Condensed Consolidating Financial Information

9 Months Ended

Sep. 30, 2015

Condensed Financial Information of Parent Company Only Disclosure [Abstract]

Condensed Consolidating Financial Information

CONDENSED CONSOLIDATING FINANCIAL INFORMATION

On October 17, 2012, December 21, 2012 and August 18, 2014, the Company issued an aggregate of $600.0 million principal amount of its 7.75% Senior Notes. The October Notes and the December Notes were exchanged for substantially identical notes in the same aggregate principal amount that were registered under the Securities Act. The Exchange Notes and the August Notes are collectively referred to as the "Old Notes." The Old 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 Old 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.

In connection with the issuance of the August Notes, the Company and the subsidiary guarantors entered into a registration rights agreement with the initial purchasers on August 18, 2014, pursuant to which the Company and the subsidiary guarantors have agreed to file a registration statement with respect to an offer to exchange the August Notes for a new issue of substantially identical debt securities registered under the Securities Act. The registration statement relating to the exchange offer for the August Notes was filed on November 6, 2014, as amended on February 3, 2015, and declared effective by the SEC on February 4, 2015. The exchange offer for the August Notes was completed in March 2015.

On April 21, 2015, the Company issued $350.0 million in aggregate principal amount of 6.625% Senior Notes due 2023 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 April 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 April Notes for a new issue of substantially identical debt securities registered under the Securities Act. The registration statement relating to the exchange offer for the April Notes was filed on August 24, 2015 and declared effective by the SEC on September 4, 2015. The exchange offer for the April Notes was completed on October 13, 2015.

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)

	September 30, 2015
	Parent			Guarantors			Non-Guarantor			Eliminations			Consolidated
Assets
Current assets:
Cash and cash equivalents	$	226,161		$	1,949		$	1		$	—		$	228,111
Accounts receivable - oil and gas	66,228			43			—			—			66,271
Accounts receivable - related parties	149			—			—			—			149
Accounts receivable - intercompany	334,886			55			—			(334,941		)	—
Prepaid expenses and other current assets	16,156			—			—			—			16,156
Short-term derivative instruments	116,100			—			—			—			116,100
Total current assets	759,680			2,047			1			(334,941		)	426,787
Property and equipment:
Oil and natural gas properties, full-cost accounting	4,934,813			324,678			—			(729		)	5,258,762
Other property and equipment	27,627			43			—			—			27,670
Accumulated depletion, depreciation, amortization and impairment	(1,896,385		)	(28		)	—			—			(1,896,413		)
Property and equipment, net	3,066,055			324,693			—			(729		)	3,390,019
Other assets:
Equity investments and investments in subsidiaries	285,980			—			99,489			(90,366		)	295,103
Derivative instruments	51,171			—			—			—			51,171
Deferred tax asset	27,368			—			—			—			27,368
Other assets	24,982			—			—			—			24,982
Total other assets	389,501			—			99,489			(90,366		)	398,624
Total assets	$	4,215,236		$	326,740		$	99,490		$	(426,036	)	$	4,215,430
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable and accrued liabilities	$	311,922		$	194		$	—		$	—		$	312,116
Accounts payable - intercompany	—			334,817			124			(334,941		)	—
Asset retirement obligation - current	75			—			—			—			75
Deferred tax liability - current	38,734			—			—			—			38,734
Short-term derivative instruments	2,351			—			—			—			2,351
Current maturities of long-term debt	1,695			—			—			—			1,695
Total current liabilities	354,777			335,011			124			(334,941		)	354,971
Long-term derivative instrument	3,208			—			—			—			3,208
Asset retirement obligation - long-term	23,073			—			—			—			23,073
Long-term debt, net of current maturities	963,048			—			—			—			963,048
Total liabilities	1,344,106			335,011			124			(334,941		)	1,344,300
Stockholders' equity:
Common stock	1,082			—			—			—			1,082
Paid-in capital	2,820,500			322			240,916			(241,238		)	2,820,500
Accumulated other comprehensive (loss) income	(49,950		)	—			(49,950		)	49,950			(49,950		)
Retained earnings (accumulated deficit)	99,498			(8,593		)	(91,600		)	100,193			99,498
Total stockholders' equity	2,871,130			(8,271		)	99,366			(91,095		)	2,871,130
Total liabilities and stockholders' equity	$	4,215,236		$	326,740		$	99,490		$	(426,036	)	$	4,215,430

CONDENSED CONSOLIDATING BALANCE SHEETS

(Amounts in thousands)

	December 31, 2014
	Parent			Guarantors			Non-Guarantor			Eliminations			Consolidated
Assets
Current assets:
Cash and cash equivalents	$	141,535		$	804		$	1		$	—		$	142,340
Accounts receivable - oil and gas	103,762			96			—			—			103,858
Accounts receivable - related parties	46			—			—			—			46
Accounts receivable - intercompany	45,222			27			—			(45,249		)	—
Prepaid expenses and other current assets	3,714			—			—			—			3,714
Short-term derivative instruments	78,391			—			—			—			78,391
Total current assets	372,670			927			1			(45,249		)	328,349
Property and equipment:
Oil and natural gas properties, full-cost accounting,	3,887,874			35,990			—			(710		)	3,923,154
Other property and equipment	18,301			43			—			—			18,344
Accumulated depletion, depreciation, amortization and impairment	(1,050,855		)	(24		)	—			—			(1,050,879		)
Property and equipment, net	2,855,320			36,009			—			(710		)	2,890,619
Other assets:
Equity investments and investments in subsidiaries	360,238			—			180,217			(170,874		)	369,581
Derivative instruments	24,448			—			—			—			24,448
Other assets	19,396			—			—			—			19,396
Total other assets	404,082			—			180,217			(170,874		)	413,425
Total assets	$	3,632,072		$	36,936		$	180,218		$	(216,833	)	$	3,632,393
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable and accrued liabilities	$	371,089		$	321		$	—		$	—		$	371,410
Accounts payable - intercompany	—			45,143			106			(45,249		)	—
Asset retirement obligation - current	75			—			—			—			75
Deferred tax liability	27,070			—			—			—			27,070
Current maturities of long-term debt	168			—			—			—			168
Total current liabilities	398,402			45,464			106			(45,249		)	398,723
Asset retirement obligation - long-term	17,863			—			—			—			17,863
Deferred tax liability	203,195			—			—			—			203,195
Long-term debt, net of current maturities	716,316			—			—			—			716,316
Total liabilities	1,335,776			45,464			106			(45,249		)	1,336,097
Stockholders' equity:
Common stock	856			—			—			—			856
Paid-in capital	1,828,602			322			227,079			(227,401		)	1,828,602
Accumulated other comprehensive (loss) income	(26,675		)	—			(26,675		)	26,675			(26,675		)
Retained earnings (accumulated deficit)	493,513			(8,850		)	(20,292		)	29,142			493,513
Total stockholders' equity	2,296,296			(8,528		)	180,112			(171,584		)	2,296,296
Total liabilities and stockholders' equity	$	3,632,072		$	36,936		$	180,218		$	(216,833	)	$	3,632,393

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS

(Amounts in thousands)

	Three months ended September 30, 2015
	Parent			Guarantors		Non-Guarantor			Eliminations			Consolidated
Total revenues	$	230,282		$	287	$	—		$	—		$	230,569
Costs and expenses:
Lease operating expenses	17,358			210		—			—			17,568
Production taxes	3,570			23		—			—			3,593
Midstream gathering and processing	42,139			27		—			—			42,166
Depreciation, depletion, and amortization	90,327			2		—			—			90,329
Impairment of oil and gas properties	594,776			—		—			—			594,776
General and administrative	10,999			6		(4		)	—			11,001
Accretion expense	212			—		—			—			212
	759,381			268		(4		)	—			759,645
(LOSS) INCOME FROM OPERATIONS	(529,099		)	19		4			—			(529,076		)
OTHER (INCOME) EXPENSE:
Interest expense	14,124			—		—			—			14,124
Interest income	(279		)	—		—			—			(279		)
Loss (income) from equity method investments and investments in subsidiaries	61,868			—		58,653			(58,630		)	61,891
	75,713			—		58,653			(58,630		)	75,736
(LOSS) INCOME BEFORE INCOME TAXES	(604,812		)	19		(58,649		)	58,630			(604,812		)
INCOME TAX BENEFIT	(216,603		)	—		—			—			(216,603		)
NET (LOSS) INCOME	$	(388,209	)	$	19	$	(58,649	)	$	58,630		$	(388,209	)

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS

(Amounts in thousands)

	Three months ended September 30, 2014
	Parent			Guarantors		Non-Guarantor			Eliminations			Consolidated
Total revenues	$	170,284		$	520	$	—		$	—		$	170,804
Costs and expenses:
Lease operating expenses	11,628			255		—			—			11,883
Production taxes	5,154			59		—			—			5,213
Midstream gathering and processing	18,694			20		—			—			18,714
Depreciation, depletion, and amortization	72,408			1		—			—			72,409
General and administrative	8,909			29		1			—			8,939
Accretion expense	192			—		—			—			192
	116,985			364		1			—			117,350
INCOME (LOSS) FROM OPERATIONS	53,299			156		(1		)	—			53,454
OTHER (INCOME) EXPENSE:
Interest expense	5,706			—		—			—			5,706
Interest income	(25		)	—		—			—			(25		)
Litigation settlement	1,500			—		—			—			1,500
Loss (income) from equity method investments and investments in subsidiaries	34,322			—		4,633			(4,478		)	34,477
	41,503			—		4,633			(4,478		)	41,658
INCOME (LOSS) BEFORE INCOME TAXES	11,796			156		(4,634		)	4,478			11,796
INCOME TAX EXPENSE	4,876			—		—			—			4,876
NET INCOME (LOSS)	$	6,920		$	156	$	(4,634	)	$	4,478		$	6,920

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS

(Amounts in thousands)

	Nine months ended September 30, 2015
	Parent			Guarantors		Non-Guarantor			Eliminations			Consolidated
Total revenues	$	518,141		$	1,015	$	—		$	—		$	519,156
Costs and expenses:
Lease operating expenses	50,830			581		—			—			51,411
Production taxes	11,083			80		—			—			11,163
Midstream gathering and processing	100,405			46		—			—			100,451
Depreciation, depletion, and amortization	251,389			4		—			—			251,393
Impairment of oil and gas properties	594,776			—		—			—			594,776
General and administrative	31,248			47		20			—			31,315
Accretion expense	594			—		—			—			594
	1,040,325			758		20			—			1,041,103
(LOSS) INCOME FROM OPERATIONS	(522,184		)	257		(20		)	—			(521,947		)
OTHER (INCOME) EXPENSE:
Interest expense	34,906			—		—			—			34,906
Interest income	(536		)	—		—			—			(536		)
Loss (income) from equity method investments and investments in subsidiaries	56,799			—		71,289			(71,052		)	57,036
	91,169			—		71,289			(71,052		)	91,406
(LOSS) INCOME BEFORE INCOME TAXES	(613,353		)	257		(71,309		)	71,052			(613,353		)
INCOME TAX BENEFIT	(219,338		)	—		—			—			(219,338		)
NET (LOSS) INCOME	$	(394,015	)	$	257	$	(71,309	)	$	71,052		$	(394,015	)

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS

(Amounts in thousands)

	Nine months ended September 30, 2014
	Parent			Guarantors		Non-Guarantor			Eliminations			Consolidated
Total revenues	$	402,148		$	1,421	$	—		$	—		$	403,569
Costs and expenses:
Lease operating expenses	35,466			726		—			—			36,192
Production taxes	18,620			151		—			—			18,771
Midstream gathering and processing	37,209			54		—			—			37,263
Depreciation, depletion, and amortization	185,278			2		—			—			185,280
General and administrative	28,743			91		(2		)	—			28,832
Accretion expense	569			—		—			—			569
Gain on sale of assets	(11		)	—		—			—			(11		)
	305,874			1,024		(2		)	—			306,896
INCOME FROM OPERATIONS	96,274			397		2			—			96,673
OTHER (INCOME) EXPENSE:
Interest expense	11,993			—		—			—			11,993
Interest income	(167		)	—		—			—			(167		)
Litigation settlement	25,500			—		—			—			25,500
(Income) loss from equity method investments and investments in subsidiaries	(163,966		)	—		8,862			(8,463		)	(163,567		)
	(126,640		)	—		8,862			(8,463		)	(126,241		)
INCOME (LOSS) BEFORE INCOME TAXES	222,914			397		(8,860		)	8,463			222,914
INCOME TAX EXPENSE	85,584			—		—			—			85,584
NET INCOME (LOSS)	$	137,330		$	397	$	(8,860	)	$	8,463		$	137,330

CONDENSED CONSOLIDATING STATEMENTS OF COMPREHENSIVE (LOSS) INCOME

(Amounts in thousands)

	Three months ended September 30, 2015
	Parent			Guarantors		Non-Guarantor			Eliminations		Consolidated
Net (loss) income	$	(388,209	)	$	19	$	(58,649	)	$	58,630	$	(388,209	)
Foreign currency translation adjustment	(11,538		)	—		(11,538		)	11,538		(11,538		)
Other comprehensive (loss) income	(11,538		)	—		(11,538		)	11,538		(11,538		)
Comprehensive (loss) income	$	(399,747	)	$	19	$	(70,187	)	$	70,168	$	(399,747	)

	Three months ended September 30, 2014
	Parent			Guarantors		Non-Guarantor			Eliminations		Consolidated
Net income (loss)	$	6,920		$	156	$	(4,634	)	$	4,478	$	6,920
Foreign currency translation adjustment	(9,536		)	—		(9,536		)	9,536		(9,536		)
Other comprehensive (loss) income	(9,536		)	—		(9,536		)	9,536		(9,536		)
Comprehensive (loss) income	$	(2,616	)	$	156	$	(14,170	)	$	14,014	$	(2,616	)

	Nine months ended September 30, 2015
	Parent			Guarantors		Non-Guarantor			Eliminations		Consolidated
Net (loss) income	$	(394,015	)	$	257	$	(71,309	)	$	71,052	$	(394,015	)
Foreign currency translation adjustment	(23,275		)	—		(23,275		)	23,275		(23,275		)
Other comprehensive (loss) income	(23,275		)	—		(23,275		)	23,275		(23,275		)
Comprehensive (loss) income	$	(417,290	)	$	257	$	(94,584	)	$	94,327	$	(417,290	)

	Nine months ended September 30, 2014
	Parent			Guarantors		Non-Guarantor			Eliminations		Consolidated
Net income (loss)	$	137,330		$	397	$	(8,860	)	$	8,463	$	137,330
Foreign currency translation adjustment	(9,998		)	—		(9,998		)	9,998		(9,998		)
Other comprehensive (loss) income	(9,998		)	—		(9,998		)	9,998		(9,998		)
Comprehensive income (loss)	$	127,332		$	397	$	(18,858	)	$	18,461	$	127,332

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS

(Amounts in thousands)

	Nine months ended September 30, 2015
	Parent			Guarantors			Non-Guarantor			Eliminations			Consolidated
Net cash provided by (used in) operating activities	$	247,447		$	(12,356	)	$	—		$	—		$	235,091
Net cash (used in) provided by investing activities	(1,385,878		)	13,501			(13,837		)	13,837			(1,372,377		)
Net cash provided by (used in) financing activities	1,223,057			—			13,837			(13,837		)	1,223,057
Net increase in cash and cash equivalents	84,626			1,145			—			—			85,771
Cash and cash equivalents at beginning of period	141,535			804			1			—			142,340
Cash and cash equivalents at end of period	$	226,161		$	1,949		$	1		$	—		$	228,111

	Nine months ended September 30, 2014
	Parent			Guarantors			Non-Guarantor			Eliminations			Consolidated
Net cash provided by (used in) operating activities	$	286,500		$	(598	)	$	(3	)	$	—		$	285,899
Net cash (used in) provided by investing activities	(897,527		)	(6,523		)	(16,569		)	16,572			(904,047		)
Net cash provided by (used in) financing activities	312,075			—			16,572			(16,572		)	312,075
Net decrease in cash and cash equivalents	(298,952		)	(7,121		)	—			—			(306,073		)
Cash and cash equivalents at beginning of period	451,431			7,525			—			—			458,956
Cash and cash equivalents at end of period	$	152,479		$	404		$	—		$	—		$	152,883