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Condensed Consolidating Financial Information (Tables) | 9 Months Ended
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Sep. 30, 2012
Schedule of Condensed Consolidating Balance Sheet | Condensed Consolidating Balance Sheet (In thousands, except share data)
|  | September 30, 2012 |
|  | Parent/ Issuer |  |  | Combined Guarantor Subsidiaries |  |  | Intercompany Eliminations |  |  | Consolidated |
ASSETS |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Current assets |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Cash and cash equivalents |  | $ | 231,170 |  |  | $ | 49,133 |  |  | $ | — |  |  | $ | 280,303 |
Short-term investments |  |  | 126,213 |  |  |  | — |  |  |  | — |  |  |  | 126,213 |
Accounts receivable — oil and gas revenues |  |  | — |  |  |  | 104,965 |  |  |  | — |  |  |  | 104,965 |
Accounts receivable — joint interest partners |  |  | — |  |  |  | 83,630 |  |  |  | — |  |  |  | 83,630 |
Accounts receivable — from affiliates |  |  | 291 |  |  |  | 3,559 |  |  |  | (3,850 | ) |  |  | — |
Inventory |  |  | — |  |  |  | 21,142 |  |  |  | — |  |  |  | 21,142 |
Prepaid expenses |  |  | 501 |  |  |  | 3,529 |  |  |  | — |  |  |  | 4,030 |
Advances to joint interest partners |  |  | — |  |  |  | 4,025 |  |  |  | — |  |  |  | 4,025 |
Derivative instruments |  |  | — |  |  |  | 17,320 |  |  |  | — |  |  |  | 17,320 |
Other current assets |  |  | 78 |  |  |  | — |  |  |  | — |  |  |  | 78 |
Total current assets |  |  | 358,253 |  |  |  | 287,303 |  |  |  | (3,850 | ) |  |  | 641,706 |
Property, plant and equipment |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Oil and gas properties (successful efforts method) |  |  | — |  |  |  | 2,079,016 |  |  |  | — |  |  |  | 2,079,016 |
Other property and equipment |  |  | — |  |  |  | 45,261 |  |  |  | — |  |  |  | 45,261 |
Less: accumulated depreciation, depletion, amortization and impairment |  |  | — |  |  |  | (320,478 | ) |  |  | — |  |  |  | (320,478 | )
Total property, plant and equipment, net |  |  | — |  |  |  | 1,803,799 |  |  |  | — |  |  |  | 1,803,799 |
Investments in and advances to subsidiaries |  |  | 1,563,143 |  |  |  | — |  |  |  | (1,563,143 | ) |  |  | — |
Derivative instruments |  |  | — |  |  |  | 10,047 |  |  |  | — |  |  |  | 10,047 |
Deferred income taxes |  |  | 33,616 |  |  |  | — |  |  |  | (33,616 | ) |  |  | — |
Deferred costs and other assets |  |  | 21,405 |  |  |  | 3,944 |  |  |  | — |  |  |  | 25,349 |
Total assets |  | $ | 1,976,417 |  |  | $ | 2,105,093 |  |  | $ | (1,600,609 | ) |  | $ | 2,480,901 |
LIABILITIES AND STOCKHOLDERS’ EQUITY |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Current liabilities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Accounts payable |  | $ | 4 |  |  | $ | 30,950 |  |  | $ | — |  |  | $ | 30,954 |
Accounts payable — from affiliates |  |  | 3,559 |  |  |  | 291 |  |  |  | (3,850 | ) |  |  | — |
Advances from joint interest partners |  |  | — |  |  |  | 26,572 |  |  |  | — |  |  |  | 26,572 |
Revenues and production taxes payable |  |  | — |  |  |  | 64,091 |  |  |  | — |  |  |  | 64,091 |
Accrued liabilities |  |  | 25 |  |  |  | 200,519 |  |  |  | — |  |  |  | 200,544 |
Accrued interest payable |  |  | 22,465 |  |  |  | 16 |  |  |  | — |  |  |  | 22,481 |
Derivative instruments |  |  | — |  |  |  | 1,273 |  |  |  | — |  |  |  | 1,273 |
Deferred income taxes |  |  | — |  |  |  | 3,782 |  |  |  | — |  |  |  | 3,782 |
Other current liabilities |  |  | — |  |  |  | 5,256 |  |  |  | — |  |  |  | 5,256 |
Total current liabilities |  |  | 26,053 |  |  |  | 332,750 |  |  |  | (3,850 | ) |  |  | 354,953 |
Long-term debt |  |  | 1,200,000 |  |  |  | — |  |  |  | — |  |  |  | 1,200,000 |
Asset retirement obligations |  |  | — |  |  |  | 20,529 |  |  |  | — |  |  |  | 20,529 |
Derivative instruments |  |  | — |  |  |  | 360 |  |  |  | — |  |  |  | 360 |
Deferred income taxes |  |  | — |  |  |  | 186,233 |  |  |  | (33,616 | ) |  |  | 152,617 |
Other liabilities |  |  | — |  |  |  | 2,078 |  |  |  | — |  |  |  | 2,078 |
Total liabilities |  |  | 1,226,053 |  |  |  | 541,950 |  |  |  | (37,466 | ) |  |  | 1,730,537 |
Stockholders’ equity |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Capital contributions from affiliates |  |  | — |  |  |  | 1,400,817 |  |  |  | (1,400,817 | ) |  |  | — |
Common stock, $0.01 par value; 300,000,000 shares authorized; 93,435,593 issued and 93,369,468 outstanding |  |  | 923 |  |  |  | — |  |  |  | — |  |  |  | 923 |
Treasury stock, at cost; 66,125 shares |  |  | (1,901 | ) |  |  | — |  |  |  | — |  |  |  | (1,901 | )
Additional paid-in-capital |  |  | 653,999 |  |  |  | 8,743 |  |  |  | (8,743 | ) |  |  | 653,999 |
Retained earnings |  |  | 97,343 |  |  |  | 153,583 |  |  |  | (153,583 | ) |  |  | 97,343 |
Total stockholders’ equity |  |  | 750,364 |  |  |  | 1,563,143 |  |  |  | (1,563,143 | ) |  |  | 750,364 |
Total liabilities and stockholders’ equity |  | $ | 1,976,417 |  |  | $ | 2,105,093 |  |  | $ | (1,600,609 | ) |  | $ | 2,480,901 |
Condensed Consolidating Balance Sheet (In thousands, except share data)
|  | December 31, 2011 |
|  | Parent/ Issuer |  |  | Combined Guarantor Subsidiaries |  |  | Intercompany Eliminations |  |  | Consolidated |
ASSETS |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Current assets |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Cash and cash equivalents |  | $ | 443,482 |  |  | $ | 27,390 |  |  | $ | — |  |  | $ | 470,872 |
Short-term investments |  |  | 19,994 |  |  |  | — |  |  |  | — |  |  |  | 19,994 |
Accounts receivable — oil and gas revenues |  |  | — |  |  |  | 52,164 |  |  |  | — |  |  |  | 52,164 |
Accounts receivable — joint interest partners |  |  | — |  |  |  | 67,268 |  |  |  | — |  |  |  | 67,268 |
Accounts receivable — from affiliates |  |  | 88 |  |  |  | 1,540 |  |  |  | (1,628 | ) |  |  | — |
Inventory |  |  | — |  |  |  | 3,543 |  |  |  | — |  |  |  | 3,543 |
Prepaid expenses |  |  | 309 |  |  |  | 1,831 |  |  |  | — |  |  |  | 2,140 |
Advances to joint interest partners |  |  | — |  |  |  | 3,935 |  |  |  | — |  |  |  | 3,935 |
Deferred income taxes |  |  | — |  |  |  | 3,233 |  |  |  | — |  |  |  | 3,233 |
Other current assets |  |  | 18 |  |  |  | 473 |  |  |  | — |  |  |  | 491 |
Total current assets |  |  | 463,891 |  |  |  | 161,377 |  |  |  | (1,628 | ) |  |  | 623,640 |
Property, plant and equipment |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Oil and gas properties (successful efforts method) |  |  | — |  |  |  | 1,235,357 |  |  |  | — |  |  |  | 1,235,357 |
Other property and equipment |  |  | — |  |  |  | 20,859 |  |  |  | — |  |  |  | 20,859 |
Less: accumulated depreciation, depletion, amortization and impairment |  |  | — |  |  |  | (176,261 | ) |  |  | — |  |  |  | (176,261 | )
Total property, plant and equipment, net |  |  | — |  |  |  | 1,079,955 |  |  |  | — |  |  |  | 1,079,955 |
Investments in and advances to subsidiaries |  |  | 958,880 |  |  |  | — |  |  |  | (958,880 | ) |  |  | — |
Derivative instruments |  |  | — |  |  |  | 4,362 |  |  |  | — |  |  |  | 4,362 |
Deferred income taxes |  |  | 13,158 |  |  |  | — |  |  |  | (13,158 | ) |  |  | — |
Deferred costs and other assets |  |  | 15,742 |  |  |  | 3,683 |  |  |  | — |  |  |  | 19,425 |
Total assets |  | $ | 1,451,671 |  |  | $ | 1,249,377 |  |  | $ | (973,666 | ) |  | $ | 1,727,382 |
LIABILITIES AND STOCKHOLDERS’ EQUITY |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Current liabilities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Accounts payable |  | $ | 23 |  |  | $ | 12,184 |  |  | $ | — |  |  | $ | 12,207 |
Accounts payable — from affiliates |  |  | 1,540 |  |  |  | 88 |  |  |  | (1,628 | ) |  |  | — |
Advances from joint interest partners |  |  | — |  |  |  | 9,064 |  |  |  | — |  |  |  | 9,064 |
Revenues and production taxes payable |  |  | — |  |  |  | 19,468 |  |  |  | — |  |  |  | 19,468 |
Accrued liabilities |  |  | 103 |  |  |  | 119,589 |  |  |  | — |  |  |  | 119,692 |
Accrued interest payable |  |  | 15,767 |  |  |  | 7 |  |  |  | — |  |  |  | 15,774 |
Derivative instruments |  |  | — |  |  |  | 5,907 |  |  |  | — |  |  |  | 5,907 |
Other current liabilities |  |  | — |  |  |  | 472 |  |  |  | — |  |  |  | 472 |
Total current liabilities |  |  | 17,433 |  |  |  | 166,779 |  |  |  | (1,628 | ) |  |  | 182,584 |
Long-term debt |  |  | 800,000 |  |  |  | — |  |  |  | — |  |  |  | 800,000 |
Asset retirement obligations |  |  | — |  |  |  | 13,075 |  |  |  | — |  |  |  | 13,075 |
Derivative instruments |  |  | — |  |  |  | 3,505 |  |  |  | — |  |  |  | 3,505 |
Deferred income taxes |  |  | — |  |  |  | 106,141 |  |  |  | (13,158 | ) |  |  | 92,983 |
Other liabilities |  |  | — |  |  |  | 997 |  |  |  | — |  |  |  | 997 |
Total liabilities |  |  | 817,433 |  |  |  | 290,497 |  |  |  | (14,786 | ) |  |  | 1,093,144 |
Stockholders’ equity |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Capital contributions from affiliates |  |  | — |  |  |  | 941,575 |  |  |  | (941,575 | ) |  |  | — |
Common stock, $0.01 par value; 300,000,000 shares authorized; 92,483,393 issued and 92,460,914 outstanding |  |  | 921 |  |  |  | — |  |  |  | — |  |  |  | 921 |
Treasury stock, at cost; 22,479 shares |  |  | (602 | ) |  |  | — |  |  |  | — |  |  |  | (602 | )
Additional paid-in-capital |  |  | 647,374 |  |  |  | 8,743 |  |  |  | (8,743 | ) |  |  | 647,374 |
Retained earnings (deficit) |  |  | (13,455 | ) |  |  | 8,562 |  |  |  | (8,562 | ) |  |  | (13,455 | )
Total stockholders’ equity |  |  | 634,238 |  |  |  | 958,880 |  |  |  | (958,880 | ) |  |  | 634,238 |
Total liabilities and stockholders’ equity |  | $ | 1,451,671 |  |  | $ | 1,249,377 |  |  | $ | (973,666 | ) |  | $ | 1,727,382 |
Schedule of Condensed Consolidating Statement of Operations | Condensed Consolidating Statement of Operations (In thousands)
|  | Three Months Ended September 30, 2012 |
|  | Parent/ Issuer |  |  | Combined Guarantor Subsidiaries |  |  | Intercompany Eliminations |  |  | Consolidated |
Revenues |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Oil and gas revenues |  | $ | — |  |  | $ | 178,748 |  |  | $ | — |  |  | $ | 178,748 |
Well services revenues |  |  | — |  |  |  | 5,963 |  |  |  | — |  |  |  | 5,963 |
Total revenues |  |  | — |  |  |  | 184,711 |  |  |  | — |  |  |  | 184,711 |
Expenses |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Lease operating expenses |  |  | — |  |  |  | 16,134 |  |  |  | — |  |  |  | 16,134 |
Well services operating expenses |  |  | — |  |  |  | 5,420 |  |  |  | — |  |  |  | 5,420 |
Marketing, transportation and gathering expenses |  |  | — |  |  |  | 2,744 |  |  |  | — |  |  |  | 2,744 |
Production taxes |  |  | — |  |  |  | 16,433 |  |  |  | — |  |  |  | 16,433 |
Depreciation, depletion and amortization |  |  | — |  |  |  | 57,684 |  |  |  | — |  |  |  | 57,684 |
Exploration expenses |  |  | — |  |  |  | 336 |  |  |  | — |  |  |  | 336 |
Impairment of oil and gas properties |  |  | — |  |  |  | 36 |  |  |  | — |  |  |  | 36 |
General and administrative expenses |  |  | 2,988 |  |  |  | 10,898 |  |  |  | — |  |  |  | 13,886 |
Total expenses |  |  | 2,988 |  |  |  | 109,685 |  |  |  | — |  |  |  | 112,673 |
Operating income (loss) |  |  | (2,988 | ) |  |  | 75,026 |  |  |  | — |  |  |  | 72,038 |
Other income (expense) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Equity in earnings in subsidiaries |  |  | 32,735 |  |  |  | — |  |  |  | (32,735 | ) |  |  | — |
Net loss on derivative instruments |  |  | — |  |  |  | (22,441 | ) |  |  | — |  |  |  | (22,441 | )
Interest expense |  |  | (20,307 | ) |  |  | (672 | ) |  |  | — |  |  |  | (20,979 | )
Other income |  |  | 238 |  |  |  | 909 |  |  |  | — |  |  |  | 1,147 |
Total other income (expense) |  |  | 12,666 |  |  |  | (22,204 | ) |  |  | (32,735 | ) |  |  | (42,273 | )
Income before income taxes |  |  | 9,678 |  |  |  | 52,822 |  |  |  | (32,735 | ) |  |  | 29,765 |
Income tax benefit (expense) |  |  | 8,636 |  |  |  | (20,087 | ) |  |  | — |  |  |  | (11,451 | )
Net income |  | $ | 18,314 |  |  | $ | 32,735 |  |  | $ | (32,735 | ) |  | $ | 18,314 |
Condensed Consolidating Statement of Operations (In thousands)
|  | Three Months Ended September 30, 2011 |
|  | Parent/ Issuer |  |  | Combined Guarantor Subsidiaries |  |  | Intercompany Eliminations |  |  | Consolidated |
Oil and gas revenues |  | $ | — |  |  | $ | 87,596 |  |  | $ | — |  |  | $ | 87,596 |
Expenses |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Lease operating expenses |  |  | — |  |  |  | 9,597 |  |  |  | — |  |  |  | 9,597 |
Marketing, transportation and gathering expenses |  |  | — |  |  |  | 238 |  |  |  | — |  |  |  | 238 |
Production taxes |  |  | — |  |  |  | 8,873 |  |  |  | — |  |  |  | 8,873 |
Depreciation, depletion and amortization |  |  | — |  |  |  | 20,859 |  |  |  | — |  |  |  | 20,859 |
Exploration expenses |  |  | — |  |  |  | 54 |  |  |  | — |  |  |  | 54 |
Impairment of oil and gas properties |  |  | — |  |  |  | 396 |  |  |  | — |  |  |  | 396 |
General and administrative expenses |  |  | 1,282 |  |  |  | 6,024 |  |  |  | — |  |  |  | 7,306 |
Total expenses |  |  | 1,282 |  |  |  | 46,041 |  |  |  | — |  |  |  | 47,323 |
Operating income (loss) |  |  | (1,282 | ) |  |  | 41,555 |  |  |  | — |  |  |  | 40,273 |
Other income (expense) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Equity in earnings in subsidiaries |  |  | 71,445 |  |  |  | — |  |  |  | (71,445 | ) |  |  | — |
Net gain on derivative instruments |  |  | — |  |  |  | 71,224 |  |  |  | — |  |  |  | 71,224 |
Interest expense |  |  | (6,495 | ) |  |  | (291 | ) |  |  | — |  |  |  | (6,786 | )
Other income |  |  | 282 |  |  |  | 242 |  |  |  | — |  |  |  | 524 |
Total other income (expense) |  |  | 65,232 |  |  |  | 71,175 |  |  |  | (71,445 | ) |  |  | 64,962 |
Income before income taxes |  |  | 63,950 |  |  |  | 112,730 |  |  |  | (71,445 | ) |  |  | 105,235 |
Income tax benefit (expense) |  |  | 2,339 |  |  |  | (41,285 | ) |  |  | — |  |  |  | (38,946 | )
Net income |  | $ | 66,289 |  |  | $ | 71,445 |  |  | $ | (71,445 | ) |  | $ | 66,289 |
Condensed Consolidating Statement of Operations (In thousands)
|  | Nine Months Ended September 30, 2012 |
|  | Parent/ Issuer |  |  | Combined Guarantor Subsidiaries |  |  | Intercompany Eliminations |  |  | Consolidated |
Revenues |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Oil and gas revenues |  | $ | — |  |  | $ | 461,857 |  |  | $ | — |  |  | $ | 461,857 |
Well services revenues |  |  | — |  |  |  | 10,484 |  |  |  | — |  |  |  | 10,484 |
Total revenues |  |  | — |  |  |  | 472,341 |  |  |  | — |  |  |  | 472,341 |
Expenses |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Lease operating expenses |  |  | — |  |  |  | 37,979 |  |  |  | — |  |  |  | 37,979 |
Well services operating expenses |  |  | — |  |  |  | 7,104 |  |  |  | — |  |  |  | 7,104 |
Marketing, transportation and gathering expenses |  |  | — |  |  |  | 7,283 |  |  |  | — |  |  |  | 7,283 |
Production taxes |  |  | — |  |  |  | 43,419 |  |  |  | — |  |  |  | 43,419 |
Depreciation, depletion and amortization |  |  | — |  |  |  | 140,783 |  |  |  | — |  |  |  | 140,783 |
Exploration expenses |  |  | — |  |  |  | 3,171 |  |  |  | — |  |  |  | 3,171 |
Impairment of oil and gas properties |  |  | — |  |  |  | 2,607 |  |  |  | — |  |  |  | 2,607 |
General and administrative expenses |  |  | 8,078 |  |  |  | 31,544 |  |  |  | — |  |  |  | 39,622 |
Total expenses |  |  | 8,078 |  |  |  | 273,890 |  |  |  | — |  |  |  | 281,968 |
Operating income (loss) |  |  | (8,078 | ) |  |  | 198,451 |  |  |  | — |  |  |  | 190,373 |
Other income (expense) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Equity in earnings in subsidiaries |  |  | 145,021 |  |  |  | — |  |  |  | (145,021 | ) |  |  | — |
Net gain on derivative instruments |  |  | — |  |  |  | 33,568 |  |  |  | — |  |  |  | 33,568 |
Interest expense |  |  | (47,136 | ) |  |  | (1,816 | ) |  |  | — |  |  |  | (48,952 | )
Other income |  |  | 533 |  |  |  | 1,988 |  |  |  | — |  |  |  | 2,521 |
Total other income (expense) |  |  | 98,418 |  |  |  | 33,740 |  |  |  | (145,021 | ) |  |  | (12,863 | )
Income before income taxes |  |  | 90,340 |  |  |  | 232,191 |  |  |  | (145,021 | ) |  |  | 177,510 |
Income tax benefit (expense) |  |  | 20,458 |  |  |  | (87,170 | ) |  |  | — |  |  |  | (66,712 | )
Net income |  | $ | 110,798 |  |  | $ | 145,021 |  |  | $ | (145,021 | ) |  | $ | 110,798 |
Condensed Consolidating Statement of Operations (In thousands)
|  | Nine Months Ended September 30, 2011 |
|  | Parent/ Issuer |  |  | Combined Guarantor Subsidiaries |  |  | Intercompany Eliminations |  |  | Consolidated |
Oil and gas revenues |  | $ | — |  |  | $ | 213,546 |  |  | $ | — |  |  | $ | 213,546 |
Expenses |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Lease operating expenses |  |  | — |  |  |  | 21,178 |  |  |  | — |  |  |  | 21,178 |
Marketing, transportation and gathering expenses |  |  | — |  |  |  | 797 |  |  |  | — |  |  |  | 797 |
Production taxes |  |  | — |  |  |  | 22,041 |  |  |  | — |  |  |  | 22,041 |
Depreciation, depletion and amortization |  |  | — |  |  |  | 47,771 |  |  |  | — |  |  |  | 47,771 |
Exploration expenses |  |  | — |  |  |  | 345 |  |  |  | — |  |  |  | 345 |
Impairment of oil and gas properties |  |  | — |  |  |  | 3,313 |  |  |  | — |  |  |  | 3,313 |
General and administrative expenses |  |  | 3,863 |  |  |  | 16,007 |  |  |  | — |  |  |  | 19,870 |
Total expenses |  |  | 3,863 |  |  |  | 111,452 |  |  |  | — |  |  |  | 115,315 |
Operating income (loss) |  |  | (3,863 | ) |  |  | 102,094 |  |  |  | — |  |  |  | 98,231 |
Other income (expense) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Equity in earnings in subsidiaries |  |  | 105,832 |  |  |  | — |  |  |  | (105,832 | ) |  |  | — |
Net gain on derivative instruments |  |  | — |  |  |  | 67,105 |  |  |  | — |  |  |  | 67,105 |
Interest expense |  |  | (17,909 | ) |  |  | (836 | ) |  |  | — |  |  |  | (18,745 | )
Other income |  |  | 946 |  |  |  | 269 |  |  |  | — |  |  |  | 1,215 |
Total other income (expense) |  |  | 88,869 |  |  |  | 66,538 |  |  |  | (105,832 | ) |  |  | 49,575 |
Income before income taxes |  |  | 85,006 |  |  |  | 168,632 |  |  |  | (105,832 | ) |  |  | 147,806 |
Income tax benefit (expense) |  |  | 7,785 |  |  |  | (62,800 | ) |  |  | — |  |  |  | (55,015 | )
Net income |  | $ | 92,791 |  |  | $ | 105,832 |  |  | $ | (105,832 | ) |  | $ | 92,791 |
Schedule of Condensed Consolidating Statementof Cash Flows | Condensed Consolidating Statement of Cash Flows (In thousands)
|  | Nine Months Ended September 30, 2012 |
|  | Parent/ Issuer |  |  | Combined Guarantor Subsidiaries |  |  | Intercompany Eliminations |  |  | Consolidated |
Cash flows from operating activities: |  | $ | 110,798 |  |  | $ | 145,021 |  |  | $ | (145,021 | ) |  | $ | 110,798 |
Net income |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Adjustments to reconcile net income to net cash provided by (used in) operating activities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Equity in earnings of subsidiaries |  |  | (145,021 | ) |  |  | — |  |  |  | 145,021 |  |  |  | — |
Depreciation, depletion and amortization |  |  | — |  |  |  | 140,783 |  |  |  | — |  |  |  | 140,783 |
Impairment of oil and gas properties |  |  | — |  |  |  | 2,607 |  |  |  | — |  |  |  | 2,607 |
Deferred income taxes |  |  | (20,458 | ) |  |  | 87,106 |  |  |  | — |  |  |  | 66,648 |
Derivative instruments |  |  | — |  |  |  | (33,568 | ) |  |  | — |  |  |  | (33,568 | )
Stock-based compensation expenses |  |  | 6,397 |  |  |  | 230 |  |  |  | — |  |  |  | 6,627 |
Debt discount amortization and other |  |  | 1,616 |  |  |  | 422 |  |  |  | — |  |  |  | 2,038 |
Working capital and other changes: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Change in accounts receivable |  |  | (203 | ) |  |  | (70,899 | ) |  |  | 1,939 |  |  |  | (69,163 | )
Change in inventory |  |  | — |  |  |  | (26,790 | ) |  |  | — |  |  |  | (26,790 | )
Change in prepaid expenses |  |  | (192 | ) |  |  | (1,817 | ) |  |  | — |  |  |  | (2,009 | )
Change in other current assets |  |  | (60 | ) |  |  | 473 |  |  |  | — |  |  |  | 413 |
Change in other assets |  |  | (24 | ) |  |  | (95 | ) |  |  | — |  |  |  | (119 | )
Change in accounts payable and accrued liabilities |  |  | 8,620 |  |  |  | 72,398 |  |  |  | (1,939 | ) |  |  | 79,079 |
Change in other current liabilities |  |  | — |  |  |  | 4,784 |  |  |  | — |  |  |  | 4,784 |
Net cash provided by (used in) operating activities |  |  | (38,527 | ) |  |  | 320,655 |  |  |  | — |  |  |  | 282,128 |
Cash flows from investing activities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Capital expenditures |  |  | — |  |  |  | (777,426 | ) |  |  | — |  |  |  | (777,426 | )
Derivative settlements |  |  | — |  |  |  | 2,784 |  |  |  | — |  |  |  | 2,784 |
Purchases of short-term investments |  |  | (126,213 | ) |  |  | — |  |  |  | — |  |  |  | (126,213 | )
Redemptions of short-term investments |  |  | 19,994 |  |  |  | — |  |  |  | — |  |  |  | 19,994 |
Advances to joint interest partners |  |  | — |  |  |  | (90 | ) |  |  | — |  |  |  | (90 | )
Advances from joint interest partners |  |  | — |  |  |  | 17,508 |  |  |  | — |  |  |  | 17,508 |
Net cash used in investing activities |  |  | (106,219 | ) |  |  | (757,224 | ) |  |  | — |  |  |  | (863,443 | )
Cash flows from financing activities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Proceeds from issuance of senior notes |  |  | 400,000 |  |  |  | — |  |  |  | — |  |  |  | 400,000 |
Purchases of treasury stock |  |  | (1,299 | ) |  |  | — |  |  |  | — |  |  |  | (1,299 | )
Debt issuance costs Debt |  |  | (7,255 | ) |  |  | (700 | ) |  |  | — |  |  |  | (7,955 | )
Investment in / capital contributions from affiliates |  |  | (459,012 | ) |  |  | 459,012 |  |  |  | — |  |  |  | — |
Net cash provided by (used in) financing activities |  |  | (67,566 | ) |  |  | 458,312 |  |  |  | — |  |  |  | 390,746 |
Decrease in cash and cash equivalents |  |  | (212,312 | ) |  |  | 21,743 |  |  |  | — |  |  |  | (190,569 | )
Cash and cash equivalents at beginning of period |  |  | 443,482 |  |  |  | 27,390 |  |  |  | — |  |  |  | 470,872 |
Cash and cash equivalents at end of period |  | $ | 231,170 |  |  | $ | 49,133 |  |  | $ | — |  |  | $ | 280,303 |
Condensed Consolidating Statement of Cash Flows (In thousands)
|  | Nine Months Ended September 30, 2011 |
|  | Parent/ Issuer |  |  | Combined Guarantor Subsidiaries |  |  | Intercompany Eliminations |  |  | Consolidated |
Cash flows from operating activities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Net income |  | $ | 92,791 |  |  | $ | 105,832 |  |  | $ | (105,832 | ) |  | $ | 92,791 |
Adjustments to reconcile net income to net cash provided by (used in) operating activities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Equity in earnings of subsidiaries |  |  | (105,832 | ) |  |  | — |  |  |  | 105,832 |  |  |  | — |
Depreciation, depletion and amortization |  |  | — |  |  |  | 47,771 |  |  |  | — |  |  |  | 47,771 |
Impairment of oil and gas properties |  |  | — |  |  |  | 3,313 |  |  |  | — |  |  |  | 3,313 |
Deferred income taxes |  |  | (7,785 | ) |  |  | 62,800 |  |  |  | — |  |  |  | 55,015 |
Derivative instruments |  |  | — |  |  |  | (67,105 | ) |  |  | — |  |  |  | (67,105 | )
Stock-based compensation expenses |  |  | 2,592 |  |  |  | — |  |  |  | — |  |  |  | 2,592 |
Debt discount amortization and other |  |  | 793 |  |  |  | 248 |  |  |  | — |  |  |  | 1,041 |
Working capital and other changes: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Change in accounts receivable |  |  | (80 | ) |  |  | (42,306 | ) |  |  | 1,100 |  |  |  | (41,286 | )
Change in inventory |  |  | — |  |  |  | (1,850 | ) |  |  | — |  |  |  | (1,850 | )
Change in prepaid expenses |  |  | (227 | ) |  |  | (70 | ) |  |  | — |  |  |  | (297 | )
Change in other current assets |  |  | (337 | ) |  |  | — |  |  |  | — |  |  |  | (337 | )
Change in other assets |  |  | (100 | ) |  |  | (3 | ) |  |  | — |  |  |  | (103 | )
Change in accounts payable and accrued liabilities |  |  | 5,864 |  |  |  | 43,056 |  |  |  | (1,100 | ) |  |  | 47,820 |
Change in other liabilities |  |  | — |  |  |  | 317 |  |  |  | — |  |  |  | 317 |
Net cash provided by (used in) operating activities |  |  | (12,321 | ) |  |  | 152,003 |  |  |  | — |  |  |  | 139,682 |
Cash flows from investing activities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Capital expenditures |  |  | — |  |  |  | (386,927 | ) |  |  | — |  |  |  | (386,927 | )
Derivative settlements |  |  | — |  |  |  | (4,831 | ) |  |  | — |  |  |  | (4,831 | )
Purchases of short-term investments |  |  | (164,913 | ) |  |  | — |  |  |  | — |  |  |  | (164,913 | )
Redemptions of short-term investments |  |  | 39,974 |  |  |  | — |  |  |  | — |  |  |  | 39,974 |
Advances to joint interest partners |  |  | — |  |  |  | (408 | ) |  |  | — |  |  |  | (408 | )
Advances from joint interest partners |  |  | — |  |  |  | 8,093 |  |  |  | — |  |  |  | 8,093 |
Net cash used in investing activities |  |  | (124,939 | ) |  |  | (384,073 | ) |  |  | — |  |  |  | (509,012 | )
Cash flows from financing activities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Proceeds from issuance of senior notes |  |  | 400,000 |  |  |  | — |  |  |  | — |  |  |  | 400,000 |
Purchases of treasury stock |  |  | (562 | ) |  |  | — |  |  |  | — |  |  |  | (562 | )
Debt issuance costs Debt |  |  | (9,650 | ) |  |  | (377 | ) |  |  | — |  |  |  | (10,027 | )
Investment in / capital contributions from affiliates |  |  | (252,138 | ) |  |  | 252,138 |  |  |  | — |  |  |  | — |
Net cash provided by financing activities |  |  | 137,650 |  |  |  | 251,761 |  |  |  | — |  |  |  | 389,411 |
Increase in cash and cash equivalents |  |  | 390 |  |  |  | 19,691 |  |  |  | — |  |  |  | 20,081 |
Cash and cash equivalents at beginning of period |  |  | 119,940 |  |  |  | 23,580 |  |  |  | — |  |  |  | 143,520 |
Cash and cash equivalents at end of period |  | $ | 120,330 |  |  | $ | 43,271 |  |  | $ | — |  |  | $ | 163,601 |

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