Quarterly report pursuant to Section 13 or 15(d)

Accounts Receivable and Revenues from Contracts with Customers - Additional Information (Details)

v3.20.2
Accounts Receivable and Revenues from Contracts with Customers - Additional Information (Details)
6 Months Ended 12 Months Ended
Jun. 30, 2020
USD ($)
Customer
Jun. 30, 2019
USD ($)
Customer
Dec. 31, 2019
USD ($)
Jan. 01, 2020
USD ($)
Accounts, Notes, Loans and Financing Receivable [Line Items]        
Retained earnings $ 388,290,000   $ 319,987,000  
Accounts Receivable, Allowance for Credit Loss 157,000   52,000  
Accounts Receivable, Credit Loss Expense (Reversal) 29,000      
Accounts Receivable, Allowance for Credit Loss, Writeoff $ 0      
Accounts Receivable and Revenues from Contracts with Customers Accounts Receivable and Revenues from Contracts with Customers
Accounts Receivable and Major Customers
The following table summarizes our accounts receivable by type as of the dates presented:
June 30, December 31,
  2020 2019
Customers $ 40,944    $ 63,165   
Joint interest partners 2,046    6,929   
Other —    674   
  42,990    70,768   
Less: Allowance for credit losses (157)   (52)  
  $ 42,833    $ 70,716   
For the six months ended June 30, 2020, four customers accounted for $99.2 million, or approximately 73%, of our consolidated product revenues. The revenues generated from these customers during the six months ended June 30, 2020, were $34.8 million, $26.3 million, $19.8 million and $18.3 million, or 26%, 19%, 15% and 13% of the consolidated total, respectively. As of June 30, 2020 and December 31, 2019, $29.0 million and $52.7 million, or approximately 71% and 83%, respectively, of our consolidated accounts receivable from customers was related to these customers. For the six months ended June 30, 2019, three customers accounted for $150.0 million, or approximately 66%, of our consolidated product revenues. No significant uncertainties exist related to the collectability of amounts owed to us by any of these customers. As of June 30, 2020 and December 31, 2019, the allowance for credit losses is entirely attributable to receivables from joint interest partners.
Credit Losses and Allowance for Credit Losses
Adoption of ASU 2016–13
Effective January 1, 2020, we adopted ASU 2016–13 and have applied the guidance therein to our portfolio of accounts receivable including those from our customers and our joint interest partners. We have adopted ASU 2016–13 using the modified retrospective method resulting in an adjustment of less than $0.1 million to the beginning balance of retained earnings and a corresponding increase to the allowance for credit losses as of January 1, 2020.
Accounting Policies for Credit Losses
We monitor and assess our portfolio of accounts receivable, including those from our customers, our joint interest partners and others, when applicable, for credit losses on a monthly basis as we originate the underlying financial assets. Our review process and related internal controls take into appropriate consideration (i) past events and historical experience with the identified portfolio segments, (ii) current economic and related conditions within the broad energy industry as well as those factors with broader applicability and (iii) reasonable supportable forecasts consistent with other estimates that are inherent in our financial statements. In order to facilitate our processes for the review and assessment of credit losses, we have identified the following portfolio segments which are described below: (i) customers for our commodity production and (ii) joint interest partners which are further stratified into the following sub-segments: (a) mutual operators which includes joint interest partners with whom we are a non-operating joint interest partner in properties for which they are the operator, (b) large partners consisting of those legal entities that maintain a working interest of at least 10 percent in properties for which we are the operator and (c) all others which includes legal entities that maintain working interests of less than 10 percent in properties for which we are the operator as well as legal entities with whom we no longer have an active joint interest relationship, but continue to have transactions, including joint venture audit settlements, that from time-to-time give rise to the origination of new accounts receivable.
Customers. We sell our commodity products to approximately 15 customers. A substantial majority of these customers are large, internationally recognized refiners and marketers in the case of our crude oil sales and large domestic processors and interstate pipelines with respect to our NGL and natural gas sales. As noted in our disclosures regarding major customers above, a significant portion of our outstanding customer accounts receivable are concentrated within a group of up to five customers at any given time. Due primarily to the historical market efficiencies and generally timely settlements associated with commodity sale transactions for crude oil, NGLs and natural gas, we have assessed this portfolio segment at zero risk for credit loss upon the adoption of ASU 2016–13 and for each of the six months included in the period ended June 30, 2020. Historically, we have never experienced a credit loss with such customers including the periods during the 2008-2009 financial crisis and the more recent periods of significant commodity price declines. While we believe that the receivables that originated in June 2020 will be fully collected despite the ongoing uncertainty associated with the COVID-19 health crisis and the related global energy market disruptions, future originations of customer receivables will continue to be assessed with a greater emphasis on current economic conditions and reasonable supportable forecasts.
Mutual Operators. As of June 30, 2020, we had mutual joint interest partner relationships with three upstream producers that also operate properties within the Eagle Ford for which we have non-operated working interests. Historically we have had full and timely collection experiences with these entities and we ourselves are timely with respect to our payments to them of joint venture costs. Upon adoption of ASU 2016–13, we had assessed this portfolio segment at zero risk for credit loss; however, in light of the potential for liquidity concerns due to current economic conditions in the near-term, we have assessed receivables originating in 2020 with a five percent risk.
Large Partners. As of June 30, 2020, four legal entities had working interests of 10 percent or greater in properties that we operate. These entities are primarily passive investors. Historically we have had full and timely collection experiences with these entities. Upon adoption of ASU 2016–13, we had assessed this portfolio segment at risk of one percent for credit loss; however, in light of the potential for liquidity concerns due to current economic conditions in the near-term, we have increased the assessed receivables originating in 2020 to a two percent risk.
All Others. As of June 30, 2020, approximately thirty legal entities had working interests of less than 10 percent in properties that we operate. Historically, this is the only portfolio segment with whom we have experienced credit losses. Generally, this group includes passive investors and smaller producers that may not have the wherewithal or alternative sources of liquidity to settle their obligations to us in the event of individual challenges unique to smaller entities as well as adverse economic conditions in general. Upon adoption of ASU 2016–13, we had assessed this portfolio segment at a risk of five percent for credit loss; however, in light of the potential for liquidity concerns due to current economic conditions in the near-term, we have increased the assessed receivables originated in 2020 to a 10 percent risk. As of June 30, 2020, approximately $0.1 million of accounts receivables attributable to this portfolio segment was past due, or over 60 days.
Supplemental Disclosures
        The following table summarizes the activity in our allowance for credit losses, by portfolio segment, for the six months ended June 30, 2020:
Joint Interest Partners
Customers Mutual Operators Large Partners All Others Total
Balance at beginning of period $ —    $ —    $ —    $ 52    $ 52   
Adjustment upon adoption —    —    60    16    76   
Provision for expected credit losses —      13    11    29   
Write-offs and recoveries —    —    —    —    —   
Balance at end of period $ —    $   $ 73    $ 79    $ 157   
     
Name of Major Customer [Domain]        
Accounts, Notes, Loans and Financing Receivable [Line Items]        
Commodity Products, Number of Customers | Customer 15      
Financing Receivable, Credit Risk Percentage 0.00%     0.00%
Accounts Receivable, Allowance for Credit Loss $ 0   0  
Accounts Receivable, Credit Loss Expense (Reversal) 0      
Accounts Receivable, Allowance for Credit Loss, Writeoff $ 0      
Joint Interest Partners, Mutual Operators [Domain]        
Accounts, Notes, Loans and Financing Receivable [Line Items]        
Commodity Products, Number of Customers | Customer 3      
Financing Receivable, Credit Risk Percentage 5.00%     0.00%
Accounts Receivable, Allowance for Credit Loss $ 5,000   0  
Accounts Receivable, Credit Loss Expense (Reversal) 5,000      
Accounts Receivable, Allowance for Credit Loss, Writeoff $ 0      
Joint Interest Partners, Large Partners [Domain]        
Accounts, Notes, Loans and Financing Receivable [Line Items]        
Financing Receivable, Credit Risk Percentage 2.00%     1.00%
Number of Legal Entities With Working Interest in Properties $ 4      
Accounts Receivable, Allowance for Credit Loss 73,000   0  
Accounts Receivable, Credit Loss Expense (Reversal) 13,000      
Accounts Receivable, Allowance for Credit Loss, Writeoff $ 0      
Joint Interest Partners, All Others [Domain]        
Accounts, Notes, Loans and Financing Receivable [Line Items]        
Financing Receivable, Credit Risk Percentage 10.00%     5.00%
Number of Legal Entities With Working Interest in Properties $ 30      
Financing Receivable, Past Due 100,000      
Accounts Receivable, Allowance for Credit Loss 79,000   $ 52,000  
Accounts Receivable, Credit Loss Expense (Reversal) 11,000      
Accounts Receivable, Allowance for Credit Loss, Writeoff $ 0      
Cumulative Effect, Period of Adoption, Adjustment [Member]        
Accounts, Notes, Loans and Financing Receivable [Line Items]        
Accounts Receivable, Allowance for Credit Loss       $ 76,000
Cumulative Effect, Period of Adoption, Adjustment [Member] | Name of Major Customer [Domain]        
Accounts, Notes, Loans and Financing Receivable [Line Items]        
Accounts Receivable, Allowance for Credit Loss       0
Cumulative Effect, Period of Adoption, Adjustment [Member] | Joint Interest Partners, Mutual Operators [Domain]        
Accounts, Notes, Loans and Financing Receivable [Line Items]        
Accounts Receivable, Allowance for Credit Loss       0
Cumulative Effect, Period of Adoption, Adjustment [Member] | Joint Interest Partners, Large Partners [Domain]        
Accounts, Notes, Loans and Financing Receivable [Line Items]        
Accounts Receivable, Allowance for Credit Loss       60,000
Cumulative Effect, Period of Adoption, Adjustment [Member] | Joint Interest Partners, All Others [Domain]        
Accounts, Notes, Loans and Financing Receivable [Line Items]        
Accounts Receivable, Allowance for Credit Loss       16,000
Cumulative Effect, Period of Adoption, Adjustment [Member] | Accounting Standards Update 2016-13 [Member]        
Accounts, Notes, Loans and Financing Receivable [Line Items]        
Retained earnings       $ 100,000
Accounts Receivable | Credit Concentration Risk        
Accounts, Notes, Loans and Financing Receivable [Line Items]        
Concentration risk, percentage 71.00%   83.00%  
Accounts receivable, major customers $ 29,000,000.0   $ 52,700,000  
Accounts Receivable | Customer Concentration Risk [Member]        
Accounts, Notes, Loans and Financing Receivable [Line Items]        
Number of major customers | Customer 4 3    
Revenues, major customers $ 99,200,000 $ (150,000,000.0)    
Concentration risk, percentage 73.00% 66.00%    
Accounts Receivable | Customer Concentration Risk [Member] | Major Customer 1        
Accounts, Notes, Loans and Financing Receivable [Line Items]        
Revenues, major customers $ (34,800,000)      
Concentration risk, percentage 26.00%      
Accounts Receivable | Customer Concentration Risk [Member] | Major Customer 2        
Accounts, Notes, Loans and Financing Receivable [Line Items]        
Revenues, major customers $ (26,300,000)      
Concentration risk, percentage 19.00%      
Accounts Receivable | Customer Concentration Risk [Member] | Major Customer 3        
Accounts, Notes, Loans and Financing Receivable [Line Items]        
Revenues, major customers $ (19,800,000)      
Concentration risk, percentage 15.00%      
Accounts Receivable | Customer Concentration Risk [Member] | Major Customer Four [Member]        
Accounts, Notes, Loans and Financing Receivable [Line Items]        
Revenues, major customers $ (18,300,000)      
Concentration risk, percentage 13.00%