Quarterly report pursuant to Section 13 or 15(d)

Condensed Consolidating Financial Information

v3.5.0.2
Condensed Consolidating Financial Information
9 Months Ended
Sep. 30, 2016
Condensed Financial Information of Parent Company Only Disclosure [Abstract]  
Condensed Consolidating Financial Information
CONDENSED CONSOLIDATING FINANCIAL INFORMATION
On October 17, 2012, December 21, 2012 and August 18, 2014, the Company issued an aggregate of $600.0 million principal amount of its 7.75% Senior Notes. The October Notes, December Notes, and the August Notes are collectively referred to as the "2020 Notes". The 2020 Notes are guaranteed on a senior unsecured basis by all existing consolidated subsidiaries that guarantee the Company's secured revolving credit facility or certain other debt (the "Guarantors"). The 2020 Notes are not guaranteed by Grizzly Holdings, Inc. (the "Non-Guarantor"). The Guarantors are 100% owned by Gulfport (the "Parent"), and the guarantees are full, unconditional, joint and several. There are no significant restrictions on the ability of the Parent or the Guarantors to obtain funds from each other in the form of a dividend or loan.
In connection with the issuance of the 2020 Notes, the Company and the subsidiary guarantors entered into registration rights agreements with the initial purchasers, pursuant to which the Company and the subsidiary guarantors agreed to file a registration statement with respect to an offer to exchange the 2020 Notes for a new issue of substantially identical debt securities registered under the Securities Act. The exchange offer for the October Notes and December Notes was completed in October 2013 and the exchange offer for the August Notes was completed in March 2015.
On April 21, 2015, the Company issued $350.0 million in aggregate principal amount of 6.625% Senior Notes due 2023 to qualified institutional buyers pursuant to Rule 144A under the Securities Act and to certain non-U.S. persons in accordance with Regulation S under the Securities Act. In connection with the 2023 Notes Offering, the Company and its subsidiary guarantors entered into a registration rights agreement, dated as of April 21, 2015, pursuant to which the Company agreed to file a registration statement with respect to an offer to exchange the 2023 Notes for a new issue of substantially identical debt securities registered under the Securities Act. The exchange offer for the 2023 Notes was completed on October 13, 2015.
The following condensed consolidating balance sheets, statements of operations, statements of comprehensive (loss) income and statements of cash flows are provided for the Parent, the Guarantors and the Non-Guarantor and include the consolidating adjustments and eliminations necessary to arrive at the information for the Company on a condensed consolidated basis. The information has been presented using the equity method of accounting for the Parent's ownership of the Guarantors and the Non-Guarantor.
CONDENSED CONSOLIDATING BALANCE SHEETS
(Amounts in thousands)
 
September 30, 2016
 
Parent
 
Guarantors
 
Non-Guarantor
 
Eliminations
 
Consolidated
Assets
 
 
 
 
 
 
 
 
 
Current assets:
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
$
363,279

 
$
996

 
$
1

 
$
—

 
$
364,276

Accounts receivable - oil and gas
133,159

 
16,283

 
—

 
(21,654
)
 
127,788

Accounts receivable - related parties
96

 
—

 
—

 
—

 
96

Accounts receivable - intercompany
384,280

 
5,970

 
—

 
(390,250
)
 
—

Prepaid expenses and other current assets
10,270

 
470

 
—

 
—

 
10,740

Short-term derivative instruments
39,363

 
—

 
—

 
—

 
39,363

Deferred tax asset
38

 
—

 
—

 
—

 
38

Total current assets
930,485

 
23,719

 
1

 
(411,904
)
 
542,301

Property and equipment:
 
 
 
 
 
 
 
 
 
Oil and natural gas properties, full-cost accounting
5,425,128

 
392,059

 
—

 
(729
)
 
5,816,458

Other property and equipment
54,417

 
43

 
—

 
—

 
54,460

Accumulated depletion, depreciation, amortization and impairment
(3,613,630
)
 
(32
)
 
—

 
—

 
(3,613,662
)
Property and equipment, net
1,865,915

 
392,070

 
—

 
(729
)
 
2,257,256

Other assets:
 
 
 
 
 
 
 
 
 
Equity investments
241,342

 
26,540

 
48,596

 
(65,169
)
 
251,309

Long-term derivative instruments
15,262

 
—

 
—

 
—

 
15,262

Deferred tax asset
4,203

 
—

 
—

 
—

 
4,203

Other assets
5,512

 
—

 
—

 
—

 
5,512

Total other assets
266,319

 
26,540

 
48,596

 
(65,169
)
 
276,286

  Total assets
$
3,062,719

 
$
442,329

 
$
48,597

 
$
(477,802
)
 
$
3,075,843

 
 
 
 
 
 
 
 
 
 
Liabilities and Stockholders' Equity
 
 
 
 
 
 
 
 
 
Current liabilities:
 
 
 
 
 
 
 
 
 
Accounts payable and accrued liabilities
$
291,217

 
$
40,557

 
$
1

 
$
(27,434
)
 
$
304,341

Accounts payable - intercompany
—

 
384,346

 
125

 
(384,471
)
 
—

Asset retirement obligation - current
75

 
—

 
—

 
—

 
75

Short-term derivative instruments
37,220

 
—

 
—

 
—

 
37,220

Current maturities of long-term debt
220

 
—

 
—

 
—

 
220

Total current liabilities
328,732

 
424,903

 
126

 
(411,905
)
 
341,856

Long-term derivative instrument
14,907

 
—

 
—

 
—

 
14,907

Asset retirement obligation - long-term
32,910

 
—

 
—

 
—

 
32,910

Long-term debt
961,050

 
—

 
—

 
—

 
961,050

Total liabilities
1,337,599

 
424,903

 
126

 
(411,905
)
 
1,350,723

 
 
 
 
 
 
 
 
 
 
Stockholders' equity:
 
 
 
 
 
 
 
 
 
Common stock
1,253

 
—

 
—

 
—

 
1,253

Paid-in capital
3,245,393

 
26,822

 
256,065

 
(282,887
)
 
3,245,393

Accumulated other comprehensive (loss) income
(50,816
)
 
—

 
(46,925
)
 
46,925

 
(50,816
)
Retained (deficit) earnings
(1,470,710
)
 
(9,396
)
 
(160,669
)
 
170,065

 
(1,470,710
)
Total stockholders' equity
1,725,120

 
17,426

 
48,471

 
(65,897
)
 
1,725,120

  Total liabilities and stockholders' equity
$
3,062,719

 
$
442,329

 
$
48,597

 
$
(477,802
)
 
$
3,075,843

CONDENSED CONSOLIDATING BALANCE SHEETS
(Amounts in thousands)
 
December 31, 2015
 
Parent
 
Guarantors
 
Non-Guarantor
 
Eliminations
 
Consolidated
Assets
 
 
 
 
 
 
 
 
 
Current assets:
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
$
112,494

 
$
479

 
$
1

 
$
—

 
$
112,974

Accounts receivable - oil and gas
72,241

 
54

 
—

 
(423
)
 
71,872

Accounts receivable - related parties
16

 
—

 
—

 
—

 
16

Accounts receivable - intercompany
326,475

 
60

 
—

 
(326,535
)
 
—

Prepaid expenses and other current assets
3,905

 
—

 
—

 
—

 
3,905

Short-term derivative instruments
142,794

 
—

 
—

 
—

 
142,794

Total current assets
657,925

 
593

 
1

 
(326,958
)
 
331,561

 
 
 
 
 
 
 
 
 
 
Property and equipment:
 
 
 
 
 
 
 
 
 
Oil and natural gas properties, full-cost accounting,
5,108,258

 
316,813

 
—

 
(729
)
 
5,424,342

Other property and equipment
33,128

 
43

 
—

 
—

 
33,171

Accumulated depletion, depreciation, amortization and impairment
(2,829,081
)
 
(29
)
 
—

 
—

 
(2,829,110
)
Property and equipment, net
2,312,305

 
316,827

 
—

 
(729
)
 
2,628,403

Other assets:
 
 
 
 
 
 
 
 
 
Equity investments
231,892

 
—

 
50,644

 
(40,143
)
 
242,393

Long-term derivative instruments
51,088

 
—

 
—

 
—

 
51,088

Deferred tax assets
74,925

 
—

 
—

 
—

 
74,925

Other assets
6,364

 
—

 
—

 
—

 
6,364

Total other assets
364,269

 
—

 
50,644

 
(40,143
)
 
374,770

  Total assets
$
3,334,499

 
$
317,420

 
$
50,645

 
$
(367,830
)
 
$
3,334,734

 
 
 
 
 
 
 
 
 
 
Liabilities and Stockholders' Equity
 
 
 
 
 
 
 
 
 
Current liabilities:
 
 
 
 
 
 
 
 
 
Accounts payable and accrued liabilities
$
264,893

 
$
527

 
$
—

 
$
(292
)
 
$
265,128

Accounts payable - intercompany
—

 
326,541

 
124

 
(326,665
)
 
—

Asset retirement obligation - current
75

 
—

—

—

 
—

 
75

Short-term derivative instruments
437

 
—

 
—

 
—

 
437

Deferred tax liability
50,697

 
—

 
—

 
—

 
50,697

Current maturities of long-term debt
179

 
—

 
—

 
—

 
179

Total current liabilities
316,281

 
327,068

 
124

 
(326,957
)
 
316,516

 
 
 
 
 
 
 
 
 
 
Long-term derivative instrument
6,935

 
—

 
—

 
—

 
6,935

Asset retirement obligation - long-term
26,362

 
—

 
—

 
—

 
26,362

Long-term debt, net of current maturities
946,084

 
—

 
—

 
—

 
946,084

Total liabilities
1,295,662

 
327,068

 
124

 
(326,957
)
 
1,295,897

 
 
 
 
 
 
 
 
 
 
Stockholders' equity:
 
 
 
 
 
 
 
 
 
Common stock
1,082

 
—

 
—

 
—

 
1,082

Paid-in capital
2,824,303

 
322

 
241,553

 
(241,875
)
 
2,824,303

Accumulated other comprehensive (loss) income
(55,177
)
 
—

 
(55,177
)
 
55,177

 
(55,177
)
Retained (deficit) earnings
(731,371
)
 
(9,970
)
 
(135,855
)
 
145,825

 
(731,371
)
Total stockholders' equity
2,038,837

 
(9,648
)
 
50,521

 
(40,873
)
 
2,038,837

  Total liabilities and stockholders' equity
$
3,334,499

 
$
317,420

 
$
50,645

 
$
(367,830
)
 
$
3,334,734

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS
(Amounts in thousands)
 
Three months ended September 30, 2016
 
Parent
 
Guarantors
 
Non-Guarantor
 
Eliminations
 
Consolidated
 
 
 
 
 
 
 
 
 
 
Total revenues
$
193,222

 
$
464

 
$
—

 
$
—

 
$
193,686

 
 
 
 
 
 
 
 
 
 
Costs and expenses:
 
 
 
 
 
 
 
 
 
Lease operating expenses
17,283

 
188

 
—

 
—

 
17,471

Production taxes
3,495

 
30

 
—

 
—

 
3,525

Midstream gathering and processing
45,385

 
90

 
—

 
—

 
45,475

Depreciation, depletion, and amortization
62,284

 
1

 
—

 
—

 
62,285

Impairment of oil and gas properties
212,194

 
—

 
—

 
—

 
212,194

General and administrative
10,772

 
(305
)
 
—

 
—

 
10,467

Accretion expense
269

 
—

 
—

 
—

 
269

 
351,682


4


—


—


351,686

 
 
 
 
 
 
 
 
 
 
(LOSS) INCOME FROM OPERATIONS
(158,460
)

460


—


—


(158,000
)
 
 
 
 
 
 
 
 
 
 
OTHER (INCOME) EXPENSE:
 
 
 
 
 
 
 
 
 
Interest expense
12,787

 
—

 
—

 
—

 
12,787

Interest income
(337
)
 
—

 
—

 
—

 
(337
)
Insurance proceeds
(3,750
)
 
—

 
—

 
—

 
(3,750
)
(Income) loss from equity method investments and investments in subsidiaries
(6,457
)
 
(99
)
 
364

 
195

 
(5,997
)
 
2,243


(99
)

364


195


2,703

 
 
 
 
 
 
 
 
 
 
(LOSS) INCOME BEFORE INCOME TAXES
(160,703
)
 
559

 
(364
)
 
(195
)
 
(160,703
)
INCOME TAX BENEFIT
(3,407
)
 
—

 
—

 
—

 
(3,407
)
 
 
 
 
 
 
 
 
 
 
NET (LOSS) INCOME
$
(157,296
)

$
559


$
(364
)

$
(195
)

$
(157,296
)
CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS
(Amounts in thousands)

 
Three months ended September 30, 2015
 
Parent
 
Guarantors
 
Non-Guarantor
 
Eliminations
 
Consolidated
 
 
 
 
 
 
 
 
 
 
Total revenues
$
230,282

 
$
287

 
$
—

 
$
—

 
$
230,569

 
 
 
 
 
 
 
 
 
 
Costs and expenses:
 
 
 
 
 
 
 
 
 
Lease operating expenses
17,358

 
210

 
—

 
—

 
17,568

Production taxes
3,570

 
23

 
—

 
—

 
3,593

Midstream gathering and processing
42,139

 
27

 
—

 
—

 
42,166

Depreciation, depletion, and amortization
90,327

 
2

 
—

 
—

 
90,329

Impairment of oil and gas properties
594,776

 
—

 
—

 
—

 
594,776

General and administrative
10,999

 
6

 
(4
)
 
—

 
11,001

Accretion expense
212

 
—

 
—

 
—

 
212

 
759,381

 
268

 
(4
)
 
—

 
759,645

 
 
 
 
 
 
 
 
 
 
(LOSS) INCOME FROM OPERATIONS
(529,099
)

19


4


—


(529,076
)
 
 
 
 
 
 
 
 
 
 
OTHER (INCOME) EXPENSE:
 
 
 
 
 
 
 
 
 
Interest expense
14,124

 
—

 
—

 
—

 
14,124

Interest income
(279
)
 
—

 
—

 
—

 
(279
)
Loss (income) from equity method investments and investments in subsidiaries
61,868

 
—

 
58,653

 
(58,630
)
 
61,891

 
75,713

 
—

 
58,653

 
(58,630
)
 
75,736

 
 
 
 
 
 
 
 
 
 
(LOSS) INCOME BEFORE INCOME TAXES
(604,812
)

19


(58,649
)

58,630


(604,812
)
INCOME TAX BENEFIT
(216,603
)
 
—

 
—

 
—

 
(216,603
)
 
 
 
 
 
 
 
 
 
 
NET (LOSS) INCOME
$
(388,209
)
 
$
19

 
$
(58,649
)
 
$
58,630

 
$
(388,209
)
CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS
(Amounts in thousands)
 
Nine months ended September 30, 2016
 
Parent
 
Guarantors
 
Non-Guarantor
 
Eliminations
 
Consolidated
 
 
 
 
 
 
 
 
 
 
Total revenues
$
321,399

 
$
1,098

 
$
—

 
$
—

 
$
322,497

 
 
 
 
 
 
 
 
 
 
Costs and expenses:
 
 
 
 
 
 
 
 
 
Lease operating expenses
48,246

 
543

 
—

 
—

 
48,789

Production taxes
9,410

 
82

 
—

 
—

 
9,492

Midstream gathering and processing
122,250

 
226

 
—

 
—

 
122,476

Depreciation, depletion, and amortization
183,411

 
3

 


 


 
183,414

Impairment of oil and gas properties
601,806

 
—

 
—

 
—

 
601,806

General and administrative
33,230

 
(291
)
 
2

 
—

 
32,941

Accretion expense
777

 
—

 
—

 
—

 
777

 
999,130

 
563

 
2

 
—

 
999,695

 
 
 
 
 
 
 
 
 
 
(LOSS) INCOME FROM OPERATIONS
(677,731
)
 
535

 
(2
)
 
—

 
(677,198
)
 
 
 
 
 
 
 
 
 
 
OTHER (INCOME) EXPENSE:
 
 
 
 
 
 
 
 
 
Interest expense
44,891

 
1

 
—

 
—

 
44,892

Interest income
(822
)
 
—

 
—

 
—

 
(822
)
Insurance proceeds
(3,750
)
 
—

 
—

 
—

 
(3,750
)
Loss (income) from equity method investments and investments in subsidiaries
25,044

 
(40
)
 
24,812

 
(24,240
)
 
25,576

 
65,363

 
(39
)
 
24,812

 
(24,240
)
 
65,896

 
 
 
 
 
 
 
 
 
 
(LOSS) INCOME BEFORE INCOME TAXES
(743,094
)
 
574

 
(24,814
)
 
24,240

 
(743,094
)
INCOME TAX BENEFIT
(3,755
)
 
—

 
—

 
—

 
(3,755
)
 
 
 
 
 
 
 
 
 
 
NET (LOSS) INCOME
$
(739,339
)
 
$
574

 
$
(24,814
)
 
$
24,240

 
$
(739,339
)
CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS
(Amounts in thousands)
 
Nine months ended September 30, 2015
 
Parent
 
Guarantors
 
Non-Guarantor
 
Eliminations
 
Consolidated
 
 
 
 
 
 
 
 
 
 
Total revenues
$
518,141

 
$
1,015

 
$
—

 
$
—

 
$
519,156

 
 
 
 
 
 
 
 
 
 
Costs and expenses:
 
 
 
 
 
 
 
 
 
Lease operating expenses
50,830

 
581

 
—

 
—

 
51,411

Production taxes
11,083

 
80

 
—

 
—

 
11,163

Midstream gathering and processing
100,405

 
46

 
—

 
—

 
100,451

Depreciation, depletion, and amortization
251,389

 
4

 
—

 
—

 
251,393

Impairment of oil and gas properties
594,776

 
—

 
—

 
—

 
594,776

General and administrative
31,248

 
47

 
20

 
—

 
31,315

Accretion expense
594

 
—

 
—

 
—

 
594

 
1,040,325

 
758

 
20

 
—

 
1,041,103

 
 
 
 
 
 
 
 
 
 
(LOSS) INCOME FROM OPERATIONS
(522,184
)
 
257

 
(20
)
 
—

 
(521,947
)
 
 
 
 
 
 
 
 
 
 
OTHER (INCOME) EXPENSE:
 
 
 
 
 
 
 
 
 
Interest expense
34,906

 
—

 
—

 
—

 
34,906

Interest income
(536
)
 
—

 
—

 
—

 
(536
)
Loss (income) from equity method investments and investments in subsidiaries
56,799

 
—

 
71,289

 
(71,052
)
 
57,036

 
91,169

 
—

 
71,289

 
(71,052
)
 
91,406

 
 
 
 
 
 
 
 
 
 
(LOSS) INCOME BEFORE INCOME TAXES
(613,353
)
 
257

 
(71,309
)
 
71,052

 
(613,353
)
INCOME TAX BENEFIT
(219,338
)
 
—

 
—

 
—

 
(219,338
)
 
 
 
 
 
 
 
 
 
 
NET (LOSS) INCOME
$
(394,015
)
 
$
257

 
$
(71,309
)
 
$
71,052

 
$
(394,015
)
CONDENSED CONSOLIDATING STATEMENTS OF COMPREHENSIVE (LOSS) INCOME
(Amounts in thousands)
 
Three months ended September 30, 2016
 
Parent
 
Guarantors
 
Non-Guarantor
 
Eliminations
 
Consolidated
 
 
 
 
 
 
 
 
 
 
Net (loss) income
$
(157,296
)
 
$
559

 
$
(364
)
 
$
(195
)
 
$
(157,296
)
Foreign currency translation adjustment, net of taxes
(4,013
)
 
—

 
(1,417
)
 
1,417

 
(4,013
)
Other comprehensive (loss) income
(4,013
)
 
—

 
(1,417
)
 
1,417

 
(4,013
)
Comprehensive (loss) income
$
(161,309
)
 
$
559

 
$
(1,781
)
 
$
1,222

 
$
(161,309
)
 
Three months ended September 30, 2015
 
Parent
 
Guarantors
 
Non-Guarantor
 
Eliminations
 
Consolidated
 
 
 
 
 
 
 
 
 
 
Net (loss) income
$
(388,209
)
 
$
19

 
$
(58,649
)
 
$
58,630

 
$
(388,209
)
Foreign currency translation adjustment
(11,538
)
 
—

 
(11,538
)
 
11,538

 
(11,538
)
Other comprehensive (loss) income
(11,538
)
 
—

 
(11,538
)
 
11,538

 
(11,538
)
Comprehensive (loss) income
$
(399,747
)
 
$
19

 
$
(70,187
)
 
$
70,168

 
$
(399,747
)

 
Nine months ended September 30, 2016
 
Parent
 
Guarantors
 
Non-Guarantor
 
Eliminations
 
Consolidated
 
 
 
 
 
 
 
 
 
 
Net (loss) income
$
(739,339
)
 
$
574

 
$
(24,814
)
 
$
24,240

 
$
(739,339
)
Foreign currency translation adjustment, net of taxes
4,361

 
—

 
8,252

 
(8,252
)
 
4,361

Other comprehensive income (loss)
4,361

 
—

 
8,252

 
(8,252
)
 
4,361

Comprehensive (loss) income
$
(734,978
)
 
$
574

 
$
(16,562
)
 
$
15,988

 
$
(734,978
)

 
Nine months ended September 30, 2015
 
Parent
 
Guarantors
 
Non-Guarantor
 
Eliminations
 
Consolidated
 
 
Net (loss) income
$
(394,015
)
 
$
257

 
$
(71,309
)
 
$
71,052

 
$
(394,015
)
Foreign currency translation adjustment
(23,275
)
 
—

 
(23,275
)
 
23,275

 
(23,275
)
Other comprehensive (loss) income
(23,275
)
 
—

 
(23,275
)
 
23,275

 
(23,275
)
Comprehensive (loss) income
$
(417,290
)
 
$
257

 
$
(94,584
)
 
$
94,327

 
$
(417,290
)
CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS
(Amounts in thousands)
 
Nine months ended September 30, 2016
 
Parent
 
Guarantors
 
Non-Guarantor
 
Eliminations
 
Consolidated
 
 
 
 
 
 
 
 
 
 
Net cash provided by (used in) operating activities
$
244,758

 
$
517

 
$
3,998

 
$
(3,998
)
 
$
245,275

 
 
 
 
 
 
 
 
 
 
Net cash (used in) provided by investing activities
(420,257
)
 
(26,500
)
 
(18,510
)
 
45,010

 
(420,257
)
 
 
 
 
 
 
 
 
 
 
Net cash provided by (used in) financing activities
426,284

 
26,500

 
14,512

 
(41,012
)
 
426,284

 
 
 
 
 
 
 
 
 
 
Net increase in cash and cash equivalents
250,785

 
517

 
—

 
—

 
251,302

 
 
 
 
 
 
 
 
 
 
Cash and cash equivalents at beginning of period
112,494

 
479

 
1

 
—

 
112,974

 
 
 
 
 
 
 
 
 
 
Cash and cash equivalents at end of period
$
363,279

 
$
996

 
$
1

 
$
—

 
$
364,276


 
Nine months ended September 30, 2015
 
Parent
 
Guarantors
 
Non-Guarantor
 
Eliminations
 
Consolidated
 
 
 
 
 
 
 
 
 
 
Net cash provided by (used in) operating activities
$
247,447

 
$
(12,356
)
 
$
—

 
$
—

 
$
235,091

 
 
 
 
 
 
 
 
 
 
Net cash (used in) provided by investing activities
(1,385,878
)
 
13,501

 
(13,837
)
 
13,837

 
(1,372,377
)
 
 
 
 
 
 
 
 
 
 
Net cash provided by (used in) financing activities
1,223,057

 
—

 
13,837

 
(13,837
)
 
1,223,057

 
 
 
 
 
 
 
 
 
 
Net increase in cash and cash equivalents
84,626

 
1,145

 
—

 
—

 
85,771

 
 
 
 
 
 
 
 
 
 
Cash and cash equivalents at beginning of period
141,535

 
804

 
1

 
—

 
142,340

 
 
 
 
 
 
 
 
 
 
Cash and cash equivalents at end of period
$
226,161

 
$
1,949

 
$
1

 
$
—

 
$
228,111