Quarterly report pursuant to Section 13 or 15(d)

CONDENSED CONSOLIDATING FINANCIAL INFORMATION

v3.19.2
CONDENSED CONSOLIDATING FINANCIAL INFORMATION
6 Months Ended
Jun. 30, 2019
Condensed Financial Information Disclosure [Abstract]  
CONDENSED CONSOLIDATING FINANCIAL INFORMATION CONDENSED CONSOLIDATING FINANCIAL INFORMATION
The 2023 Notes, the 2024 Notes, the 2025 Notes and the 2026 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 Notes are not guaranteed by Grizzly Holdings or Mule Sky LLC ("Mule Sky") (the “Non-Guarantors”). 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. Effective June 1, 2019, the Parent contributed interests in certain oil and gas assets and related liabilities to certain of the Guarantors.
The following condensed consolidating balance sheets, statements of operations, statements of comprehensive income and statements of cash flows are provided for the Parent, the Guarantors and the Non-Guarantors 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-Guarantors.
CONDENSED CONSOLIDATING BALANCE SHEETS
(Amounts in thousands)
 
June 30, 2019
 
Parent
 
Guarantors
 
Non-Guarantors
 
Eliminations
 
Consolidated
Assets
 
 
 
 
 
 
 
 
 
Current assets:
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
$
10,940

 
$
9,799

 
$
38

 
$

 
$
20,777

Accounts receivable - oil and natural gas sales
4,116

 
127,559

 

 

 
131,675

Accounts receivable - joint interest and other
9,043

 
37,602

 

 

 
46,645

Accounts receivable - intercompany
819,584

 
433,776

 

 
(1,253,360
)
 

Prepaid expenses and other current assets
5,948

 
3,451

 
75

 

 
9,474

Short-term derivative instruments
134,920

 

 

 

 
134,920

Total current assets
984,551

 
612,187

 
113

 
(1,253,360
)
 
343,491

 
 
 
 
 
 
 
 
 
 
Property and equipment:
 
 
 
 
 
 
 
 
 
Oil and natural gas properties, full-cost accounting
1,352,894

 
9,158,193

 
69

 
(729
)
 
10,510,427

Other property and equipment
92,343

 
751

 
3,319

 

 
96,413

Accumulated depletion, depreciation, amortization and impairment
(1,414,011
)
 
(3,468,663
)
 
(55
)
 

 
(4,882,729
)
Property and equipment, net
31,226

 
5,690,281

 
3,333

 
(729
)
 
5,724,111

Other assets:
 
 
 
 
 
 
 
 
 
Equity investments and investments in subsidiaries
5,171,925

 

 
51,607

 
(5,104,225
)
 
119,307

Long-term derivative instruments
5,036

 

 

 

 
5,036

Deferred tax asset
179,331

 

 

 

 
179,331

Inventories
188

 
8,813

 

 

 
9,001

Operating lease assets
19,334

 

 

 

 
19,334

Operating lease assets - related parties
53,579

 

 

 

 
53,579

Other assets
11,682

 
598

 

 

 
12,280

Total other assets
5,441,075

 
9,411

 
51,607

 
(5,104,225
)
 
397,868

Total assets
$
6,456,852

 
$
6,311,879

 
$
55,053

 
$
(6,358,314
)
 
$
6,465,470

 
 
 
 
 
 
 
 
 
 
Liabilities and Stockholders Equity
 
 
 
 
 
 
 
 
 
Current liabilities:
 
 
 
 
 
 
 
 
 
Accounts payable and accrued liabilities
$
74,597

 
$
419,190

 
$
43

 
$

 
$
493,830

Accounts payable - intercompany
469,071

 
780,600

 
3,689

 
(1,253,360
)
 

Short-term derivative instruments
198

 

 

 

 
198

Current portion of operating lease liabilities
17,999

 

 

 

 
17,999

Current portion of operating lease liabilities - related parties
20,817

 

 

 

 
20,817

Current maturities of long-term debt
615

 

 

 

 
615

Total current liabilities
583,297

 
1,199,790

 
3,732

 
(1,253,360
)
 
533,459

Long-term derivative instruments
210

 

 

 

 
210

Asset retirement obligation - long-term
30,035

 
58,456

 

 

 
88,491

Deferred tax liability
3,127

 

 

 

 
3,127

Non-current operating lease liabilities
1,335

 

 

 

 
1,335

Non-current operating lease liabilities - related parties
32,762

 

 

 

 
32,762

Long-term debt, net of current maturities
2,198,678

 

 

 

 
2,198,678

Total liabilities
2,849,444

 
1,258,246

 
3,732

 
(1,253,360
)
 
2,858,062

 
 
 
 
 
 
 
 
 
 
Stockholders’ equity:
 
 
 
 
 
 
 
 
 
Common stock
1,594

 

 

 

 
1,594

Paid-in capital
4,202,599

 
4,170,574

 
262,059

 
(4,432,633
)
 
4,202,599

Accumulated other comprehensive loss
(48,615
)
 

 
(46,527
)
 
46,527

 
(48,615
)
(Accumulated deficit) retained earnings
(548,170
)
 
883,059

 
(164,211
)
 
(718,848
)
 
(548,170
)
Total stockholders’ equity
3,607,408

 
5,053,633

 
51,321

 
(5,104,954
)
 
3,607,408

Total liabilities and stockholders equity
$
6,456,852

 
$
6,311,879

 
$
55,053

 
$
(6,358,314
)
 
$
6,465,470


CONDENSED CONSOLIDATING BALANCE SHEETS
(Amounts in thousands)
 
December 31, 2018
 
Parent
 
Guarantors
 
Non-Guarantor
 
Eliminations
 
Consolidated
Assets
 
 
 
 
 
 
 
 
 
Current assets:
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
$
25,585

 
$
26,711

 
$
1

 
$

 
$
52,297

Accounts receivable - oil and natural gas sales
146,075

 
64,125

 

 

 
210,200

Accounts receivable - joint interest and other
16,212

 
6,285

 

 

 
22,497

Accounts receivable - intercompany
671,633

 
319,464

 

 
(991,097
)
 

Prepaid expenses and other current assets
8,433

 
2,174

 

 

 
10,607

Short-term derivative instruments
21,352

 

 

 

 
21,352

Total current assets
889,290

 
418,759

 
1

 
(991,097
)
 
316,953

 
 
 
 
 
 
 
 
 
 
Property and equipment:
 
 
 
 
 
 
 
 
 
Oil and natural gas properties, full-cost accounting,
7,044,550

 
2,983,015

 

 
(729
)
 
10,026,836

Other property and equipment
91,916

 
751

 

 

 
92,667

Accumulated depletion, depreciation, amortization and impairment
(4,640,059
)
 
(39
)
 

 

 
(4,640,098
)
Property and equipment, net
2,496,407

 
2,983,727

 

 
(729
)
 
5,479,405

Other assets:
 
 
 
 
 
 
 
 
 
Equity investments and investments in subsidiaries
2,856,988

 

 
44,259

 
(2,665,126
)
 
236,121

Inventories
3,620

 
1,134

 

 

 
4,754

Other assets
12,624

 
1,178

 

 
1

 
13,803

Total other assets
2,873,232

 
2,312

 
44,259

 
(2,665,125
)
 
254,678

  Total assets
$
6,258,929

 
$
3,404,798

 
$
44,260

 
$
(3,656,951
)
 
$
6,051,036

 
 
 
 
 
 
 
 
 
 
Liabilities and Stockholders Equity
 
 
 
 
 
 
 
 
 
Current liabilities:
 
 
 
 
 
 
 
 
 
Accounts payable and accrued liabilities
$
419,107

 
$
99,273

 
$

 
$

 
$
518,380

Accounts payable - intercompany
320,259

 
670,708

 
130

 
(991,097
)
 

Short-term derivative instruments
20,401

 

 

 

 
20,401

Current maturities of long-term debt
651

 

 

 

 
651

Total current liabilities
760,418

 
769,981

 
130

 
(991,097
)
 
539,432

Long-term derivative instruments
13,992

 

 

 

 
13,992

Asset retirement obligation - long-term
66,859

 
13,093

 

 

 
79,952

Deferred tax liability
3,127

 

 

 

 
3,127

Long-term debt, net of current maturities
2,086,765

 

 

 

 
2,086,765

Total liabilities
2,931,161


783,074


130


(991,097
)

2,723,268

 
 
 
 
 
 
 
 
 
 
Stockholders’ equity:
 
 
 
 
 
 
 
 
 
Common stock
1,630

 

 

 

 
1,630

Paid-in capital
4,227,532

 
1,915,598

 
261,626

 
(2,177,224
)
 
4,227,532

Accumulated other comprehensive loss
(56,026
)
 

 
(53,783
)
 
53,783

 
(56,026
)
(Accumulated deficit) retained earnings
(845,368
)
 
706,126

 
(163,713
)
 
(542,413
)
 
(845,368
)
Total stockholders’ equity
3,327,768

 
2,621,724

 
44,130

 
(2,665,854
)
 
3,327,768

  Total liabilities and stockholders equity
$
6,258,929

 
$
3,404,798

 
$
44,260

 
$
(3,656,951
)
 
$
6,051,036


CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS
(Amounts in thousands)
 
Three months ended June 30, 2019
 
Parent
 
Guarantors
 
Non-Guarantors
 
Eliminations
 
Consolidated
 
 
 
 
 
 
 
 
 
 
Total revenues
$
280,291

 
$
178,703

 
$

 
$

 
$
458,994

 
 
 
 
 
 
 
 
 
 
Costs and expenses:
 
 
 
 
 
 
 
 
 
Lease operating expenses
12,256

 
10,132

 

 

 
22,388

Production taxes
2,820

 
5,278

 

 

 
8,098

Midstream gathering and processing expenses
28,121

 
43,894

 

 

 
72,015

Depreciation, depletion and amortization
80,132

 
44,764

 
55

 

 
124,951

General and administrative expenses
16,745

 
(3,583
)
 
103

 

 
13,265

Accretion expense
438

 
921

 

 

 
1,359

 
140,512


101,406


158




242,076

 
 
 
 
 
 
 
 
 
 
INCOME (LOSS) FROM OPERATIONS
139,779


77,297


(158
)



216,918

 
 
 
 
 
 
 
 
 
 
OTHER EXPENSE (INCOME):
 
 
 
 
 
 
 
 
 
Interest expense
35,835

 
(955
)
 

 

 
34,880

Interest income
(120
)
 
(39
)
 

 

 
(159
)
Insurance proceeds
(83
)
 

 

 

 
(83
)
Loss (income) from equity method investments and investments in subsidiaries
47,449

 

 
(54
)
 
78,187

 
125,582

Other expense
1,073

 

 

 

 
1,073

 
84,154


(994
)

(54
)

78,187


161,293

 
 
 
 
 
 
 
 
 
 
INCOME (LOSS) BEFORE INCOME TAXES
55,625

 
78,291

 
(104
)
 
(78,187
)
 
55,625

INCOME TAX BENEFIT
(179,331
)
 

 

 

 
(179,331
)
 
 
 
 
 
 
 
 
 
 
NET INCOME (LOSS)
$
234,956


$
78,291


$
(104
)

$
(78,187
)

$
234,956


CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS
(Amounts in thousands)

 
Three months ended June 30, 2018
 
Parent
 
Guarantors
 
Non-Guarantor
 
Eliminations
 
Consolidated
 
 
 
 
 
 
 
 
 
 
Total revenues
$
146,774

 
$
105,966

 
$

 
$

 
$
252,740

 
 
 
 
 
 
 
 
 
 
Costs and expenses:
 
 
 
 
 
 
 
 
 
Lease operating expenses
16,593

 
6,319

 

 

 
22,912

Production taxes
4,793

 
2,866

 

 

 
7,659

Midstream gathering and processing expenses
52,542

 
18,898

 

 

 
71,440

Depreciation, depletion and amortization
121,915

 

 

 

 
121,915

General and administrative expenses
14,975

 
(968
)
 
1

 

 
14,008

Accretion expense
795

 
220

 

 

 
1,015

 
211,613


27,335


1




238,949

 
 
 
 
 
 
 
 
 
 
(LOSS) INCOME FROM OPERATIONS
(64,839
)

78,631


(1
)



13,791

 
 
 
 
 
 
 
 
 
 
OTHER (INCOME) EXPENSE:
 
 
 
 
 
 
 
 
 
Interest expense
34,663

 
(959
)
 

 

 
33,704

Interest income
(27
)
 
(6
)
 

 

 
(33
)
Insurance proceeds
(231
)
 

 

 

 
(231
)
Gain on sale of equity method investments
(25,616
)
 
(96,419
)
 

 

 
(122,035
)
(Income) loss from equity method investments and investments in subsidiaries
(183,901
)
 
(336
)
 
228

 
175,121

 
(8,888
)
Other (income) expense
(1,046
)
 
1

 

 
1,000

 
(45
)
 
(176,158
)
 
(97,719
)
 
228

 
176,121

 
(97,528
)
 
 
 
 
 
 
 
 
 
 
INCOME (LOSS) BEFORE INCOME TAXES
111,319


176,350


(229
)

(176,121
)

111,319

INCOME TAX BENEFIT

 

 

 

 

 
 
 
 
 
 
 
 
 
 
NET INCOME (LOSS)
$
111,319

 
$
176,350

 
$
(229
)
 
$
(176,121
)
 
$
111,319


CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS
(Amounts in thousands)

 
Six months ended June 30, 2019
 
Parent
 
Guarantors
 
Non-Guarantors
 
Eliminations
 
Consolidated
 
 
 
 
 
 
 
 
 
 
Total revenues
$
466,537

 
$
313,035

 
$

 
$

 
$
779,572

 
 
 
 
 
 
 
 
 
 
Costs and expenses:
 
 
 
 
 
 
 
 
 
Lease operating expenses
27,149

 
15,046

 

 

 
42,195

Production taxes
6,081

 
9,938

 

 

 
16,019

Midstream gathering and processing expenses
71,420

 
70,877

 

 

 
142,297

Depreciation, depletion, and amortization
198,564

 
44,765

 
55

 

 
243,384

General and administrative expenses
28,977

 
(4,258
)
 
104

 

 
24,823

Accretion expense
1,389

 
1,037

 

 

 
2,426

 
333,580

 
137,405

 
159

 

 
471,144

 
 
 
 
 
 
 
 
 
 
INCOME (LOSS) FROM OPERATIONS
132,957

 
175,630

 
(159
)
 

 
308,428

 
 
 
 
 
 
 
 
 
 
OTHER EXPENSE (INCOME):
 
 
 
 
 
 
 
 
 
Interest expense
70,259

 
(1,259
)
 

 

 
69,000

Interest income
(267
)
 
(44
)
 

 

 
(311
)
Insurance proceeds
(83
)
 

 

 

 
(83
)
(Income) loss from equity method investments and investments in subsidiaries
(55,465
)
 

 
339

 
176,435

 
121,309

Other expense
646

 

 

 

 
646

 
15,090

 
(1,303
)
 
339

 
176,435

 
190,561

 
 
 
 
 
 
 
 
 
 
INCOME (LOSS) BEFORE INCOME TAXES
117,867

 
176,933

 
(498
)
 
(176,435
)
 
117,867

INCOME TAX BENEFIT
(179,331
)
 

 

 

 
(179,331
)
 
 
 
 
 
 
 
 
 
 
NET INCOME (LOSS)
$
297,198

 
$
176,933

 
$
(498
)
 
$
(176,435
)
 
$
297,198


CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS
(Amounts in thousands)

 
Six months ended June 30, 2018
 
Parent
 
Guarantors
 
Non-Guarantor
 
Eliminations
 
Consolidated
 
 
 
 
 
 
 
 
 
 
Total revenues
$
360,335

 
$
217,797

 
$

 
$

 
$
578,132

 
 
 
 
 
 
 
 
 
 
Costs and expenses:
 
 
 
 
 
 
 
 
 
Lease operating expenses
30,424

 
11,394

 

 

 
41,818

Production taxes
8,804

 
5,709

 

 

 
14,513

Midstream gathering and processing expenses
98,208

 
37,425

 

 

 
135,633

Depreciation, depletion, and amortization
232,932

 
1

 

 

 
232,933

General and administrative expenses
28,786

 
(1,681
)
 
2

 

 
27,107

Accretion expense
1,585

 
434

 

 

 
2,019

 
400,739

 
53,282

 
2

 

 
454,023

 
 
 
 
 
 
 
 
 
 
(LOSS) INCOME FROM OPERATIONS
(40,404
)
 
164,515

 
(2
)
 

 
124,109

 
 
 
 
 
 
 
 
 
 
OTHER (INCOME) EXPENSE:
 
 
 
 
 
 
 
 
 
Interest expense
69,056

 
(1,387
)
 

 

 
67,669

Interest income
(58
)
 
(12
)
 

 

 
(70
)
Insurance proceeds
(231
)
 

 

 

 
(231
)
Gain on sale of equity method investments
(25,616
)
 
(96,419
)
 

 

 
(122,035
)
(Income) loss from equity method investments and investments in subsidiaries
(283,765
)
 
(693
)
 
558

 
261,476

 
(22,424
)
Other (income) expense
(1,130
)
 
(10
)
 

 
1,000

 
(140
)
 
(241,744
)
 
(98,521
)
 
558

 
262,476

 
(77,231
)
 
 
 
 
 
 
 
 
 
 
INCOME (LOSS) BEFORE INCOME TAXES
201,340

 
263,036

 
(560
)
 
(262,476
)
 
201,340

INCOME TAX BENEFIT
(69
)
 

 

 

 
(69
)
 
 
 
 
 
 
 
 
 
 
NET INCOME (LOSS)
$
201,409

 
$
263,036

 
$
(560
)
 
$
(262,476
)
 
$
201,409


CONDENSED CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(Amounts in thousands)
 
Three months ended June 30, 2019
 
Parent
 
Guarantors
 
Non-Guarantors
 
Eliminations
 
Consolidated
 
 
 
 
 
 
 
 
 
 
Net income (loss)
$
234,956

 
$
78,291

 
$
(104
)
 
$
(78,187
)
 
$
234,956

Foreign currency translation adjustment
3,610

 
61

 
3,549

 
(3,610
)
 
3,610

Other comprehensive income (loss)
3,610

 
61

 
3,549

 
(3,610
)
 
3,610

Comprehensive income (loss)
$
238,566

 
$
78,352

 
$
3,445

 
$
(81,797
)
 
$
238,566


 
Three months ended June 30, 2018
 
Parent
 
Guarantors
 
Non-Guarantor
 
Eliminations
 
Consolidated
 
 
 
 
 
 
 
 
 
 
Net income (loss)
$
111,319

 
$
176,350

 
$
(229
)
 
$
(176,121
)
 
$
111,319

Foreign currency translation adjustment
(3,364
)
 
14

 
(3,378
)
 
3,364

 
(3,364
)
Other comprehensive (loss) income
(3,364
)
 
14

 
(3,378
)
 
3,364

 
(3,364
)
Comprehensive income (loss)
$
107,955

 
$
176,364

 
$
(3,607
)
 
$
(172,757
)
 
$
107,955


 
Six months ended June 30, 2019
 
Parent
 
Guarantors
 
Non-Guarantors
 
Eliminations
 
Consolidated
 
 
 
 
 
 
 
 
 
 
Net income (loss)
$
297,198

 
$
176,933

 
$
(498
)
 
$
(176,435
)
 
$
297,198

Foreign currency translation adjustment
7,411

 
155

 
7,256

 
(7,411
)
 
7,411

Other comprehensive income (loss)
7,411

 
155

 
7,256

 
(7,411
)
 
7,411

Comprehensive income (loss)
$
304,609

 
$
177,088

 
$
6,758

 
$
(183,846
)
 
$
304,609


 
Six months ended June 30, 2018
 
Parent
 
Guarantors
 
Non-Guarantor
 
Eliminations
 
Consolidated
 
 
Net income (loss)
$
201,409

 
$
263,036

 
$
(560
)
 
$
(262,476
)
 
$
201,409

Foreign currency translation adjustment
(8,867
)
 
(173
)
 
(8,694
)
 
8,867

 
(8,867
)
Other comprehensive (loss) income
(8,867
)
 
(173
)
 
(8,694
)
 
8,867

 
(8,867
)
Comprehensive income (loss)
$
192,542

 
$
262,863

 
$
(9,254
)
 
$
(253,609
)
 
$
192,542


CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS
(Amounts in thousands)
 
Six months ended June 30, 2019
 
Parent
 
Guarantors
 
Non-Guarantors
 
Eliminations
 
Consolidated
 
 
 
 
 
 
 
 
 
 
Net cash provided by operating activities
$
230,776

 
$
74,857

 
$
3,355

 
$
1

 
$
308,989

 
 
 
 
 
 
 
 
 
 
Net cash (used in) provided by investing activities
(324,357
)
 
(91,769
)
 
(3,751
)
 
432

 
(419,445
)
 
 
 
 
 
 
 
 
 
 
Net cash provided by (used in) financing activities
78,936

 

 
433

 
(433
)
 
78,936

 
 
 
 
 
 
 
 
 
 
Net (decrease) increase in cash, cash equivalents and restricted cash
(14,645
)
 
(16,912
)
 
37

 

 
(31,520
)
 
 
 
 
 
 
 
 
 
 
Cash, cash equivalents and restricted cash at beginning of period
25,585

 
26,711

 
1

 

 
52,297

 
 
 
 
 
 
 
 
 
 
Cash, cash equivalents and restricted cash at end of period
$
10,940

 
$
9,799

 
$
38

 
$

 
$
20,777



 
Six months ended June 30, 2018
 
Parent
 
Guarantors
 
Non-Guarantor
 
Eliminations
 
Consolidated
 
 
 
 
 
 
 
 
 
 
Net cash provided by operating activities
$
370,965

 
$
40,078

 
$

 
$
1

 
$
411,044

 
 
 
 
 
 
 
 
 
 
Net cash (used in) provided by investing activities
(327,362
)
 
(33,103
)
 
(1,569
)
 
1,569

 
(360,465
)
 
 
 
 
 
 
 
 
 
 
Net cash (used in) provided by financing activities
(30,906
)
 

 
1,570

 
(1,570
)
 
(30,906
)
 
 
 
 
 
 
 
 
 
 
Net increase in cash, cash equivalents and restricted cash
12,697

 
6,975

 
1

 

 
19,673

 
 
 
 
 
 
 
 
 
 
Cash, cash equivalents and restricted cash at beginning of period
67,908

 
31,649

 

 

 
99,557

 
 
 
 
 
 
 
 
 
 
Cash, cash equivalents and restricted cash at end of period
$
80,605

 
$
38,624

 
$
1

 
$

 
$
119,230