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SUBSEQUENT EVENTS
 12 Months Ended
Dec. 31, 2015
Subsequent Events [Abstract]  
SUBSEQUENT EVENTS
19. SUBSEQUENT EVENTS

 

As discussed in Note 6, in February 2016 the Company disposed of its mining segment and issued Preferred Stock with an initial liquidation preference of $2,000. Since the cash consideration paid for the Preferred Stock was a nominal amount, during the first quarter of 2016 the Company expects to record a charge to operations of approximately $2,000 associated with the issuance.

 

The Company’s quarterly reserve reports are prepared based on a trailing 12-month average for benchmark oil and gas prices. The weighted average oil price used to prepare reserve estimates and to calculate the Full Cost Ceiling limitation for the first quarter of 2016 is expected to decline from $50.28 to approximately $46.00 (both before further deductions for basis differentials). Assuming other variables remain substantially unchanged, the Company expects to record an impairment charge in the range of $3,000 to $4,000 during the first quarter of 2016.

 

As discussed in Note 7, as of December 31, 2015, the Company was not in compliance with any of the financial covenants under its credit facility and on April 14, 2016, the lender provided a limited waiver for the Company’s noncompliance.