Quarterly report pursuant to Section 13 or 15(d)

Condensed Consolidating Financial Information

v3.8.0.1
Condensed Consolidating Financial Information
3 Months Ended
Mar. 31, 2018
Condensed Financial Information of Parent Company Only Disclosure [Abstract]  
Condensed Consolidating Financial Information
CONDENSED CONSOLIDATING FINANCIAL INFORMATION
On April 21, 2015, the Company issued $350.0 million in aggregate principal amount of the 2023 Notes 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.
On October 14, 2016, the Company issued $650.0 million in aggregate principal amount of the 2024 Notes 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. The net proceeds from the issuance of the 2024 Notes, together with cash on hand, were used to repurchase or redeem all of the then-outstanding 2020 Notes in October 2016.
On December 21, 2016, the Company issued $600.0 million in aggregate principal amount of the 2025 Notes 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. The Company used the net proceeds from the issuance of the 2025 Notes, together with the net proceeds from the December 2016 underwritten offering of the Company’s common stock and cash on hand, to fund the cash portion of the purchase price for the Vitruvian Acquisition.
In connection with the 2024 Notes and the 2025 Notes Offerings, the Company and its subsidiary guarantors entered into two registration rights agreements, pursuant to which the Company agreed to file a registration statement with respect to offers to exchange the 2024 Notes and the 2025 Notes for new issues of substantially identical debt securities registered under the Securities Act. The exchange offers for the 2024 Notes and the 2025 Notes were completed on September 13, 2017.
On October 11, 2017, the Company issued $450.0 million in aggregate principal amount of the 2026 Notes 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. A portion of the net proceeds from the issuance of the 2026 Notes was used to repay all of the Company's outstanding borrowings under its secured revolving credit facility on October 11, 2017 and the balance was used to fund the remaining outspend related to the Company's 2017 capital development plans.
In connection with the 2026 Notes offering, the Company and its subsidiary guarantors entered into a registration rights agreement pursuant to which the Company agreed to file a registration statement with respect to an offer to exchange the 2026 Notes for a new issue of substantially identical debt securities registered under the Securities Act. On January 18, 2018, the Company filed a registration statement on Form S-4 with respect to an offer to exchange the 2026 Notes for substantially identical debt securities registered under the Securities Act, which registration statement was declared effective by the SEC on February 12, 2018. The exchange offer relating to the 2026 notes closed on March 22, 2018.
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 2023 Notes, the 2024 Notes, the 2025 Notes and the 2026 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.
The following condensed consolidating balance sheets, statements of operations, statements of comprehensive income (loss) 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)
 
March 31, 2018
 
Parent
 
Guarantors
 
Non-Guarantor
 
Eliminations
 
Consolidated
Assets
 
 
 
 
 
 
 
 
 
Current assets:
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
$
81,357

 
$
37,254

 
$
2

 
$

 
$
118,613

Accounts receivable - oil and natural gas
133,387

 
66,070

 

 

 
199,457

Accounts receivable - intercompany
585,111

 
64,492

 

 
(649,603
)
 

Prepaid expenses and other current assets
6,115

 
1,449

 

 

 
7,564

Short-term derivative instruments
50,906

 

 

 

 
50,906

Total current assets
856,876

 
169,265

 
2

 
(649,603
)
 
376,540

 
 
 
 
 
 
 
 
 
 
Property and equipment:
 
 
 
 
 
 
 
 
 
Oil and natural gas properties, full-cost accounting
6,769,164

 
2,702,262

 

 
(729
)
 
9,470,697

Other property and equipment
89,597

 
51

 

 

 
89,648

Accumulated depletion, depreciation, amortization and impairment
(4,264,609
)
 
(38
)
 

 

 
(4,264,647
)
Property and equipment, net
2,594,152

 
2,702,275

 

 
(729
)
 
5,295,698

Other assets:
 
 
 
 
 
 
 
 
 
Equity investments and investments in subsidiaries
2,458,237

 
77,350

 
53,563

 
(2,277,456
)
 
311,694

Long-term derivative instruments
15,769

 

 

 

 
15,769

Deferred tax asset

 

 

 

 

Inventories
6,045

 
2,460

 

 

 
8,505

Other assets
13,569

 
6,617

 

 

 
20,186

Total other assets
2,493,620

 
86,427

 
53,563

 
(2,277,456
)
 
356,154

  Total assets
$
5,944,648

 
$
2,957,967

 
$
53,565

 
$
(2,927,788
)
 
$
6,028,392

 
 
 
 
 
 
 
 
 
 
Liabilities and Stockholders Equity
 
 
 
 
 
 
 
 
 
Current liabilities:
 
 
 
 
 
 
 
 
 
Accounts payable and accrued liabilities
$
443,963

 
$
133,585

 
$

 
$

 
$
577,548

Accounts payable - intercompany
64,980

 
584,495

 
128

 
(649,603
)
 

Asset retirement obligation - current
120

 

 

 

 
120

Short-term derivative instruments
37,570

 

 

 

 
37,570

Current maturities of long-term debt
629

 

 

 

 
629

Total current liabilities
547,262

 
718,080

 
128

 
(649,603
)
 
615,867

Long-term derivative instruments
2,499

 

 

 

 
2,499

Asset retirement obligation - long-term
64,091

 
12,176

 

 

 
76,267

Deferred tax liability
2,884

 

 

 

 
2,884

Other non-current liabilities

 
2,963

 

 

 
2,963

Long-term debt, net of current maturities
2,239,023

 

 

 

 
2,239,023

Total liabilities
2,855,759

 
733,219

 
128

 
(649,603
)
 
2,939,503

 
 
 
 
 
 
 
 
 
 
Stockholders’ equity:
 
 
 
 
 
 
 
 
 
Common stock
1,735

 

 

 

 
1,735

Paid-in capital
4,319,034

 
1,915,598

 
260,877

 
(2,176,475
)
 
4,319,034

Accumulated other comprehensive (loss) income
(46,042
)
 

 
(43,909
)
 
43,909

 
(46,042
)
Retained (deficit) earnings
(1,185,838
)
 
309,150

 
(163,531
)
 
(145,619
)
 
(1,185,838
)
Total stockholders’ equity
3,088,889

 
2,224,748

 
53,437

 
(2,278,185
)
 
3,088,889

  Total liabilities and stockholders equity
$
5,944,648

 
$
2,957,967

 
$
53,565

 
$
(2,927,788
)
 
$
6,028,392

CONDENSED CONSOLIDATING BALANCE SHEETS
(Amounts in thousands)
 
December 31, 2017
 
Parent
 
Guarantors
 
Non-Guarantor
 
Eliminations
 
Consolidated
Assets
 
 
 
 
 
 
 
 
 
Current assets:
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
$
67,908

 
$
31,649

 
$

 
$

 
$
99,557

Accounts receivable - oil and natural gas
128,121

 
54,092

 

 

 
182,213

Accounts receivable - intercompany
554,439

 
63,374

 

 
(617,813
)
 

Prepaid expenses and other current assets
4,719

 
193

 

 

 
4,912

Short-term derivative instruments
78,847

 

 

 

 
78,847

Total current assets
834,034

 
149,308

 

 
(617,813
)
 
365,529

 
 
 
 
 
 
 
 
 
 
Property and equipment:
 
 
 
 
 
 
 
 
 
Oil and natural gas properties, full-cost accounting,
6,562,147

 
2,607,738

 

 
(729
)
 
9,169,156

Other property and equipment
86,711

 
43

 

 

 
86,754

Accumulated depletion, depreciation, amortization and impairment
(4,153,696
)
 
(37
)
 

 

 
(4,153,733
)
Property and equipment, net
2,495,162

 
2,607,744

 

 
(729
)
 
5,102,177

Other assets:
 
 
 
 
 
 
 
 
 
Equity investments and investments in subsidiaries
2,361,575

 
77,744

 
57,641

 
(2,194,848
)
 
302,112

Long-term derivative instruments
8,685

 

 

 

 
8,685

Deferred tax asset
1,208

 

 

 

 
1,208

Inventories
5,816

 
2,411

 

 

 
8,227

Other assets
12,483

 
7,331

 

 

 
19,814

Total other assets
2,389,767

 
87,486

 
57,641

 
(2,194,848
)
 
340,046

  Total assets
$
5,718,963

 
$
2,844,538

 
$
57,641

 
$
(2,813,390
)
 
$
5,807,752

 
 
 
 
 
 
 
 
 
 
Liabilities and Stockholders Equity
 
 
 
 
 
 
 
 
 
Current liabilities:
 
 
 
 
 
 
 
 
 
Accounts payable and accrued liabilities
$
416,249

 
$
137,361

 
$

 
$
(1
)
 
$
553,609

Accounts payable - intercompany
63,373

 
554,313

 
127

 
(617,813
)
 

Asset retirement obligation - current
120

 

 

 

 
120

Short-term derivative instruments
32,534

 

 

 

 
32,534

Current maturities of long-term debt
622

 

 

 

 
622

Total current liabilities
512,898

 
691,674

 
127

 
(617,814
)
 
586,885

Long-term derivative instruments
2,989

 

 

 

 
2,989

Asset retirement obligation - long-term
63,141

 
11,839

 

 

 
74,980

Other non-current liabilities

 
2,963

 

 

 
2,963

Long-term debt, net of current maturities
2,038,321

 

 

 

 
2,038,321

Total liabilities
2,617,349


706,476


127


(617,814
)

2,706,138

 
 
 
 
 
 
 
 
 
 
Stockholders’ equity:
 
 
 
 
 
 
 
 
 
Common stock
1,831

 

 

 

 
1,831

Paid-in capital
4,416,250

 
1,915,598

 
259,307

 
(2,174,905
)
 
4,416,250

Accumulated other comprehensive (loss) income
(40,539
)
 

 
(38,593
)
 
38,593

 
(40,539
)
Retained (deficit) earnings
(1,275,928
)
 
222,464

 
(163,200
)
 
(59,264
)
 
(1,275,928
)
Total stockholders’ equity
3,101,614

 
2,138,062

 
57,514

 
(2,195,576
)
 
3,101,614

  Total liabilities and stockholders equity
$
5,718,963

 
$
2,844,538

 
$
57,641

 
$
(2,813,390
)
 
$
5,807,752

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS
(Amounts in thousands)
 
Three months ended March 31, 2018
 
Parent
 
Guarantors
 
Non-Guarantor
 
Eliminations
 
Consolidated
 
 
 
 
 
 
 
 
 
 
Total revenues
$
213,561

 
$
111,831

 
$

 
$

 
$
325,392

 
 
 
 
 
 
 
 
 
 
Costs and expenses:
 
 
 
 
 
 
 
 
 
Lease operating expenses
13,831

 
5,075

 

 

 
18,906

Production taxes
4,011

 
2,843

 

 

 
6,854

Midstream gathering and processing
45,666

 
18,527

 

 

 
64,193

Depreciation, depletion and amortization
111,017

 
1

 

 

 
111,018

General and administrative
13,811

 
(713
)
 
1

 

 
13,099

Accretion expense
790

 
214

 

 

 
1,004

Acquisition expense

 

 

 

 

 
189,126


25,947


1




215,074

 
 
 
 
 
 
 
 
 
 
INCOME (LOSS) FROM OPERATIONS
24,435


85,884


(1
)



110,318

 
 
 
 
 
 
 
 
 
 
OTHER (INCOME) EXPENSE:
 
 
 
 
 
 
 
 
 
Interest expense
34,393

 
(428
)
 

 

 
33,965

Interest income
(31
)
 
(6
)
 

 

 
(37
)
(Income) loss from equity method investments and investments in subsidiaries
(99,864
)
 
(357
)
 
330

 
86,355

 
(13,536
)
Other income
(84
)
 
(11
)
 

 

 
(95
)
 
(65,586
)

(802
)

330


86,355


20,297

 
 
 
 
 
 
 
 
 
 
INCOME (LOSS) BEFORE INCOME TAXES
90,021

 
86,686

 
(331
)
 
(86,355
)
 
90,021

INCOME TAX BENEFIT
(69
)
 

 

 

 
(69
)
 
 
 
 
 
 
 
 
 
 
NET INCOME (LOSS)
$
90,090


$
86,686


$
(331
)

$
(86,355
)

$
90,090

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS
(Amounts in thousands)

 
Three months ended March 31, 2017
 
Parent
 
Guarantors
 
Non-Guarantor
 
Eliminations
 
Consolidated
 
 
 
 
 
 
 
 
 
 
Total revenues
$
272,441

 
$
60,563

 
$

 
$

 
$
333,004

 
 
 
 
 
 
 
 
 
 
Costs and expenses:
 
 
 
 
 
 
 
 
 
Lease operating expenses
17,449

 
1,854

 

 

 
19,303

Production taxes
3,102

 
804

 

 

 
3,906

Midstream gathering and processing
37,724

 
10,217

 

 

 
47,941

Depreciation, depletion and amortization
65,990

 
1

 

 

 
65,991

General and administrative
12,874

 
(275
)
 
1

 

 
12,600

Accretion expense
282

 

 

 

 
282

Acquisition expense

 
1,298

 

 

 
1,298

 
137,421


13,899


1




151,321

 
 
 
 
 
 
 
 
 
 
INCOME (LOSS) FROM OPERATIONS
135,020


46,664


(1
)



181,683

 
 
 
 
 
 
 
 
 
 
OTHER (INCOME) EXPENSE:
 
 
 
 
 
 
 
 
 
Interest expense
25,048

 
(1,569
)
 

 

 
23,479

Interest income
(842
)
 

 

 

 
(842
)
(Income) loss from equity method investments and investments in subsidiaries
(42,614
)
 
2,541

 
365

 
44,615

 
4,907

Other (income) expense
(1,027
)
 
(189
)
 

 
900

 
(316
)
 
(19,435
)
 
783

 
365

 
45,515

 
27,228

 
 
 
 
 
 
 
 
 
 
INCOME (LOSS) BEFORE INCOME TAXES
154,455


45,881


(366
)

(45,515
)

154,455

INCOME TAX EXPENSE

 

 

 

 

 
 
 
 
 
 
 
 
 
 
NET INCOME (LOSS)
$
154,455

 
$
45,881

 
$
(366
)
 
$
(45,515
)
 
$
154,455

CONDENSED CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(Amounts in thousands)
 
Three months ended March 31, 2018
 
Parent
 
Guarantors
 
Non-Guarantor
 
Eliminations
 
Consolidated
 
 
 
 
 
 
 
 
 
 
Net income (loss)
$
90,090

 
$
86,686

 
$
(331
)
 
$
(86,355
)
 
$
90,090

Foreign currency translation adjustment
(5,503
)
 
(187
)
 
(5,316
)
 
5,503

 
(5,503
)
Other comprehensive (loss) income
(5,503
)
 
(187
)
 
(5,316
)
 
5,503

 
(5,503
)
Comprehensive income (loss)
$
84,587

 
$
86,499

 
$
(5,647
)
 
$
(80,852
)
 
$
84,587

 
Three months ended March 31, 2017
 
Parent
 
Guarantors
 
Non-Guarantor
 
Eliminations
 
Consolidated
 
 
 
 
 
 
 
 
 
 
Net income (loss)
$
154,455

 
$
45,881

 
$
(366
)
 
$
(45,515
)
 
$
154,455

Foreign currency translation adjustment
1,373

 
55

 
1,318

 
(1,373
)
 
1,373

Other comprehensive income (loss)
1,373

 
55

 
1,318

 
(1,373
)
 
1,373

Comprehensive income (loss)
$
155,828

 
$
45,936

 
$
952

 
$
(46,888
)
 
$
155,828

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS
(Amounts in thousands)
 
Three months ended March 31, 2018
 
Parent
 
Guarantors
 
Non-Guarantor
 
Eliminations
 
Consolidated
 
 
 
 
 
 
 
 
 
 
Net cash provided by operating activities
$
144,895

 
$
81,452

 
$
1

 
$
1

 
$
226,349

 
 
 
 
 
 
 
 
 
 
Net cash (used in) provided by investing activities
(231,024
)
 
(75,847
)
 
(1,569
)
 
1,569

 
(306,871
)
 
 
 
 
 
 
 
 
 
 
Net cash provided by (used in) financing activities
99,578

 

 
1,570

 
(1,570
)
 
99,578

 
 
 
 
 
 
 
 
 
 
Net increase in cash, cash equivalents and restricted cash
13,449

 
5,605

 
2

 

 
19,056

 
 
 
 
 
 
 
 
 
 
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
$
81,357

 
$
37,254

 
$
2

 
$

 
$
118,613


 
Three months ended March 31, 2017
 
Parent
 
Guarantors
 
Non-Guarantor
 
Eliminations
 
Consolidated
 
 
 
 
 
 
 
 
 
 
Net cash provided by operating activities
$
139,260

 
$
3,384

 
$
1

 
$

 
$
142,645

 
 
 
 
 
 
 
 
 
 
Net cash (used in) provided by investing activities
(1,557,852
)
 
(1,348,964
)
 
(673
)
 
1,374,810

 
(1,532,679
)
 
 
 
 
 
 
 
 
 
 
Net cash provided by (used in) financing activities
31,644

 
1,374,137

 
673

 
(1,374,810
)
 
31,644

 
 
 
 
 
 
 
 
 
 
Net (decrease) increase in cash, cash equivalents and restricted cash
(1,386,948
)
 
28,557

 
1

 

 
(1,358,390
)
 
 
 
 
 
 
 
 
 
 
Cash, cash equivalents and restricted cash at beginning of period
1,458,882

 
1,993

 

 

 
1,460,875

 
 
 
 
 
 
 
 
 
 
Cash, cash equivalents and restricted cash at end of period
$
71,934

 
$
30,550

 
$
1

 
$

 
$
102,485