XML 48 R16.htm IDEA: XBRL DOCUMENT
v3.10.0.1

Long-Term Debt | 12 Months Ended
--- | ---
Dec. 31, 2018
Debt Disclosure [Abstract] |
Long-Term Debt | Long-Term Debt Long-term debt consists of the following (in thousands):
| December 31, |  |
| 2018 |  | 2017
Credit facility | $ | — |  | $ | —
Building Note | — |  | 37,502
Total debt | — |  | 37,502
Less: current maturities of long-term debt | — |  | —
Long-term debt | $ | — |  | $ | 37,502
Credit Facility. On February 10, 2017, the Company's First Lien Exit Facility was refinanced and replaced by a new $600.0 million credit facility with a $425.0 million available borrowing base. The borrowing base under the credit facility was reduced from $425.0 million to $350.0 million during the October 2018 semi-annual redetermination. The next borrowing base redetermination is scheduled for April 1, 2019. The credit facility matures on March 31, 2020. Outstanding borrowings under the credit facility bear interest based on a pricing grid tied to borrowing base utilization of (a) LIBOR plus an applicable margin that varies from 3.00% to 4.00% per annum, or (b) the base rate plus an applicable margin that varies from 2.00% to 3.00% per annum. Interest on base rate borrowings is payable quarterly in arrears and interest on LIBOR borrowings is payable every one, two, three or six months, at the election of the Company. Quarterly, the Company pays commitment fees assessed at annual rates of 0.50% on any available portion of the credit facility. The Company has the right to prepay loans under the credit facility at any time without a prepayment penalty, other than customary “breakage” costs with respect to LIBOR loans. Upon refinancing of the First Lien Exit Facility, $50.0 million maintained in a restricted cash collateral account, as required by the terms of the First Lien Exit Facility, was released to the Company. The credit facility is secured by (i) first-priority mortgages on at least 95% of the PV-9 valuation of all the Company's proved reserves included in the reserve report most recently provided to the lenders, (ii) a first-priority perfected pledge of substantially all of the capital stock owned by each credit party and equity interests in the Royalty Trusts that are owned by a credit party and (iii) a first-priority perfected security interest in substantially all the cash, cash equivalents, deposits, securities and other similar accounts, and other tangible and intangible assets of the credit parties (including but not limited to as-extracted collateral, accounts receivable, inventory, equipment, general intangibles, investment property, intellectual property, real property and the proceeds of the foregoing). As of the end of each fiscal quarter, the credit facility requires the Company to maintain (i) a maximum consolidated total net leverage ratio of no greater than 3.50 to 1.00 and (ii) a minimum consolidated interest coverage ratio of no less than 2.25 to 1.00. These financial covenants are subject to customary cure rights. The Company was in compliance with all applicable financial covenants under the credit facility at the end of each fiscal quarter in 2018. The credit facility contains customary affirmative and negative covenants, including compliance with certain laws (including environmental laws, ERISA and anti-corruption laws), maintaining required insurance, delivering quarterly and annual financial statements, oil and gas engineering reports, maintenance and operation of property (including oil and gas properties), restrictions on incurring liens and indebtedness, asset dispositions, fundamental changes, restricted payments and other customary covenants. The Company was in compliance with these covenants as of December 31, 2018. The credit facility includes events of default relating to customary matters, including, among other things, nonpayment of principal, interest or other amounts; violation of covenants; incorrectness of representations and warranties in any material respect; cross-payment default and cross acceleration with respect to indebtedness in an aggregate principal amount of $25.0 million or more; bankruptcy; judgments involving a liability of $25.0 million or more that are not paid; and ERISA events. Many events of default are subject to customary notice and cure periods. Changes in the composition of the Company's Board resulting from the 2018 annual meeting in June 2018 may have been an event of default under the change in control provisions in the credit facility. However, the Company entered into a consent and waiver agreement with the administrative agent and certain lenders constituting the majority lenders under the credit facility. The consent and waiver agreement waived any event of default which might have occurred as a result of the change in the composition of the members of the Company’s Board and recognized the new members of the Board as existing members of the Board under the definition of change in control in the credit agreement. The Company had no amounts outstanding under the credit facility at December 31, 2018 and $5.2 million in outstanding letters of credit, which reduce availability under the credit facility on a dollar-for-dollar basis. First Lien Exit Facility. On the Emergence Date, the Company entered into the First Lien Exit Facility with the lenders party thereto and Royal Bank of Canada, as administrative agent and issuing lender. The First Lien Exit Facility had a borrowing base of $425.0 million and was set to mature on February 4, 2020. Outstanding borrowings bore interest at a rate equal to either (a) a base rate plus an applicable rate of 3.75% per annum or (b) LIBOR plus 4.75% per annum, subject to a 1.00% LIBOR floor. Interest on base rate borrowings was payable quarterly in arrears and interest on LIBOR borrowings was payable every one, two, three or six months. Quarterly commitment fees were assessed at annual rates of 0.50% on any available portion of the First Lien Exit Facility. The Company had the right to prepay loans under the First Lien Exit Facility at any time without a prepayment penalty, other than customary “breakage” costs with respect to LIBOR loans. Convertible Notes. As discussed in Note 1, on the Emergence Date, pursuant to the terms of the Plan, the Company issued approximately $281.8 million principal amount of Convertible Notes, which did not bear regular interest and were set to mature and mandatorily convert into shares of Common Stock on October 4, 2020, unless repurchased, redeemed or converted prior to that date. Under fresh start accounting, the Convertible Notes were recorded at their fair value of $445.7 million, which resulted in a premium of $163.9 million being recorded to additional paid in capital. The Company’s obligations pursuant to the Convertible Notes were fully and unconditionally guaranteed, jointly and severally, by each of the guarantors of the First Lien Exit Facility. The Convertible Notes were initially convertible at a conversion rate of 0.05330841 shares of Common Stock per $1.00 principal amount of Convertible Notes, which represented, approximately 15.0 million total shares of common stock. The conversion rate was subject to customary anti-dilution adjustments. Convertible Notes holders could convert them at any time up to, and including, the business day prior to the maturity date. Between the Emergence Date and December 31, 2016, holders requested conversion of approximately $13.0 million of the Convertible Notes into approximately 0.7 million shares of Common Stock. Additionally, from January 1, 2017 to February 9, 2017, holders requested conversion of approximately $5.1 million of the Convertible Notes into approximately 0.3 million shares of Common Stock. The remaining $263.7 million par value of outstanding Convertible Notes mandatorily converted into 14.1 million shares of Common Stock when the First Lien Exit Facility was refinanced on February 10, 2017, after the determination by the Successor Company’s board of directors in good faith that: (a) the refinancing provided for terms that were materially more favorable to the Company and (b) causing a conversion was not the primary purpose of the refinancing. Building Note. As discussed in Note 1, on the Emergence Date, the Company entered into the Building Note which had an initial principal amount of $35.0 million, and was set to mature on October 2, 2021. The Company sold the Building Note for net proceeds of $26.8 million which were then remitted to unsecured creditors on the Emergence Date. The Company repaid the Building Note in full in February 2018. Interest was payable on the Building Note at 6% per annum for the first year following the Emergence Date, 8% per annum for the second year following the Emergence Date, and 10% thereafter through maturity. Interest costs were payable in-kind until 90 days after the refinancing of the First Lien Exit Facility. Approximately $1.3 million in in-kind interest costs were added to the Building Note principal from the Emergence Date through May 11, 2017. Interest became payable in cash after that date. The Building Note became prepayable in whole or in part without premium or penalty when the First Lien Exit Facility was refinanced. Under fresh start accounting, the Building Note was initially recorded at a fair value of $36.6 million and the resulting premium was being amortized to interest expense over the term of the Building Note. When the Building Note was repaid, the remaining unamortized premium of $1.2 million was recognized as a gain on extinguishment of debt in the statement of operations for the year ended December 31, 2018.

X
- References No definition available. + Details
Name: | us-gaap_DebtDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for long-term debt. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -URI http://asc.fasb.org/topic&trid=2208564 + Details
Name: | us-gaap_LongTermDebtTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration