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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

X

- References

No definition available.

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- Definition

The entire disclosure for condensed financial statements.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Section 3
-Paragraph d
-Subparagraph 4
-Subsection 10

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Section 3
-Paragraph c
-Subparagraph 4
-Subsection 10

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Section 12
-Paragraph a
-Subsection 04

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Section 3
-Paragraph e
-Subparagraph 4
-Subsection 10

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Section 3
-Paragraph f
-Subparagraph 4
-Subsection 10

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