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Supplemental Information About Oil & Natural Gas Producing Activities (Unaudited) (Notes) | 12 Months Ended
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Dec. 31, 2016
Oil and Gas Exploration and Production Industries Disclosures [Abstract] |
Supplemental Information About Oil & Natural Gas Producing Activities | Supplemental Information About Oil & Natural Gas Producing Activities (Unaudited) Costs Incurred For Oil and Natural Gas Producing Activities The following table sets forth the capitalized costs incurred in the Company’s oil and gas production, exploration, and development activities:
| Successor |  |  | Predecessor
| October 11, 2016 through December 31, 2016 |  |  | January 1, 2016 through October 10, 2016 |  | Year Ended December 31,
(in thousands) |  |  |  | 2015 |  | 2014
Acquisition costs: |  |  |  |  |  |  |  |
Proved properties | $ | 561,251 |  |  |  | $ | 16,386 |  |  | $ | 14,268 |  |  | $ | 5,758 |
Unproved properties | 1,905,660 |  |  |  | 39,399 |  |  | 28,955 |  |  | 16,409 |
Development costs | 44,602 |  |  |  | 53,512 |  |  | 87,452 |  |  | 324,802 |
Exploration costs | 844 |  |  |  | — |  |  | 84 |  |  | — |
Total | $ | 2,512,357 |  |  |  | $ | 109,297 |  |  | $ | 130,759 |  |  | $ | 346,969 |
Results of Oil and Natural Gas Producing Activities The results of operations for oil and natural gas producing activities (excluding corporate overhead and interest costs) are presented below:
| Successor |  |  | Predecessor
| October 11, 2016 through December 31, 2016 |  |  | January 1, 2016 through October 10, 2016 |  | Year Ended December 31,
(in thousands) |  |  |  | 2015 |  | 2014
Revenues: |  |  |  |  |  |  |  |
Oil, natural gas and NGL sales | $ | 29,717 |  |  |  | $ | 69,116 |  |  | $ | 90,460 |  |  | $ | 131,825 |
Costs: |  |  |  |  |  |  |  |
Lease operating expenses | 3,541 |  |  |  | 11,036 |  |  | 21,173 |  |  | 17,690 |
Severance and ad valorem taxes | 1,636 |  |  |  | 3,696 |  |  | 5,021 |  |  | 6,875 |
Transportation, processing, gathering and other operating expenses | 2,187 |  |  |  | 4,583 |  |  | 5,732 |  |  | 4,772 |
Depletion, amortization and accretion of asset retirement obligations | 14,486 |  |  |  | 62,228 |  |  | 89,350 |  |  | 68,981 |
Abandonment expense and impairment of unproved properties | — |  |  |  | 2,545 |  |  | 7,619 |  |  | 20,025 |
Exploration | 844 |  |  |  | — |  |  | 84 |  |  | — |
Contract termination and rig stacking | — |  |  |  | — |  |  | 2,387 |  |  | — |
Income tax expense (benefit) | — |  |  |  | (406 | ) |  | (572 | ) |  | 1,524 |
Results of operations | $ | 7,023 |  |  |  | $ | (14,566 | ) |  | $ | (40,334 | ) |  | $ | 11,958 |
Oil and Gas Reserve Quantities The reserve estimates presented below were made in accordance with GAAP requirements for disclosures about oil and natural gas producing activities and Securities and Exchange Commission (“SEC”) rules for oil and natural gas reporting reserves estimation and disclosure. Estimates of the Company’s proved oil and natural gas reserves at December 31, 2016, 2015 and 2014 were prepared by Netherland, Sewell & Associates, Inc. There are numerous uncertainties inherent in estimating quantities of proved oil and natural gas reserves. Oil and natural gas reserve engineering is a subjective process of estimating underground accumulations of oil and natural gas that cannot be precisely measured and the accuracy of any reserve estimate is a function of the quality of available data and of engineering and geological interpretation and judgment. Results of drilling, testing and production subsequent to the date of the estimate may justify revision of such estimate. Accordingly, reserve estimates are often different from the quantities of oil and natural gas that are ultimately recovered. The following table summarizes the average price during the 12-month period, determined as the unweighted arithmetic average of the first-day-of-the-month for the periods from October 11, 2016, through December 31, 2016 (Successor) and January 1, 2016, through October 10, 2016 (Predecessor) and for the years ended December 31, 2015 and 2014. The following prices, as adjusted for transportation, quality, and basis differentials, were used in the calculation of the standardized measure of discounted future net cash flows (“standardized measure”):
| Successor |  |  | Predecessor
| October 11, 2016 through December 31, 2016 |  |  | January 1, 2016 through October 10, 2016 |  | Year Ended December 31,
|  |  |  | 2015 |  | 2014
Oil (per Bbl) | $ | 38.49 |  |  |  | $ | 36.98 |  |  | $ | 41.85 |  |  | $ | 84.94 |
Gas (per Mcf) | 0.98 |  |  |  | 1.24 |  |  | 1.71 |  |  | 4.70 |
NGLs (per Bbl) | 14.59 |  |  |  | 13.28 |  |  | 13.94 |  |  | 22.70 |
The table below presents a summary of changes in the Company’s estimated proved reserves:
| Successor |  |  | Predecessor
| October 11, 2016, through December 31, 2016 |  |  | January 1, 2016, through October 10, 2016
| Crude Oil (MBbls) |  | Natural Gas (MMcf) |  | Natural Gas Liquids (MBbls) |  |  | Crude Oil (MBbls) |  | Natural Gas (MMcf) |  | Natural Gas Liquids (MBbls)
Total proved reserves: |  |  |  |  |  |  |  |  |  |  |  |
Beginning of period | 30,091 |  |  | 36,801 |  |  | 4,506 |  |  |  | 23,199 |  |  | 32,442 |  |  | 3,851 |
Extensions and discoveries | 7,063 |  |  | 12,219 |  |  | 1,225 |  |  |  | 5,851 |  |  | 6,410 |  |  | 773 |
Revisions of previous estimates | 184 |  |  | 16,445 |  |  | 983 |  |  |  | 1,025 |  |  | (1,521 | ) |  | (110 | )
Purchases of reserves in place | 9,651 |  |  | 83,992 |  |  | 5,152 |  |  |  | 1,600 |  |  | 2,130 |  |  | 245 |
Divestitures of reserves in place | — |  |  | — |  |  | — |  |  |  | — |  |  | — |  |  | — |
Production | (523 | ) |  | (1,113 | ) |  | (96 | ) |  |  | (1,584 | ) |  | (2,660 | ) |  | (253 | )
End of period | 46,466 |  |  | 148,344 |  |  | 11,770 |  |  |  | 30,091 |  |  | 36,801 |  |  | 4,506 |
Proved developed reserves: |  |  |  |  |  |  |  |  |  |  |  |
Beginning of period | 11,346 |  |  | 14,973 |  |  | 1,927 |  |  |  | 9,347 |  |  | 12,711 |  |  | 1,603 |
End of period | 14,551 |  |  | 42,190 |  |  | 3,618 |  |  |  | 11,346 |  |  | 14,973 |  |  | 1,927 |
Proved undeveloped reserves: |  |  |  |  |  |  |  |  |  |  |  |
Beginning of period | 18,745 |  |  | 21,828 |  |  | 2,579 |  |  |  | 13,852 |  |  | 19,731 |  |  | 2,248 |
End of period | 31,914 |  |  | 106,154 |  |  | 8,152 |  |  |  | 18,745 |  |  | 21,828 |  |  | 2,579 |
| Predecessor
| Year Ended December 31, 2015 |  |  | Year Ended December 31, 2014
| Crude Oil (MBbls) |  | Natural Gas (MMcf) |  | Natural Gas Liquids (MBbls) |  |  | Crude Oil (MBbls) |  | Natural Gas (MMcf) |  | Natural Gas Liquids (MBbls)
Total proved reserves: |  |  |  |  |  |  |  |  |  |  |  |
Beginning of period | 19,850 |  |  | 27,414 |  |  | 1,551 |  |  |  | 18,510 |  |  | 6,968 |  |  | 525 |
Extensions and discoveries | 9,444 |  |  | 11,927 |  |  | 1,432 |  |  |  | 16,122 |  |  | 22,575 |  |  | 1,127 |
Revisions of previous estimates | (5,109 | ) |  | (5,204 | ) |  | 995 |  |  |  | 56 |  |  | 178 |  |  | 180 |
Purchases of reserves in place | 844 |  |  | 1,363 |  |  | 204 |  |  |  | 162 |  |  | 192 |  |  | 23 |
Divestitures of reserves in place | — |  |  | — |  |  | — |  |  |  | (13,572 | ) |  | (387 | ) |  | (69 | )
Production | (1,830 | ) |  | (3,058 | ) |  | (331 | ) |  |  | (1,428 | ) |  | (2,112 | ) |  | (235 | )
End of period | 23,199 |  |  | 32,442 |  |  | 3,851 |  |  |  | 19,850 |  |  | 27,414 |  |  | 1,551 |
Proved developed reserves: |  |  |  |  |  |  |  |  |  |  |  |
Beginning of period | 8,026 |  |  | 11,959 |  |  | 766 |  |  |  | 6,021 |  |  | 4,837 |  |  | 382 |
End of period | 9,347 |  |  | 12,711 |  |  | 1,603 |  |  |  | 8,026 |  |  | 11,959 |  |  | 766 |
Proved undeveloped reserves: |  |  |  |  |  |  |  |  |  |  |  |
Beginning of period | 11,823 |  |  | 15,455 |  |  | 785 |  |  |  | 12,489 |  |  | 2,131 |  |  | 143 |
End of period | 13,852 |  |  | 19,731 |  |  | 2,248 |  |  |  | 11,823 |  |  | 15,455 |  |  | 785 |
Proved reserves at December 31, 2016 increased 104% to 82,959 MBoe, compared to 40,730 MBoe at October 10, 2016. During the period from October 11, 2016, through December 31, 2016 (Successor), the Company acquired 28,801 MBoe of proved reserves. Refer to Note 3—Property Acquisitions and Dispositions. Additionally, the Company added 10,324 MBoe of proved reserves through extensions, primarily due to its drilling activity, as well as, 3,908 MBoe of revisions due to improved results in completion techniques and adjustments of natural gas and NGL treatment through the gas plants slightly offset by 805 MBoe of production. Proved reserves at October 10, 2016 increased 25% to 40,730 MBoe, compared to 32,457 MBoe at December 31, 2015. During the period from January 1, 2016, through October 10, 2016 (Predecessor), the Company acquired 2,200 MBoe of proved reserves. Refer to Note 3—Property Acquisitions and Dispositions. Additionally, the Company added 7,692 MBoe of proved reserves through extensions, primarily due to its drilling activity, as well as 660 MBoe due to positive performance revisions, slightly offset by 2,280 MBoe of production. Proved reserves at December 31, 2015 increased 25% to 32,457 MBoe, compared to 25,970 MBoe at December 31, 2014. During 2015, the Company added 12,864 MBoe of proved reserves through extensions, primarily due to its drilling activity. During 2015, the Company had net negative revisions of 4,981 MBoe. The significant decrease in commodity prices seen in 2015 resulted in negative revisions related to the conversion of approximately 6,794 MBoe from PUDs to unproved reserves, partially offset by a positive revision in performance. During 2015, the Company acquired 1,275 MBoe of proved reserves. Refer to Note 3—Property Acquisitions and Dispositions. During 2014, the Company added 21,012 MBoe of proved reserves through extensions and discoveries, primarily due to its continued development drilling program and 265 MBoe of proved reserves, due to better than expected performance of its proved developed reserves. During 2014, the Company divested of 13,706 MBoe of proved reserves. Refer to Note 3—Property Acquisitions and Dispositions. Standardized Measure of Discounted Future Net Cash Flows The standardized measure of discounted future net cash flows does not purport to be, nor should it be interpreted to present, the fair value of the oil and natural gas reserves of the property. An estimate of fair value would take into account, among other things, the recovery of reserves not presently classified as proved, the value of unproved properties and consideration of expected future economic and operating conditions. Estimated future production of proved reserves and estimated future production and development costs of proved reserves are based on current costs and economic conditions. The estimated future net cash flows are then discounted at a rate of 10%. It is not intended that the FASB’s standardized measure of discounted future net cash flows represent the fair market value of its’ Predecessor’s proved reserves. The Company cautions that the disclosures shown are based on estimates of proved reserve quantities and future production schedules which are inherently imprecise and subject to revision and the 10% discount rate is arbitrary. In addition, costs and prices as of the measurement date are used in the determinations and no value may be assigned to probable or possible reserves. The following table presents the Company’s standardized measure of discounted future net cash flows:
| Successor |  |  | Predecessor
| October 11, 2016 through December 31, 2016 |  |  | January 1, 2016 through October 10, 2016 |  | Year Ended December 31,
(in thousands) |  |  |  | 2015 |  | 2014
Future cash inflows | $ | 2,105,585 |  |  |  | $ | 1,217,641 |  |  | $ | 1,079,962 |  |  | $ | 1,850,205 |
Future development costs | (482,162 | ) |  |  | (297,559 | ) |  | (277,837 | ) |  | (440,366 | )
Future production costs | (640,306 | ) |  |  | (413,410 | ) |  | (450,058 | ) |  | (457,236 | )
Future income tax expenses | (136,587 | ) |  |  | (5,614 | ) |  | (6,643 | ) |  | (10,834 | )
Future net cash flows | 846,530 |  |  |  | 501,058 |  |  | 345,424 |  |  | 941,769 |
10% discount to reflect timing of cash flows | (471,438 | ) |  |  | (291,345 | ) |  | (210,355 | ) |  | (575,886 | )
Standardized measure of discounted future net cash flows | $ | 375,092 |  |  |  | $ | 209,713 |  |  | $ | 135,069 |  |  | $ | 365,883 |
The following summarizes the principal sources of change in the standardized measure of discounted future net cash flows:
| Successor |  |  | Predecessor
(in thousands) | October 11, 2016 through December 31, 2016 |  |  | January 1, 2016 through October 10, 2016
Standardized measure of discounted future net cash flows, beginning of period | $ | 209,713 |  |  |  | $ | 135,069 |
Sales of oil, natural gas and NGLs, net of production costs | (22,354 | ) |  |  | (49,801 | )
Purchase of minerals in place | 127,842 |  |  |  | 10,145 |
Divestiture of minerals in place | — |  |  |  | — |
Extensions and discoveries, net of future development costs | 55,825 |  |  |  | 46,438 |
Change in estimated development costs | 10,891 |  |  |  | 11,743 |
Net change in prices and production costs | (978 | ) |  |  | 6,661 |
Change in estimated future development costs | 571 |  |  |  | 28,998 |
Revisions of previous quantity estimates | 20,190 |  |  |  | 3,673 |
Accretion of discount | 4,753 |  |  |  | 11,319 |
Net change in income taxes | (47,990 | ) |  |  | (1,568 | )
Net change in timing of production and other | 16,629 |  |  |  | 7,036 |
Standardized measure of discounted future net cash flows, end of period | $ | 375,092 |  |  |  | $ | 209,713 |
| Predecessor
| Year Ended December 31,
(in thousands) | 2015 |  |  | 2014
Standardized measure of discounted future net cash flows, beginning of period | $ | 365,883 |  |  |  | $ | 371,307 |
Sales of oil, natural gas and NGLs, net of production costs | (58,534 | ) |  |  | (102,488 | )
Purchase of minerals in place | 14,416 |  |  |  | 5,650 |
Divestiture of minerals in place | — |  |  |  | (242,344 | )
Extensions and discoveries, net of future development costs | 57,894 |  |  |  | 312,532 |
Change in estimated development costs | 16,100 |  |  |  | 10,386 |
Net change in prices and production costs | (494,734 | ) |  |  | (3,027 | )
Change in estimated future development costs | 247,642 |  |  |  | 2,935 |
Revisions of previous quantity estimates | (51,342 | ) |  |  | 924 |
Accretion of discount | 37,517 |  |  |  | 13,561 |
Net change in income taxes | 1,601 |  |  |  | (2,762 | )
Net change in timing of production and other | (1,374 | ) |  |  | (791 | )
Standardized measure of discounted future net cash flows, end of period | $ | 135,069 |  |  |  | $ | 365,883 |

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