Quarterly report pursuant to Section 13 or 15(d)

Share-based Compensation

v3.21.1
Share-based Compensation
 3 Months Ended
Mar. 31, 2021
Share-based Payment Arrangement [Abstract]  
Share-based Compensation Share-based Compensation
All share and per share numbers included in this footnote have been adjusted for the reverse stock split. See “Note 10 - Stockholders’ Equity” for discussion of the reverse stock split and reduction in authorized shares.
RSU Equity Awards
The following table summarizes activity for restricted stock units that may be settled in common stock (“RSU Equity Awards”) for the three months ended March 31, 2021 and 2020:
Three Months Ended March 31,
2021 2020
RSU Equity Awards
(in thousands)		 Weighted Average Grant Date
Fair Value		 RSU Equity Awards
(in thousands)		 Weighted Average Grant Date
Fair Value
Unvested, beginning of the period 677  $34.57  269  $102.48 
Granted (1)
570  $38.41  232  $33.19 
Vested (2)
(21) $70.03  (16) $98.36 
Forfeited (16) $15.42  —  $— 
Unvested, end of the period 1,210  $36.02  485  $69.50 

(1)Includes zero and 85.4 thousand target performance-based RSU Equity Awards granted during the three months ended March 31, 2021 and 2020, respectively.
(2)The fair value of shares vested was $0.3 million and $0.7 million during the three months ended March 31, 2021 and 2020, respectively.
Grant activity for the three months ended March 31, 2021 primarily consisted of RSU Equity Awards granted to executives and employees as part of the annual grant of long-term equity incentive awards, as compared to the annual grant of long-term equity to only executives during the first quarter of 2020.
No performance-based RSU Equity Awards were granted during the three months ended March 31, 2021. For the performance-based RSU Equity Awards granted in the first quarter of 2020, the number of outstanding performance-based RSU Equity Awards that can vest is based on a calculation that compares the Company’s total shareholder return (“TSR”) to the same calculated return of a group of peer companies selected by the Company and can range between 0% and 300% of the target units for the awards granted. These awards include an absolute TSR modifier, which was added as a second factor in the calculation, which could increase the number of awards that vest or reduce the number of awards that vest if the absolute TSR is less than 5% over the performance period.
The Company recognizes expense for performance-based RSU Equity Awards based on the fair value of the awards at the grant date. Awards with a performance-based provision do not allow for the reversal of previously recognized expense, even if the market metric is not achieved and no shares ultimately vest. The grant date fair value of performance-based RSU Equity Awards, calculated using a Monte Carlo simulation, was $2.9 million for the three months ended March 31, 2020. The following table summarizes the assumptions used to calculate the grant date fair value of the performance-based RSU Equity Awards granted during the three months ended March 31, 2020:
Performance-based Awards January 31, 2020
Expected term (in years) 2.9
Expected volatility 54.8  %
Risk-free interest rate 1.3  %
Dividend yield —  %
As of March 31, 2021, unrecognized compensation costs related to unvested RSU Equity Awards were $32.7 million and will be recognized over a weighted average period of 2.5 years.
Cash-Settled RSU Awards
The table below summarizes the activity for restricted stock units that may be settled in cash (“Cash-Settled RSU Awards”) for the three months ended March 31, 2021 and 2020:
Three Months Ended March 31,
2021 2020
Cash-Settled RSU Awards
(in thousands)		 Weighted Average Grant Date
Fair Value		 Cash-Settled RSU Awards
(in thousands)		 Weighted Average Grant Date
Fair Value
Unvested, beginning of the period 196  $47.56  86  $124.22 
Granted —  $—  86  $33.98 
Vested (1) $107.80  (1) $122.96 
Did not vest at end of performance period (1) $107.80  —  $166.60 
Forfeited —  $—  —  $— 
Unvested, end of the period 194  $47.15  171  $78.54 
No Cash-Settled RSU Awards were granted during the three months ended March 31, 2021. Grant activity in the first quarter of 2020 primarily consisted of Cash-Settled RSU Awards to executives as part of the annual grant of long-term equity incentive awards. These awards cliff vest after an approximate three-year performance period.
The Company’s outstanding Cash-Settled RSU Awards include the same performance-based vesting conditions as the performance-based RSU Equity Awards, which are described above. Additionally, the assumptions used to calculate the grant date fair value per Cash-Settled RSU Award granted during the three months ended March 31, 2020 are the same as the performance-based RSU Equity Awards presented above.
The following table summarizes the Company’s liability for Cash-Settled RSU Awards and the classification in the consolidated balance sheets for the periods indicated:
March 31, 2021 December 31, 2020
(In thousands)
Other current liabilities $850  $182 
Other long-term liabilities 4,928  1,336 
Total Cash-Settled RSU Awards $5,778  $1,518 
As of March 31, 2021, unrecognized compensation costs related to unvested Cash-Settled RSU Awards were $5.4 million and will be recognized over a weighted average period of 1.7 years.
Cash-Settled SARs
As a result of the Carrizo Acquisition, cash-settled stock appreciation rights (“Cash SARs”) previously granted by Carrizo that were outstanding at closing were canceled and converted into a Cash SAR covering shares of the Company’s common stock, with the conversion calculated as prescribed in the agreement governing the Carrizo Acquisition. The liabilities for Cash SARs as of March 31, 2021 and December 31, 2020 were $6.5 million and $1.7 million, respectively, all of which were classified as “Other current liabilities” in the consolidated balance sheets in the respective periods. Changes in the fair value of the Cash SARs are included in “General and administrative” in the consolidated statements of operations.
Share-Based Compensation Expense (Benefit), Net
Share-based compensation expense associated with the RSU Equity Awards, Cash-Settled RSU Awards, Cash SARs, net of amounts capitalized, is included in “General and administrative” in the consolidated statements of operations. The following table presents share-based compensation expense (benefit), net for each respective period:
Three Months Ended March 31,
2021 2020
(In thousands)
RSU Equity Awards $2,608  $3,948 
Cash-Settled RSU Awards 4,442  (1,996)
Cash SARs 4,866  (4,756)
11,916  (2,804)
Less: amounts capitalized to oil and gas properties (4,308) (168)
Total share-based compensation expense (benefit), net $7,608  ($2,972)
See “Note 10 - Share-Based Compensation” of the Notes to Consolidated Financial Statements in the 2020 Annual Report for details of the Company’s equity-based incentive plans.