Quarterly report pursuant to Section 13 or 15(d)

CONDENSED CONSOLIDATING FINANCIAL INFORMATION

v3.19.3
CONDENSED CONSOLIDATING FINANCIAL INFORMATION
9 Months Ended
Sep. 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)
 
September 30, 2019
 
Parent
 
Guarantors
 
Non-Guarantors
 
Eliminations
 
Consolidated
Assets
 
 
 
 
 
 
 
 
 
Current assets:
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
$
6,279

 
$
3,715

 
$
130

 
$

 
$
10,124

Accounts receivable - oil and natural gas sales
857

 
111,800

 

 

 
112,657

Accounts receivable - joint interest and other
6,909

 
34,418

 

 

 
41,327

Accounts receivable - intercompany
953,446

 
625,306

 

 
(1,578,752
)
 

Prepaid expenses and other current assets
3,886

 
1,697

 
75

 

 
5,658

Short-term derivative instruments
134,571

 

 

 

 
134,571

Total current assets
1,105,948

 
776,936

 
205

 
(1,578,752
)
 
304,337

 
 
 
 
 
 
 
 
 
 
Property and equipment:
 
 
 
 
 
 
 
 
 
Oil and natural gas properties, full-cost accounting
1,312,715

 
9,239,581

 
146

 
(729
)
 
10,551,713

Other property and equipment
92,163

 
751

 
3,319

 

 
96,233

Accumulated depletion, depreciation, amortization and impairment
(1,416,261
)
 
(3,646,931
)
 
(221
)
 

 
(5,063,413
)
Property and equipment, net
(11,383
)
 
5,593,401

 
3,244

 
(729
)
 
5,584,533

Other assets:
 
 
 
 
 
 
 
 
 
Equity investments and investments in subsidiaries
5,106,904

 

 
49,545

 
(5,082,487
)
 
73,962

Long-term derivative instruments
23,419

 

 

 

 
23,419

Deferred tax asset
205,853

 

 

 

 
205,853

Inventories
94

 
6,928

 

 

 
7,022

Operating lease assets
13,920

 

 

 

 
13,920

Operating lease assets - related parties
48,449

 

 

 

 
48,449

Other assets
11,333

 
320

 

 

 
11,653

Total other assets
5,409,972

 
7,248

 
49,545

 
(5,082,487
)
 
384,278

Total assets
$
6,504,537

 
$
6,377,585

 
$
52,994

 
$
(6,661,968
)
 
$
6,273,148

 
 
 
 
 
 
 
 
 
 
Liabilities and Stockholders Equity
 
 
 
 
 
 
 
 
 
Current liabilities:
 
 
 
 
 
 
 
 
 
Accounts payable and accrued liabilities
$
69,863

 
$
369,129

 
$
27

 
$

 
$
439,019

Accounts payable - intercompany
660,364

 
914,401

 
3,987

 
(1,578,752
)
 

Short-term derivative instruments
429

 

 

 

 
429

Current portion of operating lease liabilities
12,848

 

 

 

 
12,848

Current portion of operating lease liabilities - related parties
21,017

 

 

 

 
21,017

Current maturities of long-term debt
622

 

 

 

 
622

Total current liabilities
765,143

 
1,283,530

 
4,014

 
(1,578,752
)
 
473,935

Long-term derivative instruments
72,040

 

 

 

 
72,040

Asset retirement obligation - long-term

 
59,819

 

 

 
59,819

Uncertain tax position liability
3,127

 

 

 

 
3,127

Non-current operating lease liabilities
1,072

 

 

 

 
1,072

Non-current operating lease liabilities - related parties
27,432

 

 

 

 
27,432

Long-term debt, net of current maturities
2,076,569

 

 

 

 
2,076,569

Total liabilities
2,945,383

 
1,343,349

 
4,014

 
(1,578,752
)
 
2,713,994

 
 
 
 
 
 
 
 
 
 
Stockholders’ equity:
 
 
 
 
 
 
 
 
 
Common stock
1,597

 

 

 

 
1,597

Paid-in capital
4,205,158

 
4,170,573

 
262,061

 
(4,432,634
)
 
4,205,158

Accumulated other comprehensive loss
(50,679
)
 

 
(48,548
)
 
48,548

 
(50,679
)
(Accumulated deficit) retained earnings
(596,922
)
 
863,663

 
(164,533
)
 
(699,130
)
 
(596,922
)
Total stockholders’ equity
3,559,154

 
5,034,236

 
48,980

 
(5,083,216
)
 
3,559,154

Total liabilities and stockholders equity
$
6,504,537

 
$
6,377,585

 
$
52,994

 
$
(6,661,968
)
 
$
6,273,148


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
7,843

 
2,174

 

 

 
10,017

Short-term derivative instruments
21,352

 

 

 

 
21,352

Total current assets
888,700

 
418,759

 
1

 
(991,097
)
 
316,363

 
 
 
 
 
 
 
 
 
 
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
4,210

 
1,134

 

 

 
5,344

Other assets
12,624

 
1,178

 

 
1

 
13,803

Total other assets
2,873,822

 
2,312

 
44,259

 
(2,665,125
)
 
255,268

  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

Uncertain tax position 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 September 30, 2019
 
Parent
 
Guarantors
 
Non-Guarantors
 
Eliminations
 
Consolidated
 
 
 
 
 
 
 
 
 
 
Total revenues
$
27,358

 
$
257,817

 
$

 
$

 
$
285,175

 
 
 
 
 
 
 
 
 
 
Costs and expenses:
 
 
 
 
 
 
 
 
 
Lease operating expenses
(231
)
 
22,704

 

 

 
22,473

Production taxes
36

 
6,529

 

 

 
6,565

Midstream gathering and processing expenses

 
78,435

 

 

 
78,435

Depreciation, depletion and amortization
2,699

 
142,625

 
166

 

 
145,490

Impairment of oil and natural gas properties

 
35,647

 

 

 
35,647

General and administrative expenses
27,218

 
(12,675
)
 
116

 

 
14,659

Accretion expense

 
747

 

 

 
747

 
29,722


274,012


282




304,016

 
 
 
 
 
 
 
 
 
 
LOSS FROM OPERATIONS
(2,364
)

(16,195
)

(282
)



(18,841
)
 
 
 
 
 
 
 
 
 
 
OTHER EXPENSE (INCOME):
 
 
 
 
 
 
 
 
 
Interest expense
35,105

 
(1,010
)
 

 

 
34,095

Interest income
(187
)
 
(151
)
 

 

 
(338
)
Gain on debt extinguishment
(23,600
)
 

 

 

 
(23,600
)
Loss from equity method investments and investments in subsidiaries
62,760

 

 
40

 
(19,718
)
 
43,082

Other (income) expense
(1,168
)
 
3,362

 

 
1,000

 
3,194

 
72,910


2,201


40


(18,718
)

56,433

 
 
 
 
 
 
 
 
 
 
LOSS BEFORE INCOME TAXES
(75,274
)
 
(18,396
)
 
(322
)
 
18,718

 
(75,274
)
INCOME TAX BENEFIT
(26,522
)
 

 

 

 
(26,522
)
 
 
 
 
 
 
 
 
 
 
NET LOSS
$
(48,752
)

$
(18,396
)

$
(322
)

$
18,718


$
(48,752
)

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS
(Amounts in thousands)

 
Three months ended September 30, 2018
 
Parent
 
Guarantors
 
Non-Guarantor
 
Eliminations
 
Consolidated
 
 
 
 
 
 
 
 
 
 
Total revenues
$
235,683

 
$
125,279

 
$

 
$

 
$
360,962

 
 
 
 
 
 
 
 
 
 
Costs and expenses:
 
 
 
 
 
 
 
 
 
Lease operating expenses
16,502

 
5,823

 

 

 
22,325

Production taxes
4,505

 
4,843

 

 

 
9,348

Midstream gathering and processing expenses
54,397

 
24,516

 

 

 
78,913

Depreciation, depletion and amortization
119,914

 
1

 

 

 
119,915

General and administrative expenses
16,314

 
(467
)
 
1

 

 
15,848

Accretion expense
812

 
225

 

 

 
1,037

 
212,444


34,941


1




247,386

 
 
 
 
 
 
 
 
 
 
INCOME (LOSS) FROM OPERATIONS
23,239


90,338


(1
)



113,576

 
 
 
 
 
 
 
 
 
 
OTHER (INCOME) EXPENSE:
 
 
 
 
 
 
 
 
 
Interest expense
34,254

 
(1,001
)
 

 

 
33,253

Interest income
(86
)
 
(6
)
 

 

 
(92
)
Gain on sale of equity method investments
(2,733
)
 

 

 

 
(2,733
)
(Income) loss from equity method investments and investments in subsidiaries
(104,226
)
 
(1
)
 
275

 
91,094

 
(12,858
)
Other expense (income)
880

 
(24
)
 

 

 
856

 
(71,911
)
 
(1,032
)
 
275

 
91,094

 
18,426

 
 
 
 
 
 
 
 
 
 
INCOME (LOSS) BEFORE INCOME TAXES
95,150


91,370


(276
)

(91,094
)

95,150

INCOME TAX BENEFIT

 

 

 

 

 
 
 
 
 
 
 
 
 
 
NET INCOME (LOSS)
$
95,150

 
$
91,370

 
$
(276
)
 
$
(91,094
)
 
$
95,150


CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS
(Amounts in thousands)

 
Nine months ended September 30, 2019
 
Parent
 
Guarantors
 
Non-Guarantors
 
Eliminations
 
Consolidated
 
 
 
 
 
 
 
 
 
 
Total revenues
$
493,895

 
$
570,852

 
$

 
$

 
$
1,064,747

 
 
 
 
 
 
 
 
 
 
Costs and expenses:
 
 
 
 
 
 
 
 
 
Lease operating expenses
26,918

 
37,750

 

 

 
64,668

Production taxes
6,117

 
16,467

 

 

 
22,584

Midstream gathering and processing expenses
71,420

 
149,312

 

 

 
220,732

Depreciation, depletion, and amortization
201,263

 
187,390

 
221

 

 
388,874

Impairment of oil and gas properties

 
35,647

 

 

 
35,647

General and administrative expenses
56,195

 
(16,933
)
 
220

 

 
39,482

Accretion expense
1,389

 
1,784

 

 

 
3,173

 
363,302

 
411,417

 
441

 

 
775,160

 
 
 
 
 
 
 
 
 
 
INCOME (LOSS) FROM OPERATIONS
130,593

 
159,435

 
(441
)
 

 
289,587

 
 
 
 
 
 
 
 
 
 
OTHER EXPENSE (INCOME):
 
 
 
 
 
 
 
 
 
Interest expense
105,364

 
(2,269
)
 

 

 
103,095

Interest income
(454
)
 
(195
)
 

 

 
(649
)
Gain on debt extinguishment
(23,600
)
 

 

 

 
(23,600
)
Loss from equity method investments and investments in subsidiaries
7,295

 

 
379

 
156,717

 
164,391

Other (income) expense
(605
)
 
3,362

 

 
1,000

 
3,757

 
88,000

 
898

 
379

 
157,717

 
246,994

 
 
 
 
 
 
 
 
 
 
INCOME (LOSS) BEFORE INCOME TAXES
42,593

 
158,537

 
(820
)
 
(157,717
)
 
42,593

INCOME TAX BENEFIT
(205,853
)
 

 

 

 
(205,853
)
 
 
 
 
 
 
 
 
 
 
NET INCOME (LOSS)
$
248,446

 
$
158,537

 
$
(820
)
 
$
(157,717
)
 
$
248,446


CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS
(Amounts in thousands)

 
Nine months ended September 30, 2018
 
Parent
 
Guarantors
 
Non-Guarantor
 
Eliminations
 
Consolidated
 
 
 
 
 
 
 
 
 
 
Total revenues
$
596,018

 
$
343,076

 
$

 
$

 
$
939,094

 
 
 
 
 
 
 
 
 
 
Costs and expenses:
 
 
 
 
 
 
 
 
 
Lease operating expenses
46,926

 
17,217

 

 

 
64,143

Production taxes
13,309

 
10,552

 

 

 
23,861

Midstream gathering and processing expenses
152,605

 
61,941

 

 

 
214,546

Depreciation, depletion, and amortization
352,846

 
2

 

 

 
352,848

General and administrative expenses
45,100

 
(2,148
)
 
3

 

 
42,955

Accretion expense
2,397

 
659

 

 

 
3,056

 
613,183

 
88,223

 
3

 

 
701,409

 
 
 
 
 
 
 
 
 
 
(LOSS) INCOME FROM OPERATIONS
(17,165
)
 
254,853

 
(3
)
 

 
237,685

 
 
 
 
 
 
 
 
 
 
OTHER (INCOME) EXPENSE:
 
 
 
 
 
 
 
 
 
Interest expense
103,310

 
(2,388
)
 

 

 
100,922

Interest income
(144
)
 
(18
)
 

 

 
(162
)
Gain on sale of equity method investments
(28,349
)
 
(96,419
)
 

 

 
(124,768
)
(Income) loss from equity method investments and investments in subsidiaries
(387,991
)
 
(694
)
 
833

 
352,570

 
(35,282
)
Other (income) expense
(481
)
 
(34
)
 

 
1,000

 
485

 
(313,655
)
 
(99,553
)
 
833

 
353,570

 
(58,805
)
 
 
 
 
 
 
 
 
 
 
INCOME (LOSS) BEFORE INCOME TAXES
296,490

 
354,406

 
(836
)
 
(353,570
)
 
296,490

INCOME TAX BENEFIT
(69
)
 

 

 

 
(69
)
 
 
 
 
 
 
 
 
 
 
NET INCOME (LOSS)
$
296,559

 
$
354,406

 
$
(836
)
 
$
(353,570
)
 
$
296,559


CONDENSED CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(Amounts in thousands)
 
Three months ended September 30, 2019
 
Parent
 
Guarantors
 
Non-Guarantors
 
Eliminations
 
Consolidated
 
 
 
 
 
 
 
 
 
 
Net loss
$
(48,752
)
 
$
(18,396
)
 
$
(322
)
 
$
18,718

 
$
(48,752
)
Foreign currency translation adjustment
(2,064
)
 
(43
)
 
(2,021
)
 
2,064

 
(2,064
)
Other comprehensive loss
(2,064
)
 
(43
)
 
(2,021
)
 
2,064

 
(2,064
)
Comprehensive loss
$
(50,816
)
 
$
(18,439
)
 
$
(2,343
)
 
$
20,782

 
$
(50,816
)

 
Three months ended September 30, 2018
 
Parent
 
Guarantors
 
Non-Guarantor
 
Eliminations
 
Consolidated
 
 
 
 
 
 
 
 
 
 
Net income (loss)
$
95,150

 
$
91,370

 
$
(276
)
 
$
(91,094
)
 
$
95,150

Foreign currency translation adjustment
3,052

 
103

 
2,949

 
(3,052
)
 
3,052

Other comprehensive income
3,052

 
103

 
2,949

 
(3,052
)
 
3,052

Comprehensive income
$
98,202

 
$
91,473

 
$
2,673

 
$
(94,146
)
 
$
98,202


 
Nine months ended September 30, 2019
 
Parent
 
Guarantors
 
Non-Guarantors
 
Eliminations
 
Consolidated
 
 
 
 
 
 
 
 
 
 
Net income (loss)
$
248,446

 
$
158,537

 
$
(820
)
 
$
(157,717
)
 
$
248,446

Foreign currency translation adjustment
5,347

 
112

 
5,235

 
(5,347
)
 
5,347

Other comprehensive income
5,347

 
112

 
5,235

 
(5,347
)
 
5,347

Comprehensive income
$
253,793

 
$
158,649

 
$
4,415

 
$
(163,064
)
 
$
253,793


 
Nine months ended September 30, 2018
 
Parent
 
Guarantors
 
Non-Guarantor
 
Eliminations
 
Consolidated
 
 
Net income (loss)
$
296,559

 
$
354,406

 
$
(836
)
 
$
(353,570
)
 
$
296,559

Foreign currency translation adjustment
(5,815
)
 
(70
)
 
(5,745
)
 
5,815

 
(5,815
)
Other comprehensive loss
(5,815
)
 
(70
)
 
(5,745
)
 
5,815

 
(5,815
)
Comprehensive income (loss)
$
290,744

 
$
354,336

 
$
(6,581
)
 
$
(347,755
)
 
$
290,744


CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS
(Amounts in thousands)
 
Nine months ended September 30, 2019
 
Parent
 
Guarantors
 
Non-Guarantors
 
Eliminations
 
Consolidated
 
 
 
 
 
 
 
 
 
 
Net cash (used in) provided by operating activities
$
(7,604
)
 
$
621,511

 
$
3,445

 
$
3

 
$
617,355

 
 
 
 
 
 
 
 
 
 
Net cash provided by (used in) investing activities
9,178

 
(644,507
)
 
(3,751
)
 
432

 
(638,648
)
 
 
 
 
 
 
 
 
 
 
Net cash (used in) provided by financing activities
(20,880
)
 

 
435

 
(435
)
 
(20,880
)
 
 
 
 
 
 
 
 
 
 
Net (decrease) increase in cash, cash equivalents and restricted cash
(19,306
)
 
(22,996
)
 
129

 

 
(42,173
)
 
 
 
 
 
 
 
 
 
 
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
$
6,279

 
$
3,715

 
$
130

 
$

 
$
10,124



 
Nine months ended September 30, 2018
 
Parent
 
Guarantors
 
Non-Guarantor
 
Eliminations
 
Consolidated
 
 
 
 
 
 
 
 
 
 
Net cash provided by (used in) operating activities
$
427,351

 
$
203,446

 
$
(1
)
 
$
1

 
$
630,797

 
 
 
 
 
 
 
 
 
 
Net cash (used in) provided by investing activities
(354,848
)
 
(199,738
)
 
(2,318
)
 
2,318

 
(554,586
)
 
 
 
 
 
 
 
 
 
 
Net cash (used in) provided by financing activities
(51,197
)
 

 
2,319

 
(2,319
)
 
(51,197
)
 
 
 
 
 
 
 
 
 
 
Net increase in cash, cash equivalents and restricted cash
21,306

 
3,708

 

 

 
25,014

 
 
 
 
 
 
 
 
 
 
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
$
89,214

 
$
35,357

 
$

 
$

 
$
124,571