Condensed Consolidating Financial Information (Tables)

9 Months Ended

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