Consolidating Financial Statements (Tables)

12 Months Ended

Dec. 31, 2013

Consolidating Balance Sheet

(In thousands, except share data)



	December 31, 2013
	Parent/ Issuer		Combined Guarantor Subsidiaries			Intercompany Eliminations			Consolidated
ASSETS
Current assets
Cash and cash equivalents	$	34,277	$	57,624		$	—		$	91,901
Accounts receivable – oil and gas revenues	—		175,653			—			175,653
Accounts receivable – joint interest partners	—		139,459			—			139,459
Accounts receivable – affiliates	770		9,100			(9,870		)	—
Inventory	—		20,652			—			20,652
Prepaid expenses	318		9,873			—			10,191
Advances to joint interest partners	—		760			—			760
Derivative instruments	—		2,264			—			2,264
Deferred income taxes	—		6,335			—			6,335
Other current assets	—		391			—			391
Total current assets	35,365		422,111			(9,870		)	447,606
Property, plant and equipment
Oil and gas properties (successful efforts method)	—		4,528,958			—			4,528,958
Other property and equipment	—		188,468			—			188,468
Less: accumulated depreciation, depletion, amortization and impairment	—		(637,676		)	—			(637,676		)
Total property, plant and equipment, net	—		4,079,750			—			4,079,750
Assets held for sale	—		137,066			—			137,066
Investments in and advances to subsidiaries	3,450,668		—			(3,450,668		)	—
Derivative instruments	—		1,333			—			1,333
Deferred income taxes	85,288		—			(85,288		)	—
Deferred costs and other assets	33,983		12,186			—			46,169
Total assets	$	3,605,304	$	4,652,446		$	(3,545,826	)	$	4,711,924
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable	$	—	$	8,920		$	—		$	8,920
Accounts payable – affiliates	9,100		770			(9,870		)	—
Advances from joint interest partners	—		12,829			—			12,829



Revenues and production taxes payable	—			146,741		—			146,741
Accrued liabilities	33			241,797		—			241,830
Accrued interest payable	47,622			288		—			47,910
Derivative instruments	—			8,188		—			8,188
Total current liabilities	56,755			419,533		(9,870		)	466,418
Long-term debt	2,200,000			335,570		—			2,535,570
Asset retirement obligations	—			35,918		—			35,918
Derivative instruments	—			139		—			139
Deferred income taxes	—			408,435		(85,288		)	323,147
Other liabilities	—			2,183		—			2,183
Total liabilities	2,256,755			1,201,778		(95,158		)	3,363,375
Stockholders’ equity
Capital contributions from affiliates	—			2,930,978		(2,930,978		)	—
Common stock, $0.01 par value; 300,000,000 shares authorized; 100,866,589 shares issued	996			—		—			996
Treasury stock, at cost; 167,155 shares	(5,362		)	—		—			(5,362		)
Additional paid-in-capital	985,023			8,743		(8,743		)	985,023
Retained earnings	367,892			510,947		(510,947		)	367,892
Total stockholders’ equity	1,348,549			3,450,668		(3,450,668		)	1,348,549
Total liabilities and stockholders’ equity	$	3,605,304		$	4,652,446	$	(3,545,826	)	$	4,711,924

Condensed Consolidating Balance Sheet

(In thousands, except share data)



	December 31, 2012
	Parent/ Issuer		Combined Guarantor Subsidiaries			Intercompany Eliminations			Consolidated
ASSETS
Current assets
Cash and cash equivalents	$	133,797	$	79,650		$	—		$	213,447
Short-term investments	25,891		—			—			25,891
Accounts receivable – oil and gas revenues	—		110,341			—			110,341
Accounts receivable – joint interest partners	—		99,194			—			99,194
Accounts receivable – affiliates	310		5,845			(6,155		)	—
Inventory	—		20,707			—			20,707
Prepaid expenses	313		1,457			—			1,770
Advances to joint interest partners	—		1,985			—			1,985
Derivative instruments	—		19,016			—			19,016
Other current assets	235		100			—			335
Total current assets	160,546		338,295			(6,155		)	492,686
Property, plant and equipment
Oil and gas properties (successful efforts method)	—		2,348,128			—			2,348,128
Other property and equipment	—		49,732			—			49,732
Less: accumulated depreciation, depletion, amortization and impairment	—		(391,260		)	—			(391,260		)
Total property, plant and equipment, net	—		2,006,600			—			2,006,600
Investments in and advances to subsidiaries	1,807,010		—			(1,807,010		)	—



Derivative instruments	—			4,981		—			4,981
Deferred income taxes	42,746			—		(42,746		)	—
Deferred costs and other assets	20,748			3,779		—			24,527
Total assets	$	2,031,050		$	2,353,655	$	(1,855,911	)	$	2,528,794
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable	$	9		$	12,482	$	—		$	12,491
Accounts payable - affiliates	5,845			310		(6,155		)	—
Advances from joint interest partners	—			21,176		—			21,176
Revenues and production taxes payable	—			71,553		—			71,553
Accrued liabilities	100			189,763		—			189,863
Accrued interest payable	30,091			5		—			30,096
Derivative instruments	—			1,048		—			1,048
Deferred income taxes	—			4,558		—			4,558
Total current liabilities	36,045			300,895		(6,155		)	330,785
Long-term debt	1,200,000			—		—			1,200,000
Asset retirement obligations	—			22,956		—			22,956
Derivative instruments	—			380		—			380
Deferred income taxes	—			220,417		(42,746		)	177,671
Other liabilities	—			1,997		—			1,997
Total liabilities	1,236,045			546,645		(48,901		)	1,733,789
Stockholders’ equity
Capital contributions from affiliates	—			1,586,780		(1,586,780		)	—
Common stock, $0.01 par value; 300,000,000 shares authorized; 93,432,712 issued	925			—		—			925
Treasury stock, at cost; 129,414 shares	(3,796		)	—		—			(3,796		)
Additional paid-in-capital	657,943			8,743		(8,743		)	657,943
Retained earnings	139,933			211,487		(211,487		)	139,933
Total stockholders’ equity	795,005			1,807,010		(1,807,010		)	795,005
Total liabilities and stockholders’ equity	$	2,031,050		$	2,353,655	$	(1,855,911	)	$	2,528,794

Schedule of Consolidating Statement of Operations

Consolidating Statement of Operations

(In thousands)



	Year Ended December 31, 2013
	Parent/ Issuer			Combined Guarantor Subsidiaries			Intercompany Eliminations			Consolidated
Revenues
Oil and gas revenues	$	—		$	1,084,412		$	—		$	1,084,412
Well services and midstream revenues	—			57,587			—			57,587
Total revenues	—			1,141,999			—			1,141,999
Expenses
Lease operating expenses	—			94,634			—			94,634
Well services and midstream operating expenses	—			30,713			—			30,713
Marketing, transportation and gathering expenses	—			25,924			—			25,924
Production taxes	—			100,537			—			100,537
Depreciation, depletion and amortization	—			307,055			—			307,055
Exploration expenses	—			2,260			—			2,260
Impairment of oil and gas properties	—			1,168			—			1,168
General and administrative expenses	14,044			61,266			—			75,310
Total expenses	14,044			623,557			—			637,601
Operating income (loss)	(14,044		)	518,442			—			504,398
Other income (expense)
Equity in earnings of subsidiaries	299,459			—			(299,459		)	—
Net loss on derivative instruments	—			(35,432		)	—			(35,432		)
Interest expense, net of capitalized interest	(99,663		)	(7,502		)	—			(107,165		)
Other income (expense)	(335		)	1,551			—			1,216
Total other income (expense)	199,461			(41,383		)	(299,459		)	(141,381		)
Income before income taxes	185,417			477,059			(299,459		)	363,017
Income tax benefit (expense)	42,542			(177,600		)	—			(135,058		)
Net income	$	227,959		$	299,459		$	(299,459	)	$	227,959

Condensed Consolidating Statement of Operations

(In thousands)



	Year Ended December 31, 2012
	Parent/ Issuer			Combined Guarantor Subsidiaries			Intercompany Eliminations			Consolidated
Revenues
Oil and gas revenues	$	—		$	670,491		$	—		$	670,491
Well services revenues	—			16,177			—			16,177
Total revenues	—			686,668			—			686,668
Expenses
Lease operating expenses	—			54,924			—			54,924
Well services operating expenses	—			11,774			—			11,774
Marketing, transportation and gathering expenses	—			9,257			—			9,257
Production taxes	—			62,965			—			62,965
Depreciation, depletion and amortization	—			206,734			—			206,734
Exploration expenses	—			3,250			—			3,250
Impairment of oil and gas properties	—			3,581			—			3,581
General and administrative expenses	12,591			44,599			—			57,190
Total expenses	12,591			397,084			—			409,675
Operating income (loss)	(12,591		)	289,584			—			276,993
Other income (expense)
Equity in earnings of subsidiaries	202,924			—			(202,924		)	—
Net gain on derivative instruments	—			34,164			—			34,164
Interest expense, net of capitalized interest	(67,651		)	(2,492		)	—			(70,143		)
Other income (expense)	1,118			3,742			—			4,860
Total other income (expense)	136,391			35,414			(202,924		)	(31,119		)
Income before income taxes	123,800			324,998			(202,924		)	245,874
Income tax benefit (expense)	29,588			(122,074		)	—			(92,486		)
Net income	$	153,388		$	202,924		$	(202,924	)	$	153,388

Condensed Consolidating Statement of Operations

(In thousands)



	Year Ended December 31, 2011
	Parent/ Issuer			Combined Guarantor Subsidiaries			Intercompany Eliminations			Consolidated
Oil and gas revenues	$	—		$	330,422		$	—		$	330,422
Expenses
Lease operating expenses	—			32,707			—			32,707
Marketing, transportation and gathering expenses	—			1,365			—			1,365
Production taxes	—			33,865			—			33,865
Depreciation, depletion and amortization	—			74,981			—			74,981
Exploration expenses	—			1,685			—			1,685
Impairment of oil and gas properties	—			3,610			—			3,610
Loss on sale of properties	—			207			—			207
General and administrative expenses	5,505			23,930			—			29,435
Total expenses	5,505			172,350			—			177,855
Operating income (loss)	(5,505		)	158,072			—			152,567
Other income (expense)
Equity in earnings of subsidiaries	99,836			—			(99,836		)	—
Net gain on derivative instruments	—			1,595			—			1,595
Interest expense, net of capitalized interest	(28,310		)	(1,308		)	—			(29,618		)
Other income (expense)	1,165			470			—			1,635
Total other income (expense)	72,691			757			(99,836		)	(26,388		)
Income before income taxes	67,186			158,829			(99,836		)	126,179
Income tax benefit (expense)	12,204			(58,993		)	—			(46,789		)
Net income	$	79,390		$	99,836		$	(99,836	)	$	79,390

Schedule of Consolidating Statement of Cash Flows

onsolidating Statement of Cash Flows

(In thousands)



	Year Ended December 31, 2013
	Parent/ Issuer			Combined Guarantor Subsidiaries			Intercompany Eliminations			Consolidated
Cash flows from operating activities:
Net income	$	227,959		$	299,459		$	(299,459	)	$	227,959
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Equity in earnings of subsidiaries	(299,459		)	—			299,459			—
Depreciation, depletion and amortization	—			307,055			—			307,055
Impairment of oil and gas properties	—			1,168			—			1,168
Deferred income taxes	(42,542		)	177,125			—			134,583
Derivative instruments	—			35,432			—			35,432
Stock-based compensation expenses	11,602			380			—			11,982
Debt discount amortization and other	4,018			230			—			4,248
Working capital and other changes:
Change in accounts receivable	(460		)	(110,266		)	3,253			(107,473		)
Change in inventory	—			(13,941		)	—			(13,941		)
Change in prepaid expenses	(5		)	(8,186		)	—			(8,191		)
Change in other current assets	235			(291		)	—			(56		)
Change in other assets	—			(3,248		)	—			(3,248		)
Change in accounts payable and accrued liabilities	20,710			89,994			(3,253		)	107,451
Change in other liabilities	—			887			—			887
Net cash provided by (used in) operating activities	(77,942		)	775,798			—			697,856
Cash flows from investing activities:
Capital expenditures	—			(893,524		)	—			(893,524		)
Acquisition of oil and gas properties	—			(1,560,072		)	—			(1,560,072		)
Derivative settlements	—			(8,133		)	—			(8,133		)
Redemptions of short-term investments	25,000			—			—			25,000
Advances from joint interest partners	—			(8,347		)	—			(8,347		)
Net cash provided by (used in) investing activities	25,000			(2,470,076		)	—			(2,445,076		)
Cash flows from financing activities:
Proceeds from issuance of senior notes	1,000,000			—			—			1,000,000
Proceeds from revolving credit facility	—			600,000			—			600,000
Principal payments on revolving credit facility	—			(264,430		)	—			(264,430		)
Debt issuance costs	(16,362		)	(6,548		)	—			(22,910		)
Proceeds from sale of common stock	314,580			—			—			314,580
Purchases of treasury stock	(1,566		)	—			—			(1,566		)
Investment in / capital contributions from subsidiaries	(1,343,230		)	1,343,230			—			—
Net cash provided by (used in) financing activities	(46,578		)	1,672,252			—			1,625,674
Decrease in cash and cash equivalents	(99,520		)	(22,026		)	—			(121,546		)
Cash and cash equivalents at beginning of period	133,797			79,650			—			213,447
Cash and cash equivalents at end of period	$	34,277		$	57,624		$	—		$	91,901

Condensed Consolidating Statement of Cash Flows

(In thousands)



	Year Ended December 31, 2012
	Parent/ Issuer			Combined Guarantor Subsidiaries			Intercompany Eliminations			Consolidated
Cash flows from operating activities:
Net income	$	153,388		$	202,924		$	(202,924	)	$	153,388
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Equity in earnings of subsidiaries	(202,924		)	—			202,924			—
Depreciation, depletion and amortization	—			206,734			—			206,734
Impairment of oil and gas properties	—			3,581			—			3,581
Deferred income taxes	(29,588		)	122,067			—			92,479
Derivative instruments	—			(34,164		)	—			(34,164		)
Stock-based compensation expenses	10,219			114			—			10,333
Debt discount amortization and other	2,277			533			—			2,810
Working capital and other changes:
Change in accounts receivable	(222		)	(94,106		)	4,225			(90,103		)
Change in inventory	—			(29,313		)	—			(29,313		)
Change in prepaid expenses	(4		)	350			—			346
Change in other current assets	(217		)	373			—			156
Change in other assets	25			(120		)	—			(95		)
Change in accounts payable and accrued liabilities	18,612			62,319			(4,225		)	76,706
Change in other current liabilities	—			(472		)	—			(472		)
Net cash provided by (used in) operating activities	(48,434		)	440,820			—			392,386
Cash flows from investing activities:
Capital expenditures	—			(1,051,365		)	—			(1,051,365		)
Derivative settlements	—			6,545			—			6,545
Purchases of short-term investments	(126,213		)	—			—			(126,213		)
Redemptions of short-term investments	120,316			—			—			120,316
Advances from joint interest partners	—			12,112			—			12,112
Net cash used in investing activities	(5,897		)	(1,032,708		)	—			(1,038,605		)
Cash flows from financing activities:
Proceeds from issuance of senior notes	400,000			—			—			400,000
Debt issuance costs	(7,307		)	(705		)	—			(8,012		)
Purchases of treasury stock	(3,194		)	—			—			(3,194		)
Investment in / capital contributions from subsidiaries	(644,853		)	644,853			—			—
Net cash provided by (used in) financing activities	(255,354		)	644,148			—			388,794
Increase (decrease) in cash and cash equivalents	(309,685		)	52,260			—			(257,425		)
Cash and cash equivalents at beginning of period	443,482			27,390			—			470,872
Cash and cash equivalents at end of period	$	133,797		$	79,650		$	—		$	213,447

Condensed Consolidating Statement of Cash Flows

(In thousands)



	Year Ended December 31, 2011
	Parent/ Issuer			Combined Guarantor Subsidiaries			Intercompany Eliminations			Consolidated
Cash flows from operating activities:
Net income	$	79,390		$	99,836		$	(99,836	)	$	79,390
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Equity in earnings of subsidiaries	(99,836		)	—			99,836			—
Depreciation, depletion and amortization	—			74,981			—			74,981
Impairment of oil and gas properties	—			3,610			—			3,610
Loss on sale of properties	—			207			—			207
Deferred income taxes	(12,204		)	58,993			—			46,789
Derivative instruments	—			(1,595		)	—			(1,595		)
Stock-based compensation expenses	3,656			—			—			3,656
Debt discount amortization and other	1,196			365			—			1,561
Working capital and other changes:
Change in accounts receivable	(88		)	(66,134		)	1,322			(64,900		)
Change in inventory	—			(2,550		)	—			(2,550		)
Change in prepaid expenses	(73		)	(1,527		)	—			(1,600		)
Change in other current assets	(18		)	(473		)	—			(491		)
Change in other assets	(100		)	(39		)	—			(139		)
Change in accounts payable and accrued liabilities	17,127			20,511			(1,322		)	36,316
Change in other current liabilities	—			472			—			472
Change in other liabilities	—			317			—			317
Net cash provided by (used in) operating activities	(10,950		)	186,974			—			176,024
Cash flows from investing activities:
Capital expenditures	—			(613,720		)	—			(613,720		)
Derivative settlements	—			(3,841		)	—			(3,841		)
Purchases of short-term investments	(184,907		)	—			—			(184,907		)
Redemptions of short-term investments	164,913			—			—			164,913
Advances from joint interest partners	—			5,963			—			5,963
Proceeds from equipment and property sales	—			2,202			—			2,202
Net cash used in investing activities	(19,994		)	(609,396		)	—			(629,390		)
Cash flows from financing activities:
Proceeds from issuance of senior notes	800,000			—			—			800,000
Debt issuance costs	(16,838		)	(1,842		)	—			(18,680		)
Purchases of treasury stock	(602		)	—			—			(602		)
Investment in / capital contributions from subsidiaries	(428,074		)	428,074			—			—
Net cash provided by financing activities	354,486			426,232			—			780,718
Increase in cash and cash equivalents	323,542			3,810			—			327,352
Cash and cash equivalents at beginning of period	119,940			23,580			—			143,520
Cash and cash equivalents at end of period	$	443,482		$	27,390		$	—		$	470,872