Condensed Consolidating Financial Information | CONDENSED CONSOLIDATING FINANCIAL INFORMATION On October 17, 2012 , December 21, 2012 and August 18, 2014 , the Company issued the 2020 Notes in an aggregate of $600.0 million principal amount. The 2020 Notes were subsequently exchanged for substantially identical notes in the same aggregate principal amount that were registered under the Securities Act. 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 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 2023 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 2023 Notes for a new issue of substantially identical debt securities registered under the Securities Act. The exchange offer for the 2023 Notes was completed on October 13, 2015 . On October 14, 2016, the Company issued $650.0 million in aggregate principal amount of 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 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 used 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 Vitruvian Acquisition. In connection with the 2024 Notes Offering and the 2025 Notes Offering, the Company and its subsidiary guarantors entered into two registration rights agreements, pursuant to which the Company agreed to file a registration statement with respect to offers to exchange the 2024 Notes and the 2025 Notes for new issues of substantially identical debt securities registered under the Securities Act. The exchange offers for the 2024 Notes and the 2025 Notes were completed on September 13, 2017. On October 11, 2017, the Company issued $450.0 million in aggregate principal amount of the 2026 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. A portion of the net proceeds from the issuance of the 2026 Notes was used to repay all of the Company's outstanding borrowings under its secured revolving credit facility on October 11, 2017 and the balance was used to fund the remaining outspend related to the Company's 2017 capital development plans. The 2020 Notes were, and 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 2020 Notes were not, and the 2023 Notes, the 2024 Notes, the 2025 Notes and the 2026 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, 2017 Parent Guarantors Non-Guarantor Eliminations Consolidated Assets Current assets: Cash and cash equivalents $ 67,908 $ 31,649 $ — $ — $ 99,557 Restricted cash — — — — — Accounts receivable - oil and natural gas 128,121 54,092 — — 182,213 Accounts receivable - related parties — — — — — Accounts receivable - intercompany 554,439 63,374 — (617,813 ) — Prepaid expenses and other current assets 4,719 193 — — 4,912 Short-term derivative instruments 78,847 — — — 78,847 Total current assets 834,034 149,308 — (617,813 ) 365,529 Property and equipment: Oil and natural gas properties, full-cost accounting 6,562,147 2,607,738 — (729 ) 9,169,156 Other property and equipment 86,711 43 — — 86,754 Accumulated depletion, depreciation, amortization and impairment (4,153,696 ) (37 ) — — (4,153,733 ) Property and equipment, net 2,495,162 2,607,744 — (729 ) 5,102,177 Other assets: Equity investments and investments in subsidiaries 2,361,575 77,744 57,641 (2,194,848 ) 302,112 Long-term derivative instruments 8,685 — — — 8,685 Deferred tax asset 1,208 — — — 1,208 Inventories 5,816 2,411 — — 8,227 Other assets 12,483 7,331 — — 19,814 Total other assets 2,389,767 87,486 57,641 (2,194,848 ) 340,046 Total assets $ 5,718,963 $ 2,844,538 $ 57,641 $ (2,813,390 ) $ 5,807,752 Liabilities and stockholders' equity Current liabilities: Accounts payable and accrued liabilities $ 416,249 $ 137,361 $ — $ (1 ) $ 553,609 Accounts payable - intercompany 63,373 554,313 127 (617,813 ) — Asset retirement obligation - current 120 — — — 120 Short-term derivative instruments 32,534 — — — 32,534 Current maturities of long-term debt 622 — — — 622 Total current liabilities 512,898 691,674 127 (617,814 ) 586,885 Long-term derivative instruments 2,989 — — — 2,989 Asset retirement obligation - long-term 63,141 11,839 — — 74,980 Other non-current liabilities — 2,963 — — 2,963 Long-term debt, net of current maturities 2,038,321 — — — 2,038,321 Total liabilities 2,617,349 706,476 127 (617,814 ) 2,706,138 Stockholders' equity: Common stock 1,831 — — — 1,831 Paid-in capital 4,416,250 1,915,598 259,307 (2,174,905 ) 4,416,250 Accumulated other comprehensive (loss) income (40,539 ) — (38,593 ) 38,593 (40,539 ) Retained (deficit) earnings (1,275,928 ) 222,464 (163,200 ) (59,264 ) (1,275,928 ) Total stockholders' equity 3,101,614 2,138,062 57,514 (2,195,576 ) 3,101,614 Total liabilities and stockholders' equity $ 5,718,963 $ 2,844,538 $ 57,641 $ (2,813,390 ) $ 5,807,752 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 natural 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 3,135 — — — 3,135 Short-term derivative instruments 3,488 — — — 3,488 Total current assets 2,052,125 40,640 — (488,490 ) 1,604,275 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 Inventories 3,095 1,409 — — 4,504 Other assets 8,932 — — — 8,932 Total other assets 258,742 34,999 45,213 (71,210 ) 267,744 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 - current 195 — — — 195 Short-term 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 instruments 26,759 — — — 26,759 Asset retirement obligation - long-term 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 STATEMENTS OF OPERATIONS (Amounts in thousands) Year Ended December 31, 2017 Parent Guarantors Non-Guarantor Eliminations Consolidated Total revenues $ 1,010,989 $ 309,314 $ — $ — $ 1,320,303 Costs and expenses: Lease operating expenses 65,793 14,453 — — 80,246 Production taxes 15,100 6,026 — — 21,126 Midstream gathering and processing 187,678 61,317 — — 248,995 Depreciation, depletion and amortization 364,625 4 — — 364,629 General and administrative 55,589 (2,654 ) 3 — 52,938 Accretion expense 1,246 365 — — 1,611 Acquisition expense — 2,392 — — 2,392 690,031 81,903 3 — 771,937 INCOME (LOSS) FROM OPERATIONS 320,958 227,411 (3 ) — 548,366 OTHER (INCOME) EXPENSE: Interest expense 112,732 (4,534 ) — — 108,198 Interest income (988 ) (21 ) — — (1,009 ) (Income) loss from equity method investments and investments in subsidiaries (226,130 ) 1,955 2,189 227,243 5,257 Other (income) expense (1,617 ) (324 ) — 900 (1,041 ) (116,003 ) (2,924 ) 2,189 228,143 111,405 INCOME (LOSS) BEFORE INCOME TAXES 436,961 230,335 (2,192 ) (228,143 ) 436,961 INCOME TAX EXPENSE 1,809 — — — 1,809 NET INCOME (LOSS) $ 435,152 $ 230,335 $ (2,192 ) $ (228,143 ) $ 435,152 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 natural 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 natural 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 (income) expense (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 COMPREHENSIVE INCOME (LOSS) (Amounts in thousands) Year Ended December 31, 2017 Parent Guarantors Non-Guarantor Eliminations Consolidated Net income (loss) $ 435,152 $ 230,335 $ (2,192 ) $ (228,143 ) $ 435,152 Foreign currency translation adjustment 12,519 182 12,337 (12,519 ) 12,519 Other comprehensive income (loss) 12,519 182 12,337 (12,519 ) 12,519 Comprehensive income (loss) $ 447,671 $ 230,517 $ 10,145 $ (240,662 ) $ 447,671 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 ) CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS (Amounts in thousands) Year Ended December 31, 2017 Parent Guarantors Non-Guarantor Eliminations Consolidated Net cash provided by operating activities $ 392,680 $ 287,209 $ — $ — $ 679,889 Net cash (used in) provided by investing activities (2,031,615 ) (1,674,690 ) (2,280 ) 1,419,417 (2,289,168 ) Net cash provided by (used in) financing activities 432,961 1,417,137 2,280 (1,419,417 ) 432,961 Net (decrease) increase in cash and cash equivalents (1,205,974 ) 29,656 — — (1,176,318 ) Cash and cash equivalents at beginning of period 1,273,882 1,993 — — 1,275,875 Cash and cash equivalents at end of period $ 67,908 $ 31,649 $ — $ — $ 99,557 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 |