Condensed Consolidating Financial Information

6 Months Ended

Jun. 30, 2014

Condensed Financial Information of Parent Company Only Disclosure [Abstract]

Condensed Consolidating Financial Information

CONDENSED CONSOLIDATING FINANCIAL INFORMATION

On October 17, 2012 and December 21, 2012, the Company issued an aggregate of $300.0 million of its 7.75% Senior Notes (the "Notes"). The 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, 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)

	June 30, 2014
	Parent			Guarantors			Non-Guarantor			Eliminations			Consolidated
Assets
Current assets:
Cash and cash equivalents	$	72,921		$	2,371		$	1		$	—		$	75,293
Accounts receivable - oil and gas	102,136			5,319			—			—			107,455
Accounts receivable - related parties	127			—			—			—			127
Accounts receivable - intercompany	24,774			27			—			(24,801		)	—
Prepaid expenses and other current assets	3,575			—			—			—			3,575
Deferred tax asset	7,661			—			—			—			7,661
Note receivable - related party	875			—			—			—			875
Total current assets	212,069			7,717			1			(24,801		)	194,986
Property and equipment:
Oil and natural gas properties, full-cost accounting	3,191,073			11,029			—			(573		)	3,201,529
Other property and equipment	12,575			30			—			—			12,605
Accumulated depletion, depreciation, amortization and impairment	(897,530		)	(23		)	—			—			(897,553		)
Property and equipment, net	2,306,118			11,036			—			(573		)	2,316,581
Other assets:
Equity investments and investments in subsidiaries	494,342			—			203,351			(196,257		)	501,436
Derivative instruments	784			—			—			—			784
Other assets	17,985			—			—			—			17,985
Total other assets	513,111			—			203,351			(196,257		)	520,205
Total assets	$	3,031,298		$	18,753		$	203,352		$	(221,631	)	$	3,031,772
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable and accrued liabilities	$	286,984		$	474		$	—		$	—		$	287,458
Accounts payable - intercompany	—			24,696			105			(24,801		)	—
Asset retirement obligation - current	795			—			—			—			795
Short-term derivative instruments	24,532			—			—			—			24,532
Current maturities of long-term debt	163			—			—			—			163
Total current liabilities	312,474			25,170			105			(24,801		)	312,948
Long-term derivative instrument	5,487			—			—			—			5,487
Asset retirement obligation - long-term	15,181			—			—			—			15,181
Deferred tax liability	170,559			—			—			—			170,559
Long-term debt, net of current maturities	339,098			—			—			—			339,098
Total liabilities	842,799			25,170			105			(24,801		)	843,273
Stockholders' equity:
Common stock	854			—			—			—			854
Paid-in capital	1,821,368			322			224,849			(225,171		)	1,821,368
Accumulated other comprehensive income (loss)	(10,243		)	—			(10,243		)	10,243			(10,243		)
Retained earnings (accumulated deficit)	376,520			(6,739		)	(11,359		)	18,098			376,520
Total stockholders' equity	2,188,499			(6,417		)	203,247			(196,830		)	2,188,499
Total liabilities and stockholders' equity	$	3,031,298		$	18,753		$	203,352		$	(221,631	)	$	3,031,772

CONDENSED CONSOLIDATING BALANCE SHEETS

(Amounts in thousands)

	December 31, 2013
	Parent			Guarantors			Non-Guarantor			Eliminations			Consolidated
Assets
Current assets:
Cash and cash equivalents	$	451,431		$	7,525		$	—		$	—		$	458,956
Accounts receivable - oil and gas	58,662			162			—			—			58,824
Accounts receivable - related parties	2,617			—			—			—			2,617
Accounts receivable - intercompany	21,379			27			—			(21,406		)	—
Prepaid expenses and other current assets	2,581			—			—			—			2,581
Deferred tax asset	6,927			—			—			—			6,927
Short-term derivative instruments	324			—			—			—			324
Note receivable - related party	875			—			—			—			875
Total current assets	544,796			7,714			—			(21,406		)	531,104
Property and equipment:
Oil and natural gas properties, full-cost accounting,	2,470,411			7,340			—			(573		)	2,477,178
Other property and equipment	11,102			29			—			—			11,131
Accumulated depletion, depreciation, amortization and impairment	(784,695		)	(22		)	—			—			(784,717		)
Property and equipment, net	1,696,818			7,347			—			(573		)	1,703,592
Other assets:
Equity investments and investments in subsidiaries	432,727			—			191,473			(184,132		)	440,068
Derivative instruments	521			—			—			—			521
Other assets	17,851			—			—			—			17,851
Total other assets	451,099			—			191,473			(184,132		)	458,440
Total assets	$	2,692,713		$	15,061		$	191,473		$	(206,111	)	$	2,693,136
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable and accrued liabilities	$	190,284		$	423		$	—		$	—		$	190,707
Accounts payable - intercompany	—			21,296			110			(21,406		)	—
Asset retirement obligation - current	795			—			—			—			795
Short-term derivative instruments	12,280			—			—			—			12,280
Current maturities of long-term debt	159			—			—			—			159
Total current liabilities	203,518			21,719			110			(21,406		)	203,941
Long-term derivative instrument	11,366			—			—			—			11,366
Asset retirement obligation - long-term	14,288			—			—			—			14,288
Deferred tax liability	114,275			—			—			—			114,275
Long-term debt, net of current maturities	299,028			—			—			—			299,028
Total liabilities	642,475			21,719			110			(21,406		)	642,898
Stockholders' equity:
Common stock	851			—			—			—			851
Paid-in capital	1,813,058			322			208,277			(208,599		)	1,813,058
Accumulated other comprehensive income (loss)	(9,781		)	—			(9,781		)	9,781			(9,781		)
Retained earnings (accumulated deficit)	246,110			(6,980		)	(7,133		)	14,113			246,110
Total stockholders' equity	2,050,238			(6,658		)	191,363			(184,705		)	2,050,238
Total liabilities and stockholders' equity	$	2,692,713		$	15,061		$	191,473		$	(206,111	)	$	2,693,136

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS

(Amounts in thousands)

	Six months ended June 30, 2014
	Parent			Guarantors		Non-Guarantor			Eliminations			Consolidated
Total revenues	$	231,864		$	901	$	—		$	—		$	232,765
Costs and expenses:
Lease operating expenses	23,838			471		—			—			24,309
Production taxes	13,466			92		—			—			13,558
Midstream processing and marketing	18,515			34		—			—			18,549
Depreciation, depletion, and amortization	112,870			1		—			—			112,871
General and administrative	19,834			62		(3		)	—			19,893
Accretion expense	377			—		—			—			377
Gain on sale of assets	(11		)	—		—			—			(11		)
	188,889			660		(3		)	—			189,546
INCOME FROM OPERATIONS	42,975			241		3			—			43,219
OTHER (INCOME) EXPENSE:
Interest expense	6,287			—		—			—			6,287
Interest income	(142		)	—		—			—			(142		)
Litigation settlement	24,000			—		—			—			24,000
(Income) loss from equity method investments and investments in subsidiaries	(198,288		)	—		4,229			(3,985		)	(198,044		)
	(168,143		)	—		4,229			(3,985		)	(167,899		)
INCOME (LOSS) BEFORE INCOME TAXES	211,118			241		(4,226		)	3,985			211,118
INCOME TAX EXPENSE	80,708			—		—			—			80,708
NET INCOME (LOSS)	$	130,410		$	241	$	(4,226	)	$	3,985		$	130,410

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS

(Amounts in thousands)

	Six months ended June 30, 2013
	Parent			Guarantors		Non-Guarantor			Eliminations			Consolidated
Total revenues	$	124,695		$	739	$	—		$	—		$	125,434
Costs and expenses:
Lease operating expenses	10,712			338		—			—			11,050
Production taxes	13,267			43		—			—			13,310
Midstream processing and marketing	2,310			8		—			—			2,318
Depreciation, depletion, and amortization	51,122			1		—			—			51,123
General and administrative	9,237			72		3			—			9,312
Accretion expense	349			—		—			—			349
Loss on sale of assets	572			—		—			—			572
	87,569			462		3			—			88,034
INCOME (LOSS) FROM OPERATIONS	37,126			277		(3		)	—			37,400
OTHER (INCOME) EXPENSE:
Interest expense	6,763			—		—			—			6,763
Interest income	(141		)	—		—			—			(141		)
(Income) loss from equity method investments and investments in subsidiaries	(111,592		)	—		1,262			(988		)	(111,318		)
	(104,970		)	—		1,262			(988		)	(104,696		)
INCOME (LOSS) BEFORE INCOME TAXES	142,096			277		(1,265		)	988			142,096
INCOME TAX EXPENSE	53,709			—		—			—			53,709
NET INCOME (LOSS)	$	88,387		$	277	$	(1,265	)	$	988		$	88,387

	Six months ended June 30, 2014
	Parent			Guarantors		Non-Guarantor			Eliminations		Consolidated
Net income (loss)	$	130,410		$	241	$	(4,226	)	$	3,985	$	130,410
Foreign currency translation adjustment	(462		)	—		(462		)	462		(462		)
Other comprehensive income (loss)	(462		)	—		(462		)	462		(462		)
Comprehensive income (loss)	$	129,948		$	241	$	(4,688	)	$	4,447	$	129,948

	Six months ended June 30, 2013
	Parent			Guarantors		Non-Guarantor			Eliminations		Consolidated
Net income (loss)	$	88,387		$	277	$	(1,265	)	$	988	$	88,387
Foreign currency translation adjustment	(9,680		)	—		(9,680		)	9,680		(9,680		)
Change in fair value of derivative instruments, net of taxes	(1,074		)	—		—			—		(1,074		)
Reclassification of settled contracts, net of taxes	3,201			—		—			—		3,201
Other comprehensive income (loss)	(7,553		)	—		(9,680		)	9,680		(7,553		)
Comprehensive income (loss)	$	80,834		$	277	$	(10,945	)	$	10,668	$	80,834

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS

(Amounts in thousands)

	Six months ended June 30, 2014
	Parent			Guarantors			Non-Guarantor			Eliminations			Consolidated
Net cash provided by operating activities	$	203,057		$	(1,546	)	$	(2	)	$	—		$	201,509
Net cash provided by (used in) investing activities	(621,155		)	(3,608		)	(16,569		)	16,572			(624,760		)
Net cash provided by (used in) financing activities	39,588			—			16,572			(16,572		)	39,588
Net iecrease in cash and cash equivalents	(378,510		)	(5,154		)	1			—			(383,663		)
Cash and cash equivalents at beginning of period	451,431			7,525			—			—			458,956
Cash and cash equivalents at end of period	$	72,921		$	2,371		$	1		$	—		$	75,293

	Six months ended June 30, 2013
	Parent			Guarantors			Non-Guarantor			Eliminations			Consolidated
Net cash provided by (used in) operating activities	$	73,633		$	(88	)	$	—		$	—		$	73,545
Net cash provided by (used in) investing activities	(383,817		)	(712		)	(15,055		)	15,055			(384,529		)
Net cash provided by (used in) financing activities	358,281			—			15,055			(15,055		)	358,281
Net increase (decrease) in cash and cash equivalents	48,097			(800		)	—			—			47,297
Cash and cash equivalents at beginning of period	165,293			1,795			—			—			167,088
Cash and cash equivalents at end of period	$	213,390		$	995		$	—		$	—		$	214,385