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Assets Held for Sale, Divestitures and Acquisitions | 9 Months Ended
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Sep. 30, 2016
Acquisitions, Divestitures, and Assets Held for Sale [Abstract] |
Assets held for sale, Divestitures and Acquisitions | Note 3 – Assets Held for Sale, Divestitures and Acquisitions Assets Held for Sale Assets are classified as held for sale when the Company commits to a plan to sell the assets and there is reasonable certainty the sale will take place within one year. Upon classification as held for sale, long-lived assets are no longer depreciated or depleted, and a measurement for impairment is performed to identify and expense any excess of carrying value over fair value less estimated costs to sell. Any subsequent changes to the fair value less estimated costs to sell impact the measurement of assets held for sale with any gain or loss reflected in the net gain on divestiture activity line item in the accompanying condensed consolidated statements of operations (“accompanying statements of operations”). As of September 30, 2016, the accompanying condensed consolidated balance sheets (“accompanying balance sheets”) present $1.1 billion of assets held for sale, net of accumulated depletion, depreciation, and amortization expense, which primarily consists of the Company’s outside-operated Eagle Ford shale assets and all of the Company’s North Rocky Mountain assets outside of its Divide County program (referred to as “Raven/Bear Den” throughout this report). A corresponding aggregate asset retirement obligation liability of $46.3 million is separately presented. The Company expects to close these transactions by year-end or within the first quarter of 2017. There were no material assets held for sale as of December 31, 2015. The following table presents income (loss) before income taxes for the three and nine months ended September 30, 2016, and 2015, of the Company’s assets held for sale as of September 30, 2016; specifically, its outside-operated Eagle Ford shale assets and Raven/Bear Den assets, each of which are considered a significant asset disposal group.
| For the Three Months Ended September 30, |  | For the Nine Months Ended September 30,
| 2016 |  | 2015 |  | 2016 |  | 2015
| (in thousands)
Income (loss) before income taxes (1) | $ | 20,309 |  |  | $ | (15,132 | ) |  | $ | (289,563 | ) |  | $ | 55,445 |
____________________________________________ (1) Income (loss) before income taxes reflects oil, gas, and NGL production revenue less oil, gas, and NGL production expense, depletion, depreciation, amortization, and asset retirement obligation liability accretion, and related general and administrative expense and exploration overhead. Additionally, loss before income taxes for the nine months ended September 30, 2016, includes $269.6 million of proved property impairments, and income (loss) before income taxes for the three and nine months ended September 30, 2015, includes $17.8 million of proved property impairments. Subsequent to September 30, 2016, the Company entered into a definitive agreement for the sale of its Raven/Bear Den assets for a gross purchase price of $785.0 million, subject to customary purchase price adjustments. This transaction is expected to close in early December 2016, with the net proceeds expected to be used to partially fund the QStar Acquisition (defined and discussed below). The closing of this divestiture is subject to the satisfaction of customary closing conditions, and there can be no assurance that this transaction will close on the expected closing date or at all. Divestitures During the third quarter of 2016, the Company divested certain of its Permian and Rocky Mountain assets in separate packages that were previously classified as held for sale. The Permian assets consisted of non-core properties in New Mexico and were divested for total cash received at closing, net of paid or accrued commissions and payments to Net Profits Plan participants (referred throughout this report as “net divestiture proceeds”) of $54.6 million. The Company recorded a net loss of $10.1 million related to these divested assets for the nine months ended September 30, 2016. The Rocky Mountain assets, which consisted of certain non-core properties in the Williston and Powder River Basins, were divested in two separate packages for total net divestiture proceeds of $110.6 million. The Company recorded a net gain of $16.4 million related to these divested assets for the nine months ended September 30, 2016. Certain of these sold assets were written down in the first quarter of 2016 and subsequently written up in the second quarter of 2016 based on changes in the estimated fair value less selling costs. Each of these divestitures is subject to normal post-closing adjustments, and the respective post-closings are expected to occur in the fourth quarter of 2016 or early 2017. During the second quarter of 2015, the Company divested its Mid-Continent assets in separate packages for net divestiture proceeds received at closing of $310.2 million and recorded a net gain of $108.4 million for the nine months ended September 30, 2015. Final settlement of these divestitures occurred in the fourth quarter of 2015 and first quarter of 2016. In conjunction with these divestitures, the Company closed its Tulsa, Oklahoma office in 2015. Please refer to Note 12 - Exit and Disposal Costs for additional discussion. The Company determined that neither these planned nor executed asset sales qualified for discontinued operations accounting under financial statement presentation authoritative guidance. Acquisitions During the third quarter of 2016, the Company entered into a definitive purchase agreement with Rock Oil Holdings, LLC to acquire all membership interests of JPM EOC Opal, LLC, which owned proved and unproved properties in the Midland Basin, for an aggregate purchase price of $980.0 million, subject to customary purchase price adjustments (referred to throughout this report as the “Rock Oil Acquisition”). Upon executing the purchase agreement, the Company tendered a $49.0 million deposit that was held in escrow as of September 30, 2016, and reflected as restricted cash in the accompanying balance sheets. The Rock Oil Acquisition closed on October 4, 2016, for an adjusted purchase price of $991.0 million and was funded by the Company’s recent asset divestitures, and the Company’s equity, Senior Convertible Notes, and 2026 Notes offerings during the third quarter of 2016, as defined and discussed in Note 5 - Long-Term Debt and Note 13 - Equity. This acquisition is subject to normal post-closing adjustments that are expected to occur in the fourth quarter of 2016 or early 2017. Final purchase accounting for the Rock Oil Acquisition transaction was not complete at the time this report was filed, and as such, certain disclosures required by ASC Topic 805, Business Combinations, have not been made herein. The Company will include this information in its 2016 Annual Report on Form 10-K. Subsequent to September 30, 2016, the Company entered into a definitive purchase agreement with QStar LLC (“QStar”) to acquire proved and unproved properties in the Midland Basin. Additionally, the Company entered into a Ratification and Joinder Agreement (“Joinder Agreement”) with RRP-QStar, LLC (“RRP”), whereby the Company agreed to acquire RRP’s interests in the same Midland Basin assets on the same terms and conditions set forth in the agreement with QStar LLC, except as such terms are modified under the Joinder Agreement. Under these agreements, the Company agreed to purchase QStar’s and RRP’s interest in the Midland Basin assets for $1.1 billion in cash consideration, and approximately 13.4 million shares of the Company’s common stock, par value $0.01 per share, as discussed further in Note 13 - Equity. The Company intends to fund the cash portion of the transactions with proceeds from planned asset divestitures and borrowings under the credit facility. Together these transactions are referred to as the “QStar Acquisition” throughout this report and are expected to close mid-December 2016. The closing of the QStar and RRP transactions are subject to the satisfaction of customary closing conditions, and there can be no assurance that either of these transactions will close on the expected closing dates or at all.

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- Definition The entire disclosure related to a disposal group. Includes, but is not limited to, a discontinued operation, disposal classified as held-for-sale or disposed of by means other than sale or disposal of an individually significant component. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -Section 45 -Paragraph 11 -URI http://asc.fasb.org/extlink&oid=65878427&loc=SL51721533-107759 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -Section 50 -Paragraph 4B -URI http://asc.fasb.org/extlink&oid=64827811&loc=SL51721665-107760 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -Section 50 -Paragraph 5C -URI http://asc.fasb.org/extlink&oid=64827811&loc=SL51721675-107760 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 360 -SubTopic 10 -Section 50 -Paragraph 3A -URI http://asc.fasb.org/extlink&oid=64862545&loc=SL51724579-110230 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -Section 50 -Paragraph 4A -URI http://asc.fasb.org/extlink&oid=64827811&loc=SL51721663-107760 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 360 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=64862545&loc=d3e2941-110230 Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=64827811&loc=d3e1361-107760 Reference 8: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -Section 50 -Paragraph 5B -URI http://asc.fasb.org/extlink&oid=64827811&loc=SL51721673-107760 Reference 9: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -Section 50 -Paragraph 3A -URI http://asc.fasb.org/extlink&oid=64827811&loc=SL51721659-107760 Reference 10: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -Section 50 -Paragraph 5A -URI http://asc.fasb.org/extlink&oid=64827811&loc=SL51721671-107760 Reference 11: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -Section 50 -Paragraph 5D -URI http://asc.fasb.org/extlink&oid=64827811&loc=SL51721677-107760 Reference 12: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=64827811&loc=d3e1474-107760 Reference 13: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -Section 50 -Paragraph 7 -URI http://asc.fasb.org/extlink&oid=64827811&loc=SL51721683-107760 + Details
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