Fair Value Measurements (Tables)
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12 Months Ended |
Dec. 31, 2021 |
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| Fair Value Disclosures [Abstract] |
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| Summary of Fair Value of Financial Instruments at Carrying and Fair Value |
The carrying amount of borrowings outstanding under the Credit Facility approximates fair value as the borrowings bear interest at variable rates and are reflective of market rates. The following table presents the principal amounts of the Company’s Second Lien Notes and Senior Unsecured Notes with the fair values measured using quoted secondary market trading prices which are designated as Level 2 within the valuation hierarchy. See “Note 7 - Borrowings” for further discussion.
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December 31, 2021 |
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December 31, 2020 |
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Principal Amount |
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Fair Value |
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Principal Amount |
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Fair Value |
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(In thousands) |
6.25% Senior Notes
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$— |
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$— |
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$542,720 |
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$344,627 |
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6.125% Senior Notes |
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460,241 |
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455,639 |
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460,241 |
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260,036 |
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9.00% Second Lien Notes |
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319,659 |
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343,633 |
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516,659 |
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470,160 |
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8.25% Senior Notes |
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187,238 |
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184,429 |
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187,238 |
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100,172 |
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6.375% Senior Notes |
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320,783 |
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309,556 |
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320,783 |
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161,995 |
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8.00% Senior Notes |
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650,000 |
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663,000 |
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— |
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— |
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| Total |
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$1,937,921
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$1,956,257
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$2,027,641
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$1,336,990
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| Fair Value of Assets Measured on Recurring Basis |
The following tables present the Company’s assets and liabilities measured at fair value on a recurring basis as of December 31, 2021 and 2020:
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December 31, 2021 |
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Level 1 |
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Level 2 |
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Level 3 |
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(In thousands) |
| Assets |
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| Commodity derivative instruments |
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$— |
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$1,798 |
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$— |
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| Contingent consideration arrangements |
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— |
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20,833 |
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— |
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| Liabilities |
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Commodity derivative instruments (1)
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— |
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(172,386) |
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— |
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| Contingent consideration arrangements |
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— |
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(25,000) |
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— |
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| Total net assets (liabilities) |
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$—
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($174,755) |
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$—
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December 31, 2020 |
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Level 1 |
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Level 2 |
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Level 3 |
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(In thousands) |
| Assets |
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| Commodity derivative instruments |
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$— |
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$921 |
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$— |
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| Contingent consideration arrangements |
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— |
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1,816 |
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— |
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| Liabilities |
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Commodity derivative instruments (2)
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— |
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(97,060) |
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— |
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| Contingent consideration arrangements |
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— |
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(8,618) |
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— |
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| September 2020 Warrants |
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— |
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— |
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(79,428) |
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| Total net assets (liabilities) |
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$—
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($102,941) |
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($79,428) |
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(1) Includes approximately $2.9 million of deferred premiums which will be paid as the applicable contracts settle.
(2) Includes approximately $11.2 million of deferred premiums which will be paid as the applicable contracts settle.
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| Fair Value of Liabilities Measured on Recurring Basis |
The following tables present the Company’s assets and liabilities measured at fair value on a recurring basis as of December 31, 2021 and 2020:
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December 31, 2021 |
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Level 1 |
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Level 2 |
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Level 3 |
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(In thousands) |
| Assets |
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| Commodity derivative instruments |
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$— |
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$1,798 |
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$— |
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| Contingent consideration arrangements |
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— |
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20,833 |
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— |
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| Liabilities |
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Commodity derivative instruments (1)
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— |
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(172,386) |
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— |
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| Contingent consideration arrangements |
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— |
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(25,000) |
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— |
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| Total net assets (liabilities) |
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$—
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($174,755) |
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$—
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December 31, 2020 |
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Level 1 |
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Level 2 |
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Level 3 |
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(In thousands) |
| Assets |
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| Commodity derivative instruments |
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$— |
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$921 |
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$— |
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| Contingent consideration arrangements |
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— |
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1,816 |
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— |
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| Liabilities |
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Commodity derivative instruments (2)
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— |
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(97,060) |
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— |
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| Contingent consideration arrangements |
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— |
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(8,618) |
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— |
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| September 2020 Warrants |
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— |
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— |
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(79,428) |
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| Total net assets (liabilities) |
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$—
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($102,941) |
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($79,428) |
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(1) Includes approximately $2.9 million of deferred premiums which will be paid as the applicable contracts settle.
(2) Includes approximately $11.2 million of deferred premiums which will be paid as the applicable contracts settle.
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| Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation |
The following table presents a reconciliation of the change in the fair value of the liability related to the September 2020 Warrants, which was designated as Level 3 within the valuation hierarchy, for the years ended December 31, 2021 and 2020.
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Years Ended December 31, |
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2021 |
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2020 |
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(In thousands) |
| Beginning of period |
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$79,428
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$—
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| Recognition of issuance date fair value |
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— |
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23,909 |
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(Gain) loss on changes in fair value (1)
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55,390 |
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55,519 |
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| Transfers into (out of) Level 3 |
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(134,818) |
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— |
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| End of period |
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$—
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$79,428
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(1) Included in “(Gain) loss on derivative contracts” in the consolidated statements of operations.
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