ERIN ENERGY CORP., 10-Q filed on 8/9/2017
Quarterly Report
Document And Entity Information
6 Months Ended
Jun. 30, 2017
Aug. 1, 2017
Document And Entity Information [Abstract]
 
 
Entity Registrant Name
Erin Energy Corp. 
 
Entity Central Index Key
0001402281 
 
Current Fiscal Year End Date
--12-31 
 
Entity Filer Category
Accelerated Filer 
 
Document Type
10-Q 
 
Document Period End Date
Jun. 30, 2017 
 
Document Fiscal Year Focus
2017 
 
Document Fiscal Period Focus
Q2 
 
Amendment Flag
false 
 
Entity Common Stock, Shares Outstanding
 
213,564,393 
CONSOLIDATED BALANCE SHEETS (USD $)
In Thousands, unless otherwise specified
Jun. 30, 2017
Dec. 31, 2016
Current assets:
 
 
Cash and cash equivalents
$ 10,654 
$ 7,177 
Restricted cash
12,600 
2,600 
Accounts receivable - partners
5,279 
674 
Accounts receivable - related party
2,427 
1,956 
Accounts receivable - other
5 
29 
Crude oil inventory
8,879 
9,398 
Prepaids and other current assets
4,627 
872 
Total current assets
44,471 
22,706 
Property, plant and equipment:
 
 
Oil and gas properties (successful efforts method of accounting), net
145,944 
265,713 
Other property, plant and equipment, net
481 
716 
Total property, plant and equipment, net
146,425 
266,429 
Other non-current assets
35 
66 
Total assets
190,931 
289,201 
Current liabilities:
 
 
Accounts payable and accrued liabilities
249,846 
244,963 
Accounts payable and accrued liabilities - related party
32,708 
29,513 
Current portion of long-term debt, net
41,937 
12,627 
Derivative liability
656 
0 
Total current liabilities
325,147 
287,103 
Long-term notes payable - related party, net
129,812 
129,800 
Long-term debt, net
61,778 
74,446 
Asset retirement obligations
23,421 
22,476 
Total liabilities
540,158 
513,821 
Commitments and contingencies (Note 9)
   
   
Capital deficiency:
 
 
Preferred stock $0.001 par value - 50,000,000 shares authorized; none issued and outstanding as of June 30, 2017 and December 31, 2016, respectively
0 
0 
Common stock $0.001 par value - 416,666,667 shares authorized; 213,564,393 and 212,622,218 shares outstanding as of June 30, 2017 and December 31, 2016, respectively
214 
213 
Additional paid-in capital
794,179 
792,972 
Accumulated deficit
(1,143,364)
(1,018,292)
Treasury stock at cost, 304,481 and 99,932 shares as of June 30, 2017 and December 31, 2016, respectively
(936)
(228)
Total deficit - Erin Energy Corporation
(349,907)
(225,335)
Non-controlling interest
680 
715 
Total capital deficiency
(349,227)
(224,620)
Total liabilities and capital deficiency
$ 190,931 
$ 289,201 
CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $)
Jun. 30, 2017
Dec. 31, 2016
Statement of Financial Position [Abstract]
 
 
Preferred stock par value (in dollars per share)
$ 0.001 
$ 0.001 
Preferred stock, authorized shares
50,000,000 
50,000,000 
Preferred stock, issued shares
0 
0 
Preferred stock, outstanding shares
0 
0 
Common stock, par value (in dollars per share)
$ 0.001 
$ 0.001 
Common stock, authorized shares
416,666,667 
416,666,667 
Common stock, outstanding shares
213,564,393 
212,622,218 
Treasury stock, shares
304,481 
99,932 
CONSOLIDATED STATEMENTS OF OPERATIONS (USD $)
In Thousands, except Per Share data, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2017
Jun. 30, 2016
Jun. 30, 2017
Jun. 30, 2016
Revenues:
 
 
 
 
Crude oil sales, net of royalties
$ 14,588 
$ 23,151 
$ 45,866 
$ 28,080 
Operating costs and expenses:
 
 
 
 
Production costs
14,635 
22,123 
37,190 
44,687 
Crude oil inventory (increase) decrease
(3,031)
729 
(83)
(102)
Workover expenses
(713)
7,585 
(713)
7,585 
Exploratory expenses
802 
1,200 
2,398 
3,262 
Depreciation, depletion and amortization
11,759 
14,856 
37,170 
19,668 
Accretion of asset retirement obligations
478 
461 
945 
913 
Impairment of oil and gas properties
78,711 
0 
78,711 
0 
Loss on settlement of asset retirement obligations
0 
0 
0 
205 
General and administrative expenses
3,278 
3,396 
6,672 
7,354 
Total operating costs and expenses
105,919 
50,350 
162,290 
83,572 
Operating loss
(91,331)
(27,199)
(116,424)
(55,492)
Other income (expense):
 
 
 
 
Currency transaction gain
1,350 
10,465 
3,485 
11,328 
Interest expense
(10,908)
(5,954)
(14,874)
(11,379)
Loss on disposal of other property and equipment
(149)
0 
(149)
0 
Gain on sale of oil and gas properties
2,348 
0 
2,348 
0 
Gain on fair value of derivative liability
37 
0 
37 
0 
Total other expense, net
(7,322)
4,511 
(9,153)
(51)
Loss before income taxes
(98,653)
(22,688)
(125,577)
(55,543)
Income tax expense
0 
0 
0 
0 
Net loss before non-controlling interest
(98,653)
(22,688)
(125,577)
(55,543)
Net loss attributable to non-controlling interest
88 
116 
505 
560 
Net loss attributable to Erin Energy Corporation
$ (98,565)
$ (22,572)
$ (125,072)
$ (54,983)
Net loss attributable to Erin Energy Corporation per common share:
 
 
 
 
Basic (in dollars per share)
$ (0.46)
$ (0.11)
$ (0.59)
$ (0.26)
Diluted (in dollars per share)
$ (0.46)
$ (0.11)
$ (0.59)
$ (0.26)
Weighted average common shares outstanding:
 
 
 
 
Basic (in shares)
213,297 
212,290 
213,070 
212,067 
Diluted (in shares)
213,297 
212,290 
213,070 
212,067 
CONSOLIDATED STATEMENTS OF CAPITAL DEFIENCY (USD $)
In Thousands, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2017
Jun. 30, 2017
Increase (Decrease) in Stockholders' Equity [Roll Forward]
 
 
Balance at December 31, 2016
 
$ (224,620)
Common stock issued
 
1 
Stock-based compensation
 
1,207 
Transfer to treasury arising from withholding taxes upon vesting of restricted stock and exercise of stock options
 
(708)
Non-controlling interest
 
470 
Net loss
(98,653)
(125,577)
Balance at June 30, 2017
(349,227)
(349,227)
Common Stock
 
 
Increase (Decrease) in Stockholders' Equity [Roll Forward]
 
 
Balance at December 31, 2016
 
213 
Common stock issued
 
1 
Balance at June 30, 2017
214 
214 
Additional Paid-in Capital
 
 
Increase (Decrease) in Stockholders' Equity [Roll Forward]
 
 
Balance at December 31, 2016
 
792,972 
Common stock issued
 
0 
Stock-based compensation
 
1,207 
Balance at June 30, 2017
794,179 
794,179 
Accumulated Deficit
 
 
Increase (Decrease) in Stockholders' Equity [Roll Forward]
 
 
Balance at December 31, 2016
 
(1,018,292)
Net loss
 
(125,072)
Balance at June 30, 2017
(1,143,364)
(1,143,364)
Treasury Stock
 
 
Increase (Decrease) in Stockholders' Equity [Roll Forward]
 
 
Balance at December 31, 2016
 
(228)
Transfer to treasury arising from withholding taxes upon vesting of restricted stock and exercise of stock options
 
(708)
Balance at June 30, 2017
(936)
(936)
Non-controlling Interest
 
 
Increase (Decrease) in Stockholders' Equity [Roll Forward]
 
 
Balance at December 31, 2016
 
715 
Non-controlling interest
 
470 
Net loss
 
(505)
Balance at June 30, 2017
$ 680 
$ 680 
CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $)
In Thousands, unless otherwise specified
6 Months Ended
Jun. 30, 2017
Jun. 30, 2016
Cash flows from operating activities
 
 
Net loss
$ (125,577)
$ (55,543)
Adjustments to reconcile net loss to cash provided by operating activities:
 
 
Depreciation, depletion and amortization
37,170 
19,668 
Accretion of asset retirement obligations
945 
913 
Impairment of oil and gas properties
78,711 
0 
Amortization of debt discount and debt issuance costs
2,142 
1,789 
Unrealized foreign currency transaction gain
(1,014)
(8,686)
Loss on disposal of other property and equipment
149 
0 
Gain on sale of oil and gas properties
(2,348)
0 
Gain on fair value of derivative liability
37 
0 
Settlement of accounts payable and accrued expenses
(6,166)
0 
Share-based compensation
1,207 
1,619 
Change in operating assets and liabilities:
 
 
Decrease (increase) in accounts receivable
(504)
603 
Increase in crude oil inventory
(83)
(102)
Increase in prepaids and other current assets
(3,724)
(688)
Increase in accounts payable and accrued liabilities
23,508 
41,895 
Net cash provided by operating activities
4,379 
1,468 
Cash flows from investing activities
 
 
Capital expenditures
(5,747)
(9,667)
Net cash used in investing activities
(5,747)
(9,667)
Cash flows from financing activities
 
 
Proceeds from exercise of stock options and warrants
0 
167 
Payments for treasury stock arising from withholding taxes upon restricted stock vesting and exercise of stock options
(700)
(192)
Proceeds from MCB Finance Facility
24,443 
0 
Repayments of term loan facility
(235)
(5,981)
Proceeds from short-term notes payable
0 
504 
Proceeds from notes payable - related party, net
0 
6,129 
Debt issuance costs
(8,655)
(693)
Funds restricted for debt service
(10,000)
0 
Funds released from restricted cash
0 
8,661 
Net cash provided by financing activities
4,845 
8,595 
Net increase in cash and cash equivalents
3,477 
396 
Cash and cash equivalents at beginning of period
7,177 
8,363 
Cash and cash equivalents at end of period
10,654 
8,759 
Cash paid for:
 
 
Interest, net of amounts capitalized
4,769 
5,680 
Supplemental disclosure of non-cash investing and financing activities:
 
 
Discount on notes payable pursuant to issuance of warrants
693 
53 
Reduction in oil and gas properties arising from settlements of accounts payable and accrued liabilities
$ 11,051 
$ 0 
Company Description
Company Description
Company Description

Erin Energy Corporation (NYSE MKT: ERN; JSE: ERN) is an independent oil and gas exploration and production company engaged in the acquisition and development of energy resources in Africa. The Company’s asset portfolio consists of seven licenses across four countries covering an area of approximately 5 million acres (approximately 19,000 square kilometers). The Company owns producing properties and conducts exploration activities offshore Nigeria, conducts exploration activities offshore Ghana and The Gambia, and onshore Kenya.

The Company is headquartered in Houston, Texas and has offices in Lagos, Nigeria, Nairobi, Kenya, Banjul, The Gambia, and Accra, Ghana.

The Company’s operating subsidiaries include Erin Petroleum Nigeria Limited (“EPNL”), Erin Energy Kenya Limited ("EEKL"), Erin Energy Gambia Ltd., and Erin Energy Ghana Limited. The terms “we,” “us,” “our,” “the Company,” and “our Company” refer to Erin Energy Corporation and its subsidiaries.

On February 16, 2017, Babatunde (Segun) Omidele informed the Company that he would resign from service as a member of the Board of Directors ("the Board") and as the Chief Executive Officer of the Company. The Board accepted his resignation effective as of February 22, 2017. The Board appointed Jean-Michel Malek, the Company’s Senior Vice President, General Counsel and Secretary, to serve as Interim Chief Executive Officer effective February 22, 2017 while the Board conducted a search for a permanent replacement for Mr. Omidele. Effective on May 18, 2017, the Board appointed Sakiru Adefemi (Femi) Ayoade as the Company’s Chief Executive Officer to replace the then Interim Chief Executive Officer, Jean-Michel Malek.

Changes in Control during 2017

The Company was advised by Oltasho Nigeria Limited (“Oltasho”) and Latmol Investment Limited (“Latmol”) that on (a) April 3, 2017, an aggregate of 116,108,833 shares of the Company’s common stock previously held by Allied Energy Plc. (“Allied”), were transferred to Oltasho; and (b) April 13, 2017, an aggregate of 1,515,927 shares of the Company’s common stock previously held by CAMAC Int’l (Nigeria) Ltd. (“CAMAC International”), were transferred to Latmol. Prior to April 2017, the shares of common stock previously held by Allied and CAMAC International were beneficially owned by Dr. Kase Lawal, the Company’s former Chairman and Chief Executive Officer, due to his ownership of equity interests in such entities and voting and dispositive control over the securities held by such entities.

The shares transferred to Oltasho and Latmol represented approximately 54.6% of the Company’s outstanding voting shares (53.9% owned by Allied and 0.7% owned by CAMAC International) as of the dates of transfer and as such, represented a change in control of the Company. The Company has been advised that the shares held by Oltasho are beneficially owned by Alhaji Murhi Busari, its Chairman, and the shares held by Latmol are beneficially owned by Alhaji Murhi Busari, its Chairman.

On July 5, 2017, Oltasho and Latmol entered into a Voting Agreement with Dr. Lawal (the “Voting Agreement”) resulting in another change in control of the Company. Pursuant to the Voting Agreement, Oltasho and Latmol provided complete authority to Dr. Lawal to vote the 117,624,760 shares foreclosed upon (and any other securities of the Company obtained by Oltasho and/or Latmol in the future) at any and all meetings of stockholders of the Company and via any written consents. Those 117,624,760 shares represent approximately 54.6% of the Company’s common stock as of the parties’ entry into the Voting Agreement. The Voting Agreement has a term of approximately 10 years, through July 31, 2027, but can be terminated at any time with the mutual consent of the parties. In connection with their entry into the Voting Agreement, Oltasho and Latmol each provided Dr. Lawal an irrevocable voting proxy to vote the shares covered by the Voting Agreement. Additionally, during the term of such agreement, Oltasho and Latmol agreed not to transfer the shares covered by the Voting Agreement except pursuant to certain limited exceptions. According to the Voting Agreement, Oltasho and Latmol have no desire to control the Company and believe that voting control of the Company was best determined by Dr. Lawal, a United States resident, who has extensive knowledge of United States laws and the assets and operations of the Company, as Dr. Lawal was, until he retired in 2015, the Chairman and Chief Executive Officer of the Company. Due to the Voting Agreement, Dr. Lawal will continue to hold voting control over the Company even after the foreclosures described above.

The Company conducts certain business transactions with CAMAC Energy Holdings Limited (“CEHL”), and its affiliates, which include Allied, which are entities controlled by Dr. Lawal. These entities are deemed to be related parties for financial reporting purposes. See Note 8 - Related Party Transactions for further information.
Basis of Presentation and Recently Issued Accounting Standards
Basis of Presentation and Recently Issued Accounting Standards
Basis of Presentation and Recently Issued Accounting Standards

The accompanying unaudited consolidated financial statements include the accounts of the Company and its wholly-owned and majority-owned direct and indirect subsidiaries, and have been prepared in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”) pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). All significant intercompany transactions and balances have been eliminated in consolidation. The unaudited consolidated financial statements reflect all adjustments that are, in the opinion of management, necessary for a fair presentation of the consolidated financial position and results of operations for the indicated periods. All such adjustments are of a normal recurring nature. This Form 10-Q should be read in conjunction with our audited consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2016, filed with the SEC on March 16, 2017.

Use of Estimates
 
The preparation of the Company's consolidated financial statements in conformity with U.S. GAAP requires management to make estimates based on certain assumptions. Estimates affect the reported amounts of assets and liabilities, disclosure of contingent liabilities, and the reported amounts of revenues and expenses attributable to the reporting periods. Accordingly, accounting estimates in conformity with U.S. GAAP require the exercise of judgment. These estimates and assumptions used in the preparation of the Company’s consolidated financial statements are based on information available as of the date of the consolidated financial statements, and while management believes that the estimates and assumptions are appropriate, actual results could differ from management's estimates.
 
Estimates that may have a significant effect on the Company’s financial position and results from operations include share-based compensation assumptions, oil and natural gas reserve quantities, impairments, depletion and amortization relating to oil and natural gas properties, asset retirement obligation assumptions, calculations related to derivative liabilities, and income taxes. The accounting estimates used in the preparation of the Company's consolidated financial statements may change as new events occur, more experience is acquired, additional information is obtained and our operating environment changes.

Restricted Cash

Restricted cash consists of cash deposits that are contractually restricted for withdrawal or required to be maintained in a reserve bank account for a specific period of time, as provided for under certain agreements with third parties.

Restricted cash as of June 30, 2017 totaling $12.6 million consists of $2.6 million held in a debt service reserve account to secure certain interest and principal repayments pursuant to the Term Loan Facility in Nigeria and $10.0 million held in a debt service reserve account as required under the MCB Finance Facility (see Note 7 - Debt for further information). Restricted cash as of December 31, 2016 consists of $2.6 million held in a debt service reserve account to secure certain interest and principal repayments pursuant to the Term Loan Facility in Nigeria.

Capitalized Interest

The Company capitalizes interest costs for qualifying oil and gas properties. The capitalization period begins when expenditures are incurred on qualified properties, activities begin which are necessary to prepare the property for production, and interest costs have been incurred. The capitalization period continues as long as these events occur. Capitalized interest is added to the cost of the underlying assets and is depleted using the unit-of-production method in the same manner as the underlying assets.
During the six months ended June 30, 2017 and 2016, the Company capitalized $0.5 million and nil, respectively, of interest costs as additions to property, plant and equipment.

Treasury Stock

Treasury stock is reported at cost and is included in the accompanying consolidated balance sheets. Pursuant to the Company’s withholding tax policy with respect to vested restricted stock awards, the Company may withhold, on a cashless basis, a number of shares needed to settle statutory withholding tax requirements. During the six months ended June 30, 2017, 204,549 shares were withheld for payroll taxes at a total cost of $0.7 million. During the six months ended June 30, 2016, 84,185 shares were withheld for payroll taxes at a total cost of $0.2 million.

The following table sets forth certain information with respect to the withholding and related repurchases of our common stock during the six months ended June 30, 2017.

 
Total Number of
Shares Purchased (1)
 
Average Price
Paid Per Share
January 1 - January 31, 2017
12,650

 
$
3.55

February 1 - February 28, 2017
158,264

 
3.82

March 1 - March 31, 2017
—

 
—

May 1 - May 31, 2017
33,635

 
1.75

Total
204,549

 
$
3.46


(1)
All shares repurchased were surrendered by employees to settle tax withholding obligations upon the vesting of restricted stock awards and the exercise of stock options. The price paid was the closing price on the dates in which the shares of common stock vested or when the stock options were exercised.


Net Loss Per Common Share

Basic net earnings or loss per common share is computed by dividing net earnings or loss by the weighted average number of shares of common stock outstanding at the end of the reporting period. Diluted net earnings or loss per share is computed by dividing net earnings or loss by the fully dilutive common stock equivalent, which consists of shares outstanding, augmented by potentially dilutive shares issuable upon the exercise of the Company's stock options, stock warrants, non-vested restricted stock awards, as well as the conversions of the 2011 Promissory Note, the 2014 Convertible Subordinated Note and the 2016 Promissory Note (collectively, the "Convertible Notes"), calculated using the treasury stock method.

The table below sets forth the number of stock options, stock warrants, non-vested restricted stock, and shares issuable upon conversion of the Convertible Notes that were excluded from dilutive shares outstanding during the three and six months ended June 30, 2017 and 2016, respectively, as these securities are anti-dilutive because the Company was in a loss position during each period.

 
Three Months Ended June 30,
Six Months Ended June 30,
(In thousands)
2017
 
2016
2017
 
2016
Stock options
22

 
183

167

 
250

Stock warrants
—

 
1

49

 
—

Unvested restricted stock awards
1,760

 
1,993

1,937

 
1,769

 
1,782

 
2,177

2,153

 
2,019


Upon the occurrence of certain events, the Company is also contingently liable to make additional payments to Allied, under a Transfer Agreement entered into in November 2013 by the Company, its affiliates and Allied (the “Transfer Agreement”), up to an additional amount totaling $50.0 million in cash, or the equivalent in shares of the Company’s common stock, at Allied’s option. See Note 9 - Commitments and Contingencies for further information.

Fair Value Measurements

Fair value is defined as the amount at which an asset (or liability) could be bought (or incurred) or sold (or settled) in an orderly transaction between market participants at the measurement date. The established framework for measuring fair value establishes a fair value hierarchy based on the quality of inputs used to measure fair value, and includes certain disclosure requirements. Fair value estimates are based on either (i) actual market data or (ii) assumptions that other market participants would use in pricing an asset or liability, including estimates of risk.

There are three levels of valuation hierarchy for disclosure of fair value measurements. The valuation hierarchy categorizes assets and liabilities measured at fair value into one of three different levels depending on the observability of the inputs employed in the measurement. The three levels are defined as follows:

Level 1 -
Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. The Company considers active markets as those in which transactions for the assets or liabilities occur in sufficient frequency and volume to provide pricing information on an on-going basis.

Level 2 -
Quoted prices in markets that are not active, or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability. Substantially all of these inputs are observable in the marketplace throughout the term, can be derived from observable data, or supported by observable levels at which transactions are executed in the marketplace.

Level 3 -
Inputs that are unobservable and significant to the fair value measurement (including the Company’s own assumptions in determining fair value).

The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability.

Fair Value on a Recurring Basis

The Company used discounted cash flow techniques to determine the estimated fair value of its oil and gas properties as part of the Company's analysis for impairment. Accordingly, the Company estimated the present value of expected future net cash flows from the Oyo field, discounted using risk-adjusted cost of capital. Significant Level 3 assumptions used in the calculation include the Company's estimate of future crude oil prices, production costs, development costs, and anticipated production of proved reserves, as well as appropriate risk-adjusted probable and possible reserves.

As discussed under Note 7 - Debt, the Company recognized a derivative liability relating to the portion of the amount drawn from the MCB Financing Facility as of June 30, 2017 in which issuance of stock warrants is expected on the day the Company receives funds under the MCB Finance Facility. The Company utilized a combination of a lattice-binomial option-pricing model and the Black-Scholes valuation model to determine the estimated fair value of this derivative liability.

The following table sets forth the Company’s oil and gas properties and derivative liability that is accounted for at fair value using Level 3 assumptions on a recurring basis as of June 30, 2017 and December 31, 2016:

 
Level 3
(in thousands)
June 30, 2017
 
December 31, 2016
Assets:
 
 
 
Value of oil and gas properties (1)
$
95,519

 
$
—

Liabilities:
 
 
 
Derivative liability
$
656

 
$
—


(1
)
This represents non-financial assets that are measured at fair value on a non-recurring basis due to impairments. This is the fair value of the asset base that was subjected to impairment and does not reflect the entire asset balance as presented on the accompanying unaudited balance sheets. Please see Note 4. — Property, Plant and Equipment for further information. Amounts included here are presented only in periods where an impairment has occurred.


The fair value of the derivative liability is estimated using a combination of a lattice-binomial option-pricing model and the Black-Scholes valuation model with the following assumptions as of June 30, 2017:

 
June 30, 2017
Estimated market value of common stock on measurement date
$
1.5

Estimated exercise price
$
1.5

Risk-free interest rate (1)
1.55
%
Expected warrant term (years)
3

Expected volatilities (2)
10.0% - 38.8%

Expected annual dividend yield
—

(1
)
The risk-free rate for periods within the contractual life of the warrants is based on the U.S. Treasury yield curve in effect at the time of grant.
(2
)
Expected volatilities are based on historical volatility of the Oil & Gas Exploration & Production Select Industries Index, among other factors.

The following table sets forth a reconciliation of changes in the fair value of the Company's financial liability that is accounted for at fair value using Level 3 classified as level 3 in the fair value hierarchy:

 
Significant Unobservable Inputs (Level 3)
 
Three Months Ended
 
Six Months Ended
(in thousands)
June 30, 2017
 
June 30, 2017
Beginning balance
$
807

 
$
—

Gain on fair value of derivative liability
(36
)
 
(36
)
Additions
96

 
903

Revisions
(211
)
 
(211
)
Transfers
—

 
—

Ending balance
$
656

 
$
656

 
 
 
 
Change in unrealized gains included in earnings relating to derivatives still held as of June 30, 2017
$
(36
)
 
$
(36
)


Fair Value of Financial Instruments

The carrying amounts of the Company’s financial instruments, which include cash and cash equivalents, restricted cash, accounts receivable, inventory, deposits, accounts payable and accrued liabilities, and debts at floating interest rates, approximate their fair values at June 30, 2017 and December 31, 2016, respectively, principally due to the short-term nature, maturities or nature of interest rates of the above listed items.

Reclassification

Certain amounts in prior periods have been reclassified to conform with current period presentation.

Recently Issued Accounting Standards

In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842). ASU 2016-02 is aimed at making leasing activities more transparent and comparable, and requires substantially all leases be recognized by lessees on their balance sheet as a right-of-use asset and corresponding lease liability, including leases currently accounted for as operating leases. ASU 2016-02 is effective for the Company in the fiscal year beginning after December 15, 2018, and interim periods within those fiscal years with early adoption permitted. The Company is still evaluating the impact of this standard. However, due to the nature of its operations, the adoption of this standards update could have a material impact on its consolidated financial statements.

In January 2017, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business (“ASU 2017-01”). This ASU clarifies the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. This guidance is to be applied using a prospective method and is effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2017. Early adoption is permitted. The adoption of this standards update is not expected to have a material impact on the Company’s consolidated financial statements.

In January 2017, the FASB issued ASU 2017-04, Simplifying the Test for Goodwill Impairment. ASU 2017-04 eliminates step 2 of the goodwill impairment test. An entity no longer will determine goodwill impairment by calculating the implied fair value of goodwill by assigning the fair value of a reporting unit to all of its assets and liabilities as if that reporting unit had been acquired in a business combination. A goodwill impairment will now be the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. ASU 2017-04 is effective for annual reporting periods and interim reporting periods within those annual reporting periods, beginning after December 15, 2019. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The adoption of this standards update is not expected to have a material impact on the Company’s consolidated financial statements.

In February 2017, the FASB issued ASU 2017-05, Other Income-Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20): Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets. This ASU clarifies the scope and application of ASC 610-20 on the sale or transfer of nonfinancial assets and in substance nonfinancial assets to noncustomers, including partial sales. The Company is required to adopt this guidance at the same time that it adopts the guidance in ASU 2014-09. The adoption of this standards update is not expected to have a material impact on the Company’s consolidated financial statements.

In March 2017, the FASB has issued ASU 2017-08, Receivables-Nonrefundable Fees and Other Costs (Subtopic 310-20), Premium Amortization on Purchased Callable Debt Securities. This ASU shortens the amortization period for certain callable debt securities held at a premium to the earliest call date. However, the amendments do not require an accounting change for securities held at a discount; the discount continues to be amortized to maturity. ASU 2017-08 is effective for the Company in the fiscal year beginning after December 15, 2018, and interim periods within those fiscal years, with early adoption permitted. The adoption of this standards update is not expected to have a material impact on the Company’s consolidated financial statements.

In May 2017, the FASB issued ASU 2017-09, Compensation - Stock Compensation (Topic 718): Scope of Modification Accounting, which provides guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting in Topic 718. This pronouncement is effective for annual reporting periods beginning after December 15, 2017. Early adoption is permitted. The adoption of this standards update is not expected to have a material impact on the Company’s consolidated financial statements.

In May 2017, the FASB issued ASU No. 2017-10, Service Concession Arrangements (Topic 853): Determining the Customer of the Operation Services. ASU No. 2017-10 provides clarity on determining the customer in a service concession arrangement. ASU No. 2017-10 is effective for interim and annual periods beginning after December 15, 2017, and the Company will adopt this standards update, as required, beginning with the first quarter of 2018. The adoption of this standards update is not expected to have a material impact on the Company’s consolidated financial statements.
Liquidity Matters and Going Concern
Liquidity Matters and Going Concern
Liquidity Matters and Going Concern

The Company incurred losses from operations for the three and six months ended June 30, 2017. As of June 30, 2017, the Company's total current liabilities of $325.1 million exceeded its total current assets of $44.5 million, resulting in a working capital deficit of $280.7 million. As a result of the current low commodity prices, the Company has not been able to generate sufficient cash from operations to satisfy certain obligations as they became due.

Well Oyo-7 is currently shut-in as a result of an emergency shut-in of the Oyo field production that occurred in early July 2016. This has resulted in a loss of approximately 1,400 BOPD. The Company is currently working on relocating an existing gaslift line to well Oyo-7 to enable continuous gaslift operation to assist in restoring lost production volumes. For cost effectiveness, the relocation of the gaslift line to well Oyo-7 is now planned to be combined with the Oyo-9 subsea equipment installation scheduled for the second half of 2017. During an approximately two (2) week period starting from late June 2017 to early July 2017, the owners of the floating, production, storage, and offloading vessel (“FPSO”) Armada Perdana suspended its operations due to an impasse in contract negotiations that led to a temporary shut-in of the Oyo-8 well during this period. The FPSO operation was subsequently fully restored and the production from the Oyo-8 well was re-established on July 6, 2017. Contract negotiations have resumed.

The Company is currently pursuing a number of actions, including (i) obtaining additional funds through public or private financing sources, (ii) restructuring existing debts from lenders, (iii) obtaining forbearance of debt from trade creditors, (iv) reducing ongoing operating costs, (v) minimizing projected capital costs for the 2017 exploration and development campaign, (vi) farming-out a portion of its rights to certain of its oil and gas properties and (vii) exploring potential business combination transactions. There can be no assurances that sufficient liquidity can be raised from one or more of these actions or that these actions can be consummated within the period needed to meet certain obligations.


The Company's consolidated financial statements have been prepared under the assumption that it will continue as a going concern, which assumes the continuity of operations, the realization of assets and the satisfaction of liabilities as they come due in the normal course of business. Although the Company believes that it will be able to generate sufficient liquidity from the measures described above, its current circumstances raise substantial doubt about its ability to continue to operate as a going concern. The accompanying consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Property, Plant and Equipment
Property, Plant and Equipment
Property, Plant and Equipment
Property, plant and equipment were comprised of the following:
(In thousands)
June 30, 
 2017
 
December 31, 2016
Wells and production facilities
$
308,986

 
$
318,739

Proved properties
386,196

 
386,196

Work in progress and exploration inventory
44,225

 
34,712

Oilfield assets
739,407

 
739,647

Accumulated depletion
(599,663
)
 
(483,754
)
Oilfield assets, net
139,744

 
255,893

Unevaluated leaseholds
6,200

 
9,820

Oil and gas properties, net
145,944

 
265,713

 
 
 
 
Other property and equipment
2,878

 
3,040

Accumulated depreciation
(2,397
)
 
(2,324
)
Other property and equipment, net
481

 
716

 
 
 
 
Total property, plant and equipment, net
$
146,425

 
$
266,429



All of the Company’s oilfield assets are located offshore Nigeria in the Oil Mining Leases 120 and 121 (the "OMLs"). “Work-in-progress and exploration inventory” includes warehouse inventory items purchased as part of the redevelopment plan of the Oyo field.

The Company’s unevaluated leasehold costs include costs to acquire the rights to the exploration acreage in its various oil and gas properties.

Gambia Sale Agreement

In March 2017, the Company entered into a sale agreement with FAR Ltd. ("FAR"), an Australian Securities Exchange listed oil and gas company (the "Sale Agreement"), whereby FAR will acquire an 80% interest and operatorship of Erin Energy’s offshore A2 and A5 blocks in The Gambia. The Company will retain a 20% working interest in both blocks.

Under the terms of the Sale Agreement, which was approved by the Government of the Republic of The Gambia in June 2017, upon closing of the transaction, FAR paid the Company the purchase price of $5.2 million and will carry $8.0 million of the Company’s share of costs in a planned exploration well to be drilled in late 2018. In addition, if the Company’s share of the exploration well is less than $8.0 million, the balance is to be paid in cash to the Company. Any amount in excess of the $8.0 million representing the Company’s share of the exploration well will be borne by the Company.

Impairment of Oil and Gas Properties

The Company used discounted cash flow techniques to determine the estimated fair value of its oil and gas properties as part of the Company's analysis for impairment. Accordingly, the Company estimated the present value of expected future net cash flows from the Oyo field, discounted using risk-adjusted cost of capital. Significant Level 3 assumptions used in the calculation include the Company's estimate of future crude oil prices, production costs, development costs, and anticipated production of proved reserves, as well as appropriate risk-adjusted probable and possible reserves.

In June 2017, the Company concluded that the carrying value of its oilfield assets would not be recoverable under the then current market conditions. Accordingly, the Company recorded a non-cash impairment charge of $78.1 million to reduce the carrying value of its oil and gas properties to their estimated fair values as of June 30, 2017. In addition, the Company recorded a non-cash impairment charge of $0.6 million to write-off the carrying value of its onshore leases in Kenya.
Accounts Payable and Accrued Liabilities
Accounts Payable and Accrued Liabilities
Accounts Payable and Accrued Liabilities
 
The table below sets forth a summary of the Company’s accounts payable and accrued liabilities at June 30, 2017 and December 31, 2016:
(In thousands)
June 30, 
 2017
 
December 31, 2016
Accounts payable - vendors
$
177,171

 
$
173,306

Amounts due to government entities
67,843

 
66,573

Accrued payroll and benefits
1,377

 
3,074

Accrued interest
3,455

 
1,204

Other liabilities
—

 
806

 
$
249,846

 
$
244,963

Asset Retirement Obligations
Asset Retirement Obligations
Asset Retirement Obligations

The Company’s asset retirement obligations primarily represent the estimated fair value of the amounts that will be incurred to plug, abandon and remediate its producing properties at the end of their productive lives. Significant inputs used in determining such obligations include, but are not limited to, estimates of plugging and abandonment costs, estimated future inflation rates and changes in property lives. The inputs used in the fair value determination were based on Level 3 inputs, which were essentially management's assumptions.
On a quarterly basis, the Company reviews the assumptions used to estimate the expected cash flows required to settle the asset retirement obligations, including changes in estimated probabilities, amounts and timing of the settlement of the asset retirement obligations, as well as changes in the legal obligation for each of its properties. Changes in any one or more of these assumptions may cause revisions in the estimated liabilities for the corresponding assets. The following summarizes changes in the Company’s asset retirement obligations during the six months ended June 30, 2017 (in thousands):

Balance at January 1, 2017
$
22,476

Accretion expense
945

Balance at June 30, 2017
$
23,421

Debt
Debt
Debt

Short-Term Debt:

Short-Term Borrowing - Glencore Advance

In February 2017, the Company received $13.6 million as an advance (the “February Advance”) under a stand-alone spot oil sales contract with Glencore Energy UK Ltd. ("Glencore"). Interest accrued on the February Advance at the rate of LIBOR plus 6.5%. Repayment of the February Advance was made from the February 2017 crude oil lifting.

Long-Term Debt:

Term Loan Facility

In September 2014, the Company, through its wholly owned subsidiary EPNL, entered into the Term Loan Facility (as amended or modified, the “Term Loan Facility”) with Zenith Bank PLC ("Zenith") for a five-year senior secured term loan providing initial borrowing capacity of up to $100.0 million. Of the total commitment provided, 90.0% of the Term Loan Facility was available in U.S. dollars, while the remaining 10% was available in Nigerian Naira. U.S. dollar borrowings under the Term Loan Facility currently bear interest at the rate of LIBOR plus 9.0%. The obligations under the Term Loan Facility include a legal charge over the OMLs and an assignment of proceeds from oil sales. The obligations of EPNL have been guaranteed by the Company and rank in priority with all its other obligations, subject to the provisions under the Override Deed. Proceeds from the Term Loan Facility were used for the further expansion and development of the Oyo field offshore Nigeria.

In June 2016, the Term Loan Facility was modified contingent upon the signing of a loan agreement, which was signed in August 2016. The modification put in place a moratorium on principal payments until June 2017 and extended the term of the Term Loan Facility until February 2021. Additionally, it reduced the funding requirement of the debt service reserve account (“DSRA”) to an amount equal to one quarter of interest until the price of oil exceeds $55 per barrel, at which time an amount equal to two quarters of interest will then be required.

Upon executing the Term Loan Facility, the Company paid fees totaling $2.6 million. Upon modification of the Term Loan Facility, additional fees of $1.4 million were incurred. These fees were recorded as debt issuance cost and are being amortized over the life of the Term Loan Facility using the effective interest method. As of June 30, 2017, $1.9 million of the debt issuance costs remained unamortized.

Under the Term Loan Facility, the following events, among others, constitute events of default: EPNL failing to pay any amounts due within thirty days of the due date; bankruptcy, insolvency, liquidation or dissolution of EPNL; a material breach of the Term Loan Facility by EPNL that remains unremedied within thirty days of written notice by EPNL; or a representation or warranty of EPNL proves to have been incorrect or materially inaccurate when made. Upon any event of default, all outstanding principal and interest under any loans will become immediately due and payable. Further, Zenith has the right to review the terms and conditions of the Term Loan Facility.

During the six months ended June 30, 2017, the Company made payments of $0.2 million and nil for the principal repayment of the Naira portion of the loan and for the U.S. dollar principal, respectively.

As of June 30, 2017, the Company recognized an unrealized foreign currency gain of $4.6 million on the Naira portion of the loan, reducing the balance under the Term Loan Facility to $86.9 million, net of debt discount. Of this amount, $64.7 million was classified as long-term and $22.2 million as short-term. Accrued interest for the Term Loan Facility was $2.3 million as of June 30, 2017.

MCB Finance Facility and Related Agreements

On February 6, 2017, the Company and its subsidiary, EPNL, entered into a Pre-export Finance Facility Agreement (the “MCB Finance Facility”) with The Mauritius Commercial Bank Limited, as mandated lead arranger, agent, security agent, original lender and issuing bank ( “MCB”). The MCB Finance Facility provides for a total commitment of $100.0 million and is supported by a guarantee from The Standard Bank of South Africa Limited (“SBSA”), as named guarantor, which guarantee is facilitated by the South African Public Investment Corporation (SOC) Limited ("PIC"), the Company’s second largest shareholder. The PIC guarantee is made with recourse to the Company pursuant to the Company’s entry into the Financing Support Agreement with PIC (the "Financing Support Agreement").

In connection with the MCB Finance Facility, and as a condition precedent to the initial drawdown thereunder, EPNL entered into an exclusive off-take contract with Glencore dated January 18, 2017 (the “Off-take Contract”) for EPNL’s entire volumes of oil produced from the OMLs located offshore Nigeria. Pursuant to the MCB Finance Facility, EPNL is required to comply with the terms of the Off-take Contract, ensure payments and deliveries of oil and notify MCB of any failures under such contract and ensure that it receives a fair market price for delivered oil.

The MCB Finance Facility is supported by the SBSA guarantee as facilitated by PIC, the assignment of the Off-take Contract and the assignment by way of security of certain accounts, including a debt service reserve account, as set forth in the MCB Finance Facility. EPNL is required to deposit $10.0 million (see Note 2 – Restricted Cash) at the closing of the MCB Finance Facility into the debt service reserve account with MCB and maintain that balance for so long as borrowings are outstanding under the MCB Finance Facility. The aforementioned guarantee and security agreements were entered into by the parties thereto before the initial drawdown on the MCB Finance Facility.

EPNL may make drawdowns under the MCB Finance Facility by way of loans and/or letters of credit until June 30, 2017 after which the remaining balance of MCB's commitment as of that date may be drawn and deposited into a capital expenditure reserve account for payment of invoices expected to be payable within six months after June 30, 2017. Borrowings under the MCB Finance Facility bear interest at three-month LIBOR plus a 6% margin. Additionally the Company is required to pay an unused commitment fee of 2% per annum. After a grace period that ended on June 30, 2017, the MCB Finance Facility will be repaid over a period starting from June 30, 2017 and ending on December 31, 2019.

The MCB Finance Facility includes customary fees, including a commitment fee, structuring fee, underwriting fee, management fee, fees payable in respect of utilization of the MCB Finance Facility by way of letter of credit and other fees, and subjects EPNL to certain covenants under the terms of the MCB Finance Facility, and is subject to customary events of default.

The Company did not draw down the remaining Available Facility on June 30, 2017 as expected and is currently in discussions with MCB to amend the agreement.  The Company is seeking to extend the Availability period, including the Grace Period, as well as a revised repayment schedule.

The Company did not make principal and interest payments and commitment fees due on June 30, 2017. Also, on June 27, 2017, a vendor filed a suit against a wholly-owned subsidiary of the Company seeking an amount in excess of $10.0 million (see Note 9 - Commitments and Contingencies for further information). These constitute events of default under the MCB Finance Facility. In August 2017, the Company obtained a waiver of default on these events from MCB.

The Company made its initial drawdown under the MCB Finance Facility in March 2017 (the "March 2017 drawdown"). As part of the March 2017 drawdown, the Company incurred debt issuance costs amounting to $8.7 million. As of June 30, 2017, $7.7 million of the debt issuance costs remained unamortized, which is shown as a discount to Long-term debt under the consolidated balance sheet. As of June 30, 2017, the amount drawn under the MBC Finance Facility reached $24.4 million. Accrued interest and unused commitment fees under the MCB Finance Facility was $1.1 million as of June 30, 2017.

Under the MCB Finance Facility, the Company is required to maintain specified financial ratios. Maintenance of these financial ratios (the "cover ratios"), including a debt service cover ratio and a life cover ratio, commenced during the quarter after the initial drawdown. As of June 30, 2017, the Company is in compliance with the cover ratios.

Also on February 6, 2017, the Company and PIC also entered into the Financing Support Agreement. Pursuant to the Financing Support Agreement, PIC agrees to apply for, request and authorize SBSA, or any other reputable commercial bank acceptable to MCB, to issue a bank guarantee in favor of MCB in the amount of $100.0 million. The issuance of a guarantee in favor of MCB by SBSA or another reputable commercial bank was a condition precedent to the closing of the MCB Finance Facility.

In consideration for this undertaking, the Company has agreed to pay PIC an upfront fee equal to 250 basis points on the guarantee amount and issue to PIC warrants to purchase a number of shares of the Company’s common stock in an amount equal to the guarantee amount multiplied by 20% divided by the closing market price of the Company’s common stock on the day that EPNL receives the funds available under the MCB Finance Facility (the "warrants issuance date), with an exercise price equal to such closing market price. The Company recognized a derivative liability for the warrants that are expected to be issued for the portion of the amount drawn under the MCB Finance Facility at June 30, 2017. See Note 2 – Fair Value Measurements for further information. The Company also has agreed to indemnify PIC from and against certain claims and losses. The amount of any and all indemnifiable losses suffered by PIC agreed or otherwise required to be paid by the Company will be paid in cash or, at the option of PIC, may be paid in newly issued shares of the Company’s common stock. In March 2017, the Company paid $2.5 million to PIC in fees under the Financing Support Agreement which is recorded as debt issuance costs as discussed above and is being amortized to interest expense over the life of the MCB Financing Facility.

On February 8, 2017, and in connection with the MCB Finance Facility, the Company, EPNL, MCB and Zenith, the Company’s existing secured lender, also entered into an Override Deed (the “Override Deed”). The Override Deed establishes, inter alia, pro-rata rights of MCB and Zenith in respect of the proceeds from the Off-take Contract, governs the mechanics of any enforcement action by the creditors and sets out pro-rata sharing of enforcement proceeds between MCB and Zenith. The Override Deed also grants the necessary consents to EPNL’s entry into the MCB Finance Facility and related documents.

Long-Term Debt Maturities

Scheduled principal repayments on the outstanding balance on the Term Loan Facility and the MCB Finance Facility are as follows (in thousands):

Scheduled payments by year
Principal
2017
$
29,407

2018
23,541

2019
21,378

2020
26,724

2021 and thereafter
12,235

Total principal payments
113,285

Less: Unamortized debt issuance costs
(9,570
)
Total Term Loan Facility, net
$
103,715



Long-Term Debt – Related Party:

As of June 30, 2017, the Company’s long-term related party debt was $129.8 million, consisting of $24.9 million owed under a 2011 Promissory Note, $50.0 million owed under a 2014 Convertible Subordinated Note, $48.5 million, net of discount, owed under a 2015 Convertible Note, and $6.4 million owed under a 2016 Promissory Note.

Allied, a related party, was the holder of each of the 2011 Promissory Note, the 2014 Convertible Subordinated Note, and the 2015 Convertible Note (collectively the "Related Party Notes"). During the quarter ended June 30, 2017, Oltasho became the holder of each of the Related Party Notes. Please also see Note 1 - Company Description for changes in control in the Company during 2017.

Each of the Related Party Notes contains certain default and cross-default provisions, including failure to pay interest and principal amounts when due and default under other indebtedness. As of June 30, 2017, the Company was not in compliance with certain default provisions of the Related Party Notes with respect to the payment of quarterly interest. Further, the risk of cross-default exists for each of the Related Party Notes if the holder of the Term Loan Facility exercises its right to terminate the Term Loan Facility and accelerate its maturity. In July 2017, Oltasho has agreed to waive through their respective maturity dates its rights under all default provisions of each of the Related Party Notes.

2011 Promissory Note

EPNL, the Company's wholly owned subsidiary, has a $25.0 million borrowing facility under the 2011 Promissory Note. Interest accrues on the outstanding principal under the 2011 Promissory Note at a rate of the 30-day LIBOR plus 2% per annum, payable quarterly. In March 2017, the 2011 Promissory Note became convertible, at the sole option of the holder, into shares of the Company’s common stock at a conversion price of $3.415 per share. In July 2017, the 2011 Promissory Note was amended to extend the maturity date to December 2019. The entire $25.0 million facility amount can be utilized for general corporate purposes. The stock of the Company’s subsidiary that holds the exploration licenses in The Gambia and Kenya were pledged as collateral to secure the 2011 Promissory Note, pursuant to an Equitable Share Mortgage arrangement. As of June 30, 2017, the outstanding principal and accrued interest under the 2011 Promissory Note were $24.9 million and $2.0 million, respectively.

As referred to above, this Note was transferred to Oltasho during the three months ended June 30, 2017.

2014 Convertible Subordinated Note

As partial consideration in connection with the February 2014 acquisition of interests in Oil Mining Leases located offshore Nigeria from Allied, the Company issued a $50.0 million Convertible Subordinated Note in favor of Allied (the “2014 Convertible Subordinated Note”). Interest on the 2014 Convertible Subordinated Note accrues at a rate per annum of one-month LIBOR plus 5%, payable quarterly in cash until the maturity of the 2014 Convertible Subordinated Note five years from the acquisition date.

At the election of the holder, the 2014 Convertible Subordinated Note is convertible into shares of the Company’s common stock at an initial conversion price of $4.2984 per share, subject to anti-dilution adjustments. The 2014 Convertible Subordinated Note is subordinated to the Company’s existing and future senior indebtedness and is subject to acceleration upon an Event of Default (as defined in the 2014 Convertible Subordinated Note). The following events, among others, constitute an Event of Default under the 2014 Convertible Subordinated Note: the Company failing to pay interest within thirty days of the due date; the Company failing to pay principal when due; bankruptcy, insolvency, liquidation or dissolution of the Company; a material breach of the 2014 Convertible Subordinated Note by the Company that remains unremedied within ten days of such material breach; or a representation or warranty of the Company proves to have been incorrect or materially inaccurate when made. Upon any event of default, all outstanding principal and interest under any loans will become immediately due and payable. As of June 30, 2017, the Company owed $9.7 million in accrued interest under the 2014 Convertible Subordinated Note.

The Company may, at its option, prepay the 2014 Convertible Subordinated Note in whole or in part, at any time, without premium or penalty. Further, the 2014 Convertible Subordinated Note is subject to mandatory prepayment upon (i) the Company’s issuance of capital stock or incurrence of indebtedness, the proceeds of which the Company does not apply to repayment of senior indebtedness or (ii) any capital markets debt issuance to the extent the net proceeds of such issuance exceed $250.0 million. The holder may assign all or any part of its rights and obligations under the 2014 Convertible Subordinated Note to any person upon written notice to the Company. In July 2017, the 2014 Convertible Subordinated Note was amended to extend the maturity date to December 2019. As of June 30, 2017, the outstanding principal under the 2014 Convertible Subordinated Note was $50.0 million.

As referred to above, this Note was transferred to Oltasho during the three months ended June 30, 2017.

2015 Convertible Note

In March 2015, the Company entered into a borrowing facility with Allied in the form of a Convertible Note (the “2015 Convertible Note”), allowing the Company to borrow up to $50.0 million for general corporate purposes. In July 2017, the maturity date of the 2015 Convertible Note was extended to December 2019. Interest accrues at the rate of LIBOR plus 5%, and is payable quarterly. 

The 2015 Convertible Note is convertible into shares of the Company’s common stock upon the occurrence and continuation of an event of default, at the sole option of the holder. The number of shares issuable upon conversion is equal to the sum of the principal amount and the accrued and unpaid interest divided by the conversion price, defined as the volume weighted average of the closing sales prices on the NYSE MKT for a share of common stock for the five complete trading days immediately preceding the conversion date.

As of June 30, 2017, the Company had borrowed $48.5 million under the note and issued to Allied warrants to purchase approximately 2.7 million shares of the Company’s common stock at prices ranging from $2.00 to $7.85 per share. The total fair market value of the warrants amounting to $5.0 million based on the Black-Scholes option pricing model was recorded as a debt discount, and is being amortized using the effective interest method over the life of the note. As of June 30, 2017, the debt discount has been fully amortized.

Additional warrants are issuable in connection with future borrowings, with the per share price for those warrants determined based on the market price of the Company’s common stock at the time of such future borrowings. As of June 30, 2017, the outstanding balance of the 2015 Convertible Note, net of discount, was $48.5 million. Accrued interest on the 2015 Convertible Note was $6.5 million as of June 30, 2017.

As referred to above, this Note was transferred to Oltasho during the three months ended June 30, 2017.

2016 Promissory Note

In March 2016, the Company borrowed $3.0 million under a short-term Promissory Note agreement entered into with an entity related to the Company's majority shareholder, which accrued interest at a rate of the 30-day LIBOR plus 7% per annum.

In April 2016, the Company borrowed an additional sum of $1.0 million from the same lender, under another short-term Promissory Note, which also accrued interest at a rate of the 30-day LIBOR plus 7% per annum.

In May 2016, the Lender of the two Promissory Notes agreed to combine both notes into a $10.0 million borrowing facility (the "2016 Promissory Note"). Interest accrues at a rate of the 30-day LIBOR plus 7% per annum.

Subsequent to the combination of both notes into the 2016 Promissory Note, the Company had additional drawings under the 2016 Promissory Note totaling $2.4 million.

As of June 30, 2017, the outstanding balance under the 2016 Promissory Note was $6.4 million. Accrued interest on the 2016 Promissory Note was $0.7 million as of June 30, 2017. In March 2017, the 2016 Promissory Note became convertible, at the sole option of the holder, into shares of the Company’s common stock at a conversion price of $3.415 per share. In July 2017, the maturity date of the 2016 Promissory Note was extended to April 2023.
Related Party Transactions
Related Party Transactions
Related Party Transactions

Assets and Liabilities

The Company has transactions in the normal course of business with its shareholders, CEHL and their affiliates. Effective April 3, 2017, Oltasho became a majority shareholder of the Company and the holder the Related Party Notes. The following table sets forth the related party assets and liabilities as of June 30, 2017 and December 31, 2016:
(In thousands)
June 30, 
 2017
 
December 31, 2016
Accounts receivable
$
2,427

 
$
1,956

Accounts payable and accrued liabilities
$
32,708

 
$
29,513

Long-term notes payable - related party
$
129,812

 
$
129,796


As of June 30, 2017 and December 31, 2016, the related party receivable balances of $2.4 million and $2.0 million, respectively, were for advance payments made for certain transactions on behalf of affiliates.
As of June 30, 2017 and December 31, 2016, the Company owed $32.7 million and $29.5 million, respectively, to affiliates primarily for logistical and support services in relation to the Company's oilfield operations in Nigeria, as well as accrued interest on the various related party notes payable. As of June 30, 2017 and December 31, 2016, accrued and unpaid interest on the various related party notes payable was $19.2 million and $15.2 million, respectively.
As of June 30, 2017, the Company had a combined note payable balance of $129.8 million owed to Oltasho and an affiliate, consisting of a $50.0 million 2014 Convertible Subordinated Note, $24.9 million in borrowings under the 2011 Promissory Note, a $48.5 million borrowing under the 2015 Convertible Note, net of discount, and $6.4 million under the 2016 Promissory Note. As of December 31, 2016, the Company had a combined note payable balance of $129.8 million owed to affiliates, consisting of the $50.0 million 2014 Convertible Subordinated Note, $24.9 million in borrowings under the 2011 Promissory Note, $48.5 million borrowing under the 2015 Convertible Note, net of discount, and $6.4 million under the 2016 Promissory Note. See Note 7 – Debt for further information relating to the notes payable transactions.

Results from Operations

The table below sets forth a summary of transactions included in the Company's results of operations that were incurred with affiliates during the three and six months ended June 30, 2017 and 2016:
 
Three Months Ended June 30,
Six Months Ended June 30,
(In thousands)
2017
 
2016
2017
 
2016
Total operating expenses, CEHL
$
2,212

 
$
2,336

$
4,725

 
$
4,019

Interest expense, CEHL
$
2,010

 
$
1,786

$
3,947

 
$
3,462



Certain affiliates of the Company provide procurement and logistical support services to the Company’s operations. In connection therewith, during the three months ended June 30, 2017 and 2016, the Company incurred operating costs amounting to approximately $2.2 million and $2.3 million, respectively, and during the six months ended June 30, 2017 and 2016, the Company incurred operating costs amounting to approximately $4.7 million and $4.0 million, respectively.

During the three months ended June 30, 2017 and 2016, the Company incurred interest expense, excluding debt discount amortization, totaling approximately $2.0 million and $1.8 million, respectively, in relation to related party notes payable. During the six months ended June 30, 2017 and 2016, the Company incurred interest expense totaling approximately $3.9 million and $3.5 million, respectively.
Commitments and Contingencies
Commitments and Contingencies
Commitments and Contingencies

Commitments

In February 2014, a long-term contract was signed for the floating, production, storage, and offloading vessel (“FPSO”) Armada Perdana, which is the vessel currently connected to the Company’s productive wells, Oyo-7 and Oyo-8, offshore Nigeria. The contract provides for an initial term of seven years beginning January 1, 2014, with an automatic extension for an additional term of two years unless terminated by the Company with prior notice. The FPSO can process up to 40,000 barrels of liquid per day, with a storage capacity of approximately one million barrels. The annual minimum contractual commitment per the terms of the agreement is approximately $48.4 million per year through 2020.

The Company also has commitments related to four production sharing contracts with the Government of the Republic of Kenya (the “Kenya PSCs”), two Petroleum Exploration, Development & Production Licenses with the Republic of The Gambia (the “Gambia Licenses”), and one Petroleum Agreement with the Republic of Ghana (the "Ghana Petroleum Agreement"). In all cases, the Company entered into these commitments through a subsidiary. To maintain compliance and ownership, the Company is required to fulfill certain minimum work obligations and to make certain payments as stated in each of the Kenya PSCs, the Gambia Licenses, and the Ghana Petroleum Agreement. Among the Kenya PSCs in which the Company have remaining obligations, production sharing contracts related to offshore blocks L27 and L28 expired in February 2017, with the Company having no intention to renew or extend these leases. In June 2017, the Company farmed out 80% of its interest and operatorship of its offshore A2 and A5 blocks under the Gambia Licenses and will retain a 20% working interest in both blocks.  See Note 4 – Property, Plant and Equipment for further information relating to the Sale Agreement.

In March 2017, the Company entered into a drilling services contract with Pacific Drilling using the Pacific Bora drilling rig. The Company plans to use this rig to drill well Oyo-9 on the Oyo field in the deepwater offshore Nigeria. Under the contract, the Company has the option to drill up to two additional wells. The option to extend the contract, if exercised, would be used to drill two of its offshore Nigeria exploration prospects in the prolific Miocene geological zone. The Pacific Bora is a highly efficient sixth generation double-hulled drillship currently in Nigeria and was mobilized to the Oyo field and on site August 1, 2017. The contract provides for a base operating rate of $195,000 per day. The rig can be used for both drilling and well completion.

Contingencies

Legal Contingencies and Proceedings

From time to time, the Company may be involved in various legal proceedings and claims in the ordinary course of business. As of June 30, 2017, and through the filing date of this report, the Company does not believe the ultimate resolution of such actions or potential actions of which the Company is currently aware will have a material effect on its consolidated financial position or results of operations.

On January 22, 2016, a request for arbitration was filed with the London Court of International Arbitration by Transocean Offshore Gulf of Guinea VII Limited and Indigo Drilling Limited, as Claimants, against the Company and its Nigerian subsidiary, EPNL, as Respondents (the “Arbitration”). The Arbitration was in relation to a drilling contract entered into by the Claimants and EPNL, and a parent company guarantee provided by the Company in relation thereto. On July 19, 2017, the London Court of International Arbitration issued a “First Partial Final Award by Consent” (the “Consent Award”) in a proceeding between the Claimants and Respondents to resolve claims by the Claimants arising out of a contract for oilfield services done in relation to the Company's ordinary course of business. Pursuant to the Consent Award, the respondents are liable to pay Claimants approximately $14.0 million and NGN11.8 million.

On February 5, 2016, a class action and derivative complaint was filed in the Delaware Chancery Court purportedly on behalf of the Company and on behalf of a putative class of persons who were stockholders as of the date the Company (1) acquired interests in Oil Mining Leases located offshore Nigeria from Allied pursuant to the Transfer Agreement and (2) issued shares to PIC in a private placement (collectively the “February 2014 Transactions”). The complaint alleges the February 2014 Transactions were unfair to the Company and purports to assert derivative claims against (1) the seven individuals who served on our Board at the time of the February 2014 Transactions and (2) our then majority shareholder, CEHL. The complaint also purports to assert a direct breach of fiduciary duty claim on behalf of the putative class against the seven individuals who served on our Board at the time of the February 2014 Transactions on the grounds that they purportedly caused the Company to disseminate a false and misleading proxy statement in connection with the February 2014 Transactions, and a direct claim for aiding and abetting against Dr. Kase Lawal, the former Executive Chairman of the Board of Directors and Chief Executive Officer of the Company. The plaintiff is seeking, on behalf of the Company and the putative class, an undisclosed amount of compensatory damages. The Company is named solely as a nominal defendant against whom the plaintiff seeks no recovery.  On March 3, 2016, all of the defendants, including the Company, filed motions to dismiss the complaint, which motions were heard on January 18, 2017. The plaintiffs filed a motion to supplement their petition to include a claim relating to what Allied paid or did not pay Nigerian Agip Exploration Limited for the asset. On May 23, 2017, the court granted plaintiffs’ motion to supplement petition.

On June 27, 2017, BGP Kenya Limited ("BGP") filed suit against EEKL in the High Court of Kenya. BGP is seeking approximately $12.2 million, which includes interest of approximately $2.7 million for allegedly unpaid amounts in connection with BGP’s performance of seismic services in Kenya done in relation to the Company's ordinary course of business. EEKL is contesting the proceedings.

On July 13, 2017, Multiplan Nigeria Limited ("Mulitiplan") entered into a settlement agreement and release (the “Multiplan Settlement Agreement”) with EPNL for $3.0 million, to resolve claims by Multiplan for work done in relation to the Company's ordinary course of business. As a result thereof, the Company decreased its accounts payable and accrued liabilities by $0.2 million with a corresponding decrease to its oil and gas properties as of June 30, 2017.  As part of the Multiplan Settlement Agreement, the Company paid $1.0 million to Multiplan in July 2017, and all remaining amounts claimed by Mulitiplan are due to be discharged by EPNL prior to the end of 2017.

On July 14, 2017, Aker Solutions Inc. ("Aker") entered into a settlement agreement and release (the “Aker Settlement Agreement”) with EPNL for $2.5 million, to resolve claims by Aker for work done in relation to the Company's ordinary course of business. As a result thereof, the Company decreased its accounts payable and accrued liabilities by $10.2 million with a corresponding decrease to its oil and gas properties as of June 30, 2017.  As part of the Aker Settlement Agreement, EPNL paid $1.0 million to Aker in July 2017, and all remaining amounts claimed by Aker are due to be discharged by EPNL prior to the end of 2017.

Unrecognized Loss Contingency

As of June 30, 2017, the Company has not accrued penalty and interest related to certain outstanding transactional tax obligations in Nigeria, including withholding taxes, value-added taxes, Nigerian Oil and Gas Industry Content Development Act (NCD) tax, Cabotage taxes, and Niger Delta Development Corporation taxes (NDDC). As of the date of this report, the Company believes that, based on its experience with local practices in Nigeria, the likelihood of being assessed penalty and interest is reasonably possible, with an estimated liability up to $20.3 million.

Contingency under the Allied Transfer Agreement

As provided for under the Transfer Agreement with Allied, the Company is required to make the following additional payments upon the occurrence of certain future events: (i) $25.0 million cash or the equivalent in shares of the Company’s common stock within fifteen days following the approval of a development plan by the Nigerian Department of Petroleum Resources ("DPR") with respect to a first new discovery of hydrocarbons in a non-Oyo field area; and (ii) $25.0 million cash or the equivalent in shares of the Company’s common stock within fifteen days starting from the commencement of the first hydrocarbon production in commercial quantities in a non-Oyo field area. The number of shares to be issued shall be determined by calculating the average closing price of the Company’s common stock over a period of thirty days, counted back from the first business day immediately prior to the approval of a development plan by DPR or the date of the first hydrocarbon production in commercial quantities, as applicable.

Contingency under the 2015 Convertible Note

As part of the condition to the extension of the maturity date of the 2015 Convertible Note, which extension was entered into in March 2016, the Company is required to (i) pay to Allied an amount equal to ten percent (10%) towards existing liabilities of any successful debt fundraising event completed during the remaining term of the 2015 Convertible Note; and (ii) pay to Allied an amount equal to twenty percent (20%) towards existing liabilities of any successful equity fundraising event completed during the remaining term of the 2015 Convertible Note. Despite the 2015 Convertible Note being transferred to Oltasho (See Note 7 - Debt) the amounts due under the provision of this extension remain due to Allied. The execution of the MCB Financing Facility in February 2017 triggered item (i) above of which a payment is due to Allied under these provisions.
Stock-Based Compensation
Stock-Based Compensation
Stock-Based Compensation

Stock Options

The table below sets forth a summary of stock option activity for the six months ended June 30, 2017.

 
  Shares
Underlying
Options
(In Thousands)
 
Weighted-Average
Exercise Price
 
Weighted-Average
Remaining
Contractual Term
(Years)
Outstanding at December 31, 2016
1,147

 
$2.54
 
2.0
Granted
733

 
$2.25
 
1.0
Exercised
(367
)
 
$1.84
 
—
Forfeited
(639
)
 
$2.69
 
—
Expired
—

 
$—
 
—
Outstanding at June 30, 2017
874

 
$2.48
 
1.5
Expected to vest
133

 
$1.80
 
4.9
Exercisable at June 30, 2017
741

 
$2.60
 
0.9


During the six months ended June 30, 2017, the Company issued 114,416 shares of common stock as a result of the exercise of stock options, all of which were issued as a result of the cashless exercise of 367,039 options. Also, during the six months ended June 30, 2017, options to purchase 638,891 shares were forfeited and no options to purchase shares of common stock expired.

The estimated fair value of stock options granted during the six months ended June 30, 2017 was approximately $0.9 million, and was computed using the Black-Scholes option pricing model.

Stock Warrants

The table below sets forth a summary of stock warrant activity for the six months ended June 30, 2017.

 
  Shares
Underlying
Warrants
(In Thousands)
 
Weighted-Average
Exercise Price
 
Weighted-Average
Remaining
Contractual Term
(Years)
Outstanding at December 31, 2016
2,983

 
$3.59
 
3.2
Granted
—

 
$—
 
—
Exercised
—

 
$—
 
—
Forfeited
—

 
$—
 
—
Expired
—

 
$—
 
—
Outstanding at June 30, 2017
2,983

 
$3.59
 
2.7
Expected to vest
—

 
$—
 
—
Exercisable at June 30, 2017
2,983

 
$3.59
 
2.7


Restricted Stock Awards

The table below sets forth a summary of restricted stock awards (“RSAs”) activity for the six months ended June 30, 2017.

 
 Shares
(In Thousands)
 
Weighted-Average
Grant Date Price Per Share
Non-vested at December 31, 2016
2,072

 
$
2.25

Granted
1,114

 
$
3.00

Vested
(1,032
)
 
$
2.38

Forfeited
(745
)
 
$
2.98

Non-vested as of June 30, 2017
1,409

 
$
2.37



During the six months ended June 30, 2017, the Company granted officers, directors, and employees a total of approximately 1.1 million shares of restricted common stock, including 0.2 million performance-based restricted stock awards ("PBRSA"), with vesting periods varying from immediate vesting to 36 months. During the same period, 0.7 million shares of restricted common stock were forfeited.

The fair value of RSAs granted during the six months ended June 30, 2017 was approximately $3.3 million.

With regards to the PBRSA, each grant will vest if the individuals remain employed three years from the date of grant and the Company achieves specific performance objectives at the end of the designated performance period. Up to 50% additional shares may be awarded if performance objectives are exceeded. None of the PBRSAs will vest if certain minimum performance goals are not met. The performance conditions are based on the Company’s total shareholder return over the performance period compared to an industry peer group of companies. Total estimated compensation expense is $0.1 million over three years.
Segment Information
Segment Information
Segment Information
The Company’s current operations are based in Nigeria, Kenya, The Gambia, and Ghana. Management reviews and evaluates the operations of each geographic segment separately. Operations include exploration for and production of hydrocarbons where commercial reserves have been found and developed. Revenues and expenditures are recognized at the relevant geographical location. The Company evaluates each segment based on operating income (loss). 

Segment activity for the three and six months ended June 30, 2017 and 2016 are as follows:

(In thousands) 
Nigeria
 
Kenya
 
The Gambia
 
Ghana
 
Corporate and Other
 
Total
Three months ended June 30,
 
 
 
 
 
 
 
 
 
 
 
2017
 
 
 
 
 
 
 
 
 
 
 
Revenues
$
14,588

 
$
—

 
$
—

 
$
—

 
$
—

 
$
14,588

Operating loss
$
(87,042
)
 
$
(975
)
 
$
(221
)
 
$
(176
)
 
$
(2,917
)
 
$
(91,331
)
2016
 
 
 
 
 
 
 
 
 
 
 
Revenues
$
23,151

 
$
—

 
$
—

 
$
—

 
$
—

 
$
23,151

Operating loss
$
(23,294
)
 
$
(509
)
 
$
(249
)
 
$
(232
)
 
$
(2,915
)
 
$
(27,199
)
 
 
 
 
 
 
 
 
 
 
 
 
Six months ended June 30,
 
 
 
 
 
 
 
 
 
 
 
2017
 
 
 
 
 
 
 
 
 
 
 
Revenues
$
45,866

 
$
—

 
$
—

 
$
—

 
$
—

 
$
45,866

Operating loss
$
(107,715
)
 
$
(1,295
)
 
$
(550
)
 
$
(1,013
)
 
$
(5,851
)
 
$
(116,424
)
2016
 
 
 
 
 
 
 
 
 
 
 
Revenues
$
28,080

 
$
—

 
$
—

 
$
—

 
$
—

 
$
28,080

Operating loss
$
(46,454
)
 
$
(1,051
)
 
$
(523
)
 
$
(1,118
)
 
$
(6,346
)
 
$
(55,492
)
Total assets by segment as of June 30, 2017 and December 31, 2016, are as follows:
(In thousands)
Nigeria
 
Kenya
 
The Gambia
 
Ghana
 
Corporate and Other
 
Total
Total Assets
 
 
 
 
 
 
 
 
 
 
 
As of June 30, 2017
$
180,894

 
$
54

 
$
4,173

 
$
4,338

 
$
1,472

 
$
190,931

As of December 31, 2016
$
281,050

 
$
698

 
$
3,034

 
$
3,648

 
$
771

 
$
289,201

Basis of Presentation and Recently Issued Accounting Standards (Policies)
Basis of Presentation 
The accompanying unaudited consolidated financial statements include the accounts of the Company and its wholly-owned and majority-owned direct and indirect subsidiaries, and have been prepared in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”) pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). All significant intercompany transactions and balances have been eliminated in consolidation. The unaudited consolidated financial statements reflect all adjustments that are, in the opinion of management, necessary for a fair presentation of the consolidated financial position and results of operations for the indicated periods. All such adjustments are of a normal recurring nature. This Form 10-Q should be read in conjunction with our audited consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2016, filed with the SEC on March 16, 2017.
Use of Estimates 
The preparation of the Company's consolidated financial statements in conformity with U.S. GAAP requires management to make estimates based on certain assumptions. Estimates affect the reported amounts of assets and liabilities, disclosure of contingent liabilities, and the reported amounts of revenues and expenses attributable to the reporting periods. Accordingly, accounting estimates in conformity with U.S. GAAP require the exercise of judgment. These estimates and assumptions used in the preparation of the Company’s consolidated financial statements are based on information available as of the date of the consolidated financial statements, and while management believes that the estimates and assumptions are appropriate, actual results could differ from management's estimates.
 
Estimates that may have a significant effect on the Company’s financial position and results from operations include share-based compensation assumptions, oil and natural gas reserve quantities, impairments, depletion and amortization relating to oil and natural gas properties, asset retirement obligation assumptions, calculations related to derivative liabilities, and income taxes. The accounting estimates used in the preparation of the Company's consolidated financial statements may change as new events occur, more experience is acquired, additional information is obtained and our operating environment changes.
Restricted Cash 
Restricted cash consists of cash deposits that are contractually restricted for withdrawal or required to be maintained in a reserve bank account for a specific period of time, as provided for under certain agreements with third parties.
Capitalized Interest 
The Company capitalizes interest costs for qualifying oil and gas properties. The capitalization period begins when expenditures are incurred on qualified properties, activities begin which are necessary to prepare the property for production, and interest costs have been incurred. The capitalization period continues as long as these events occur. Capitalized interest is added to the cost of the underlying assets and is depleted using the unit-of-production method in the same manner as the underlying assets.
Net Loss Per Common Share 
Basic net earnings or loss per common share is computed by dividing net earnings or loss by the weighted average number of shares of common stock outstanding at the end of the reporting period. Diluted net earnings or loss per share is computed by dividing net earnings or loss by the fully dilutive common stock equivalent, which consists of shares outstanding, augmented by potentially dilutive shares issuable upon the exercise of the Company's stock options, stock warrants, non-vested restricted stock awards, as well as the conversions of the 2011 Promissory Note, the 2014 Convertible Subordinated Note and the 2016 Promissory Note (collectively, the "Convertible Notes"), calculated using the treasury stock method.
Fair Value Measurements 
Fair value is defined as the amount at which an asset (or liability) could be bought (or incurred) or sold (or settled) in an orderly transaction between market participants at the measurement date. The established framework for measuring fair value establishes a fair value hierarchy based on the quality of inputs used to measure fair value, and includes certain disclosure requirements. Fair value estimates are based on either (i) actual market data or (ii) assumptions that other market participants would use in pricing an asset or liability, including estimates of risk.

There are three levels of valuation hierarchy for disclosure of fair value measurements. The valuation hierarchy categorizes assets and liabilities measured at fair value into one of three different levels depending on the observability of the inputs employed in the measurement. The three levels are defined as follows:

Level 1 -
Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. The Company considers active markets as those in which transactions for the assets or liabilities occur in sufficient frequency and volume to provide pricing information on an on-going basis.

Level 2 -
Quoted prices in markets that are not active, or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability. Substantially all of these inputs are observable in the marketplace throughout the term, can be derived from observable data, or supported by observable levels at which transactions are executed in the marketplace.

Level 3 -
Inputs that are unobservable and significant to the fair value measurement (including the Company’s own assumptions in determining fair value).

The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability.

Fair Value on a Recurring Basis

The Company used discounted cash flow techniques to determine the estimated fair value of its oil and gas properties as part of the Company's analysis for impairment. Accordingly, the Company estimated the present value of expected future net cash flows from the Oyo field, discounted using risk-adjusted cost of capital. Significant Level 3 assumptions used in the calculation include the Company's estimate of future crude oil prices, production costs, development costs, and anticipated production of proved reserves, as well as appropriate risk-adjusted probable and possible reserves.

As discussed under Note 7 - Debt, the Company recognized a derivative liability relating to the portion of the amount drawn from the MCB Financing Facility as of June 30, 2017 in which issuance of stock warrants is expected on the day the Company receives funds under the MCB Finance Facility. The Company utilized a combination of a lattice-binomial option-pricing model and the Black-Scholes valuation model to determine the estimated fair value of this derivative liability.
Recently Issued Accounting Standards 
In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842). ASU 2016-02 is aimed at making leasing activities more transparent and comparable, and requires substantially all leases be recognized by lessees on their balance sheet as a right-of-use asset and corresponding lease liability, including leases currently accounted for as operating leases. ASU 2016-02 is effective for the Company in the fiscal year beginning after December 15, 2018, and interim periods within those fiscal years with early adoption permitted. The Company is still evaluating the impact of this standard. However, due to the nature of its operations, the adoption of this standards update could have a material impact on its consolidated financial statements.

In January 2017, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business (“ASU 2017-01”). This ASU clarifies the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. This guidance is to be applied using a prospective method and is effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2017. Early adoption is permitted. The adoption of this standards update is not expected to have a material impact on the Company’s consolidated financial statements.

In January 2017, the FASB issued ASU 2017-04, Simplifying the Test for Goodwill Impairment. ASU 2017-04 eliminates step 2 of the goodwill impairment test. An entity no longer will determine goodwill impairment by calculating the implied fair value of goodwill by assigning the fair value of a reporting unit to all of its assets and liabilities as if that reporting unit had been acquired in a business combination. A goodwill impairment will now be the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. ASU 2017-04 is effective for annual reporting periods and interim reporting periods within those annual reporting periods, beginning after December 15, 2019. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The adoption of this standards update is not expected to have a material impact on the Company’s consolidated financial statements.

In February 2017, the FASB issued ASU 2017-05, Other Income-Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20): Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets. This ASU clarifies the scope and application of ASC 610-20 on the sale or transfer of nonfinancial assets and in substance nonfinancial assets to noncustomers, including partial sales. The Company is required to adopt this guidance at the same time that it adopts the guidance in ASU 2014-09. The adoption of this standards update is not expected to have a material impact on the Company’s consolidated financial statements.

In March 2017, the FASB has issued ASU 2017-08, Receivables-Nonrefundable Fees and Other Costs (Subtopic 310-20), Premium Amortization on Purchased Callable Debt Securities. This ASU shortens the amortization period for certain callable debt securities held at a premium to the earliest call date. However, the amendments do not require an accounting change for securities held at a discount; the discount continues to be amortized to maturity. ASU 2017-08 is effective for the Company in the fiscal year beginning after December 15, 2018, and interim periods within those fiscal years, with early adoption permitted. The adoption of this standards update is not expected to have a material impact on the Company’s consolidated financial statements.

In May 2017, the FASB issued ASU 2017-09, Compensation - Stock Compensation (Topic 718): Scope of Modification Accounting, which provides guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting in Topic 718. This pronouncement is effective for annual reporting periods beginning after December 15, 2017. Early adoption is permitted. The adoption of this standards update is not expected to have a material impact on the Company’s consolidated financial statements.

In May 2017, the FASB issued ASU No. 2017-10, Service Concession Arrangements (Topic 853): Determining the Customer of the Operation Services. ASU No. 2017-10 provides clarity on determining the customer in a service concession arrangement. ASU No. 2017-10 is effective for interim and annual periods beginning after December 15, 2017, and the Company will adopt this standards update, as required, beginning with the first quarter of 2018. The adoption of this standards update is not expected to have a material impact on the Company’s consolidated financial statements.
Basis of Presentation and Recently Issued Accounting Standards (Tables)
Schedule of Shares Withholding and Repurchases of Common Stock 
The following table sets forth certain information with respect to the withholding and related repurchases of our common stock during the six months ended June 30, 2017.

 
Total Number of
Shares Purchased (1)
 
Average Price
Paid Per Share
January 1 - January 31, 2017
12,650

 
$
3.55

February 1 - February 28, 2017
158,264

 
3.82

March 1 - March 31, 2017
—

 
—

May 1 - May 31, 2017
33,635

 
1.75

Total
204,549

 
$
3.46


(1)
All shares repurchased were surrendered by employees to settle tax withholding obligations upon the vesting of restricted stock awards and the exercise of stock options. The price paid was the closing price on the dates in which the shares of common stock vested or when the stock options were exercised.
Antidilutive Securities Excluded from Computation of Earnings Per Share 
The table below sets forth the number of stock options, stock warrants, non-vested restricted stock, and shares issuable upon conversion of the Convertible Notes that were excluded from dilutive shares outstanding during the three and six months ended June 30, 2017 and 2016, respectively, as these securities are anti-dilutive because the Company was in a loss position during each period.

 
Three Months Ended June 30,
Six Months Ended June 30,
(In thousands)
2017
 
2016
2017
 
2016
Stock options
22

 
183

167

 
250

Stock warrants
—

 
1

49

 
—

Unvested restricted stock awards
1,760

 
1,993

1,937

 
1,769

 
1,782

 
2,177

2,153

 
2,019

Schedule of Financial Assets and Liabilities Measured on Recurring Basis 
The following table sets forth the Company’s oil and gas properties and derivative liability that is accounted for at fair value using Level 3 assumptions on a recurring basis as of June 30, 2017 and December 31, 2016:

 
Level 3
(in thousands)
June 30, 2017
 
December 31, 2016
Assets:
 
 
 
Value of oil and gas properties (1)
$
95,519

 
$
—

Liabilities:
 
 
 
Derivative liability
$
656

 
$
—


(1
)
This represents non-financial assets that are measured at fair value on a non-recurring basis due to impairments. This is the fair value of the asset base that was subjected to impairment and does not reflect the entire asset balance as presented on the accompanying unaudited balance sheets. Please see Note 4. — Property, Plant and Equipment for further information. Amounts included here are presented only in periods where an impairment has occurred.
Schedule of Fair Value Liability Valuation Assumptions 
The fair value of the derivative liability is estimated using a combination of a lattice-binomial option-pricing model and the Black-Scholes valuation model with the following assumptions as of June 30, 2017:

 
June 30, 2017
Estimated market value of common stock on measurement date
$
1.5

Estimated exercise price
$
1.5

Risk-free interest rate (1)
1.55
%
Expected warrant term (years)
3

Expected volatilities (2)
10.0% - 38.8%

Expected annual dividend yield
—

(1
)
The risk-free rate for periods within the contractual life of the warrants is based on the U.S. Treasury yield curve in effect at the time of grant.
(2
)
Expected volatilities are based on historical volatility of the Oil & Gas Exploration & Production Select Industries Index, among other factors.

Reconciliation of Changes in Fair Value of Liabilities 
The following table sets forth a reconciliation of changes in the fair value of the Company's financial liability that is accounted for at fair value using Level 3 classified as level 3 in the fair value hierarchy:

 
Significant Unobservable Inputs (Level 3)
 
Three Months Ended
 
Six Months Ended
(in thousands)
June 30, 2017
 
June 30, 2017
Beginning balance
$
807

 
$
—

Gain on fair value of derivative liability
(36
)
 
(36
)
Additions
96

 
903

Revisions
(211
)
 
(211
)
Transfers
—

 
—

Ending balance
$
656

 
$
656

 
 
 
 
Change in unrealized gains included in earnings relating to derivatives still held as of June 30, 2017
$
(36
)
 
$
(36
)
Property, Plant and Equipment (Tables)
Property, Plant and Equipment
Property, plant and equipment were comprised of the following:
(In thousands)
June 30, 
 2017
 
December 31, 2016
Wells and production facilities
$
308,986

 
$
318,739

Proved properties
386,196

 
386,196

Work in progress and exploration inventory
44,225

 
34,712

Oilfield assets
739,407

 
739,647

Accumulated depletion
(599,663
)
 
(483,754
)
Oilfield assets, net
139,744

 
255,893

Unevaluated leaseholds
6,200

 
9,820

Oil and gas properties, net
145,944

 
265,713

 
 
 
 
Other property and equipment
2,878

 
3,040

Accumulated depreciation
(2,397
)
 
(2,324
)
Other property and equipment, net
481

 
716

 
 
 
 
Total property, plant and equipment, net
$
146,425

 
$
266,429

Accounts Payable and Accrued Liabilities (Tables)
Schedule of Accounts Payable and Accrued Liabilities
The table below sets forth a summary of the Company’s accounts payable and accrued liabilities at June 30, 2017 and December 31, 2016:
(In thousands)
June 30, 
 2017
 
December 31, 2016
Accounts payable - vendors
$
177,171

 
$
173,306

Amounts due to government entities
67,843

 
66,573

Accrued payroll and benefits
1,377

 
3,074

Accrued interest
3,455

 
1,204

Other liabilities
—

 
806

 
$
249,846

 
$
244,963

Asset Retirement Obligations (Tables)
Summary of Changes in Asset Retirement Obligations
The following summarizes changes in the Company’s asset retirement obligations during the six months ended June 30, 2017 (in thousands):

Balance at January 1, 2017
$
22,476

Accretion expense
945

Balance at June 30, 2017
$
23,421

Debt (Tables)
Schedule of Maturities of Long-term Debt
Scheduled principal repayments on the outstanding balance on the Term Loan Facility and the MCB Finance Facility are as follows (in thousands):

Scheduled payments by year
Principal
2017
$
29,407

2018
23,541

2019
21,378

2020
26,724

2021 and thereafter
12,235

Total principal payments
113,285

Less: Unamortized debt issuance costs
(9,570
)
Total Term Loan Facility, net
$
103,715

Related Party Transactions (Tables)
Summary of Related Party Transactions and Balances
The following table sets forth the related party assets and liabilities as of June 30, 2017 and December 31, 2016:
(In thousands)
June 30, 
 2017
 
December 31, 2016
Accounts receivable
$
2,427

 
$
1,956

Accounts payable and accrued liabilities
$
32,708

 
$
29,513

Long-term notes payable - related party
$
129,812

 
$
129,796

The table below sets forth a summary of transactions included in the Company's results of operations that were incurred with affiliates during the three and six months ended June 30, 2017 and 2016:
 
Three Months Ended June 30,
Six Months Ended June 30,
(In thousands)
2017
 
2016
2017
 
2016
Total operating expenses, CEHL
$
2,212

 
$
2,336

$
4,725

 
$
4,019

Interest expense, CEHL
$
2,010

 
$
1,786

$
3,947

 
$
3,462

Stock-Based Compensation (Tables)
Restricted Stock and Restricted Stock Units Activity 
The table below sets forth a summary of restricted stock awards (“RSAs”) activity for the six months ended June 30, 2017.

 
 Shares
(In Thousands)
 
Weighted-Average
Grant Date Price Per Share
Non-vested at December 31, 2016
2,072

 
$
2.25

Granted
1,114

 
$
3.00

Vested
(1,032
)
 
$
2.38

Forfeited
(745
)
 
$
2.98

Non-vested as of June 30, 2017
1,409

 
$
2.37

Schedule of Share-based Compensation 
The table below sets forth a summary of stock warrant activity for the six months ended June 30, 2017.

 
  Shares
Underlying
Warrants
(In Thousands)
 
Weighted-Average
Exercise Price
 
Weighted-Average
Remaining
Contractual Term
(Years)
Outstanding at December 31, 2016
2,983

 
$3.59
 
3.2
Granted
—

 
$—
 
—
Exercised
—

 
$—
 
—
Forfeited
—

 
$—
 
—
Expired
—

 
$—
 
—
Outstanding at June 30, 2017
2,983

 
$3.59
 
2.7
Expected to vest
—

 
$—
 
—
Exercisable at June 30, 2017
2,983

 
$3.59
 
2.7
Schedule of Share-based Compensation 
The table below sets forth a summary of stock option activity for the six months ended June 30, 2017.

 
  Shares
Underlying
Options
(In Thousands)
 
Weighted-Average
Exercise Price
 
Weighted-Average
Remaining
Contractual Term
(Years)
Outstanding at December 31, 2016
1,147

 
$2.54
 
2.0
Granted
733

 
$2.25
 
1.0
Exercised
(367
)
 
$1.84
 
—
Forfeited
(639
)
 
$2.69
 
—
Expired
—

 
$—
 
—
Outstanding at June 30, 2017
874

 
$2.48
 
1.5
Expected to vest
133

 
$1.80
 
4.9
Exercisable at June 30, 2017
741

 
$2.60
 
0.9
Segment Information (Tables)
Schedule of Segment Activity
Segment activity for the three and six months ended June 30, 2017 and 2016 are as follows:

(In thousands) 
Nigeria
 
Kenya
 
The Gambia
 
Ghana
 
Corporate and Other
 
Total
Three months ended June 30,
 
 
 
 
 
 
 
 
 
 
 
2017
 
 
 
 
 
 
 
 
 
 
 
Revenues
$
14,588

 
$
—

 
$
—

 
$
—

 
$
—

 
$
14,588

Operating loss
$
(87,042
)
 
$
(975
)
 
$
(221
)
 
$
(176
)
 
$
(2,917
)
 
$
(91,331
)
2016
 
 
 
 
 
 
 
 
 
 
 
Revenues
$
23,151

 
$
—

 
$
—

 
$
—

 
$
—

 
$
23,151

Operating loss
$
(23,294
)
 
$
(509
)
 
$
(249
)
 
$
(232
)
 
$
(2,915
)
 
$
(27,199
)
 
 
 
 
 
 
 
 
 
 
 
 
Six months ended June 30,
 
 
 
 
 
 
 
 
 
 
 
2017
 
 
 
 
 
 
 
 
 
 
 
Revenues
$
45,866

 
$
—

 
$
—

 
$
—

 
$
—

 
$
45,866

Operating loss
$
(107,715
)
 
$
(1,295
)
 
$
(550
)
 
$
(1,013
)
 
$
(5,851
)
 
$
(116,424
)
2016
 
 
 
 
 
 
 
 
 
 
 
Revenues
$
28,080

 
$
—

 
$
—

 
$
—

 
$
—

 
$
28,080

Operating loss
$
(46,454
)
 
$
(1,051
)
 
$
(523
)
 
$
(1,118
)
 
$
(6,346
)
 
$
(55,492
)
Total assets by segment as of June 30, 2017 and December 31, 2016, are as follows:
(In thousands)
Nigeria
 
Kenya
 
The Gambia
 
Ghana
 
Corporate and Other
 
Total
Total Assets
 
 
 
 
 
 
 
 
 
 
 
As of June 30, 2017
$
180,894

 
$
54

 
$
4,173

 
$
4,338

 
$
1,472

 
$
190,931

As of December 31, 2016
$
281,050

 
$
698

 
$
3,034

 
$
3,648

 
$
771

 
$
289,201

Company Description (Details)
0 Months Ended
Jun. 30, 2017
sqkm
Jun. 30, 2017
acre
license
country
Jun. 30, 2017
Allied Energy Plc
Apr. 3, 2017
Allied Energy Plc
Jun. 30, 2017
CAMAC International (Nigeria) Ltd.
Apr. 13, 2017
CAMAC International (Nigeria) Ltd.
Jul. 5, 2017
Scenario, Forecast
Dr. Lawal
Jul. 5, 2017
Scenario, Forecast
Dr. Lawal
Schedule of Equity Method Investments [Line Items]
 
 
 
 
 
 
 
 
Number of exploration and production licenses
7 
7 
 
 
 
 
 
 
Number of countries company operates in Africa
4 
4 
 
 
 
 
 
 
Area of land held for exploration activities (in acres and square kilometers)
19,000 
5,000,000 
 
 
 
 
 
 
Shares transferred
 
 
 
116,108,833 
 
1,515,927 
 
 
Shares transferred, voting interest outstanding
54.60% 
54.60% 
53.90% 
 
0.70% 
 
 
 
Shares transferred, voting interest transferred
 
 
 
 
 
 
 
117,624,760 
Voting percentage owned
 
 
 
 
 
 
 
54.60% 
Voting agreement term (in years)
 
 
 
 
 
 
10 years 
 
Basis of Presentation and Recently Issued Accounting Standards - Narrative (Details) (USD $)
6 Months Ended
Jun. 30, 2017
Jun. 30, 2016
Dec. 31, 2016
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
 
 
 
Restricted cash
$ 12,600,000 
 
$ 2,600,000 
Interest costs capitalized
500,000 
0 
 
Shares withheld for taxes (in shares)
204,549 
84,185 
 
Payments for treasury stock arising from withholding taxes
700,000 
192,000 
 
Allied
 
 
 
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
 
 
 
Contingent additional payment under transfer agreement (up to)
50,000,000 
 
 
Term Loan Facility
 
 
 
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
 
 
 
Restricted cash
2,600,000 
 
2,600,000 
MCB Finance Facility, Debt Service Reserve
 
 
 
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
 
 
 
Restricted cash
$ 10,000,000 
 
 
Basis of Presentation and Recently Issued Accounting Standards - Shares Withholding and Repurchases of Common Stock (Details) (USD $)
6 Months Ended 1 Months Ended 1 Months Ended
Jun. 30, 2017
Jun. 30, 2016
Jan. 31, 2016
January 1 - January 31, 2017
Feb. 29, 2016
February 1 - February 28, 2017
Mar. 31, 2016
March 1 - March 31, 2017
Mar. 31, 2017
March 1 - March 31, 2017
May 31, 2017
May 1 - May 31, 2017
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
 
 
 
 
Total number of shares purchased (in shares)
204,549 
84,185 
12,650 
158,264 
0 
 
33,635 
Average price paid per share (in dollars per share)
$ 3.46 
 
$ 3.55 
$ 3.82 
 
$ 0.00 
$ 1.75 
Basis of Presentation and Recently Issued Accounting Standards - Antidilutive Shares (Details)
In Thousands, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2017
Jun. 30, 2016
Jun. 30, 2017
Jun. 30, 2016
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
 
 
 
 
Antidilutive securities
1,782 
2,177 
2,153 
2,019 
Stock options
 
 
 
 
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
 
 
 
 
Antidilutive securities
22 
183 
167 
250 
Stock warrants
 
 
 
 
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
 
 
 
 
Antidilutive securities
0 
1 
49 
0 
Unvested restricted stock awards
 
 
 
 
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
 
 
 
 
Antidilutive securities
1,760 
1,993 
1,937 
1,769 
Basis of Presentation and Recently Issued Accounting Standards - Schedule of Liabilities on Recurring Basis (Details) (Level 3, Recurring, USD $)
In Thousands, unless otherwise specified
Jun. 30, 2017
Dec. 31, 2016
Level 3 |
Recurring
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Value of oil and gas properties
$ 95,519 
$ 0 
Derivative liability
$ 656 
$ 0 
Basis of Presentation and Recently Issued Accounting Standards - Schedule of Fair Value Liability Assumptions (Details) (Recurring, Level 3, USD $)
6 Months Ended
Jun. 30, 2017
Fair Value Inputs, Liabilities, Quantitative Information [Line Items]
 
Estimated market value of common stock on measurement date (usd per share)
$ 1.5 
Estimated exercise price (usd per share)
$ 1.5 
Risk-free interest rate
1.55% 
Expected warrant term (years)
3 years 
Expected annual dividend yield
0.00% 
Minimum
 
Fair Value Inputs, Liabilities, Quantitative Information [Line Items]
 
Expected volatilities
10.00% 
Maximum
 
Fair Value Inputs, Liabilities, Quantitative Information [Line Items]
 
Expected volatilities
38.80% 
Basis of Presentation and Recently Issued Accounting Standards - Reconciliation of Liability Fair Value (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2017
Jun. 30, 2017
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
 
 
Beginning balance
$ 807 
$ 0 
Gain on fair value of derivative liability
(36)
(36)
Additions
96 
903 
Revisions
(211)
(211)
Transfers
0 
0 
Ending balance
656 
656 
Change in unrealized gains included in earnings relating to derivatives still held as of June 30, 2017
$ (36)
$ (36)
Liquidity Matters and Going Concern - Narrative (Details) (USD $)
6 Months Ended
Jun. 30, 2017
bbl
Dec. 31, 2016
Liquidity Matters [Abstract]
 
 
Current liabilities
$ 325,147,000 
$ 287,103,000 
Current assets
44,471,000 
22,706,000 
Working capital deficit
$ (280,700,000)
 
Emergency shut-in, barrels of oil lost per day
1,400 
 
Property, Plant and Equipment - Summary of Property, Plant and Equipment (Details) (USD $)
In Thousands, unless otherwise specified
Jun. 30, 2017
Dec. 31, 2016
Property, Plant and Equipment [Abstract]
 
 
Wells and production facilities
$ 308,986 
$ 318,739 
Proved properties
386,196 
386,196 
Work in progress and exploration inventory
44,225 
34,712 
Oilfield assets
739,407 
739,647 
Accumulated depletion
(599,663)
(483,754)
Oilfield assets, net
139,744 
255,893 
Unevaluated leaseholds
6,200 
9,820 
Oil and gas properties, net
145,944 
265,713 
Other property and equipment
2,878 
3,040 
Accumulated depreciation
(2,397)
(2,324)
Other property and equipment, net
481 
716 
Total property, plant and equipment, net
$ 146,425 
$ 266,429 
Property, Plant and Equipment - Narrative (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended 1 Months Ended
Jun. 30, 2017
Mar. 31, 2017
Disposal Group, Held-for-sale, Not Discontinued Operations
FAR
Gambia Farm-Out Agreement
Jun. 30, 2017
Disposal Group, Held-for-sale, Not Discontinued Operations
FAR
Gambia Farm-Out Agreement
Projects with Exploratory Well Costs Capitalized for More than One Year [Line Items]
 
 
 
Project interest sold
 
80.00% 
 
Project interest retained
 
20.00% 
 
Sale and operatorship transfer of offshore blocks, subject to approval
 
 
$ 5.2 
Projected exploration costs
 
 
8.0 
Noncash impairment charge to reduce oil and gas properties
78.1 
 
 
Noncash impairment of lease
$ 0.6 
 
 
Accounts Payable and Accrued Liabilities (Details) (USD $)
In Thousands, unless otherwise specified
Jun. 30, 2017
Dec. 31, 2016
Payables and Accruals [Abstract]
 
 
Accounts payable - vendors
$ 177,171 
$ 173,306 
Amounts due to government entities
67,843 
66,573 
Accrued interest
1,377 
3,074 
Accrued interest
3,455 
1,204 
Other liabilities
0 
806 
Accounts payable and accrued liabilities
$ 249,846 
$ 244,963 
Asset Retirement Obligations - Summary of Change in Asset Retirement Obligations (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2017
Jun. 30, 2016
Jun. 30, 2017
Jun. 30, 2016
Asset Retirement Obligation, Roll Forward Analysis [Roll Forward]
 
 
 
 
Asset retirement obligations, beginning balance
 
 
$ 22,476 
 
Accretion expense
478 
461 
945 
913 
Asset retirement obligations, ending balance
$ 23,421 
 
$ 23,421 
 
Debt - Short-Term Debt (Details) (Glencore Energy UK Ltd., USD $)
In Millions, unless otherwise specified
1 Months Ended
Feb. 28, 2017
Short-term Debt [Line Items]
 
Proceeds from collection of advance to affiliate
$ 13.6 
London Interbank Offered Rate (LIBOR)
 
Short-term Debt [Line Items]
 
Advance from affiliate, basis spread on variable rate
6.50% 
Debt - Long-Term Debt (Details) (USD $)
0 Months Ended 6 Months Ended 1 Months Ended 6 Months Ended 1 Months Ended 6 Months Ended 0 Months Ended 1 Months Ended 1 Months Ended 1 Months Ended 6 Months Ended 6 Months Ended
Jun. 27, 2017
Jun. 30, 2017
Jun. 30, 2016
Dec. 31, 2016
Aug. 31, 2016
Term Loan Facility
Jun. 30, 2016
Term Loan Facility
Sep. 30, 2014
Term Loan Facility
Jun. 30, 2017
Term Loan Facility
Sep. 30, 2014
Term Loan Facility
London Interbank Offered Rate (LIBOR)
Jun. 30, 2017
Term Loan Facility, Naira Portion
Jun. 30, 2017
Term Loan Facility, U.S. Dollar Portion
Jun. 30, 2017
Line of Credit
Promissory Note To Allied
Feb. 6, 2017
Line of Credit
MCB Finance Facility
Mar. 6, 2017
Line of Credit
MCB Finance Facility
Feb. 6, 2017
Line of Credit
MCB Finance Facility
Mar. 6, 2017
Line of Credit
MCB Finance Facility
60-Day London Interbank Offered Rate (LIBOR)
Jun. 30, 2017
Convertible Debt
2015 Convertible Note
Mar. 31, 2015
Convertible Debt
2015 Convertible Note
Mar. 31, 2015
Convertible Debt
2015 Convertible Note
London Interbank Offered Rate (LIBOR)
Jun. 30, 2017
EPNL
Line of Credit
MCB Finance Facility
Feb. 6, 2017
EPNL
Line of Credit
MCB Finance Facility
Jun. 30, 2017
Financial Guarantee
South African Public Investment Corporation
Line of Credit
MCB Finance Facility
Feb. 6, 2017
Financial Guarantee
South African Public Investment Corporation
Line of Credit
MCB Finance Facility
Dec. 31, 2016
Allied
Promissory Note To Allied
Line of Credit Facility [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Debt term (in years)
 
 
 
 
 
 
5 years 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Maximum borrowing capacity
 
 
 
 
 
 
$ 100,000,000.0 
 
 
 
 
$ 25,000,000.0 
 
 
$ 100,000,000.0 
 
 
$ 50,000,000.0 
 
 
 
 
 
$ 25,000,000.0 
Percent of maximum borrowing capacity available in USD
 
 
 
 
 
 
90.00% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Percent of maximum borrowing capacity available in Naira
 
 
 
 
 
 
10.00% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Basis spread on variable rate
 
 
 
 
 
 
 
 
9.00% 
 
 
 
 
 
 
6.00% 
 
 
5.00% 
 
 
 
 
 
Price of oil per barrel, initial threshold (USD per barrel)
 
 
 
 
55 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Line of credit facility, commitment fee amount
 
 
 
 
1,400,000 
2,600,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Unamortized debt issuance costs
 
 
 
 
 
 
 
1,900,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Debt instrument, unremedied material breach, maximum time period (in days)
 
 
 
 
 
 
 
30 days 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Line of credit facility, annual principal payment
 
 
 
 
 
 
 
 
 
200,000.0 
0 
 
 
 
 
 
 
 
 
 
 
 
 
 
Foreign currency transaction gain
 
1,014,000 
8,686,000 
 
 
 
 
4,600,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Term Loan Facility, net
 
103,715,000 
 
 
 
 
 
86,900,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Long-term debt, net
 
61,778,000 
 
74,446,000 
 
 
 
64,700,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Current portion of long-term debt, net
 
41,937,000 
 
12,627,000 
 
 
 
22,200,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest payable
 
 
 
 
 
 
 
2,300,000.0 
 
 
 
2,000,000 
 
 
 
 
6,500,000 
 
 
1,100,000 
 
 
 
 
Unused commitment fee (as a percentage)
 
 
 
 
 
 
 
 
 
 
 
 
 
2.00% 
 
 
 
 
 
 
 
 
 
 
Damages sought
10,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Deposit requirement
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
10,000,000 
 
 
 
Payments of debt issuance costs
 
8,655,000 
693,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
8,700,000 
 
2,500,000 
 
 
Debt issuance costs remaining unamortized
 
9,570,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
7,700,000 
 
 
 
 
Proceeds from MCB finance facility
 
24,443,000 
0 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
24,400,000 
 
 
 
 
Bank guarantee, maximum
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 100,000,000 
 
Debt instrument, upfront fee, percentage of bank guarantee
 
 
 
 
 
 
 
 
 
 
 
 
2.50% 
 
 
 
 
 
 
 
 
 
 
 
Debt instrument, upfront fee, dividend multiplier of warrants issued
 
 
 
 
 
 
 
 
 
 
 
 
20.00% 
 
 
 
 
 
 
 
 
 
 
 
Debt - Schedule of Maturities of Long-term Debt (Details) (USD $)
In Thousands, unless otherwise specified
Jun. 30, 2017
Principal
 
2017
$ 29,407 
2018
23,541 
2019
21,378 
2020
26,724 
2021 and thereafter
12,235 
Total principal payments
113,285 
Less: Unamortized debt issuance costs
(9,570)
Total Term Loan Facility, net
$ 103,715 
Debt - Related Party (Details) (USD $)
Jun. 30, 2017
Dec. 31, 2016
Jun. 30, 2017
Convertible Debt
2015 Convertible Note
Jun. 30, 2017
Line of Credit
Majority Shareholder
Promissory Note to Majority Shareholder Related Party
Apr. 30, 2016
Line of Credit
Majority Shareholder
Promissory Note to Majority Shareholder Related Party
Mar. 31, 2016
Line of Credit
Majority Shareholder
Promissory Note to Majority Shareholder Related Party
Debt Instrument [Line Items]
 
 
 
 
 
 
Long-term notes payable - related party, net
$ 129,812,000 
$ 129,800,000 
$ 48,500,000 
$ 6,400,000 
 
 
Convertible subordinate note issued
50,000,000 
 
 
 
 
 
Notes payable, related parties
 
 
 
 
1,000,000 
3,000,000 
Long-term debt, net
$ 61,778,000 
$ 74,446,000 
 
 
 
 
Debt - Promissory Note (Details) (USD $)
1 Months Ended 6 Months Ended
Jun. 30, 2017
Dec. 31, 2016
Jun. 30, 2017
Convertible Debt
2015 Convertible Note
Mar. 31, 2015
Convertible Debt
2015 Convertible Note
Feb. 6, 2017
Line of Credit
MCB Finance Facility
Mar. 6, 2017
Line of Credit
MCB Finance Facility
60-Day London Interbank Offered Rate (LIBOR) [Member] [Member]
Jun. 30, 2017
Line of Credit
Promissory Note To Allied
Dec. 31, 2016
Line of Credit
Promissory Note To Allied
Jun. 30, 2017
Line of Credit
Promissory Note To Allied
30-Day London Interbank Offered Rate (LIBOR)
Mar. 31, 2017
Allied
Promissory Note To Allied
Dec. 31, 2016
Allied
Promissory Note To Allied
Debt Instrument [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Maximum borrowing capacity
 
 
 
$ 50,000,000.0 
$ 100,000,000.0 
 
$ 25,000,000.0 
 
 
 
$ 25,000,000.0 
Basis spread on variable rate
 
 
 
 
 
6.00% 
 
 
2.00% 
 
 
Convertible debt conversion price (dollars per share)
 
 
 
 
 
 
 
 
 
$ 3.415 
 
Long-term notes payable - related party, net
129,812,000 
129,800,000 
48,500,000 
 
 
 
24,900,000 
24,900,000 
 
 
 
Interest payable
 
 
$ 6,500,000 
 
 
 
$ 2,000,000 
 
 
 
 
Debt - Convertible Subordinated Note (Details) (USD $)
1 Months Ended
Feb. 28, 2014
Jun. 30, 2017
Dec. 31, 2016
Debt Instrument [Line Items]
 
 
 
Convertible subordinate note issued
 
$ 50,000,000 
 
Long-term notes payable - related party, net
 
129,812,000 
129,800,000 
Convertible Subordinated Debt
 
 
 
Debt Instrument [Line Items]
 
 
 
Convertible subordinate note issued
50,000,000.0 
 
 
Convertible debt conversion price (dollars per share)
$ 4.2984 
 
 
Interest payable
 
9,700,000 
 
Minimum proceeds from capital market debt issuance for mandatory prepayment option
250,000,000.0 
 
 
Long-term notes payable - related party, net
 
$ 50,000,000 
$ 50,000,000 
Convertible Subordinated Debt |
30-Day London Interbank Offered Rate (LIBOR)
 
 
 
Debt Instrument [Line Items]
 
 
 
Basis spread on variable rate
5.00% 
 
 
Debt term (in years)
5 years 
 
 
Debt - Convertible Note (Details) (USD $)
Share data in Millions, except Per Share data, unless otherwise specified
6 Months Ended 1 Months Ended
Jun. 30, 2017
Dec. 31, 2016
Jun. 30, 2017
Convertible Debt
2015 Convertible Note
D
Mar. 31, 2015
Convertible Debt
2015 Convertible Note
Mar. 31, 2015
Convertible Debt
2015 Convertible Note
London Interbank Offered Rate (LIBOR)
Jun. 30, 2017
Minimum
Jun. 30, 2017
Maximum
Line of Credit Facility [Line Items]
 
 
 
 
 
 
 
Maximum borrowing capacity
 
 
 
$ 50,000,000 
 
 
 
Basis spread on variable rate
 
 
 
 
5.00% 
 
 
Threshold consecutive trading days
 
 
5 
 
 
 
 
Long term debt, gross
113,285,000 
 
48,500,000 
 
 
 
 
Number of shares called by warrants issued (in shares)
2.7 
 
 
 
 
 
 
Warrants exercise price (in dollars per share)
 
 
 
 
 
$ 2.00 
$ 7.85 
Warrants issued with debt
 
 
5,000,000 
 
 
 
 
Long-term notes payable - related party, net
129,812,000 
129,800,000 
48,500,000 
 
 
 
 
Interest payable
 
 
$ 6,500,000 
 
 
 
 
Debt - 2016 Promissory Note (Details) (USD $)
6 Months Ended 1 Months Ended 13 Months Ended 1 Months Ended
Jun. 30, 2017
Jun. 30, 2016
Dec. 31, 2016
Jun. 30, 2017
Promissory Note to Majority Shareholder Related Party
Line of Credit
Dec. 31, 2016
Promissory Note to Majority Shareholder Related Party
Line of Credit
Jun. 30, 2017
Promissory Note to Majority Shareholder Related Party
Majority Shareholder
Line of Credit
Mar. 31, 2017
Promissory Note to Majority Shareholder Related Party
Majority Shareholder
Line of Credit
May 31, 2016
Promissory Note to Majority Shareholder Related Party
Majority Shareholder
Line of Credit
note_payable
Apr. 30, 2016
Promissory Note to Majority Shareholder Related Party
Majority Shareholder
Line of Credit
Mar. 31, 2016
Promissory Note to Majority Shareholder Related Party
Majority Shareholder
Line of Credit
Apr. 30, 2016
Promissory Note to Majority Shareholder Related Party
Majority Shareholder
Line of Credit
30-Day London Interbank Offered Rate (LIBOR)
Mar. 31, 2016
Promissory Note to Majority Shareholder Related Party
Majority Shareholder
Line of Credit
30-Day London Interbank Offered Rate (LIBOR)
Jun. 30, 2017
Promissory Note to Majority Shareholder Related Party
Majority Shareholder
Line of Credit
May 31, 2016
Promissory Note to Majority Shareholder Related Party
Majority Shareholder
Line of Credit
May 31, 2016
Promissory Note to Majority Shareholder Related Party
Majority Shareholder
Line of Credit
30-Day London Interbank Offered Rate (LIBOR)
Short-term Debt [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes payable, related parties
 
 
 
 
 
 
 
 
$ 1,000,000 
$ 3,000,000 
 
 
 
 
 
Basis spread on variable rate
 
 
 
 
 
 
 
 
 
 
7.00% 
7.00% 
 
 
7.00% 
Number of outstanding notes payable
 
 
 
 
 
 
 
2 
 
 
 
 
 
 
 
Maximum borrowing capacity
 
 
 
 
 
 
 
 
 
 
 
 
 
10,000,000 
 
Proceeds from notes payable
0 
504,000 
 
 
 
 
 
 
 
 
 
 
2,400,000 
 
 
Long-term notes payable - related party, net
129,812,000 
 
129,800,000 
6,400,000 
6,400,000 
6,400,000 
 
 
 
 
 
 
 
 
 
Interest payable
 
 
 
 
 
$ 700,000 
 
 
 
 
 
 
 
 
 
Convertible debt conversion price (dollars per share)
 
 
 
 
 
 
$ 3.415 
 
 
 
 
 
 
 
 
Related Party Transactions - Summary of Assets and Liabilities (Details) (USD $)
In Thousands, unless otherwise specified
Jun. 30, 2017
Dec. 31, 2016
Related Party Transactions [Abstract]
 
 
Accounts receivable
$ 2,427 
$ 1,956 
Accounts payable and accrued liabilities
32,708 
29,513 
Long-term notes payable - related party
$ 129,812 
$ 129,800 
Related Party Transactions - Narrative (Details) (USD $)
3 Months Ended 6 Months Ended
Jun. 30, 2017
Jun. 30, 2016
Jun. 30, 2017
Jun. 30, 2016
Dec. 31, 2016
Related Party Transaction [Line Items]
 
 
 
 
 
Accounts receivable
$ 2,427,000 
 
$ 2,427,000 
 
$ 1,956,000 
Accounts payable and accrued expenses
32,708,000 
 
32,708,000 
 
29,513,000 
Accrued and unpaid interest on notes payable
19,200,000 
 
19,200,000 
 
15,200,000 
Long-term notes payable - related party, net
129,812,000 
 
129,812,000 
 
129,800,000 
Total operating expenses, CEHL
2,212,000 
2,336,000 
4,725,000 
4,019,000 
 
Interest expense, CEHL
2,010,000 
1,786,000 
3,947,000 
3,462,000 
 
Convertible Subordinated Debt
 
 
 
 
 
Related Party Transaction [Line Items]
 
 
 
 
 
Long-term notes payable - related party, net
50,000,000 
 
50,000,000 
 
50,000,000 
Convertible Subordinated Debt |
2015 Convertible Note
 
 
 
 
 
Related Party Transaction [Line Items]
 
 
 
 
 
Long-term notes payable - related party, net
 
 
 
 
48,500,000 
Line of Credit |
Promissory Note To Allied
 
 
 
 
 
Related Party Transaction [Line Items]
 
 
 
 
 
Long-term notes payable - related party, net
24,900,000 
 
24,900,000 
 
24,900,000 
Line of Credit |
Promissory Note to Majority Shareholder Related Party
 
 
 
 
 
Related Party Transaction [Line Items]
 
 
 
 
 
Long-term notes payable - related party, net
6,400,000 
 
6,400,000 
 
6,400,000 
Convertible Debt |
2015 Convertible Note
 
 
 
 
 
Related Party Transaction [Line Items]
 
 
 
 
 
Long-term notes payable - related party, net
$ 48,500,000 
 
$ 48,500,000 
 
 
Related Party Transactions - Summary of Results of Operations (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2017
Jun. 30, 2016
Jun. 30, 2017
Jun. 30, 2016
Related Party Transactions [Abstract]
 
 
 
 
Total operating expenses, CEHL
$ 2,212 
$ 2,336 
$ 4,725 
$ 4,019 
Interest expense, CEHL
$ 2,010 
$ 1,786 
$ 3,947 
$ 3,462 
Commitments and Contingencies - Narrative (Details)
0 Months Ended 6 Months Ended 6 Months Ended 1 Months Ended 0 Months Ended 1 Months Ended 1 Months Ended 0 Months Ended 1 Months Ended 0 Months Ended 1 Months Ended
Jun. 27, 2017
USD ($)
Jun. 30, 2017
USD ($)
Jun. 30, 2016
USD ($)
Jun. 30, 2017
Kenya PSCs
contract
Jun. 30, 2017
The Gambia
license
Jun. 30, 2017
NIGERIA
USD ($)
Jun. 30, 2017
Approval by Nigerian Department of Petroleum Resources
USD ($)
Feb. 28, 2014
Long-term Floating Production Storage and Offloading System Contract
bbl
Jun. 30, 2017
Long-term Floating Production Storage and Offloading System Contract
USD ($)
Feb. 5, 2016
February 2014 Transactions
people
Mar. 31, 2016
Convertible Debt
2015 Convertible Note
Mar. 31, 2017
Pacific Bora Drilling Rig
well
Jun. 30, 2017
Pacific Bora Drilling Rig
USD ($)
Mar. 31, 2017
Pacific Bora Drilling Rig
NIGERIA
well
Jun. 27, 2017
Pending litigation
BGP vs EEKL
USD ($)
Jul. 19, 2017
Subsequent Event
Judicial ruling
TransOcean Offshore Gulf of Guinea VII Limited and Indigo Drilling Limited
USD ($)
Jul. 19, 2017
Subsequent Event
Judicial ruling
TransOcean Offshore Gulf of Guinea VII Limited and Indigo Drilling Limited
NGN (?)
Jul. 13, 2017
Subsequent Event
Settled litigation
Multiplan vs EPNL
USD ($)
Jul. 31, 2017
Subsequent Event
Settled litigation
Multiplan vs EPNL
USD ($)
Jul. 14, 2017
Subsequent Event
Settled litigation
Aker vs EPNL
USD ($)
Jul. 13, 2017
Subsequent Event
Settled litigation
Aker vs EPNL
USD ($)
Jul. 31, 2017
Subsequent Event
Settled litigation
Aker vs EPNL
USD ($)
Mar. 31, 2017
Gambia Farm-Out Agreement
FAR
Disposal Group, Held-for-sale, Not Discontinued Operations
Other Commitments [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Initial contract term (in years)
 
 
 
 
 
 
 
7 years 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Additional contract term (in years)
 
 
 
 
 
 
 
2 years 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Barrels processing capacity (up to)
 
 
 
 
 
 
 
40,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Maximum storage capacity for the FPSO (in barrels)
 
 
 
 
 
 
 
1,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Contractual annual minimum commitment
 
 
 
 
 
 
 
 
$ 48,400,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Production sharing contracts
 
 
 
4 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Development and production licenses
 
 
 
 
2 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Project interest retained
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
20.00% 
Exploratory wells drilled, option
 
 
 
 
 
 
 
 
 
 
 
2 
 
2 
 
 
 
 
 
 
 
 
 
Base operating rate per day
 
 
 
 
 
 
 
 
 
 
 
 
195,000 
 
 
 
 
 
 
 
 
 
 
Settlement amount awarded to other party
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
14,000,000 
11,800,000 
3,000,000 
1,000,000 
2,500,000 
 
1,000,000 
 
Increase (decrease) in accounts payable and accrued liabilities
 
23,508,000 
41,895,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
200,000 
 
 
10,200,000 
 
 
Loss contingency, estimate of possible loss
 
 
 
 
 
20,300,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Loss contingency, number of plaintiffs
 
 
 
 
 
 
 
 
 
7 
 
 
 
 
 
 
 
 
 
 
 
 
 
Damages sought
10,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
12,200,000 
 
 
 
 
 
 
 
 
Damages sought, interest
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2,700,000 
 
 
 
 
 
 
 
 
Payment of cash or the equivalent in shares
 
 
 
 
 
 
$ 25,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Payment of cash or the equivalent of shares in period
 
 
 
 
 
 
15 days 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Number of shares to be issued in period
 
 
 
 
 
 
30 days 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Debt instrument, convertible, percent owed on debt fundraising event
 
 
 
 
 
 
 
 
 
 
10.00% 
 
 
 
 
 
 
 
 
 
 
 
 
Debt instrument, convertible, percent owed on equity fundraising event
 
 
 
 
 
 
 
 
 
 
20.00% 
 
 
 
 
 
 
 
 
 
 
 
 
Stock Based Compensation - Summary of Stock Option Activity (Details) (USD $)
6 Months Ended 12 Months Ended
Jun. 30, 2017
Dec. 31, 2016
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward]
 
 
Forfeited (in shares)
(638,891)
 
Expired (in shares)
0 
 
Employee Stock Option
 
 
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward]
 
 
Beginning balance (in shares)
1,147,000 
 
Granted (in shares)
733,000 
 
Exercised (in shares)
(367,000)
 
Forfeited (in shares)
(639,000)
 
Ending balance (in shares)
874,000 
1,147,000 
Expected to vest (in shares)
133,000 
 
Ending balance (in shares)
741,000 
 
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Abstract]
 
 
Beginning balance (dollars per share)
$ 2.54 
 
Granted (dollars per share)
$ 2.25 
 
Exercised (dollars per share)
$ 1.84 
 
Forfeited (dollars per share)
$ 2.69 
 
Expired (dollars per share)
$ 0.00 
 
Ending balance (dollars per share)
$ 2.48 
$ 2.54 
Expected to vest (dollars per share)
$ 1.80 
 
Exercisable at period end (dollars per share)
$ 2.60 
 
Outstanding at December 31, 2016 weighted-average remaining contractual term (in years)
1 year 6 months 
2 years 
Granted, weighted-average remaining contractual term (in years)
1 year 
 
Expected to vest, weighted-average remaining contractual term (in years)
4 years 11 months 
 
Exercisable at December 31, 2016 weighted-average remaining contractual term (in years)
11 months 
 
Stock-Based Compensation - Narrative (Details) (USD $)
In Millions, except Share data, unless otherwise specified
6 Months Ended
Jun. 30, 2017
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
Options forfeited (in shares)
638,891 
Common stock expired in period (in shares)
0 
Estimated fair value of options granted in period
$ 0.9 
Cashless Stock Option
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
Common stock exercised in period (in shares)
367,039 
Employee Stock Option
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
Common stock issued during period (in shares)
114,416 
Common stock exercised in period (in shares)
367,000 
Options forfeited (in shares)
639,000 
Restricted Stock
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
Number of grants in period (in shares)
1,114,000 
Number forfeited in period
745,000 
Restricted Stock |
Maximum
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
Award vesting period
36 months 
Stock warrants
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
Number of grants in period (in shares)
0 
Number forfeited in period
0 
Senior Officer |
Performance-Based Restricted Stock
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
Estimated fair value of options granted in period
3.3 
Number of grants in period (in shares)
200,000 
Award vesting period
3 years 
Maximum percentage of additional shares awarded (up to)
50.00% 
Estimated compensation expense
$ 0.1 
Estimated compensation cost not yet recognized, period of recognition
3 years 
Officers, Directors, and Employees |
Restricted Stock
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
Number of grants in period (in shares)
1,100,000 
Stock-Based Compensation - Summary of Stock Warrants Activity (Details) (Stock warrants, USD $)
In Thousands, except Per Share data, unless otherwise specified
6 Months Ended 12 Months Ended
Jun. 30, 2017
Dec. 31, 2016
Stock warrants
 
 
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward]
 
 
Beginning balance (in shares)
2,983 
 
Granted (in shares)
0 
 
Exercised (in shares)
0 
 
Forfeited (in shares)
0 
 
Expired (in shares)
0 
 
Ending balance (in shares)
2,983 
2,983 
Expected to vest (in shares)
0 
 
Outstanding at period end (in shares)
2,983 
 
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract]
 
 
Beginning balance (in dollars per share)
$ 3.59 
 
Granted (in dollars per share)
$ 0.00 
 
Exercised (in dollars per share)
$ 0.00 
 
Forfeited (in dollars per share)
$ 0.00 
 
Expired (in dollars per share)
$ 0.00 
 
Ending balance (in dollars per share)
$ 3.59 
$ 3.59 
Expected to vest (in dollars per share)
$ 0.00 
 
Exercisable at period end (in dollars per share)
$ 3.59 
 
Shares outstanding, weighted average remaining contractual terms
2 years 8 months 
3 years 2 months 
Exercisable at period end, weighted-average remaining contractual term (years)
2 years 8 months 
 
Stock-Based Compensation - Summary of Restricted Stock Activity (Details) (Restricted Stock, USD $)
In Thousands, except Per Share data, unless otherwise specified
6 Months Ended
Jun. 30, 2017
Restricted Stock
 
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward]
 
Beginning balance (in shares)
2,072 
Granted (in shares)
1,114 
Vested (in shares)
(1,032)
Forfeited (in shares)
(745)
Ending balance (in shares)
1,409 
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract]
 
Beginning balance (in dollars per share)
$ 2.25 
Granted (in dollars per share)
$ 3.00 
Vested (in dollars per share)
$ 2.38 
Forfeited (in dollars per share)
$ 2.98 
Ending balance (in dollars per share)
$ 2.37 
Segment Information - Segment Activity (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2017
Jun. 30, 2016
Jun. 30, 2017
Jun. 30, 2016
Segment Reporting Information [Line Items]
 
 
 
 
Revenues
$ 14,588 
$ 23,151 
$ 45,866 
$ 28,080 
Operating loss
(91,331)
(27,199)
(116,424)
(55,492)
Operating Segments |
Nigeria
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Revenues
14,588 
23,151 
45,866 
28,080 
Operating loss
(87,042)
(23,294)
(107,715)
(46,454)
Operating Segments |
Kenya
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Revenues
0 
0 
0 
0 
Operating loss
(975)
(509)
(1,295)
(1,051)
Operating Segments |
The Gambia
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Revenues
0 
0 
0 
0 
Operating loss
(221)
(249)
(550)
(523)
Operating Segments |
Ghana
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Revenues
0 
0 
0 
0 
Operating loss
(176)
(232)
(1,013)
(1,118)
Corporate and Other
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Revenues
0 
0 
0 
0 
Operating loss
$ (2,917)
$ (2,915)
$ (5,851)
$ (6,346)
Segment Information - Segment Assets (Details) (USD $)
In Thousands, unless otherwise specified
Jun. 30, 2017
Dec. 31, 2016
Segment Reporting Information [Line Items]
 
 
Assets
$ 190,931 
$ 289,201 
Operating Segments |
Nigeria
 
 
Segment Reporting Information [Line Items]
 
 
Assets
180,894 
281,050 
Operating Segments |
Kenya
 
 
Segment Reporting Information [Line Items]
 
 
Assets
54 
698 
Operating Segments |
The Gambia
 
 
Segment Reporting Information [Line Items]
 
 
Assets
4,173 
3,034 
Operating Segments |
Ghana
 
 
Segment Reporting Information [Line Items]
 
 
Assets
4,338 
3,648 
Corporate and Other
 
 
Segment Reporting Information [Line Items]
 
 
Assets
$ 1,472 
$ 771