Subsequent Events

Royalty Trust Distributions. On January 28, 2016, the Royalty Trusts announced quarterly distributions for the three-month period ended December 31, 2015. The following distributions will be paid on February 26, 2016 to holders of record as of the close of business on February 12, 2016 (in thousands):



Royalty Trust	Total Distribution		Amount to be Distributed to Third-Party Unitholders
Mississippian Trust I	$	8,708	$	6,367
Permian Trust	7,560		7,560
Mississippian Trust II	6,825		5,682
Total	$	23,093	$	19,609

Preferred Stock Dividends. In January 2016, the Company announced the suspension of payment of the semi-annual dividend on shares of its 8.5% convertible perpetual preferred stock.

Performance Incentive Plan. In January 2016, the Company implemented a performance incentive plan. The plan is intended to replace, on a prospective basis, the Company’s annual incentive plan and equity-based long-term incentive awards, such as restricted stock awards and restricted stock units, and provides for quarterly cash payments to participants based upon corporate performance goals with payout percentages ranging from 0% to 200%.

Personnel Reductions and Severance. The Company discontinued substantially all remaining drilling and oilfield services operations in January 2016 and completed a reduction in its corporate workforce in February 2016. Estimated severance costs incurred associated with these events totaled approximately $17.4 million through February 2016.

Senior Credit Facility. In January 2016, the Company borrowed the available capacity under the senior credit facility, or $488.9 million. On March 11, 2016, the administrative agent notified the Company that the lenders had elected to reduce the borrowing base to $340.0 million from $500.0 million pursuant to a special redetermination. On March 21, 2016, the Company notified the administrative agent that the Company would submit for the administrative agent’s consideration proposed additional oil and gas properties to serve as collateral under the senior credit facility sufficient to support a borrowing base of $500.0 million. Additionally, the Company notified the administrative agent that it believed the currently pledged assets are sufficient to support a borrowing base of $500.0 million and reserved the right to exercise all other options available to remedy the borrowing base deficiency, if any. The Company has until April 20, 2016 to submit such additional properties.

As discussed further in Note 1, the report of the Company’s independent registered public accounting firm that accompanies these consolidated financial statements for the year ended December 31, 2015 contains an explanatory paragraph regarding the substantial doubt about the Company’s ability to continue as a going concern, which under the terms of the senior credit facility may result in an event of default. If the Company does not obtain a waiver of this requirement or otherwise cure this event within 30 calendar days of the issuance of these consolidated financial statements, the lenders under the senior credit facility will be able to accelerate the maturity of the debt. Any acceleration of the obligations under the senior credit facility would result in a cross-default and potential acceleration of the Company’s other outstanding long-term debt.

Divestiture of WTO Properties and Release from Treating Agreement. On January 21, 2016, the Company paid $11.0 million in cash and transferred ownership of substantially all of its oil and natural gas properties and midstream assets located in the Piñon field in the WTO, including the PGC assets acquired in October 2015, to Occidental and was released from all past, current and future claims and obligations under an existing 30 years treating agreement between the companies. As of December 31, 2015, the Company had accrued approximately $109.9 million for penalties associated with shortfalls in meeting its delivery requirements under the agreement since it became effective in late 2012, including $34.9 million incurred for the year ended December 31, 2015. The Company expects to recognize a loss on the termination of the treating agreement and the cease-use of transportation agreements that support production from the Piñon field, however, is currently obtaining further information needed to evaluate the commitments extinguished and consideration conveyed in the transaction.

Production, proved reserves, revenues and direct operating expenses for the oil and natural gas properties transferred in the transaction were 1.9 MMBoe, 24.6 MMBoe, $14.6 million and $41.1 million, respectively, as of and for the year ended December 31, 2015.

Interest Payments on Long-Term Debt. On February 16, 2016, the Company elected to defer interest payments then due with respect to its 7.5% Senior Notes due 2023 and its Senior Convertible Notes due 2023 (collectively, the “2023 Notes”). On March 15, 2016, the Company made a payment of approximately $22 million in satisfaction of its obligations under the 2023 Notes. Further, on March 16, 2016, the Company made approximately $28.4 million in interest payments then due with respect to its 7.5% Senior Notes due 2021.

Conversions of Long-Term debt to Common Stock. During the period from January 1, 2016 to March 20, 2016, holders of $200.5 million aggregate principal amount of 8.125% Convertible Senior Notes due 2022 and $31.6 million aggregate principal amount of 7.5% Convertible Senior Notes due 2023 exercised conversion options applicable to those notes, resulting in the issuance of approximately 84.4 million shares of Company common stock and aggregate cash payments of $33.5 million for accrued interest and early conversion payments.