Quarterly report pursuant to Section 13 or 15(d)

CONDENSED CONSOLIDATING FINANCIAL INFORMATION

v3.20.2
CONDENSED CONSOLIDATING FINANCIAL INFORMATION
 6 Months Ended
Jun. 30, 2020
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, 2020
Parent Guarantors Non-Guarantors Eliminations Consolidated
Assets
Current assets:
Cash and cash equivalents $ 823    $ 1,748    $ 246    $ —    $ 2,817   
Accounts receivable - oil and natural gas sales 860    64,785    —    —    65,645   
Accounts receivable - joint interest and other 2,949    16,440    —    —    19,389   
Accounts receivable - intercompany 1,482,102    1,150,631    —    (2,632,733)   —   
Prepaid expenses and other current assets 10,781    5    76    —    10,862   
Short-term derivative instruments 53,188    —    —    —    53,188   
Total current assets 1,550,703    1,233,609    322    (2,632,733)   151,901   
Property and equipment:
Oil and natural gas properties, full-cost accounting 1,247,631    9,478,228    5,862    (729)   10,730,992   
Other property and equipment 92,768    51    4,019    —    96,838   
Accumulated depletion, depreciation, amortization and impairment (1,423,539)   (7,032,075)   (1,850)   —    (8,457,464)  
Property and equipment, net (83,140)   2,446,204    8,031    (729)   2,370,366   
Other assets:
Equity investments and investments in subsidiaries 1,930,479    6,332    13,013    (1,936,772)   13,052   
Long-term derivative instruments 4,298    —    —    —    4,298   
Operating lease assets 3,640    —    —    —    3,640   
Other assets 29,216    7,784    —    —    37,000   
Total other assets 1,967,633    14,116    13,013    (1,936,772)   57,990   
Total assets $ 3,435,196    $ 3,693,929    $ 21,366    $ (4,570,234)   $ 2,580,257   
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable and accrued liabilities $ 46,085    $ 269,490    $ —    $ —    $ 315,575   
Accounts payable - intercompany 1,185,800    1,442,144    4,789    (2,632,733)   —   
Short-term derivative instruments 8,540    —    —    —    8,540   
Current portion of operating lease liabilities 3,356    —    —    —    3,356   
Current maturities of long-term debt 649    —    —    —    649   
Total current liabilities 1,244,430    1,711,634    4,789    (2,632,733)   328,120   
Long-term derivative instruments 45,615    —    —    —    45,615   
Asset retirement obligation - long-term —    61,371    —    —    61,371   
Uncertain tax position liability 3,209    —    —    —    3,209   
Non-current operating lease liabilities 284    —    —    —    284   
Long-term debt, net of current maturities 1,910,318    —    —    —    1,910,318   
Total liabilities 3,203,856    1,773,005    4,789    (2,632,733)   2,348,917   
Stockholders’ equity:
Common stock 1,601    —    —    —    1,601   
Paid-in capital 4,211,062    4,171,409    267,559    (4,438,968)   4,211,062   
Accumulated other comprehensive loss (54,991)   —    (52,562)   52,562    (54,991)  
Accumulated deficit (3,926,332)   (2,250,485)   (198,420)   2,448,905    (3,926,332)  
Total stockholders’ equity 231,340    1,920,924    16,577    (1,937,501)   231,340   
Total liabilities and stockholders’ equity
$ 3,435,196    $ 3,693,929    $ 21,366    $ (4,570,234)   $ 2,580,257   
CONDENSED CONSOLIDATING BALANCE SHEETS
(Amounts in thousands)
December 31, 2019
Parent Guarantors Non-Guarantor Eliminations Consolidated
Assets
Current assets:
Cash and cash equivalents $ 2,768    $ 3,097    $ 195    $ —    $ 6,060   
Accounts receivable - oil and natural gas sales 859    120,351    —    —    121,210   
Accounts receivable - joint interest and other 5,279    42,696    —    —    47,975   
Accounts receivable - intercompany 1,065,593    843,223    —    (1,908,816)   —   
Prepaid expenses and other current assets 4,047    308    76    —    4,431   
Short-term derivative instruments 126,201    —    —    —    126,201   
Total current assets 1,204,747    1,009,675    271    (1,908,816)   305,877   
Property and equipment:
Oil and natural gas properties, full-cost accounting, 1,314,933    9,273,681    7,850    (729)   10,595,735   
Other property and equipment 92,650    50    4,019    —    96,719   
Accumulated depletion, depreciation, amortization and impairment (1,418,888)   (5,808,254)   (1,518)   —    (7,228,660)  
Property and equipment, net (11,305)   3,465,477    10,351    (729)   3,463,794   
Other assets:
Equity investments and investments in subsidiaries 3,064,503    6,332    21,000    (3,059,791)   32,044   
Long-term derivative instruments 563    —    —    —    563   
Deferred tax asset 7,563    —    —    —    7,563   
Operating lease assets 14,168    —    —    —    14,168   
Operating lease assets - related parties 43,270    —    —    —    43,270   
Other assets 10,026    5,514    —    —    15,540   
Total other assets 3,140,093    11,846    21,000    (3,059,791)   113,148   
  Total assets $ 4,333,535    $ 4,486,998    $ 31,622    $ (4,969,336)   $ 3,882,819   
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable and accrued liabilities $ 48,006    $ 367,088    $ 124    $ —    $ 415,218   
Accounts payable - intercompany 878,283    1,026,249    4,285    (1,908,817)   —   
Short-term derivative instruments 303    —    —    —    303   
Current portion of operating lease liabilities 13,826    —    —    —    13,826   
Current portion of operating lease liabilities - related parties 21,220    —    —    —    21,220   
Current maturities of long-term debt 631    —    —    —    631   
Total current liabilities 962,269    1,393,337    4,409    (1,908,817)   451,198   
Long-term derivative instruments 53,135    —    —    —    53,135   
Asset retirement obligation - long-term —    58,322    2,033    —    60,355   
Uncertain tax position liability 3,127    —    —    —    3,127   
Non-current operating lease liabilities 342    —    —    —    342   
Non-current operating lease liabilities - related parties 22,050    —    —    —    22,050   
Long-term debt, net of current maturities 1,978,020    —    —    —    1,978,020   
Total liabilities 3,018,943    1,451,659    6,442    (1,908,817)   2,568,227   
Stockholders’ equity:
Common stock 1,597    —    —    —    1,597   
Paid-in capital 4,207,554    4,171,408    267,557    (4,438,965)   4,207,554   
Accumulated other comprehensive loss (46,833)   —    (44,763)   44,763    (46,833)  
Accumulated deficit (2,847,726)   (1,136,069)   (197,614)   1,333,683    (2,847,726)  
Total stockholders’ equity 1,314,592    3,035,339    25,180    (3,060,519)   1,314,592   
  Total liabilities and stockholders’ equity
$ 4,333,535    $ 4,486,998    $ 31,622    $ (4,969,336)   $ 3,882,819   
CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS
(Amounts in thousands)
Three months ended June 30, 2020
Parent Guarantors Non-Guarantors Eliminations Consolidated
Total revenues $ 26,970    $ 105,440    $ —    $ —    $ 132,410   
Costs and expenses:
Lease operating expenses —    15,686    —    —    15,686   
Production taxes —    3,605    —    —    3,605   
Midstream gathering and processing expenses —    59,974    —    —    59,974   
Depreciation, depletion and amortization 2,388    62,236    166    —    64,790   
Impairment of oil and natural gas properties —    532,880    —    —    532,880   
General and administrative expenses 21,731    (11,374)   113    —    10,470   
Accretion expense —    755    —    —    755   
Total Operating Expenses 24,119    663,762    279    —    688,160   
INCOME (LOSS) FROM OPERATIONS 2,851    (558,322)   (279)   —    (555,750)  
OTHER EXPENSE (INCOME):
Interest expense 32,825    (459)   —    —    32,366   
Interest income (28)   (50)   —    —    (78)  
Gain on debt extinguishment (34,257)   —    —    —    (34,257)  
Loss from equity method investments and investments in subsidiaries 562,502    —    45    (562,502)   45   
Other expense 2,877    4,365    —    —    7,242   
Total Other Expense 563,919    3,856    45    (562,502)   5,318   
LOSS BEFORE INCOME TAXES (561,068)   (562,178)   (324)   562,502    (561,068)  
INCOME TAX EXPENSE —    —    —    —    —   
NET LOSS $ (561,068)   $ (562,178)   $ (324)   $ 562,502    $ (561,068)  
CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS
(Amounts in thousands)
Three months ended June 30, 2019
Parent Guarantors Non-Guarantor 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 15,207    (3,583)   103    —    11,727   
Accretion expense 438    921    —    —    1,359   
Total Operating Expenses 138,974    101,406    158    —    240,538   
INCOME (LOSS) FROM OPERATIONS 141,317    77,297    (158)   —    218,456   
OTHER EXPENSE (INCOME):
Interest expense 37,373    (955)   —    —    36,418   
Interest income (120)   (39)   —    —    (159)  
Loss (income) from equity method investments and investments in subsidiaries 47,449    —    (54)   78,187    125,582   
Other expense 990    —    —    —    990   
Total Other Expense (Income) 85,692    (994)   (54)   78,187    162,831   
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)
Six months ended June 30, 2020
Parent Guarantors Non-Guarantors Eliminations Consolidated
Total revenues $ 125,238    $ 254,049    $ —    $ —    $ 379,287   
Costs and expenses:
Lease operating expenses —    31,672    —    —    31,672   
Production taxes —    8,404    —    —    8,404   
Midstream gathering and processing expenses —    117,870    —    —    117,870   
Depreciation, depletion, and amortization 4,890    137,596    332    —    142,818   
Impairment of oil and gas properties —    1,086,225    —    —    1,086,225   
General and administrative expenses 46,377    (20,024)   286    —    26,639   
Accretion expense —    1,496    —    —    1,496   
Total Operating Expenses 51,267    1,363,239    618    —    1,415,124   
INCOME (LOSS) FROM OPERATIONS 73,971    (1,109,190)   (618)   —    (1,035,837)  
OTHER EXPENSE (INCOME):
Interest expense 66,002    (646)   —    —    65,356   
Interest income (87)   (143)   —    —    (230)  
Gain on debt extinguishment (49,579)   —    —    —    (49,579)  
Loss from equity method investments and investments in subsidiaries 1,125,868    —    188    (1,115,222)   10,834   
Other expense 3,083    6,015    —    —    9,098   
Total Other Expense 1,145,287    5,226    188    (1,115,222)   35,479   
LOSS BEFORE INCOME TAXES (1,071,316)   (1,114,416)   (806)   1,115,222    (1,071,316)  
INCOME TAX EXPENSE 7,290    —    —    —    7,290   
NET LOSS $ (1,078,606)   $ (1,114,416)   $ (806)   $ 1,115,222    $ (1,078,606)  
CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS
(Amounts in thousands)
Six months ended June 30, 2019
Parent Guarantors Non-Guarantor 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 25,938    (4,258)   104    —    21,784   
Accretion expense 1,389    1,037    —    —    2,426   
Total Operating Expenses 330,541    137,405    159    —    468,105   
INCOME (LOSS) FROM OPERATIONS 135,996    175,630    (159)   —    311,467   
OTHER EXPENSE (INCOME):
Interest expense 73,298    (1,259)   —    —    72,039   
Interest income (267)   (44)   —    —    (311)  
(Income) loss from equity method investments and investments in subsidiaries (55,465)   —    339    176,435    121,309   
Other expense 563    —    —    —    563   
Total Other Expense (Income) 18,129    (1,303)   339    176,435    193,600   
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   
Three months ended June 30, 2020
Parent Guarantors Non-Guarantors Eliminations Consolidated
Net loss $ (561,068)   $ (562,178)   $ (324)   $ 562,502    $ (561,068)  
Foreign currency translation adjustment 6,872    —    6,872    (6,872)   6,872   
Other comprehensive loss 6,872    —    6,872    (6,872)   6,872   
Comprehensive loss $ (554,196)   $ (562,178)   $ 6,548    $ 555,630    $ (554,196)  
Three months ended June 30, 2019
Parent Guarantors Non-Guarantor 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 3,610    61    3,549    (3,610)   3,610   
Comprehensive income $ 238,566    $ 78,352    $ 3,445    $ (81,797)   $ 238,566   
Six months ended June 30, 2020
Parent Guarantors Non-Guarantors Eliminations Consolidated
Net loss $ (1,078,606)   $ (1,114,416)   $ (806)   $ 1,115,222    $ (1,078,606)  
Foreign currency translation adjustment (8,158)   (360)   (7,798)   8,158    (8,158)  
Other comprehensive loss (8,158)   (360)   (7,798)   8,158    (8,158)  
Comprehensive loss $ (1,086,764)   $ (1,114,776)   $ (8,604)   $ 1,123,380    $ (1,086,764)  
Six months ended June 30, 2019
Parent Guarantors Non-Guarantor 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 7,411    155    7,256    (7,411)   7,411   
Comprehensive income $ 304,609    $ 177,088    $ 6,758    $ (183,846)   $ 304,609   
CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS
(Amounts in thousands)
Six months ended June 30, 2020
Parent Guarantors Non-Guarantors Eliminations Consolidated
Net cash provided by (used in) operating activities $ 18,854    $ 228,317    $ (384)   $ 435    $ 247,222   
Net cash used in investing activities (424)   (229,666)   —    —    (230,090)  
Net cash (used in) provided by financing activities (20,375)   —    435    (435)   (20,375)  
Net (decrease) increase in cash, cash equivalents and restricted cash (1,945)   (1,349)   51    —    (3,243)  
Cash, cash equivalents and restricted cash at beginning of period 2,768    3,097    195    —    6,060   
Cash, cash equivalents and restricted cash at end of period $ 823    $ 1,748    $ 246    $ —    $ 2,817   
Six months ended June 30, 2019
Parent Guarantors Non-Guarantor Eliminations Consolidated
Net cash provided by (used in) operating activities $ 312,267    $ 84,146    $ 3,355    $ 1    $ 399,769   
Net cash used in investing activities (405,848)   (101,058)   (3,751)   432    (510,225)  
Net cash (used in) provided by financing activities 78,936    —    433    (433)   78,936   
Net decrease 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