		1,917,008
Commitments and contingencies
Stockholders’ equity:
Common stock		549			—			—			—			549
Treasury stock		(860	)		—			—			—			(860	)
Additional paid-in capital		1,633,307			1,362,684			90,339			(1,453,023	)		1,633,307
Accumulated earnings (deficit)		(614,708	)		(440,699	)		12			440,687			(614,708	)
Accumulated other comprehensive income (loss)		83,315			86,784			(6,936	)		(79,848	)		83,315
Total stockholders’ equity		1,101,603			1,008,769			83,415			(1,092,184	)		1,101,603
Total liabilities and stockholders’ equity	$	2,457,388		$	1,574,087		$	83,415		($	1,096,279	)	$	3,018,611

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

Condensed Consolidating Statement of Operations

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, 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		16,398			—			20			—			16,418
Incentive compensation expense		1,264			—			—			—			1,264
Other operational expense		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 OPERATIONS

THREE MONTHS ENDED JUNE 30, 2014

(In thousands)

	Parent			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			Consolidated
Operating revenue:
Oil production	$	5,854		$	136,539		$	—		$	—		$	142,393
Natural gas production		20,800			25,867			—			—			46,667
Natural gas liquids production		10,219			5,717			—			—			15,936
Other operational income		1,880			170			—			—			2,050
Total operating revenue		38,753			168,293			—			—			207,046
Operating expenses:
Lease operating expenses		5,046			44,408			—			—			49,454
Transportation, processing and gathering expenses		10,456			3,642			—			—			14,098
Production taxes		1,903			1,354			—			—			3,257
Depreciation, depletion, amortization		30,385			62,450			—			—			92,835
Accretion expense		61			7,672			—			—			7,733
Salaries, general and administrative		16,639			—			(2	)		—			16,637
Incentive compensation expense		3,903			—			—			—			3,903
Derivative expense, net		—			2,516			—			—			2,516
Total operating expenses		68,393			122,042			(2	)		—			190,433
Income (loss) from operations		(29,640	)		46,251			2			—			16,613
Other (income) expenses:
Interest expense		9,880			33			—			—			9,913
Interest income		(146	)		(41	)		(6	)		—			(193	)
Other income		(192	)		(530	)		—			—			(722	)
Other expense		179			—			—			—			179
Income from investment in subsidiaries		(29,947	)		—			(8	)		29,955			—
Total other (income) expenses		(20,226	)		(538	)		(14	)		29,955			9,177
Income (loss) before taxes		(9,414	)		46,789			16			(29,955	)		7,436
Provision (benefit) for income taxes:
Deferred		(13,858	)		16,850			—			—			2,992
Total income taxes		(13,858	)		16,850			—			—			2,992
Net income	$	4,444		$	29,939		$	16		($	29,955	)	$	4,444
Comprehensive income (loss)	($	4,566	)	$	29,939		$	16		($	29,955	)	($	4,566	)

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

SIX MONTHS ENDED JUNE 30, 2015

(In thousands)

	Parent			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			Consolidated
Operating revenue:
Oil production	$	10,854		$	208,238		$	—		$	—		$	219,092
Natural gas production		32,264			22,980			—			—			55,244
Natural gas liquids production		17,956			5,443			—			—			23,399
Other operational income		1,792			—			—			—			1,792
Derivative income, net		—			2,427			—			—			2,427
Total operating revenue		62,866			239,088			—			—			301,954
Operating expenses:
Lease operating expenses		10,087			44,919			—			—			55,006
Transportation, processing and gathering expenses		34,082			3,561			—			—			37,643
Production taxes		3,634			708			—			—			4,342
Depreciation, depletion, 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
Salaries, general and administrative		33,399			1			25			—			33,425
Incentive compensation expense		2,827			—			—			—			2,827
Other operational expense		1,170			—			—			—			1,170
Total operating expenses		842,082			140,033			45,194			—			1,027,309
Income (loss) from operations		(779,216	)		99,055			(45,194	)		—			(725,355	)
Other (income) expenses:
Interest expense		20,816			21			—			—			20,837
Interest income		(147	)		(35	)		(6	)		—			(188	)
Other income		(320	)		(433	)		(3	)		—			(756	)
(Income) loss from investment in subsidiaries		(45,174	)		—			28,918			16,256			—
Total other (income) expenses		(24,825	)		(447	)		28,909			16,256			19,893
Income (loss) before taxes		(754,391	)		99,502			(74,103	)		(16,256	)		(745,248	)
Provision (benefit) for income taxes:
Deferred		(274,097	)		25,410			(16,267	)		—			(264,954	)
Total income taxes		(274,097	)		25,410			(16,267	)		—			(264,954	)
Net income (loss)	($	480,294	)	$	74,092		($	57,836	)	($	16,256	)	($	480,294	)
Comprehensive income (loss)	($	522,953	)	$	74,092		($	57,836	)	($	16,256	)	($	522,953	)

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

SIX MONTHS ENDED JUNE 30, 2014

(In thousands)

	Parent			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			Consolidated
Operating revenue:
Oil production	$	12,490		$	268,192		$	—		$	—		$	280,682
Gas production		49,639			53,390			—			—			103,029
Natural gas liquids production		28,473			15,433			—			—			43,906
Other operational income		2,704			343			—			—			3,047
Total operating revenue		93,306			337,358			—			—			430,664
Operating expenses:
Lease operating expenses		9,059			87,298			—			—			96,357
Transportation, processing and gathering expenses		20,773			7,951			—			—			28,724
Production taxes		3,584			2,735			—			—			6,319
Depreciation, depletion, amortization		58,440			117,041			—			—			175,481
Accretion expense		129			15,159			—			—			15,288
Salaries, general and administrative		32,964			2			—			—			32,966
Incentive compensation expense		7,037			—			—			—			7,037
Other operational expenses		176			36			—			—			212
Derivative expense, net		—			3,115			—			—			3,115
Total operating expenses		132,162			233,337			—			—			365,499
Income (loss) from operations		(38,856	)		104,021			—			—			65,165
Other (income) expenses:
Interest expense		18,233			37			—			—			18,270
Interest income		(225	)		(99	)		(12	)		—			(336	)
Other income		(373	)		(1,056	)		—			—			(1,429	)
Other expense		179			—			—			—			179
Income from investment in subsidiaries		(67,292	)		—			(12	)		67,304			—
Total other (income) expenses		(49,478	)		(1,118	)		(24	)		67,304			16,684
Income before taxes		10,622			105,139			24			(67,304	)		48,481
Provision (benefit) for income taxes:
Deferred		(19,765	)		37,859			—			—			18,094
Total income taxes		(19,765	)		37,859			—			—			18,094
Net income	$	30,387		$	67,280		$	24		($	67,304	)	$	30,387
Comprehensive income	$	14,288		$	67,280		$	24		($	67,304	)	$	14,288

Condensed Consolidating Statement of Cash Flows

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

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

SIX MONTHS ENDED JUNE 30, 2014

(In thousands)

	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Cash flows from operating activities:
Net income	$	30,387		$	67,280		$	24		($	67,304	)	$	30,387
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, depletion and amortization		58,440			117,041			—			—			175,481
Accretion expense		129			15,159			—			—			15,288
Deferred income tax (benefit) provision		(19,765	)		37,859			—			—			18,094
Settlement of asset retirement obligations		(82	)		(24,833	)		—			—			(24,915	)
Non-cash stock compensation expense		5,358			—			—			—			5,358
Non-cash derivative expense		—			2,697			—			—			2,697
Non-cash interest expense		8,229			—			—			—			8,229
Change in current income taxes		(6	)		—			—			—			(6	)
Non-cash income from investment in subsidiaries		(67,292	)		—			(12	)		67,304			—
Change in intercompany receivables/payables		(126,526	)		114,841			11,685			—			—
(Increase) decrease in accounts receivable		(42,216	)		16,692			—			—			(25,524	)
Increase in other current assets		(82	)		—			—			—			(82	)
Increase (decrease) in accounts payable		2,052			(209	)		—			—			1,843
Increase in other current liabilities		48,987			1,798			—			—			50,785
Other		381			(1,056	)		—			—			(675	)
Net cash (used in) provided by operating activities		(102,006	)		347,269			11,697			—			256,960
Cash flows from investing activities:
Investment in oil and gas properties		(121,836	)		(384,349	)		(11,719	)		—			(517,904	)
Proceeds from sale of oil and gas properties, net of expenses		9,777			42,178			—			—			51,955
Investment in fixed and other assets		(3,896	)		—			—			—			(3,896	)
Change in restricted funds		—			—			(356	)		—			(356	)
Investment in subsidiaries		—			—			(12,176	)		12,176			—
Net cash used in investing activities		(115,955	)		(342,171	)		(24,251	)		12,176			(470,201	)
Cash flows from financing activities:
Net proceeds from issuance of common stock		226,036			—			—			—			226,036
Deferred financing costs		(3,167	)		—			—			—			(3,167	)
Equity proceeds from parent		—			—			12,176			(12,176	)		—
Net payments for share-based compensation		(6,948	)		—			—			—			(6,948	)
Net cash provided by financing activities		215,921			—			12,176			(12,176	)		215,921
Effect of exchange rate on cash		—			—			(18	)		—			(18	)
Net change in cash and cash equivalents		(2,040	)		5,098			(396	)		—			2,662
Cash and cash equivalents, beginning of period		246,294			84,290			640			—			331,224
Cash and cash equivalents, end of period	$	244,254		$	89,388		$	244		$	—		$	333,886