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Compensation Plans | 6 Months Ended
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Jun. 30, 2014
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] |
Compensation Plans | Note 7 - Compensation Plans Cash Bonus Plan During the first six months of 2014 and 2013, the Company paid $41.7 million and $16.0 million, respectively, for cash bonuses earned during the 2013 and 2012 performance years, respectively. The general and administrative (“G&A”) expense and exploration expense line items in the accompanying statements of operations include $6.2 million and $5.3 million of accrued cash bonus plan expense for the three months ended June 30, 2014, and 2013, respectively, and $12.8 million and $10.9 million of accrued cash bonus plan expense for the six months ended June 30, 2014, and 2013, respectively, related to the respective performance years. Non-qualified Deferred Compensation Plan In January 2014, the Company established a non-qualified deferred compensation (“NQDC”) plan intended to provide plan participants with the ability to plan for income tax events and the opportunity to receive a benefit for matching contributions in excess of Internal Revenue Code (“IRC”) limits applicable to the Company’s 401(k) plan. The NQDC plan is designed to allow employee participants to defer a portion of base salary and cash bonuses paid pursuant to the Company’s cash bonus plan and director participants to defer a portion of the cash retainer paid to directors. Each year, participating employees may elect to defer (i) between 0% and 50% of their base salary and (ii) between 0% and 100% of the cash bonus paid pursuant to the cash bonus plan, and participating directors may elect to defer between 0% and 100% of their cash retainer. The NQDC plan requires the Company to make contributions for each eligible employee equal to 100% of the deferred amount for such employee, limited to 6% of such employee’s base salary and cash bonus. Each eligible employee’s interest in contributions made by the Company will vest 40% after the second year of such employee’s service to the Company, and 20% per year thereafter. A participant’s account will be distributed based upon the participant’s payment election made at the time of deferral. A participant may elect to have distributions made in lump sum or in annual installments ranging for a period from 1 to 10 years. Participants in the NQDC plan are currently limited to the Company’s officers and directors. Restricted Stock Units Under the Equity Incentive Compensation Plan The Company grants restricted stock units (“RSUs”) as part of its equity compensation program. Each RSU represents a right to one share of the Company’s common stock to be delivered upon settlement of the award at the end of the specified vesting period. Expense associated with RSUs is recognized as G&A expense and exploration expense over the vesting period of the award. Total expense recorded for RSUs for the three months ended June 30, 2014, and 2013, was $2.9 million and $3.3 million, respectively, and $5.7 million and $6.3 million for the six months ended June 30, 2014, and 2013, respectively. As of June 30, 2014, there was $12.8 million of total unrecognized compensation expense related to unvested RSU awards, which is being amortized through 2016. There have been no material changes to the outstanding and non-vested RSUs during the first half of 2014. Subsequent to June 30, 2014, the Company granted 231,256 RSUs as part of its regular annual long-term equity compensation program. These RSUs will vest 1/3 rd on each of the next three anniversary dates of the grant. Also, subsequent to June 30, 2014, the Company settled 243,389 RSUs that related to awards granted in previous years. The Company and the majority of grant participants mutually agreed to net share settle the awards to cover income and payroll tax withholdings as provided for in the plan document and award agreements. As a result, the Company issued 164,490 net shares of common stock. The remaining 78,899 shares were withheld to satisfy income and payroll tax withholding obligations that occurred upon delivery of the shares underlying those RSUs. Performance Share Units Under the Equity Incentive Compensation Plan The Company grants performance share units (“PSUs”) as part of its equity compensation program. The number of shares of the Company’s common stock issued to settle PSUs ranges from 0% to 200% of the number of PSUs awarded and is determined based on the Company’s performance over a three-year measurement period. The performance criteria for the PSUs are based on a combination of the Company’s annualized total shareholder return (“TSR”) for the measurement period and the relative measure of the Company’s TSR compared with the annualized TSRs of a group of peer companies for the measurement period. Expense associated with PSUs is recognized as G&A expense and exploration expense over the vesting period of the award. Total expense recorded for PSUs for the three months ended June 30, 2014, and 2013, was $3.6 million and $5.0 million, respectively, and $6.8 million and $9.7 million for the six months ended June 30, 2014, and 2013, respectively. As of June 30, 2014, there was $11.3 million of total unrecognized compensation expense related to unvested PSU awards, which is being amortized through 2016. There have been no material changes to the outstanding and non-vested PSUs during the first half of 2014. Subsequent to June 30, 2014, the Company granted 202,404 PSUs as part of its regular annual long-term equity compensation program. These PSUs will fully vest on the third anniversary of the date of the grant. Also, subsequent to June 30, 2014, the Company settled PSUs that were granted in 2011, which earned a 0.55 times multiplier, by issuing a net 85,121 shares of the Company’s common stock in accordance with the terms of the PSU awards. The Company and the majority of grant participants mutually agreed to net share settle the awards to cover income and payroll tax withholdings as provided for in the plan document and award agreements. As a result, 45,042 shares were withheld to satisfy income and payroll tax withholding obligations that occurred upon delivery of the shares underlying those PSUs. Stock Option Grants Under the Equity Incentive Compensation Plan As of June 30, 2014, there were 39,088 stock option awards outstanding at a weighted average exercise price of $20.87 with an aggregate intrinsic value of $2.5 million. There was no unrecognized compensation expense as of June 30, 2014, and no changes in these awards occurred during the six months ended June 30, 2014. Director Shares During the first half of 2014 and 2013, the Company issued 23,009 and 28,169 shares, respectively, of its common stock to its non-employee directors, under the Company’s Equity Incentive Compensation Plan. The Company recorded $1.2 million and $1.4 million of compensation expense related to these awards for both the three and six months ended June 30, 2014, and 2013, respectively. The Company’s Board of Directors appointed Rose M. Robeson as a non-employee director on July 11, 2014, and granted her 2,951 shares of the Company’s common stock as her pro-rata share of the Company’s annual director compensation. All shares of common stock issued to the Company’s non-employee directors are earned over the one-year service period following the date of grant. Employee Stock Purchase Plan Under the Company’s Employee Stock Purchase Plan (“ESPP”), eligible employees may purchase shares of the Company’s common stock through payroll deductions of up to 15 percent of eligible compensation, without accruing in excess of $25,000 in value from purchases for each calendar year. The purchase price of the stock is 85 percent of the lower of the fair market value of the stock on the first or last day of the purchase period, and shares issued under the ESPP have no restriction period. The ESPP is intended to qualify under Section 423 of the IRC. The Company had 1.2 million shares available for issuance under the ESPP as of June 30, 2014. There were 35,249 and 44,437 shares issued under the ESPP during the second quarters of 2014 and 2013, respectively. The fair value of ESPP grants is measured at the date of grant using the Black-Scholes option-pricing model. Net Profits Interest Bonus Plan Cash payments made or accrued under the Company’s Net Profits Interest Bonus Plan (“Net Profits Plan”) that have been recorded as either G&A expense or exploration expense are presented in the table below:
| For the Three Months Ended June 30, |  | For the Six Months Ended June 30,
| 2014 |  | 2013 |  | 2014 |  | 2013
| (in thousands)
General and administrative expense | $ | 1,986 |  |  | $ | 3,443 |  |  | $ | 4,964 |  |  | $ | 7,229 |
Exploration expense | 194 |  |  | 323 |  |  | 482 |  |  | 697 |
Total | $ | 2,180 |  |  | $ | 3,766 |  |  | $ | 5,446 |  |  | $ | 7,926 |
Additionally, the Company accrued or made cash payments under the Net Profits Plan of $8.5 million and $2.6 million for the three-month and six-month periods ended June 30, 2014, and 2013, respectively, as a result of divestiture proceeds. These cash payments are accounted for as a reduction in gain on divestiture activity included within the other operating revenues line in the accompanying statements of operations. The Company records changes in the present value of estimated future payments under the Net Profits Plan as a separate line item in the accompanying statements of operations. The change in the estimated liability is recorded as a non-cash expense or benefit in the current period and is not allocated to G&A expense or exploration expense because it is associated with the future net cash flows from oil and gas properties in the respective pools rather than results being realized through current period production. If the Company allocated the change in liability to these specific functional line items, based on the current allocation of actual distributions made by the Company, such expenses or benefits would predominately be allocated to G&A expense. Over time, less of the amount distributed relates to prospective exploration efforts as more of the amount distributed is paid to employees that have terminated employment and do not provide ongoing exploration support to the Company. In December 2007, the Board of Directors discontinued the creation of new pools and as a result, the 2007 pool was the last Net Profits Plan pool established by the Company.

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