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 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 October Notes, December Notes and the August Notes are collectively referred to as the "2020 Notes". In connection with the issuance of the 2020 Notes, the Company and the subsidiary guarantors entered into registration rights agreements with the initial purchasers, pursuant to which the Company and the subsidiary guarantors agreed to file a registration statement with respect to an offer to exchange the 2020 Notes for a new issue of substantially identical debt securities registered under the Securities Act. The exchange offer for the October Notes and December Notes was completed in October 2013 and the exchange offer for the August Notes was completed in March 2015 . In October 2016, the Company repurchased (in a cash tender offer) or redeemed all of the 2020 Notes, of which $600.0 million in aggregate principal amount was then outstanding, with the net proceeds from the issuance of the 2024 Notes discussed below and cash on hand. On April 21, 2015 , the Company issued $350.0 million in aggregate principal amount of its 6.625% Senior Notes due 2023 (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 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 exchange offer for the April Notes was completed on October 13, 2015 . On October 14, 2016, the Company issued $650.0 million in aggregate principal amount of its 6.000% Senior Notes due 2024 (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 its 6.375% Senior Notes due 2025 (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 intends to use 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 Acquisition. The 2020 Notes were, and the 2023 Notes, the 2024 Notes and the 2025 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 2020 Notes were not, and the 2023 Notes, the 2024 Notes and the 2025 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 (loss) income 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) December 31, 2016 Parent Guarantors Non-Guarantor Eliminations Consolidated Assets Current assets: Cash and cash equivalents $ 1,273,882 $ 1,993 $ — $ — $ 1,275,875 Restricted Cash 185,000 — — — 185,000 Accounts receivable - oil and gas 137,087 37,496 — (37,822 ) 136,761 Accounts receivable - related parties 16 — — — 16 Accounts receivable - intercompany 449,517 1,151 — (450,668 ) — Prepaid expenses and other current assets 6,230 1,409 — — 7,639 Short-term derivative instruments 3,488 — — — 3,488 Total current assets 2,055,220 42,049 — (488,490 ) 1,608,779 Property and equipment: Oil and natural gas properties, full-cost accounting 5,655,125 417,524 — (729 ) 6,071,920 Other property and equipment 68,943 43 — — 68,986 Accumulated depletion, depreciation, amortization and impairment (3,789,746 ) (34 ) — — (3,789,780 ) Property and equipment, net 1,934,322 417,533 — (729 ) 2,351,126 Other assets: Equity investments and investments in subsidiaries 236,327 33,590 45,213 (71,210 ) 243,920 Long-term derivative instruments 5,696 — — — 5,696 Deferred tax asset 4,692 — — — 4,692 Other assets 8,932 — — — 8,932 Total other assets 255,647 33,590 45,213 (71,210 ) 263,240 Total assets $ 4,245,189 $ 493,172 $ 45,213 $ (560,429 ) $ 4,223,145 Liabilities and Stockholders' Equity Current liabilities: Accounts payable and accrued liabilities $ 255,966 $ 9,158 $ — $ — $ 265,124 Accounts payable - intercompany 31,202 457,163 126 (488,491 ) — Asset retirement obligation 195 — — — 195 Derivative instruments 119,219 — — — 119,219 Current maturities of long-term debt 276 — — — 276 Total current liabilities 406,858 466,321 126 (488,491 ) 384,814 Long-term derivative instrument 26,759 — — — 26,759 Asset retirement obligation 34,081 — — — 34,081 Long-term debt, net of current maturities 1,593,599 — — — 1,593,599 Total liabilities 2,061,297 466,321 126 (488,491 ) 2,039,253 Stockholders' equity: Common stock 1,588 — — — 1,588 Paid-in capital 3,946,442 33,822 257,026 (290,848 ) 3,946,442 Accumulated other comprehensive (loss) income (53,058 ) — (50,931 ) 50,931 (53,058 ) Retained (deficit) earnings (1,711,080 ) (6,971 ) (161,008 ) 167,979 (1,711,080 ) Total stockholders' equity 2,183,892 26,851 45,087 (71,938 ) 2,183,892 Total liabilities and stockholders' equity $ 4,245,189 $ 493,172 $ 45,213 $ (560,429 ) $ 4,223,145 CONDENSED CONSOLIDATING BALANCE SHEETS (Amounts in thousands) December 31, 2015 Parent Guarantors Non-Guarantor Eliminations Consolidated Assets Current assets Cash and cash equivalents $ 112,494 $ 479 $ 1 $ — $ 112,974 Accounts receivable - oil and gas 72,241 54 — (423 ) 71,872 Accounts receivable - related parties 16 — — — 16 Accounts receivable - intercompany 326,475 60 — (326,535 ) — Prepaid expenses and other current assets 3,905 — — — 3,905 Short-term derivative instruments 142,794 — — — 142,794 Total current assets 657,925 593 1 (326,958 ) 331,561 Property and equipment: Oil and natural gas properties, full-cost accounting, 5,108,258 316,813 — (729 ) 5,424,342 Other property and equipment 33,128 43 — — 33,171 Accumulated depletion, depreciation, amortization and impairment (2,829,081 ) (29 ) — — (2,829,110 ) Property and equipment, net 2,312,305 316,827 — (729 ) 2,628,403 Other assets: Equity investments and investments in subsidiaries 231,892 — 50,644 (40,143 ) 242,393 Long-term derivative instruments 51,088 — — — 51,088 Deferred tax asset 74,925 — — — 74,925 Other assets 6,364 — — — 6,364 Total other assets 364,269 — 50,644 (40,143 ) 374,770 Total assets $ 3,334,499 $ 317,420 $ 50,645 $ (367,830 ) $ 3,334,734 Liabilities and Stockholders' Equity Current liabilities: Accounts payable and accrued liabilities $ 264,893 $ 527 $ — $ (292 ) $ 265,128 Accounts payable - intercompany — 326,541 124 (326,665 ) — Asset retirement obligation 75 — — — 75 Derivative instruments 437 — — — 437 Deferred tax liability 50,697 — — — 50,697 Current maturities of long-term debt 179 — — — 179 Total current liabilities 316,281 327,068 124 (326,957 ) 316,516 Long-term derivative instrument 6,935 — — — 6,935 Asset retirement obligation 26,362 — — — 26,362 Long-term debt, net of current maturities 946,084 — — — 946,084 Total liabilities 1,295,662 327,068 124 (326,957 ) 1,295,897 Stockholders' equity: Common stock 1,082 — — — 1,082 Paid-in capital 2,824,303 322 241,553 (241,875 ) 2,824,303 Accumulated other comprehensive (loss) income (55,177 ) — (55,177 ) 55,177 (55,177 ) Retained (deficit) earnings (731,371 ) (9,970 ) (135,855 ) 145,825 (731,371 ) Total stockholders' equity 2,038,837 (9,648 ) 50,521 (40,873 ) 2,038,837 Total liabilities and stockholders' equity $ 3,334,499 $ 317,420 $ 50,645 $ (367,830 ) $ 3,334,734 CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS (Amounts in thousands) Year Ended December 31, 2016 Parent Guarantors Non-Guarantor Eliminations Consolidated Total revenues $ 381,931 $ 3,979 $ — $ — $ 385,910 Costs and expenses: Lease operating expenses 68,034 843 — — 68,877 Production taxes 13,121 155 — — 13,276 Midstream gathering and processing 165,400 572 — — 165,972 Depreciation, depletion and amortization 245,970 4 — — 245,974 Impairment of oil and gas properties 715,495 — — — 715,495 General and administrative 43,896 (490 ) 3 — 43,409 Accretion expense 1,057 — — — 1,057 1,252,973 1,084 3 — 1,254,060 (LOSS) INCOME FROM OPERATIONS (871,042 ) 2,895 (3 ) — (868,150 ) OTHER (INCOME) EXPENSE: Interest expense 63,529 1 — — 63,530 Interest income (1,230 ) — — — (1,230 ) Insurance proceeds (5,718 ) — — — (5,718 ) Loss on debt extinguishment 23,776 — — — 23,776 Loss (income) from equity method investments and investments in subsidiaries 31,078 (89 ) 25,150 (22,154 ) 33,985 Other expense (income) 145 (16 ) — — 129 111,580 (104 ) 25,150 (22,154 ) 114,472 (LOSS) INCOME BEFORE INCOME TAXES (982,622 ) 2,999 (25,153 ) 22,154 (982,622 ) INCOME TAX BENEFIT (2,913 ) — — — (2,913 ) NET (LOSS) INCOME $ (979,709 ) $ 2,999 $ (25,153 ) $ 22,154 $ (979,709 ) CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS (Amounts in thousands) Year Ended December 31, 2015 Parent Guarantors Non-Guarantor Eliminations Consolidated Total revenues $ 707,868 $ 1,122 $ — $ — $ 708,990 Costs and expenses: Lease operating expenses 68,632 843 — — 69,475 Production taxes 14,618 122 — — 14,740 Midstream gathering and processing 138,526 64 — — 138,590 Depreciation, depletion and amortization 337,689 5 — — 337,694 Impairment of oil and gas properties 1,440,418 — — — 1,440,418 General and administrative 41,892 55 20 — 41,967 Accretion expense 820 — — — 820 2,042,595 1,089 20 — 2,043,704 (LOSS) INCOME FROM OPERATIONS (1,334,727 ) 33 (20 ) — (1,334,714 ) OTHER (INCOME) EXPENSE: Interest expense 51,221 — — — 51,221 Interest income (643 ) — — — (643 ) Insurance proceeds (10,015 ) — — — (10,015 ) Loss (income) from equity method investments and investments in subsidiaries 107,252 — 115,544 (116,703 ) 106,093 Other expense (income) (1,657 ) (346 ) — 1,518 (485 ) 146,158 (346 ) 115,544 (115,185 ) 146,171 (LOSS) INCOME BEFORE INCOME TAXES (1,480,885 ) 379 (115,564 ) 115,185 (1,480,885 ) INCOME TAX BENEFIT (256,001 ) — — — (256,001 ) NET (LOSS) INCOME $ (1,224,884 ) $ 379 $ (115,564 ) $ 115,185 $ (1,224,884 ) CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS (Amounts in thousands) Year Ended December 31, 2014 Parent Guarantors Non-Guarantor Eliminations Consolidated Total revenues $ 668,961 $ 1,801 $ — $ — $ 670,762 Costs and expenses: Lease operating expenses 51,238 953 — — 52,191 Production taxes 23,803 203 — — 24,006 Midstream gathering and processing 64,402 65 — — 64,467 Depreciation, depletion and amortization 265,428 3 — — 265,431 General and administrative 37,846 446 (2 ) — 38,290 Accretion expense 761 — — — 761 Gain on sale of assets (11 ) — — — (11 ) 443,467 1,670 (2 ) — 445,135 INCOME FROM OPERATIONS 225,494 131 2 — 225,627 OTHER (INCOME) EXPENSE: Interest expense 23,986 — — — 23,986 Interest income (195 ) — — — (195 ) Litigation settlement 25,500 — — — 25,500 Gain on contribution of investments (84,470 ) — — — (84,470 ) (Income) loss from equity method investments and investments in subsidiaries (139,965 ) — 13,159 (12,628 ) (139,434 ) Other (income) expense (106 ) (398 ) — — (504 ) (175,250 ) (398 ) 13,159 (12,628 ) (175,117 ) INCOME (LOSS) BEFORE INCOME TAXES 400,744 529 (13,157 ) 12,628 400,744 INCOME TAX EXPENSE 153,341 — — — 153,341 NET INCOME (LOSS) $ 247,403 $ 529 $ (13,157 ) $ 12,628 $ 247,403 CONDENSED CONSOLIDATING STATEMENTS OF COMPREHENSIVE (LOSS) INCOME (Amounts in thousands) Year Ended December 31, 2016 Parent Guarantors Non-Guarantor Eliminations Consolidated Net (loss) income $ (979,709 ) $ 2,999 $ (25,153 ) $ 22,154 $ (979,709 ) Foreign currency translation adjustment 2,119 778 1,341 (2,119 ) 2,119 Other comprehensive income (loss) 2,119 778 1,341 (2,119 ) 2,119 Comprehensive (loss) income $ (977,590 ) $ 3,777 $ (23,812 ) $ 20,035 $ (977,590 ) Year Ended December 31, 2015 Parent Guarantors Non-Guarantor Eliminations Consolidated Net (loss) income $ (1,224,884 ) $ 379 $ (115,564 ) $ 115,185 $ (1,224,884 ) Foreign currency translation adjustment (28,502 ) — (28,502 ) 28,502 (28,502 ) Other comprehensive (loss) income (28,502 ) — (28,502 ) 28,502 (28,502 ) Comprehensive (loss) income $ (1,253,386 ) $ 379 $ (144,066 ) $ 143,687 $ (1,253,386 ) Year Ended December 31, 2014 Parent Guarantors Non-Guarantor Eliminations Consolidated Net income (loss) $ 247,403 $ 529 $ (13,157 ) $ 12,628 $ 247,403 Foreign currency translation adjustment (16,894 ) — (16,894 ) 16,894 $ (16,894 ) Other comprehensive (loss) income (16,894 ) — (16,894 ) 16,894 (16,894 ) Comprehensive income (loss) $ 230,509 $ 529 $ (30,051 ) $ 29,522 $ 230,509 CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS (Amounts in thousands) Year Ended December 31, 2016 Parent Guarantors Non-Guarantor Eliminations Consolidated Net cash provided by (used in) operating activities $ 336,330 $ (9,486 ) $ (2 ) $ 11,001 $ 337,843 Net cash (used in) provided by investing activities (905,582 ) (22,500 ) (15,472 ) 37,972 (905,582 ) Net cash provided by (used in) financing activities 1,730,640 33,500 15,473 (48,973 ) 1,730,640 Net increase (decrease) in cash and cash equivalents 1,161,388 1,514 (1 ) — 1,162,901 Cash and cash equivalents at beginning of period 112,494 479 1 — 112,974 Cash and cash equivalents at end of period $ 1,273,882 $ 1,993 $ — $ — $ 1,275,875 Year Ended December 31, 2015 Parent Guarantors Non-Guarantor Eliminations Consolidated Net cash provided by (used in) operating activities $ 344,018 $ (21,839 ) $ (2 ) $ 2 $ 322,179 Net cash (used in) provided by investing activities (1,595,767 ) 21,514 (14,472 ) 14,472 (1,574,253 ) Net cash provided by (used in) financing activities 1,222,708 — 14,474 (14,474 ) 1,222,708 Net decrease in cash and cash equivalents (29,041 ) (325 ) — — (29,366 ) Cash and cash equivalents at beginning of period 141,535 804 1 — 142,340 Cash and cash equivalents at end of period $ 112,494 $ 479 $ 1 $ — $ 112,974 Year Ended December 31, 2014 Parent Guarantors Non-Guarantor Eliminations Consolidated Net cash provided by (used in) operating activities $ 388,177 $ 21,698 $ (2 ) $ — $ 409,873 Net cash (used in) provided by investing activities (1,108,241 ) (28,419 ) (18,799 ) 18,802 (1,136,657 ) Net cash provided by (used in) financing activities 410,168 — 18,802 (18,802 ) 410,168 Net (decrease) increase in cash and cash equivalents (309,896 ) (6,721 ) 1 — (316,616 ) Cash and cash equivalents at beginning of period 451,431 7,525 — — 458,956 Cash and cash equivalents at end of period $ 141,535 $ 804 $ 1 $ — $ 142,340 |