The following discussion and analysis should be read in conjunction with the financial statements and related notes included elsewhere in this Quarterly Report on Form 10-Q and in the Company's Annual Report on Form 10K for the year endedDecember 31, 2019 . The following discussion contains forward-looking statements based on expectations, estimates and assumptions. Actual results may differ materially from those discussed in the forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, volatility of oil, natural gas and natural gas liquids ("NGL") prices or a prolonged period of low oil, natural gas or NGL prices and the effects of actions by, or disputes among or between, members of theOrganization of Petroleum Exporting Countries and other oil producing nations ("OPEC+"), such asSaudi Arabia , and other oil and natural gas producing countries, such asRussia , with respect to production levels or other matters related to the price of oil, the effects of excess supply of oil and natural gas resulting from the reduced demand caused by the novel coronavirus disease ("COVID-19") global pandemic and the actions by certain oil and natural gas producing countries, market prices for oil, natural gas and NGLs, production volumes, estimates of proved reserves, capital expenditures, the capacity and utilization of midstream facilities, economic and competitive conditions, credit and capital market conditions, regulatory changes and other uncertainties, as well as those factors set forth in "Cautionary Statement Regarding Forward-Looking Statements" below and in Item 1A. "Risk Factors" in this Quarterly Report on Form 10Q and in the Company's Annual Report on Form 10K for the year endedDecember 31, 2019 , and elsewhere in the Annual Report.
The reference to a "Note" herein refers to the accompanying Notes to Condensed Consolidated Financial Statements contained in Item 1. "Financial Statements."
Unless otherwise indicated or the context otherwise requires, references herein to the "Company" refer toRiviera Resources, Inc. ("Riviera") and its consolidated subsidiaries. Unless otherwise indicated or the context otherwise requires, references herein to "LINN Energy" refer toLinn Energy, Inc. and its consolidated subsidiaries. In 2016,Linn Energy, LLC , certain of its direct and indirect subsidiaries, andLinnCo, LLC (collectively, the "LINN Debtors") filed Bankruptcy Petitions for relief under Chapter 11 of the Bankruptcy Code. The LINN Debtors emerged from bankruptcy in 2017. See Note 10 for additional details. In 2018, LINN Energy completed the spin-off of Riviera fromLINN Energy. The Company is incorporated underDelaware law and its headquarters are inHouston, Texas .
Executive Overview
Prior to the recent sales of interests in oil and natural gas properties and the sale of its wholly owned subsidiaryBlue Mountain Midstream LLC ("Blue Mountain Midstream"), discussed below, Riviera was an independent oil and natural gas company. The Company had two reporting segments, upstream and Blue Mountain. The upstream reporting segment was engaged in the exploration, development, production, and sale of oil, natural gas, and NGLs and its properties were all located inthe United States ("U.S.").The Blue Mountain reporting segment consisted of a cryogenic natural gas processing facility, a network of gathering pipelines and compressors and produced water services and a crude oil gathering system located in the Merge/SCOOP/STACK play. OnSeptember 1, 2020 andOctober 1, 2020 , the Company completed the sales of interests in properties located in its two upstream operating regions,North Louisiana and the Mid-Continent, respectively. In addition, onOctober 8, 2020 , the Company completed the sale of Blue Mountain Midstream (the "Blue Mountain Divestiture"). See Note 3 for additional information about divestitures. OnOctober 12, 2020 , the Board of Directors of the Company (the "Board"), approved the dissolution, winding up and liquidation of the Company (the "Plan of Liquidation") and adopted the Plan of Liquidation. Also, onOctober 12, 2020 , the required percentage of the Company's shareholders approved, through written consent in accordance with the bylaws of the Company, the Plan of Liquidation. The Plan of Liquidation contemplates the orderly sale of the Company's remaining assets and the discharge of all outstanding liabilities to third parties and, after the establishment of appropriate reserves, the distribution of any remaining cash to shareholders. The Company intends to file a certificate of dissolution with theState of Delaware , at which time the Company's transfer books and records will be closed and the Company's common stock will cease trading on the OTCQX Market, no later than the close of business onDecember 31, 2020 . The Company does not anticipate that it will be required to file an Annual Report on Form 10-K for the year endedDecember 31, 2020 . See Note 18 for more information. 31
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Item 2.Management's Discussion and Analysis of Financial Condition and Results of Operations - Continued
Results of Operations Substantially all of the revenues reported on the Company's unaudited condensed consolidated statements of operations included herein relates to properties that were divested either prior or subsequent toSeptember 30, 2020 . See Note 3 for information about divestitures. Due to the adoption of the Plan of Liquidation, the Company's results of operations for the three months and nine months endedSeptember 30, 2020 , are not indicative of its future results. See Note 18 for information about the Company's Plan of Liquidation.
For the three months ended
• oil, natural gas and NGL sales of approximately
million for the three months ended
• average daily production of approximately 35 MMcfe/d compared to 242 MMcfe/d
for the three months ended
• net loss of approximately
three months ended
• impairment charges of approximately
the three months ended
• capital expenditures of approximately
the three months ended
• no wells drilled compared to 14 wells drilled (all successful) for the three
months ended
For the nine months ended
• oil, natural gas and NGL sales of approximately
million for the nine months ended
• average daily production of approximately 53 MMcfe/d compared to 264 MMcfe/d
for the nine months ended
• net loss of approximately
months ended
• impairment charges of approximately
for the nine months ended
• capital expenditures of approximately
for the nine months endedSeptember 30, 2019 ; and • 11 wells drilled (10 successful) compared to 49 wells drilled (all successful) for the nine months endedSeptember 30, 2019 .
Divestitures - 2020
OnJanuary 15, 2020 , the Company completed the sale of its interest in non-operated properties located in the Drunkards Wash field in theUinta Basin (the "Drunkards Wash Asset Sale"). Cash proceeds from the sale of these properties were approximately$4 million (including a deposit of approximately$450,000 received in 2019), and the Company recorded a net gain of approximately$1 million .
On
On
On
On
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Item 2.Management's Discussion and Analysis of Financial Condition and Results of Operations - Continued
OnSeptember 1, 2020 , the Company completed the sale of its interest in substantially all of its properties located inNorth Louisiana (the "North Louisiana Assets"). Cash proceeds from the sale of these properties were approximately$23 million and the Company recorded a net loss of approximately$1 million . The Company recorded a noncash impairment charge of approximately$12 million to reduce the carrying value of these assets to fair value in the second quarter of 2020.
Divestitures - Subsequent Events
OnOctober 1, 2020 , the Company completed the sale of its interest in substantially all of its Mid-Continent properties located inOklahoma (the "Mid-Continent Assets"). Cash proceeds from the sale of these properties were approximately$13 million (including a deposit of approximately$2 million received in the third quarter of 2020) and the Company expects to record a net gain of approximately$16 million in the fourth quarter of 2020. The Company recognized pre-tax income of approximately$3 million and pre-tax loss of$86 million for the three months and nine months endedSeptember 30, 2020 , respectively, and pre-tax income of approximately$2 million and$8 million for the three months and nine months endedSeptember 30, 2019 , respectively, from the Mid-Continent Assets. OnOctober 8, 2020 , the Company completed the Blue Mountain Divestiture. Cash proceeds from the sale were approximately$114 million (including a deposit of approximately$11 million received in the third quarter of 2020). The Company repaid approximately$80 million , representing total borrowings under the Blue Mountain Midstream senior secured revolving loan facility (the "Blue Mountain Credit Facility"), with a portion of the proceeds. The Company recorded impairment charges of approximately$220 million and$237 million , primarily to reduce the carrying value of assets to fair value, in the three months and nine months endedSeptember 30, 2020 , respectively. The Company recognized pre-tax loss of approximately$218 million and$231 million for the three months and nine months endedSeptember 30, 2020 , respectively, and pre-tax loss of approximately$3 million and$6 million for the three months and nine months endedSeptember 30, 2019 , respectively, from Blue Mountain Midstream. The Blue Mountain Divestiture and the Mid-Continent Assets are not presented as discontinued operations as of and for the period endedSeptember 30, 2020 , the associated activity represents substantially all of the Company's results of operations and remaining net assets. Therefore, they do not meet the definition of a component of an entity because they are not clearly distinguishable from the rest of the entity. Divestitures - 2019 OnNovember 22, 2019 , the Company completed the sale of its interest in properties located in theHugoton Basin (the "Hugoton Basin Assets Sale"). Cash proceeds from the sale of these properties were approximately$286 million . In connection with theHugoton Basin Assets Sale, the buyer also acquired the Company's interest inMayzure, LLC ("Mayzure"), a wholly owned subsidiary of the Company, which was the counterparty to the volumetric production payment agreements based on helium produced from certain oil and natural gas properties in theHugoton Basin . The Company recorded a noncash impairment charge of approximately$95 million to reduce the carrying value of these assets to fair value. The Company recognized pre-tax loss of approximately$98 million and$89 million for the three months and nine months endedSeptember 30, 2019 , respectively, from theHugoton Basin .
On
OnAugust 30, 2019 , the Company completed the sale of its interest in non-core assets located inNorth Louisiana . Cash proceeds from the sale were approximately$2 million and the Company recorded a net gain of approximately$376,000 . OnJuly 3, 2019 , the Company completed the sale of its interest in properties located inMichigan . Cash proceeds from the sale of these properties were approximately$39 million . The Company recorded a noncash impairment charge of approximately$18 million to reduce the carrying value of these assets to fair value. OnMay 31, 2019 , the Company completed the sale of its interest in non-operated properties located in theHugoton Basin inKansas . Cash proceeds from the sale of these properties were approximately$29 million and the Company recorded a net loss of approximately$10 million . 33
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Item 2.Management's Discussion and Analysis of Financial Condition and Results of Operations - Continued
OnJanuary 17, 2019 , the Company completed the sale of its interest in properties located in theArkoma Basin inOklahoma . Cash proceeds from the sale of these properties were approximately$64 million (including a deposit of approximately$5 million received in 2018), and the Company recorded a net gain of approximately$28 million .
Impact of Decline in Commodity Prices
The Company and the oil and gas industry have been adversely impacted by certain events, including the initial dramatic increase in output from OPEC+ in the first quarter of 2020 and the destruction of demand resulting from the unprecedented global health and economic crisis sparked by the COVID-19 global pandemic. In order to reduce expenses, inApril 2020 , the Board made the decision to consolidate the management of Blue Mountain Midstream within the Company's existing executive management team and further reduced expenses by integration of the operations of the two companies wherever practical. The Company incurred severance expenses of approximately$10 million and$15 million for the three months and nine months endedSeptember 30, 2020 , respectively, in connection with integration activities, divestitures and the Plan of Liquidation. The Company expects to incur expenses of approximately$2 million in the fourth quarter of 2020 for share-based compensation and severance termination benefits. See Note 3 for information about divestitures, Note 12 for information about share-based compensation and Note 18 for information about the Company's Plan of Liquidation.
Impairment of Assets Held for Sale and Long-Lived Assets
During the three months and nine months endedSeptember 30, 2020 , the Company recorded impairment charges of approximately$220 million and$341 million , respectively. The impairment charges recorded in the three months endedSeptember 30, 2020 , were primarily triggered by the Company's exit from the midstream business, with the fair value being predominantly driven by the contract price of the Blue Mountain Divestiture. The impairment charges recorded in the first quarter and second quarter of 2020 were primarily due to declines in commodity prices and declines in expected future volumes. See Note 1 for additional information about impairment.
2020
For 2020, the Company estimates its total capital expenditures, excluding
acquisitions, will be approximately
Impact of COVID-19 Pandemic
Certain remote work arrangements implemented by the Company in response to the COVID-19 pandemic have not adversely affected its ability to maintain operations, including financial reporting systems, internal control over financial reporting and disclosure controls and procedures. However, the COVID-19 pandemic continues to evolve and identification of all trends, events and uncertainties, including a possible widespread resurgence in COVID-19 infections in the remainder of 2020 without the availability of generally effective therapeutics or a vaccine for the disease, that may impact the Company's financial condition and results of operations are unknown at this time. Due to the adoption of the Plan of Liquidation, the Company's results of operations for the three months and nine months endedSeptember 30, 2020 , are not indicative of its future results.
Financing Activities
CARES Act
The Coronavirus Aid, Relief, and Economic Security Act (the "CARES Act") that was enactedMarch 27, 2020 , includes measures to assist companies. The Company has not received any funding under the CARES Act or other federal programs to support operations and does not anticipate that it will.
Riviera Credit Facility
As ofSeptember 30, 2020 , Riviera's credit agreement provided for a senior secured reserve-based revolving loan facility (the "Riviera Credit Facility") with a borrowing base and borrowing commitments of$7 million . During the nine months endedSeptember 30, 2020 , the Company recorded a finance fee expense of approximately$468,000 related to the write-off of a portion of unamortized deferred financing fees due to a reduction of the Riviera Credit Facility borrowing base. OnOctober 27, 2020 , the Company entered into a Sixth Amendment (the "Sixth Amendment") to the Riviera Credit Facility. Pursuant to the Sixth Amendment, the borrowing base was reduced to$540,000 , the lenders obligations to make any loans, 34
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Item 2.Management's Discussion and Analysis of Financial Condition and Results of Operations - Continued
were eliminated and the Company's ability to make any borrowing requests was removed. In addition, the Company is required to maintain a cash deposit of at least$540,000 with a lender bank related to letter of credit commitments. The Company anticipates the Riviera Credit Facility will be terminated in the fourth quarter of 2020. See Note 6.
Blue Mountain Midstream Credit Facility
As ofSeptember 30, 2020 , the Blue Mountain Credit Facility had a borrowing base and borrowing commitments of$200 million . The Blue Mountain Credit Facility together with the Riviera Credit Facility, are referred to as the "Credit Facilities"). OnOctober 8, 2020 , the Company repaid approximately$80 million , representing total borrowings under the Blue Mountain Credit Facility, with a portion of the net proceeds from the Blue Mountain Divestiture. Subsequently, the Blue Mountain Credit Facility was terminated effectiveOctober 8, 2020 . See Note 6. Share Repurchase Program OnJuly 18, 2019 , the Board authorized the repurchase of up to$150 million of the Company's outstanding shares of common stock. During the nine months endedSeptember 30, 2020 , the Company repurchased an aggregate of 282,742 shares of common stock at an average price of$7.31 per share for a total cost of approximately$2 million . Future share repurchases are not provided for under the Company's Plan of Liquidation.
Cash Distributions
OnMarch 9, 2020 , the Board declared a cash distribution of$1.00 per share. A cash distribution totaling approximately$58 million was paid onApril 22, 2020 , to shareholders of record as of the close of business onApril 8, 2020 . OnApril 23, 2020 , the Board declared a cash distribution of$0.75 per share. The distribution totaling approximately$43 million was paid onMay 11, 2020 , to shareholders of record as of the close of business onMay 7, 2020 . In addition, approximately$1 million and$11 million for potential future distributions related to nonvested share-based compensation awards was voluntarily recorded in restricted cash atSeptember 30, 2020 , andDecember 31, 2019 , respectively.
Cash Distributions - Subsequent Event
On
Commodity Derivatives
During the three months endedSeptember 30, 2020 , the Company unwound all of its natural gas fixed price swaps, oil fixed price swaps, and Panhandle Eastern Pipeline ("PEPL") basis swaps for 2020 and 2021, for a cost of approximately$356,000 .Field Level Cash Flow To assess the performance of the Company's reporting segments, the Company's Chief Operating Decision Maker ("CODM") analyzes field level cash flow, a non-generally accepted accounting principles financial metric. The Company defines field level cash flow as revenues less direct operating expenses. Other indirect income (expenses) include "general and administrative expenses," "exploration costs," "depreciation, depletion and amortization," "(gains) on sale of assets and other, net," "impairment of long-lived assets," "other income and (expenses)" and "reorganization items, net." Field level cash flow is disclosed herein to provide financial information about the Company's reporting segments in alignment with the information reviewed by its CODM. Information regarding total assets by reporting segment is not presented because it is not reviewed by the CODM.
During the first quarter of 2020, the definition of field level cash flow analyzed by the Company's CODM was revised to report within segment results, expenses previously reported as unallocated to segment results. Information presented for the prior period has been recast to conform to current presentation.
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Item 2.Management's Discussion and Analysis of Financial Condition and Results of Operations - Continued
Results of Operations Three Months EndedSeptember 30, 2020 , Compared to Three Months EndedSeptember 30, 2019 Three Months Ended September 30, 2020 2019 Variance (in thousands) Revenues and other: Natural gas sales $ 3,796 $ 33,082$ (29,286 ) Oil sales 2,844 10,575 (7,731 ) NGL sales 700 7,372 (6,672 ) Total oil, natural gas and NGL sales 7,340 51,029 (43,689 ) Gains (losses) on commodity derivatives (2,948 ) 5,665 (8,613 ) Marketing and other revenues 29,083 51,360 (22,277 ) 33,475 108,054 (74,579 ) Expenses: Lease operating expenses 2,367 18,307 (15,940 ) Transportation expenses 818 16,275 (15,457 ) Marketing expenses 20,284 37,688 (17,404 ) General and administrative expenses (1) 16,871 16,954 (83 ) Exploration costs 413 1,947 (1,534 ) Depreciation, depletion and amortization 3,915 20,060 (16,145 ) Impairment of assets held for sale and long-lived assets 219,606 95,080 124,526 Taxes, other than income taxes 846 5,111 (4,265 ) (Gains) losses on sale of assets and other, net 3,515 (7,587 ) 11,102 268,635 203,835 64,800 Other income and (expenses) (1,009 ) (2,924 ) 1,915 Reorganization items, net (210 ) (284 ) 74 Loss before income taxes (236,379 ) (98,989 ) (137,390 ) Income tax expense - 126,646 (126,646 ) Net loss$ (236,379 ) $ (225,635 ) $ (10,744 )
(1) General and administrative expenses for the three months ended
2020, and
respectively, of share-based compensation expenses. In addition, general and
administrative expenses for the three months ended
September 30, 2019 , include approximately$10 million and$2 million , respectively, of severance costs. 36
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Item 2.Management's Discussion and Analysis of Financial Condition and Results of Operations - Continued Three Months Ended September 30, 2020 2019 Variance Average daily production: Natural gas (MMcf/d) 26 194 (87 %) Oil (MBbls/d) 0.8 2.1 (62 %) NGL (MBbls/d) 0.8 6.0 (87 %) Total (MMcfe/d) 35 242 (86 %) Weighted average prices: (1) Natural gas (Mcf) $ 1.59 $ 1.86 (15 %) Oil (Bbl) $ 39.49 $ 55.13 (28 %) NGL (Bbl) $ 9.43 $ 13.40 (30 %) Average NYMEX prices: Natural gas (MMBtu) $ 1.98 $ 2.23 (11 %) Oil (Bbl) $ 40.93 $ 55.45 (26 %) Costs per Mcfe of production: Lease operating expenses $ 0.73 $ 0.82 (11 %) Transportation expenses $ 0.25 $ 0.73 (66 %) General and administrative expenses (2) $ 5.17 $ 0.76 580 % Depreciation, depletion and amortization $ 1.20 $ 0.90 33 % Taxes, other than income taxes $ 0.26 $ 0.23 13 %
(1) Does not include the effect of gains (losses) on derivatives.
(2) General and administrative expenses for the three months ended
2020, and
respectively, of share-based compensation expenses. In addition, general and
administrative expenses for the three months ended
September 30, 2019 , include approximately$10 million and$2 million , respectively, of severance costs. 37
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Item 2.Management's Discussion and Analysis of Financial Condition and Results of Operations - Continued Upstream Reporting Segment Three Months Ended September 30, 2020 2019 Variance (in thousands)
Oil, natural gas and NGL sales $ 7,340 $ 51,029
$ (43,689 ) Marketing and other revenues 142 16,627 (16,485 ) 7,482 67,656 (60,174 ) Lease operating expenses 2,367 18,307 (15,940 ) Transportation expenses 818 16,275 (15,457 ) Marketing expenses 6 7,948 (7,942 ) Taxes, other than income taxes 421 4,468 (4,047 ) Total direct operating expenses 3,612 46,998 (43,386 ) Field level cash flow (1) $ 3,870 $ 20,658$ (16,788 )
(1) Refer to Note 17 for a reconciliation of field level cash flow to loss before
income taxes.
Oil, Natural Gas and NGL Sales
Oil, natural gas and NGL sales decreased by approximately$44 million or 86% to approximately$7 million for the three months endedSeptember 30, 2020 , from approximately$51 million for the three months endedSeptember 30, 2019 , primarily due to lower natural gas and NGL volumes as a result of divestitures completed in 2019 and 2020 and lower commodity prices. Lower natural gas and oil prices resulted in a decrease in revenues of approximately$1 million and$1 million , respectively. Average daily production volumes decreased to approximately 35 MMcfe/d for the three months endedSeptember 30, 2020 , from 242 MMcfe/d for the three months endedSeptember 30, 2019 . Lower natural gas, NGL and oil production volumes resulted in a decrease in revenues of approximately$29 million ,$6 million and$7 million , respectively.
The following table sets forth average daily production by region:
Three Months Ended September 30, 2020 2019 Variance Average daily production (MMcfe/d): Hugoton Basin - 106 (106 ) (100 %) Mid-Continent 24 42 (18 ) (43 %) East Texas - 40 (40 ) (100 %) North Louisiana 11 35 (24 ) (69 %) Uinta Basin - 17 (17 ) (100 %) Michigan/Illinois - 2 (2 ) (100 %) 35 242 (207 ) (86 %) The decrease in average daily production in the Mid-Continent operating region primarily reflects a reduction in production due to reduced development drilling and natural decline of 2019 drilling programs. The decrease in average daily production inNorth Louisiana primarily reflects those same characteristics, coupled with plant downtime and the Company's divestiture of interests in properties in this region during the third quarter of 2020. The decrease in average daily production volumes in theUinta Basin andEast Texas operating regions primarily reflect lower production volumes as a result of divestitures completed during 2020. In addition, the Company completed the divestiture of all of its interests in properties located in theHugoton Basin andMichigan /Illinois operating regions during 2019. See Note 3 for additional information about divestitures. 38
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Item 2.Management's Discussion and Analysis of Financial Condition and Results of Operations - Continued
Marketing and Other Revenues
Three Months Ended September 30, 2020 2019 Variance (in thousands) Jayhawk plant and helium $ 1 $ 14,751$ (14,750 ) Other 141 1,876 (1,735 )$ 142 $ 16,627$ (16,485 ) Marketing and other revenues decreased by approximately$17 million or 99% to approximately$142,000 for the three months endedSeptember 30, 2020 , from approximately$17 million for the three months endedSeptember 30, 2019 . The decrease was primarily due to theHugoton Basin Assets Sale, which included sale of the Jayhawk plant. Other primarily includes revenues from other midstream systems in theEast Texas andNorth Louisiana operating regions, which were divested in 2020.
Lease Operating Expenses
Lease operating expenses include expenses such as labor, field office, vehicle, supervision, maintenance, tools and supplies, and workover expenses. Lease operating expenses decreased by approximately$16 million or 87% to approximately$2 million for the three months endedSeptember 30, 2020 , from approximately$18 million for the three months endedSeptember 30, 2019 . The decrease was primarily due to divestitures completed in 2019 and 2020 and lower service costs. Lease operating expenses per Mcfe decreased to$0.73 per Mcfe for the three months endedSeptember 30, 2020 , from$0.82 per Mcfe for the three months endedSeptember 30, 2019 , primarily driven by changes in the Company's asset base as a result of divestitures.
Transportation Expenses
Transportation expenses decreased by approximately$15 million or 95% to approximately$1 million for the three months endedSeptember 30, 2020 , from approximately$16 million for the three months endedSeptember 30, 2019 . The decrease was primarily due to divestitures completed in 2019 and 2020. Transportation expenses per Mcfe decreased to$0.25 per Mcfe for the three months endedSeptember 30, 2020 , from$0.73 per Mcfe for the three months endedSeptember 30, 2019 , primarily driven by changes in the Company's asset base as a result of divestitures. Marketing Expenses
Three Months Ended September 30, 2020 2019 Variance (in thousands) Jayhawk plant $ - $ 7,255$ (7,255 ) Other 6 693 (687 )$ 6 $ 7,948$ (7,942 ) Marketing expenses represent third-party activities associated with company-owned gathering systems, plants and facilities. Marketing expenses decreased by approximately$8 million or 100% to approximately$6,000 for the three months endedSeptember 30, 2020 , from approximately$8 million for the three months endedSeptember 30, 2019 . The decrease was primarily due to theHugoton Basin Assets Sale, which included sale of the Jayhawk plant. 39
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Item 2.Management's Discussion and Analysis of Financial Condition and Results of Operations - Continued
Taxes, Other Than Income Taxes
Three Months Ended September 30, 2020 2019 Variance (in thousands) Severance taxes$ 335 $ 1,475$ (1,140 ) Ad valorem taxes 40 2,938 (2,898 ) Other taxes 46 55 (9 )$ 421 $ 4,468$ (4,047 ) Severance taxes, which are a function of revenues generated from production, decreased primarily due to lower production volumes due to divestitures completed in 2019 and 2020. Ad valorem taxes, which are based on the value of reserves and production equipment and vary by location, decreased primarily due to divestitures completed in 2019 and 2020.
Field level cash flow decreased by approximately$17 million or 81% to approximately$4 million for the three months endedSeptember 30, 2020 , from approximately$21 million for the three months endedSeptember 30, 2019 . The decrease was primarily due to divestitures completed in 2019 and 2020 and lower commodity prices.
Blue Mountain Reporting Segment
Three Months Ended September 30, 2020 2019 Variance (in thousands) Marketing revenues$ 28,941 $ 34,733 $ (5,792 ) Marketing expenses 20,278 29,740 (9,462 ) Taxes, other than income taxes 425 643 (218 ) Total direct operating expenses 20,703 30,383 (9,680 ) Field level cash flow (1) $ 8,238 $ 4,350$ 3,888
(1) Refer to Note 17 for a reconciliation of field level cash flow to loss before
income taxes. Marketing Revenues Marketing revenues decreased by approximately$6 million or 17% to approximately$29 million for the three months endedSeptember 30, 2020 , from approximately$35 million for the three months endedSeptember 30, 2019 . The decrease was primarily due to lower commodity prices and lower volumes. Average daily throughput volumes decreased to approximately 105 MMcf/d for the three months endedSeptember 30, 2020 , from 114 MMcf/d for the three months endedSeptember 30, 2019 .
Marketing Expenses
Marketing expenses decreased by approximately$10 million or 32% to approximately$20 million for the three months endedSeptember 30, 2020 , from approximately$30 million for the three months endedSeptember 30, 2019 . The decrease was primarily due to lower commodity prices and lower volumes.
Field level cash flow increased by approximately
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Item 2.Management's Discussion and Analysis of Financial Condition and Results of Operations - Continued
Indirect Income and Expenses
Gains (Losses) on Commodity Derivatives
Losses on commodity derivatives were approximately$3 million for the three months endedSeptember 30, 2020 , compared to gains of approximately$6 million for the three months endedSeptember 30, 2019 . Gains and losses on commodity derivatives were primarily due to changes in fair value of the derivative contracts. The fair value on unsettled derivative contracts changes as future commodity price expectations change compared to the contract prices on the derivatives. If the expected future commodity prices increase compared to the contract prices on the derivatives, losses are recognized; and if the expected future commodity prices decrease compared to the contract prices on the derivatives, gains are recognized. During the three months endedSeptember 30, 2020 , the Company unwound all of its natural gas fixed price swaps, oil fixed price swaps, and Panhandle Eastern Pipeline basis swaps for 2020 and 2021, for a cost of approximately$356,000 . As ofSeptember 30, 2020 , the Company had no derivative positions.
General and Administrative Expenses
General and administrative expenses are costs not directly associated with field operations and reflect the costs of employees including executive officers, related benefits, office leases and professional fees. General and administrative expenses were approximately$17 million for both the three months endedSeptember 30, 2020 , andSeptember 30, 2019 . Increased severance expenses were offset primarily by lower share-based compensation expenses and lower salaries and benefits related expenses resulting from lower headcount. Severance expenses were approximately$10 million for the three months endedSeptember 30, 2020 , compared to$2 million for the three months endedSeptember 30, 2019 . General and administrative expenses per Mcfe increased to$5.17 per Mcfe for the three months endedSeptember 30, 2020 , from$0.76 per Mcfe for the three months endedSeptember 30, 2019 , due to lower production volumes associated with divestitures and increased severance expenses.
Exploration Costs
Exploration costs were approximately
Depreciation, Depletion and Amortization
Depreciation, depletion and amortization decreased by approximately$16 million or 80% to approximately$4 million for the three months endedSeptember 30, 2020 , from approximately$20 million for the three months endedSeptember 30, 2019 . Depreciation, depletion and amortization per Mcfe increased to$1.20 per Mcfe for the three months endedSeptember 30, 2020 , from$0.90 per Mcfe for the three months endedSeptember 30, 2019 .
Impairment of Assets Held for Sale and Long-Lived Assets
During the three months endedSeptember 30, 2020 , the Company recorded impairment charges of approximately$220 million , primarily to reduce the carrying value of Blue Mountain Midstream's assets to fair value. The impairment charges were primarily triggered by the Company's exit from the midstream business, with the fair value being predominantly driven by the contract price of the Blue Mountain Divestiture. During the three months endedSeptember 30, 2019 , the Company recorded a noncash impairment charge of approximately$95 million related to divested oil and natural gas properties located in theHugoton Basin . The impairment charge was primarily due to a decline in commodity prices. See Note 1 for additional information about impairment and Note 3 for information about divestitures.
(Gains) Losses on Sale of Assets and Other, Net
During the three months endedSeptember 30, 2020 , the Company recorded a net loss of approximately$4 million , including bad debt expense of approximately$2 million , a net loss of approximately$1 million on the sale ofNorth Louisiana Assets and net losses from other divestitures. During the three months endedSeptember 30, 2019 , the Company recorded a net gain of approximately$8 million , primarily related to divestitures. See Note 3 for information about divestitures. 41
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Item 2.Management's Discussion and Analysis of Financial Condition and Results of Operations - Continued Other Income and (Expenses) Three Months Ended September 30, 2020 2019 Variance (in thousands)
Interest expense, net of amounts capitalized $ (700 ) $
(2,329 )$ 1,629 Other, net (309 ) (595 ) 286$ (1,009 ) $ (2,924 ) $ 1,915 Interest expense decreased primarily due to lower outstanding debt during the three months endedSeptember 30, 2020 , compared to the same period of the prior year. For the three months endedSeptember 30, 2020 , "other, net" is primarily related to commitment fees for the undrawn portion of the Credit Facilities. For the three months endedSeptember 30, 2019 , "other, net" is primarily related to write off of a portion of unamortized deferred financing fees of approximately$700,000 and commitment fees for the undrawn portion of the Credit Facilities, partially offset by interest and rental income. See "Debt" under "Liquidity and Capital Resources" below for additional details.
Reorganization Items, Net
Reorganization items represent costs directly associated with Chapter 11 proceedings since the petition date. During the three months endedSeptember 30, 2020 , andSeptember 30, 2019 , reorganization items were approximately$210,000 and$284,000 , respectively, primarily related to legal and other professional fees. Income Tax Expense The Company recognized no income tax expense for the three months endedSeptember 30, 2020 , because of a full valuation allowance recorded in the third quarter of 2019, compared to income tax expense of approximately$127 million for the three months endedSeptember 30, 2019 . During the third quarter of 2019, and for the first time since Riviera's inception, the Company's earnings were a cumulative loss, primarily due to losses generated during 2019. Based on the cumulative loss and projections of future taxable loss for the periods in which deferred tax assets are deductible, the Company recorded a full valuation allowance against all of its deferred tax assets.
Net Loss
A net loss of approximately$236 million was incurred for the three months endedSeptember 30, 2020 , compared to approximately$226 million for the three months endedSeptember 30, 2019 . See discussion above for explanations of variances. 42
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Item 2.Management's Discussion and Analysis of Financial Condition and Results of Operations - Continued
Results of Operations Nine Months EndedSeptember 30, 2020 , Compared to Nine Months EndedSeptember 30, 2019 Nine Months Ended September 30, 2020 2019 Variance (in thousands) Revenues and other: Natural gas sales $ 18,695$ 136,823 $ (118,128 ) Oil sales 11,424 26,525 (15,101 ) NGL sales 2,953 30,783 (27,830 ) Total oil, natural gas and NGL sales 33,072 194,131 (161,059 ) Gains on commodity derivatives 3,773 12,673 (8,900 ) Marketing and other revenues 84,909 183,254 (98,345 ) 121,754 390,058 (268,304 ) Expenses: Lease operating expenses 10,212 66,204 (55,992 ) Transportation expenses 4,201 53,478 (49,277 ) Marketing expenses 58,431 132,888 (74,457 ) General and administrative expenses (1) 37,994 49,434 (11,440 ) Exploration costs 413 4,154 (3,741 ) Depreciation, depletion and amortization 19,027 65,013 (45,986 ) Impairment of assets held for sale and long-lived assets 341,264 113,470 227,794 Taxes, other than income taxes 3,436 14,010 (10,574 ) (Gains) losses on sale of assets and other, net 1,484 (24,967 ) 26,451 476,462 473,684 2,778 Other income and (expenses) (3,685 ) (6,111 ) 2,426 Reorganization items, net (704 ) (756 ) 52 Loss before income taxes (359,097 ) (90,493 ) (268,604 ) Income tax expense - 129,092 (129,092 ) Net loss$ (359,097 ) $ (219,585 ) $ (139,512 )
(1) General and administrative expenses for the nine months ended
2020, and
million, respectively, of share-based compensation expenses. In addition,
general and administrative expenses for the nine months ended
2020, andSeptember 30, 2019 , include approximately$15 million and$2 million , respectively, of severance costs. 43
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Item 2.Management's Discussion and Analysis of Financial Condition and Results of Operations - Continued Nine Months Ended September 30, 2020 2019 Variance Average daily production: Natural gas (MMcf/d) 41 215 (81 %) Oil (MBbls/d) 1.1 1.7 (35 %) NGL (MBbls/d) 1.0 6.4 (84 %) Total (MMcfe/d) 53 264 (80 %) Weighted average prices: (1) Natural gas (Mcf) $ 1.66 $ 2.33 (29 %) Oil (Bbl) $ 39.44 $ 55.80 (29 %) NGL (Bbl) $ 11.25 $ 17.55 (36 %) Average NYMEX prices: Natural gas (MMBtu) $ 1.88 $ 2.67 (30 %) Oil (Bbl) $ 38.32 $ 56.72 (32 %) Costs per Mcfe of production: Lease operating expenses $ 0.70 $ 0.92 (24 %) Transportation expenses $ 0.29 $ 0.74 (61 %) General and administrative expenses (2) $ 2.61 $ 0.69 278 % Depreciation, depletion and amortization $ 1.31 $ 0.90 46 % Taxes, other than income taxes $ 0.24 $ 0.19 26 %
(1) Does not include the effect of gains (losses) on derivatives.
(2) General and administrative expenses for the nine months ended
2020, and
million, respectively, of share-based compensation expenses. In addition,
general and administrative expenses for the nine months ended
2020, andSeptember 30, 2019 , include approximately$15 million and$2 million , respectively, of severance costs. 44
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Item 2.Management's Discussion and Analysis of Financial Condition and Results of Operations - Continued Upstream Reporting Segment Nine Months Ended September 30, 2020 2019 Variance (in thousands) Oil, natural gas and NGL sales$ 33,072 $ 194,131 $ (161,059 ) Marketing and other revenues 2,880 63,549 (60,669 ) 35,952 257,680 (221,728 ) Lease operating expenses 10,212 66,204 (55,992 ) Transportation expenses 4,201 53,478 (49,277 ) Marketing expenses 70 35,568 (35,498 ) Taxes, other than income taxes 2,142 11,984 (9,842 ) Total direct operating expenses 16,625 167,234 (150,609 ) Field level cash flow (1)$ 19,327 $ 90,446$ (71,119 )
(1) Refer to Note 17 for a reconciliation of field level cash flow to loss before
income taxes.
Oil, Natural Gas and NGL Sales
Oil, natural gas and NGL sales decreased by approximately$161 million or 83% to approximately$33 million for the nine months endedSeptember 30, 2020 , from approximately$194 million for the nine months endedSeptember 30, 2019 , primarily due to lower production volumes as a result of divestitures completed in 2019 and 2020 and lower commodity prices. Lower natural gas, NGL and oil prices resulted in a decrease in revenues of approximately$7 million ,$2 million and$5 million , respectively. Average daily production volumes decreased to approximately 53 MMcfe/d for the nine months endedSeptember 30, 2020 , from 264 MMcfe/d for the nine months endedSeptember 30, 2019 . Lower natural gas, NGL and oil production volumes resulted in a decrease in revenues of approximately$111 million ,$26 million and$10 million , respectively.
The following table sets forth average daily production by region:
Nine Months Ended September 30, 2020 2019 Variance Average daily production (MMcfe/d): Hugoton Basin - 114 (114 ) (100 %) Mid-Continent 30 38 (8 ) (21 %) East Texas 6 43 (37 ) (86 %) North Louisiana 16 32 (16 ) (50 %) Uinta Basin 1 18 (17 ) (94 %) Michigan/Illinois - 19 (19 ) (100 %) 53 264 (211 ) (80 %) Production volumes in the Mid-Continent were consistent with the comparable period of the prior year. The decrease in average daily production inNorth Louisiana primarily reflects a reduction in production due to reduced development drilling and natural decline of 2019 drilling programs, plant downtime, and the Company's divestiture of interests in properties in this region during 2020 and 2019. The decreases in average daily production volumes in theUinta Basin andEast Texas operating regions primarily reflect lower production volumes as a result of divestitures completed during 2020. In addition, the Company completed the divestiture of all of its interests in properties located in theHugoton Basin andMichigan /Illinois operating regions during 2019. See Note 3 for additional information about divestitures. 45
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Item 2.Management's Discussion and Analysis of Financial Condition and Results of Operations - Continued
Marketing and Other Revenues
Nine Months Ended September 30, 2020 2019 Variance (in thousands) Jayhawk plant and helium $ 17 $ 58,061$ (58,044 ) Other 2,863 5,488 (2,625 ) $ 2,880 $ 63,549$ (60,669 ) Marketing and other revenues decreased by approximately$61 million or 95% to approximately$3 million for the nine months endedSeptember 30, 2020 , from approximately$64 million for the nine months endedSeptember 30, 2019 . The decrease was primarily due to theHugoton Basin Assets Sale, which included sale of the Jayhawk plant. Other primarily includes revenues from other midstream systems in theEast Texas andNorth Louisiana operating regions, which were divested in 2020.
Lease Operating Expenses
Lease operating expenses include expenses such as labor, field office, vehicle, supervision, maintenance, tools and supplies, and workover expenses. Lease operating expenses decreased by approximately$56 million or 85% to approximately$10 million for the nine months endedSeptember 30, 2020 , from approximately$66 million for the nine months endedSeptember 30, 2019 . The decrease was primarily due to divestitures completed in 2019 and 2020 and lower service costs. Lease operating expenses per Mcfe decreased to$0.70 per Mcfe for the nine months endedSeptember 30, 2020 , from$0.92 per Mcfe for the nine months endedSeptember 30, 2019 .
Transportation Expenses
Transportation expenses decreased by approximately$49 million or 92% to approximately$4 million for the nine months endedSeptember 30, 2020 , from approximately$53 million for the nine months endedSeptember 30, 2019 . Transportation expenses per Mcfe decreased to$0.29 per Mcfe for the nine months endedSeptember 30, 2020 , from$0.74 per Mcfe for the nine months endedSeptember 30, 2019 , primarily driven by changes in the Company's asset base as a result of divestitures. Marketing Expenses
Nine Months Ended September 30, 2020 2019 Variance (in thousands) Jayhawk plant$ (120 ) $ 33,446$ (33,566 ) Other 190 2,122 (1,932 ) $ 70 $ 35,568$ (35,498 ) Marketing expenses represent third-party activities associated with company-owned gathering systems, plants and facilities. Marketing expenses decreased by approximately$36 million or 100% to approximately$70,000 for the nine months endedSeptember 30, 2020 , from approximately$36 million for the nine months endedSeptember 30, 2019 . The decrease was primarily due to theHugoton Basin Assets Sale, which included sale of the Jayhawk plant and a credit to expense from receipt of an electric co-op refund during the nine months endedSeptember 30, 2020 .
Taxes, Other Than Income Taxes
Nine Months Ended September 30, 2020 2019 Variance (in thousands) Severance taxes $ 1,598 $ 6,120$ (4,522 ) Ad valorem taxes 151 9,962 (9,811 ) Other taxes 393 (4,098 ) 4,491 $ 2,142 $ 11,984$ (9,842 ) 46
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Item 2.Management's Discussion and Analysis of Financial Condition and Results of Operations - Continued
Severance taxes, which are a function of revenues generated from production, decreased primarily due to lower production volumes due to divestitures completed in 2019 and 2020. Ad valorem taxes, which are based on the value of reserves and production equipment and vary by location, decreased primarily due to divestitures completed in 2019 and 2020. Other taxes include a sales tax refund of approximately$4 million during the nine months endedSeptember 30, 2019 .Field Level Cash Flow Field level cash flow decreased by approximately$71 million or 79% to approximately$19 million for the nine months endedSeptember 30, 2020 , from approximately$90 million for the nine months endedSeptember 30, 2019 . The decrease was primarily due to divestitures completed in 2019 and 2020 and lower commodity prices.
Blue Mountain Reporting Segment
Nine Months Ended September 30, 2020 2019 Variance (in thousands) Marketing revenues$ 82,029 $ 119,705 $ (37,676 ) Marketing expenses 58,361 97,320 (38,959 ) Taxes, other than income taxes 1,294 2,026 (732 ) Total direct operating expenses 59,655 99,346 (39,691 ) Field level cash flow (1)$ 22,374 $ 20,359$ 2,015
(1) Refer to Note 17 for a reconciliation of field level cash flow to loss before
income taxes. Marketing Revenues Marketing revenues decreased by approximately$38 million or 31% to approximately$82 million for the nine months endedSeptember 30, 2020 , from approximately$120 million for the nine months endedSeptember 30, 2019 . The decrease was primarily due to lower commodity prices, lower volumes, production curtailments and contract disputes during 2020, partially offset by revenues from the water service business beginning in the second quarter of 2019. Average daily throughput volumes decreased to approximately 107 MMcf/d for the nine months endedSeptember 30, 2020 , from 117 MMcf/d for the nine months endedSeptember 30, 2019 .
Marketing Expenses
Marketing expenses decreased by approximately$39 million or 40% to approximately$58 million for the nine months endedSeptember 30, 2020 , from approximately$97 million for the nine months endedSeptember 30, 2019 . The decrease was primarily due to lower commodity prices during 2020, partially offset by expenses related to the water services business and higher marketing expenses due to discounts on gathering fees offered to producers during 2020.
Field level cash flow increased by approximately
Indirect Income and Expenses
Gains on Commodity Derivatives
Gains on commodity derivatives were approximately$4 million and$13 million for the nine months endedSeptember 30, 2020 , and the nine months endedSeptember 30, 2019 , respectively. Gains on commodity derivatives were primarily due to changes in fair value of the derivative contracts. The fair value on unsettled derivative contracts changes as future commodity price expectations change compared to the contract prices on the derivatives. If the expected future commodity prices increase compared to the contract prices on the derivatives, losses are recognized; and if the expected future commodity prices decrease compared to the contract prices on the derivatives, gains are recognized. During the nine months endedSeptember 30, 2020 , the Company unwound all of its natural gas fixed price swaps, oil fixed price swaps, and 47
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Item 2.Management's Discussion and Analysis of Financial Condition and Results of Operations - Continued
Panhandle Eastern Pipeline basis swaps for 2020 and 2021, for a cost of
approximately
General and Administrative Expenses
General and administrative expenses are costs not directly associated with field operations and reflect the costs of employees including executive officers, related benefits, office leases and professional fees. General and administrative expenses decreased by approximately$11 million or 23% to approximately$38 million for the nine months endedSeptember 30, 2020 , from approximately$49 million for the nine months endedSeptember 30, 2019 . The decrease was primarily due to lower share-based compensation expenses, which were a negative expense of approximately$3 million based on the fair value of outstanding awards, and lower salaries and benefits related expenses due to lower headcount, partially offset by increased severance expenses. Severance expenses were approximately$15 million for the nine months endedSeptember 30, 2020 , compared to$2 million for the nine months endedSeptember 30, 2019 . General and administrative expenses per Mcfe increased to$2.61 per Mcfe for the nine months endedSeptember 30, 2020 , from$0.69 per Mcfe for the nine months endedSeptember 30, 2019 , due to lower production volumes associated with divestitures and increased severance expenses.
Exploration Costs
Exploration costs were approximately
Depreciation, Depletion and Amortization
Depreciation, depletion and amortization decreased by approximately$46 million or 71% to approximately$19 million for the nine months endedSeptember 30, 2020 , from approximately$65 million for the nine months endedSeptember 30, 2019 . Depreciation, depletion and amortization per Mcfe increased to$1.31 per Mcfe for the nine months endedSeptember 30, 2020 , from$0.90 per Mcfe for the nine months endedSeptember 30, 2019 .
Impairment of Assets Held for Sale and Long-Lived Assets
During the nine months endedSeptember 30, 2020 , the Company recorded impairment charges of approximately$341 million . Approximately$237 million was recorded primarily to reduce the carrying value of Blue Mountain Midstream's assets to fair value. In addition, approximately$88 million related to proved and unproved oil and natural gas properties located inOklahoma , approximately$12 million to divested properties located inNorth Louisiana , and approximately$4 million to divested properties located inEast Texas . The impairment charges recorded in the three months endedSeptember 30, 2020 , were primarily triggered by the Company's exit from the midstream business, with the fair value being predominantly driven by the contract price of the Blue Mountain Divestiture. The impairment charges recorded in the first quarter and second quarter of 2020 were primarily due to declines in commodity prices and declines in expected future volumes. During the nine months endedSeptember 30, 2019 , the Company recorded noncash impairment charges of approximately$113 million . Of this, approximately$95 million related to divested oil and natural gas properties located in theHugoton Basin and approximately$18 million to divested properties located inMichigan . The impairment charges were primarily due to a decline in commodity prices. See Note 1 for additional information about impairment and Note 3 for information about divestitures.
Gains (Losses) on Sale of Assets and Other, Net
During the nine months endedSeptember 30, 2020 , the Company recorded a net loss of approximately$1 million , including bad debt expense of approximately$2 million , a net loss of approximately$1 million on the sale ofNorth Louisiana Assets, net losses from other divestitures and the disposal of furniture and equipment, partially offset by a net gain of approximately$1 million on the Drunkards Wash Asset Sale. During the nine months endedSeptember 30, 2019 , the Company recorded a net gain of approximately$25 million , related to net gains from divestitures of approximately$37 million , partially offset by net losses, primarily related to divestiture activity. See Note 3 for information about divestitures. 48
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Item 2.Management's Discussion and Analysis of Financial Condition and Results of Operations - Continued Other Income and (Expenses) Nine Months Ended September 30, 2020 2019 Variance (in thousands)
Interest expense, net of amounts capitalized
(5,403 )$ 3,035 Other, net (1,317 ) (708 ) (609 )$ (3,685 ) $ (6,111 ) $ 2,426 Interest expense decreased primarily due to lower outstanding debt during the nine months endedSeptember 30, 2020 , compared to the same period of the prior year. For the nine months endedSeptember 30, 2020 , "other, net" is primarily related to the write-off of a portion of unamortized deferred financing fees of approximately$468,000 and commitment fees for the undrawn portion of the Credit Facilities, partially offset by interest income and rental income. For the nine months endedSeptember 30, 2019 , "other, net" is primarily related to write off of a portion of unamortized deferred financing fees of approximately$700,000 and commitment fees for the undrawn portion of the Credit Facilities, partially offset by interest and rental income. See "Debt" under "Liquidity and Capital Resources" below for additional details.
Reorganization Items, Net
Reorganization items represent costs directly associated with the Chapter 11 proceedings since the petition date. During the nine months endedSeptember 30, 2020 , andSeptember 30, 2019 , reorganization items were approximately$704,000 and$756,000 , respectively, primarily related to legal and other professional fees. Income Tax Expense The Company recognized no income tax expense for the nine months endedSeptember 30, 2020 , because of a full valuation allowance recorded in the third quarter of 2019, compared to income tax expense of approximately$129 million for the nine months endedSeptember 30, 2019 . During the third quarter of 2019, and for the first time since Riviera's inception, the Company's earnings were a cumulative loss, primarily due to losses generated during 2019. Based on the cumulative loss and projections of future taxable loss for the periods in which deferred tax assets are deductible, the Company recorded a full valuation allowance against all of its deferred tax assets.
Net Loss
A net loss of approximately$359 million was incurred for the nine months endedSeptember 30, 2020 , compared to approximately$220 million for the nine months endedSeptember 30, 2019 . See discussion above for explanations of variances.
Liquidity and Capital Resources
The Company's sources of cash have primarily consisted of proceeds from divestitures of oil and natural gas properties, net cash provided by operating activities and borrowings under the Blue Mountain Credit Facility. As a result of divesting certain oil and natural gas properties, selling an office building, and inclusive of deposits from fourth quarter divestitures, during the nine months endedSeptember 30, 2020 , the Company received approximately$101 million in net cash proceeds. The Company has used its cash to fund capital expenditures, for distributions to shareholders, and for repurchases of Riviera common stock. See Note 18 for information about the Company's Plan of Liquidation. 49
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