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ý
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QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the quarterly period ended September 30, 2018 OR
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¨
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TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF SECURITIES EXCHANGE ACT OF 1934
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For the transition period from to
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Delaware
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73-1521290
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(State or Other Jurisdiction of
Incorporation or Organization)
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(IRS Employer
Identification Number)
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3001 Quail Springs Parkway
Oklahoma City, Oklahoma
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73134
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(Address of Principal Executive Offices)
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(Zip Code)
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Page
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Item 1.
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Item 2.
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Item 3.
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Item 4.
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Item 1.
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Item 1A.
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Item 2.
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Item 3.
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Item 4.
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Item 5.
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Item 6.
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September 30, 2018
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December 31, 2017
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||||
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(In thousands, except share data)
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||||||
Assets
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|
||||
Current assets:
|
|
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|
||||
Cash and cash equivalents
|
$
|
124,571
|
|
|
$
|
99,557
|
|
Accounts receivable—oil and natural gas sales
|
157,391
|
|
|
146,773
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Accounts receivable—joint interest and other
|
39,511
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|
|
35,440
|
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||
Accounts receivable—related parties
|
79
|
|
|
—
|
|
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Prepaid expenses and other current assets
|
9,742
|
|
|
4,912
|
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||
Short-term derivative instruments
|
19,809
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|
78,847
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Total current assets
|
351,103
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|
365,529
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Property and equipment:
|
|
|
|
||||
Oil and natural gas properties, full-cost accounting, $2,925,145 and $2,912,974 excluded from amortization in 2018 and 2017, respectively
|
9,936,714
|
|
|
9,169,156
|
|
||
Other property and equipment
|
92,388
|
|
|
86,754
|
|
||
Accumulated depletion, depreciation, amortization and impairment
|
(4,506,306
|
)
|
|
(4,153,733
|
)
|
||
Property and equipment, net
|
5,522,796
|
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|
5,102,177
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|
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Other assets:
|
|
|
|
||||
Equity investments
|
232,529
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|
302,112
|
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||
Long-term derivative instruments
|
3,530
|
|
|
8,685
|
|
||
Deferred tax asset
|
—
|
|
|
1,208
|
|
||
Inventories
|
8,234
|
|
|
8,227
|
|
||
Other assets
|
17,038
|
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|
19,814
|
|
||
Total other assets
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261,331
|
|
|
340,046
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|
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Total assets
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$
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6,135,230
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$
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5,807,752
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Liabilities and Stockholders’ Equity
|
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Current liabilities:
|
|
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|
||||
Accounts payable and accrued liabilities
|
$
|
582,464
|
|
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$
|
553,609
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Asset retirement obligation—current
|
120
|
|
|
120
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Short-term derivative instruments
|
62,601
|
|
|
32,534
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|
||
Current maturities of long-term debt
|
647
|
|
|
622
|
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Total current liabilities
|
645,832
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|
586,885
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|
||
Long-term derivative instruments
|
15,101
|
|
|
2,989
|
|
||
Asset retirement obligation—long-term
|
78,411
|
|
|
74,980
|
|
||
Deferred tax liability
|
3,046
|
|
|
—
|
|
||
Other non-current liabilities
|
—
|
|
|
2,963
|
|
||
Long-term debt, net of current maturities
|
2,100,825
|
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|
2,038,321
|
|
||
Total liabilities
|
2,843,215
|
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|
2,706,138
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|
||
Commitments and contingencies (Note 9)
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|
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|
||||
Preferred stock, $.01 par value; 5,000,000 authorized, 30,000 authorized as redeemable 12% cumulative preferred stock, Series A; 0 issued and outstanding
|
—
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|
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—
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||
Stockholders’ equity:
|
|
|
|
||||
Common stock - $.01 par value, 200,000,000 authorized, 173,218,643 issued and outstanding at September 30, 2018 and 183,105,910 at December 31, 2017
|
1,732
|
|
|
1,831
|
|
||
Paid-in capital
|
4,316,006
|
|
|
4,416,250
|
|
||
Accumulated other comprehensive loss
|
(46,354
|
)
|
|
(40,539
|
)
|
||
Retained deficit
|
(979,369
|
)
|
|
(1,275,928
|
)
|
||
Total stockholders’ equity
|
3,292,015
|
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3,101,614
|
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Total liabilities and stockholders’ equity
|
$
|
6,135,230
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$
|
5,807,752
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Three months ended September 30,
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Nine months ended September 30,
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||||||||||||
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2018
|
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2017
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2018
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2017
|
||||||||
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(In thousands, except share data)
|
||||||||||||||
Revenues:
|
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|
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|
||||||||
Natural gas sales
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$
|
271,167
|
|
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$
|
223,340
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|
|
$
|
753,261
|
|
|
$
|
606,544
|
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Oil and condensate sales
|
45,682
|
|
|
31,459
|
|
|
140,687
|
|
|
85,338
|
|
||||
Natural gas liquid sales
|
53,776
|
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|
33,559
|
|
|
141,883
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|
|
88,985
|
|
||||
Net (loss) gain on natural gas, oil, and NGL derivatives
|
(9,663
|
)
|
|
(22,860
|
)
|
|
(96,737
|
)
|
|
141,588
|
|
||||
|
360,962
|
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|
265,498
|
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|
939,094
|
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|
922,455
|
|
||||
Costs and expenses:
|
|
|
|
|
|
|
|
||||||||
Lease operating expenses
|
22,325
|
|
|
20,020
|
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|
64,143
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|
60,044
|
|
||||
Production taxes
|
9,348
|
|
|
5,419
|
|
|
23,861
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|
14,464
|
|
||||
Midstream gathering and processing
|
78,913
|
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|
69,372
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|
214,546
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|
176,258
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|
||||
Depreciation, depletion and amortization
|
119,915
|
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|
106,650
|
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|
352,848
|
|
|
254,887
|
|
||||
General and administrative
|
15,848
|
|
|
13,065
|
|
|
42,955
|
|
|
37,922
|
|
||||
Accretion expense
|
1,037
|
|
|
456
|
|
|
3,056
|
|
|
1,148
|
|
||||
Acquisition expense
|
—
|
|
|
33
|
|
|
—
|
|
|
2,391
|
|
||||
|
247,386
|
|
|
215,015
|
|
|
701,409
|
|
|
547,114
|
|
||||
INCOME FROM OPERATIONS
|
113,576
|
|
|
50,483
|
|
|
237,685
|
|
|
375,341
|
|
||||
OTHER (INCOME) EXPENSE:
|
|
|
|
|
|
|
|
||||||||
Interest expense
|
33,253
|
|
|
27,130
|
|
|
100,922
|
|
|
74,797
|
|
||||
Interest income
|
(92
|
)
|
|
(37
|
)
|
|
(162
|
)
|
|
(927
|
)
|
||||
Litigation settlement
|
917
|
|
|
—
|
|
|
917
|
|
|
—
|
|
||||
Insurance proceeds
|
—
|
|
|
—
|
|
|
(231
|
)
|
|
—
|
|
||||
Gain on sale of equity method investments
|
(2,733
|
)
|
|
—
|
|
|
(124,768
|
)
|
|
(12,523
|
)
|
||||
(Income) loss from equity method investments, net
|
(12,858
|
)
|
|
2,737
|
|
|
(35,282
|
)
|
|
33,468
|
|
||||
Other income
|
(61
|
)
|
|
(345
|
)
|
|
(201
|
)
|
|
(863
|
)
|
||||
|
18,426
|
|
|
29,485
|
|
|
(58,805
|
)
|
|
93,952
|
|
||||
INCOME BEFORE INCOME TAXES
|
95,150
|
|
|
20,998
|
|
|
296,490
|
|
|
281,389
|
|
||||
INCOME TAX EXPENSE (BENEFIT)
|
—
|
|
|
2,763
|
|
|
(69
|
)
|
|
2,763
|
|
||||
NET INCOME
|
$
|
95,150
|
|
|
$
|
18,235
|
|
|
$
|
296,559
|
|
|
$
|
278,626
|
|
NET INCOME PER COMMON SHARE:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
0.55
|
|
|
$
|
0.10
|
|
|
$
|
1.69
|
|
|
$
|
1.56
|
|
Diluted
|
$
|
0.55
|
|
|
$
|
0.10
|
|
|
$
|
1.68
|
|
|
$
|
1.56
|
|
Weighted average common shares outstanding—Basic
|
173,057,538
|
|
|
182,957,416
|
|
|
175,776,312
|
|
|
178,736,569
|
|
||||
Weighted average common shares outstanding—Diluted
|
173,304,914
|
|
|
183,008,436
|
|
|
176,440,461
|
|
|
179,130,570
|
|
|
Three months ended September 30,
|
|
Nine months ended September 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
|
(In thousands)
|
||||||||||||||
Net income
|
$
|
95,150
|
|
|
$
|
18,235
|
|
|
$
|
296,559
|
|
|
$
|
278,626
|
|
Foreign currency translation adjustment
|
3,052
|
|
|
6,832
|
|
|
(5,815
|
)
|
|
12,719
|
|
||||
Other comprehensive income (loss)
|
3,052
|
|
|
6,832
|
|
|
(5,815
|
)
|
|
12,719
|
|
||||
Comprehensive income
|
$
|
98,202
|
|
|
$
|
25,067
|
|
|
$
|
290,744
|
|
|
$
|
291,345
|
|
|
|
|
|
|
Paid-in
Capital
|
|
Accumulated
Other
Comprehensive (Loss) Income
|
|
Retained
Deficit
|
|
Total
Stockholders’
Equity
|
|||||||||||
|
Common Stock
|
|
|
|
|
|||||||||||||||||
|
Shares
|
|
Amount
|
|
|
|
|
|||||||||||||||
|
(In thousands, except share data)
|
|||||||||||||||||||||
Balance at January 1, 2018
|
183,105,910
|
|
|
$
|
1,831
|
|
|
$
|
4,416,250
|
|
|
$
|
(40,539
|
)
|
|
$
|
(1,275,928
|
)
|
|
$
|
3,101,614
|
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
296,559
|
|
|
296,559
|
|
|||||
Other Comprehensive Loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(5,815
|
)
|
|
—
|
|
|
(5,815
|
)
|
|||||
Stock-based Compensation
|
—
|
|
|
—
|
|
|
9,654
|
|
|
—
|
|
|
—
|
|
|
9,654
|
|
|||||
Shares Repurchased
|
(10,505,469
|
)
|
|
(105
|
)
|
|
(109,892
|
)
|
|
—
|
|
|
—
|
|
|
(109,997
|
)
|
|||||
Issuance of Restricted Stock
|
618,202
|
|
|
6
|
|
|
(6
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Balance at September 30, 2018
|
173,218,643
|
|
|
$
|
1,732
|
|
|
$
|
4,316,006
|
|
|
$
|
(46,354
|
)
|
|
$
|
(979,369
|
)
|
|
$
|
3,292,015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Balance at January 1, 2017
|
158,829,816
|
|
|
$
|
1,588
|
|
|
$
|
3,946,442
|
|
|
$
|
(53,058
|
)
|
|
$
|
(1,711,080
|
)
|
|
$
|
2,183,892
|
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
278,626
|
|
|
278,626
|
|
|||||
Other Comprehensive Income
|
|
|
|
|
|
|
|
|
|
12,719
|
|
|
—
|
|
|
12,719
|
|
|||||
Stock-based Compensation
|
—
|
|
|
—
|
|
|
7,988
|
|
|
—
|
|
|
—
|
|
|
7,988
|
|
|||||
Issuance of Common Stock for the Vitruvian Acquisition, net of related expenses
|
23,852,117
|
|
|
239
|
|
|
459,197
|
|
|
—
|
|
|
—
|
|
|
459,436
|
|
|||||
Issuance of Restricted Stock
|
399,843
|
|
|
4
|
|
|
(4
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Balance at September 30, 2017
|
183,081,776
|
|
|
$
|
1,831
|
|
|
$
|
4,413,623
|
|
|
$
|
(40,339
|
)
|
|
$
|
(1,432,454
|
)
|
|
$
|
2,942,661
|
|
|
Nine months ended September 30,
|
||||||
|
2018
|
|
2017
|
||||
|
(In thousands)
|
||||||
Cash flows from operating activities:
|
|
|
|
||||
Net income
|
$
|
296,559
|
|
|
$
|
278,626
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
||||
Accretion expense
|
3,056
|
|
|
1,148
|
|
||
Depletion, depreciation and amortization
|
352,848
|
|
|
254,887
|
|
||
Stock-based compensation expense
|
5,792
|
|
|
4,793
|
|
||
(Income) loss from equity investments
|
(35,040
|
)
|
|
34,018
|
|
||
Change in fair value of derivative instruments
|
106,373
|
|
|
(129,692
|
)
|
||
Deferred income tax benefit
|
(69
|
)
|
|
—
|
|
||
Amortization of loan commitment fees
|
4,554
|
|
|
3,548
|
|
||
Gain on sale of equity method investments
|
(124,768
|
)
|
|
(12,523
|
)
|
||
Distributions from equity method investments
|
1,978
|
|
|
—
|
|
||
Changes in operating assets and liabilities:
|
|
|
|
||||
Increase in accounts receivable—oil and natural gas sales
|
(10,618
|
)
|
|
(20,056
|
)
|
||
Increase in accounts receivable—joint interest and other
|
(2,277
|
)
|
|
(23,289
|
)
|
||
Increase in accounts receivable—related parties
|
(79
|
)
|
|
(346
|
)
|
||
Increase in prepaid expenses and other current assets
|
(4,830
|
)
|
|
(2,531
|
)
|
||
Decrease (increase) in other assets
|
1,228
|
|
|
(5,665
|
)
|
||
Increase in accounts payable, accrued liabilities and other
|
14,968
|
|
|
111,335
|
|
||
Settlement of asset retirement obligation
|
(719
|
)
|
|
(2,520
|
)
|
||
Net cash provided by operating activities
|
608,956
|
|
|
491,733
|
|
||
Cash flows from investing activities:
|
|
|
|
||||
Additions to other property and equipment
|
(7,134
|
)
|
|
(16,288
|
)
|
||
Acquisition of oil and natural gas properties
|
—
|
|
|
(1,339,456
|
)
|
||
Additions to oil and natural gas properties
|
(755,263
|
)
|
|
(789,743
|
)
|
||
Proceeds from sale of oil and natural gas properties
|
4,820
|
|
|
4,079
|
|
||
Proceeds from sale of other property and equipment
|
217
|
|
|
658
|
|
||
Proceeds from sale of equity method investments
|
226,487
|
|
|
—
|
|
||
Contributions to equity method investments
|
(2,318
|
)
|
|
(44,844
|
)
|
||
Distributions from equity method investments
|
446
|
|
|
4,114
|
|
||
Net cash used in investing activities
|
(532,745
|
)
|
|
(2,181,480
|
)
|
||
Cash flows from financing activities:
|
|
|
|
||||
Principal payments on borrowings
|
(165,428
|
)
|
|
(183
|
)
|
||
Borrowings on line of credit
|
225,000
|
|
|
365,000
|
|
||
Borrowings on term loan
|
—
|
|
|
2,951
|
|
||
Debt issuance costs and loan commitment fees
|
(772
|
)
|
|
(8,261
|
)
|
||
Payments on repurchase of stock
|
(109,997
|
)
|
|
—
|
|
||
Proceeds from issuance of common stock, net of offering costs
|
—
|
|
|
(5,364
|
)
|
||
Net cash (used in) provided by financing activities
|
(51,197
|
)
|
|
354,143
|
|
||
Net increase (decrease) in cash, cash equivalents and restricted cash
|
25,014
|
|
|
(1,335,604
|
)
|
||
Cash, cash equivalents and restricted cash at beginning of period
|
99,557
|
|
|
1,460,875
|
|
||
Cash, cash equivalents and restricted cash at end of period
|
$
|
124,571
|
|
|
$
|
125,271
|
|
Supplemental disclosure of cash flow information:
|
|
|
|
||||
Interest payments
|
$
|
75,045
|
|
|
$
|
50,826
|
|
Income tax payments
|
$
|
—
|
|
|
$
|
—
|
|
Supplemental disclosure of non-cash transactions:
|
|
|
|
||||
Capitalized stock-based compensation
|
$
|
3,862
|
|
|
$
|
3,195
|
|
Asset retirement obligation capitalized
|
$
|
1,094
|
|
|
$
|
11,557
|
|
Interest capitalized
|
$
|
3,956
|
|
|
$
|
8,753
|
|
Foreign currency translation (loss) gain on equity method investments
|
$
|
(5,815
|
)
|
|
$
|
12,719
|
|
1.
|
ACQUISITIONS
|
|
|
(In thousands)
|
||
Consideration:
|
|
|
||
Cash, net of purchase price adjustments
|
|
$
|
1,354,093
|
|
Fair value of Gulfport’s common stock issued
|
|
464,639
|
|
|
Total consideration
|
|
$
|
1,818,732
|
|
|
|
|
||
Estimated fair value of identifiable assets acquired and liabilities assumed:
|
|
|
||
Oil and natural gas properties
|
|
|
||
Proved properties
|
|
$
|
362,264
|
|
Unproved properties
|
|
1,462,957
|
|
|
Asset retirement obligations
|
|
(6,489
|
)
|
|
Total fair value of net identifiable assets acquired
|
|
$
|
1,818,732
|
|
|
|
|
|
Period from
|
||||
|
|
|
|
February 17, 2017
|
||||
|
|
Three months ended
|
|
to
|
||||
|
|
September 30, 2017
|
|
September 30, 2017
|
||||
|
|
(In thousands)
|
||||||
Revenue
|
|
$
|
60,940
|
|
|
$
|
137,706
|
|
|
|
Three months ended
|
|
Nine months ended
|
||||
|
|
September 30, 2017
|
|
September 30, 2017
|
||||
|
|
(In thousands, except share data)
|
||||||
Pro forma revenue
|
|
$
|
265,498
|
|
|
$
|
958,354
|
|
Pro forma net income
|
|
$
|
18,235
|
|
|
$
|
300,052
|
|
Pro forma earnings per share (basic)
|
|
$
|
0.10
|
|
|
$
|
1.68
|
|
Pro forma earnings per share (diluted)
|
|
$
|
0.10
|
|
|
$
|
1.68
|
|
2.
|
PROPERTY AND EQUIPMENT
|
|
September 30, 2018
|
|
December 31, 2017
|
||||
|
(In thousands)
|
||||||
Oil and natural gas properties
|
$
|
9,936,714
|
|
|
$
|
9,169,156
|
|
Office furniture and fixtures
|
42,302
|
|
|
37,369
|
|
||
Building
|
44,565
|
|
|
44,565
|
|
||
Land
|
5,521
|
|
|
4,820
|
|
||
Total property and equipment
|
10,029,102
|
|
|
9,255,910
|
|
||
Accumulated depletion, depreciation, amortization and impairment
|
(4,506,306
|
)
|
|
(4,153,733
|
)
|
||
Property and equipment, net
|
$
|
5,522,796
|
|
|
$
|
5,102,177
|
|
|
September 30, 2018
|
||
|
(In thousands)
|
||
Utica
|
$
|
1,522,633
|
|
MidContinent
|
1,401,392
|
|
|
Niobrara
|
449
|
|
|
Southern Louisiana
|
571
|
|
|
Bakken
|
100
|
|
|
|
$
|
2,925,145
|
|
|
September 30, 2018
|
|
September 30, 2017
|
||||
|
(In thousands)
|
||||||
Asset retirement obligation, beginning of period
|
$
|
75,100
|
|
|
$
|
34,276
|
|
Liabilities incurred
|
1,468
|
|
|
11,557
|
|
||
Liabilities settled
|
(719
|
)
|
|
(2,520
|
)
|
||
Accretion expense
|
3,056
|
|
|
1,148
|
|
||
Revisions in estimated cash flows
|
(374
|
)
|
|
—
|
|
||
Asset retirement obligation as of end of period
|
78,531
|
|
|
44,461
|
|
||
Less current portion
|
120
|
|
|
195
|
|
||
Asset retirement obligation, long-term
|
$
|
78,411
|
|
|
$
|
44,266
|
|
3.
|
EQUITY INVESTMENTS
|
|
|
|
Carrying value
|
|
(Income) loss from equity method investments
|
|||||||||||||||||||||
|
Approximate ownership %
|
|
September 30, 2018
|
|
December 31, 2017
|
|
Three months ended September 30,
|
|
Nine months ended September 30,
|
|||||||||||||||||
|
|
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||||||||||
|
|
|
(In thousands)
|
|||||||||||||||||||||||
Investment in Tatex Thailand II, LLC
|
23.5
|
%
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(137
|
)
|
|
$
|
(95
|
)
|
|
$
|
(241
|
)
|
|
$
|
(549
|
)
|
Investment in Grizzly Oil Sands ULC
|
24.9999
|
%
|
|
53,381
|
|
|
57,641
|
|
|
275
|
|
|
296
|
|
|
833
|
|
|
869
|
|
||||||
Investment in Timber Wolf Terminals LLC
|
50.0
|
%
|
|
—
|
|
|
983
|
|
|
—
|
|
|
4
|
|
|
536
|
|
|
8
|
|
||||||
Investment in Windsor Midstream LLC
|
22.5
|
%
|
|
39
|
|
|
30
|
|
|
—
|
|
|
(2
|
)
|
|
(9
|
)
|
|
25,232
|
|
||||||
Investment in Stingray Cementing LLC
(1)
|
—
|
%
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
205
|
|
||||||
Investment in Stingray Energy Services LLC
(1)
|
—
|
%
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
282
|
|
||||||
Investment in Sturgeon Acquisitions LLC
(1)
|
—
|
%
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(71
|
)
|
||||||
Investment in Mammoth Energy Services, Inc.
(1)
|
22.0
|
%
|
|
179,109
|
|
|
165,715
|
|
|
(12,996
|
)
|
|
2,407
|
|
|
(35,708
|
)
|
|
4,907
|
|
||||||
Investment in Strike Force Midstream LLC
(2)
|
—
|
%
|
|
—
|
|
|
77,743
|
|
|
—
|
|
|
127
|
|
|
(693
|
)
|
|
2,585
|
|
||||||
|
|
|
$
|
232,529
|
|
|
$
|
302,112
|
|
|
$
|
(12,858
|
)
|
|
$
|
2,737
|
|
|
$
|
(35,282
|
)
|
|
$
|
33,468
|
|
|
|
|
|
(1)
|
On June 5, 2017, Mammoth Energy Services, Inc. ("Mammoth Energy") acquired Stingray Cementing LLC, Stingray Energy Services LLC and Sturgeon Acquisitions LLC. See below under
Mammoth Energy Partners LP/Mammoth Energy Services, Inc.
for information regarding these transactions.
|
||
|
|
|
|
(2)
|
On May 1, 2018, the Company sold its 25% interest in Strike Force Midstream to EQT Midstream Partners, LP. See below under under
Strike Force Midstream LLC
for information regarding this transaction.
|
||
|
|
|
|
|
September 30, 2018
|
|
December 31, 2017
|
||||
|
|
||||||
|
(In thousands)
|
||||||
Current assets
|
$
|
481,394
|
|
|
$
|
415,032
|
|
Noncurrent assets
|
$
|
1,336,604
|
|
|
$
|
1,542,090
|
|
Current liabilities
|
$
|
358,177
|
|
|
$
|
261,086
|
|
Noncurrent liabilities
|
$
|
48,328
|
|
|
$
|
148,839
|
|
|
Three months ended September 30,
|
|
Nine months ended September 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
|
(In thousands)
|
||||||||||||||
Gross revenue
|
$
|
384,043
|
|
|
$
|
160,950
|
|
|
$
|
1,451,580
|
|
|
$
|
357,901
|
|
Net income (loss)
|
$
|
68,414
|
|
|
$
|
2,101
|
|
|
$
|
181,884
|
|
|
$
|
(109,651
|
)
|
4.
|
VARIABLE INTEREST ENTITIES
|
5.
|
LONG-TERM DEBT
|
|
September 30, 2018
|
|
December 31, 2017
|
||||
|
(In thousands)
|
||||||
Revolving credit agreement (1)
|
$
|
60,000
|
|
|
$
|
—
|
|
6.625% senior unsecured notes due 2023 (2)
|
350,000
|
|
|
350,000
|
|
||
6.000% senior unsecured notes due 2024 (3)
|
650,000
|
|
|
650,000
|
|
||
6.375% senior unsecured notes due 2025 (4)
|
600,000
|
|
|
600,000
|
|
||
6.375% senior unsecured notes due 2026 (5)
|
450,000
|
|
|
450,000
|
|
||
Net unamortized debt issuance costs (6)
|
(31,824
|
)
|
|
(34,781
|
)
|
||
Construction loan (7)
|
23,296
|
|
|
23,724
|
|
||
Less: current maturities of long term debt
|
(647
|
)
|
|
(622
|
)
|
||
Debt reflected as long term
|
$
|
2,100,825
|
|
|
$
|
2,038,321
|
|
6.
|
COMMON STOCK AND CHANGES IN CAPITALIZATION
|
7.
|
STOCK-BASED COMPENSATION
|
|
Number of
Unvested
Restricted Shares
|
|
Weighted
Average
Grant Date
Fair Value
|
|||
Unvested shares as of January 1, 2018
|
976,027
|
|
|
$
|
18.71
|
|
Granted
|
1,197,628
|
|
|
9.45
|
|
|
Vested
|
(618,202
|
)
|
|
17.77
|
|
|
Forfeited
|
(32,633
|
)
|
|
17.31
|
|
|
Unvested shares as of September 30, 2018
|
1,522,820
|
|
|
$
|
11.84
|
|
8.
|
EARNINGS PER SHARE
|
|
Three months ended September 30,
|
||||||||||||||||||||
|
2018
|
|
2017
|
||||||||||||||||||
|
Income
|
|
Shares
|
|
Per
Share
|
|
Income
|
|
Shares
|
|
Per
Share
|
||||||||||
|
(In thousands, except share data)
|
||||||||||||||||||||
Basic:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income
|
$
|
95,150
|
|
|
173,057,538
|
|
|
$
|
0.55
|
|
|
$
|
18,235
|
|
|
182,957,416
|
|
|
$
|
0.10
|
|
Effect of dilutive securities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Stock options and awards
|
—
|
|
|
247,376
|
|
|
|
|
—
|
|
|
51,020
|
|
|
|
||||||
Diluted:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income
|
$
|
95,150
|
|
|
173,304,914
|
|
|
$
|
0.55
|
|
|
$
|
18,235
|
|
|
183,008,436
|
|
|
$
|
0.10
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Nine months ended September 30,
|
||||||||||||||||||||
|
2018
|
|
2017
|
||||||||||||||||||
|
Income
|
|
Shares
|
|
Per
Share |
|
Income
|
|
Shares
|
|
Per
Share |
||||||||||
|
(In thousands, except share data)
|
||||||||||||||||||||
Basic:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income
|
$
|
296,559
|
|
|
175,776,312
|
|
|
$
|
1.69
|
|
|
$
|
278,626
|
|
|
178,736,569
|
|
|
$
|
1.56
|
|
Effect of dilutive securities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Stock options and awards
|
—
|
|
|
664,149
|
|
|
|
|
—
|
|
|
394,001
|
|
|
|
||||||
Diluted:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income
|
$
|
296,559
|
|
|
176,440,461
|
|
|
$
|
1.68
|
|
|
$
|
278,626
|
|
|
179,130,570
|
|
|
$
|
1.56
|
|
9.
|
COMMITMENTS AND CONTINGENCIES
|
10.
|
DERIVATIVE INSTRUMENTS
|
|
Location
|
Daily Volume (MMBtu/day)
|
|
Weighted
Average Price |
|||
Remaining 2018
|
NYMEX Henry Hub
|
1,010,000
|
|
|
$
|
3.01
|
|
2019
|
NYMEX Henry Hub
|
1,154,000
|
|
|
$
|
2.81
|
|
2020
|
NYMEX Henry Hub
|
204,000
|
|
|
$
|
2.77
|
|
|
Location
|
Daily Volume
(Bbls/day) |
|
Weighted
Average Price |
|||
2019
|
Mont Belvieu C2
|
1,000
|
|
|
$
|
18.48
|
|
Remaining 2018
|
Mont Belvieu C3
|
4,000
|
|
|
$
|
29.34
|
|
2019
|
Mont Belvieu C3
|
4,000
|
|
|
$
|
28.87
|
|
Remaining 2018
|
Mont Belvieu C5
|
500
|
|
|
$
|
46.62
|
|
2019
|
Mont Belvieu C5
|
500
|
|
|
$
|
54.08
|
|
|
Location
|
Daily Volume (MMBtu/day)
|
|
Weighted Average Price
|
|||
October 2018 - March 2019
|
NYMEX Henry Hub
|
50,000
|
|
|
$
|
3.13
|
|
April 2019 - December 2019
|
NYMEX Henry Hub
|
30,000
|
|
|
$
|
3.10
|
|
|
Location
|
Daily Volume (MMBtu/day)
|
|
Weighted Average Price
|
|||
Remaining 2018
|
Transco Zone 4
|
40,000
|
|
|
$
|
(0.05
|
)
|
2019
|
Transco Zone 4
|
60,000
|
|
|
$
|
(0.05
|
)
|
2020
|
Transco Zone 4
|
60,000
|
|
|
$
|
(0.05
|
)
|
|
September 30, 2018
|
|
December 31, 2017
|
||||
|
(In thousands)
|
||||||
Short-term derivative instruments - asset
|
$
|
19,809
|
|
|
$
|
78,847
|
|
Long-term derivative instruments - asset
|
$
|
3,530
|
|
|
$
|
8,685
|
|
Short-term derivative instruments - liability
|
$
|
62,601
|
|
|
$
|
32,534
|
|
Long-term derivative instruments - liability
|
$
|
15,101
|
|
|
$
|
2,989
|
|
|
Net (loss) gain on derivative instruments
|
||||||||||||||
|
Three months ended September 30,
|
|
Nine months ended September 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
|
(In thousands)
|
||||||||||||||
Natural gas derivatives
|
$
|
14,101
|
|
|
$
|
(7,077
|
)
|
|
$
|
(26,789
|
)
|
|
$
|
135,868
|
|
Oil derivatives
|
(11,610
|
)
|
|
(6,571
|
)
|
|
(45,176
|
)
|
|
12,477
|
|
||||
Natural gas liquids derivatives
|
(12,154
|
)
|
|
(9,212
|
)
|
|
(24,772
|
)
|
|
(6,757
|
)
|
||||
Total
|
$
|
(9,663
|
)
|
|
$
|
(22,860
|
)
|
|
$
|
(96,737
|
)
|
|
$
|
141,588
|
|
|
As of September 30, 2018
|
||||||||||
|
Gross Assets (Liabilities)
|
|
Gross Amounts
|
|
|
||||||
|
Presented in the
|
|
Subject to Master
|
|
Net
|
||||||
|
Consolidated Balance Sheets
|
|
Netting Agreements
|
|
Amount
|
||||||
|
(In thousands)
|
||||||||||
Derivative assets
|
$
|
23,339
|
|
|
$
|
(17,053
|
)
|
|
$
|
6,286
|
|
Derivative liabilities
|
$
|
(77,702
|
)
|
|
$
|
17,053
|
|
|
$
|
(60,649
|
)
|
|
As of December 31, 2017
|
||||||||||
|
Gross Assets (Liabilities)
|
|
Gross Amounts
|
|
|
||||||
|
Presented in the
|
|
Subject to Master
|
|
Net
|
||||||
|
Consolidated Balance Sheets
|
|
Netting Agreements
|
|
Amount
|
||||||
|
(In thousands)
|
||||||||||
Derivative assets
|
$
|
87,532
|
|
|
$
|
(22,199
|
)
|
|
$
|
65,333
|
|
Derivative liabilities
|
$
|
(35,523
|
)
|
|
$
|
22,199
|
|
|
$
|
(13,324
|
)
|
11.
|
FAIR VALUE MEASUREMENTS
|
|
September 30, 2018
|
||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||
|
(In thousands)
|
||||||||||
Assets:
|
|
|
|
|
|
||||||
Derivative Instruments
|
$
|
—
|
|
|
$
|
23,339
|
|
|
$
|
—
|
|
Liabilities:
|
|
|
|
|
|
||||||
Derivative Instruments
|
$
|
—
|
|
|
$
|
77,702
|
|
|
$
|
—
|
|
|
December 31, 2017
|
||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||
|
(In thousands)
|
||||||||||
Assets:
|
|
|
|
|
|
||||||
Derivative Instruments
|
$
|
—
|
|
|
$
|
87,532
|
|
|
$
|
—
|
|
Liabilities:
|
|
|
|
|
|
||||||
Derivative Instruments
|
$
|
—
|
|
|
$
|
35,523
|
|
|
$
|
—
|
|
12.
|
FAIR VALUE OF FINANCIAL INSTRUMENTS
|
13.
|
REVENUE FROM CONTRACTS WITH CUSTOMERS
|
|
September 30, 2018
|
||||||||||||||||||
|
Parent
|
|
Guarantors
|
|
Non-Guarantor
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
||||||||||
Current assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
89,214
|
|
|
$
|
35,357
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
124,571
|
|
Accounts receivable - oil and natural gas sales
|
111,463
|
|
|
45,928
|
|
|
—
|
|
|
—
|
|
|
157,391
|
|
|||||
Accounts receivable - joint interest and other
|
19,066
|
|
|
20,445
|
|
|
—
|
|
|
—
|
|
|
39,511
|
|
|||||
Accounts receivable - related parties
|
79
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
79
|
|
|||||
Accounts receivable - intercompany
|
662,319
|
|
|
240,373
|
|
|
—
|
|
|
(902,692
|
)
|
|
—
|
|
|||||
Prepaid expenses and other current assets
|
7,521
|
|
|
2,221
|
|
|
—
|
|
|
—
|
|
|
9,742
|
|
|||||
Short-term derivative instruments
|
19,809
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
19,809
|
|
|||||
Total current assets
|
909,471
|
|
|
344,324
|
|
|
—
|
|
|
(902,692
|
)
|
|
351,103
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Property and equipment:
|
|
|
|
|
|
|
|
|
|
||||||||||
Oil and natural gas properties, full-cost accounting
|
7,003,396
|
|
|
2,934,047
|
|
|
—
|
|
|
(729
|
)
|
|
9,936,714
|
|
|||||
Other property and equipment
|
91,637
|
|
|
751
|
|
|
—
|
|
|
—
|
|
|
92,388
|
|
|||||
Accumulated depletion, depreciation, amortization and impairment
|
(4,506,267
|
)
|
|
(39
|
)
|
|
—
|
|
|
—
|
|
|
(4,506,306
|
)
|
|||||
Property and equipment, net
|
2,588,766
|
|
|
2,934,759
|
|
|
—
|
|
|
(729
|
)
|
|
5,522,796
|
|
|||||
Other assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Equity investments and investments in subsidiaries
|
2,723,140
|
|
|
—
|
|
|
53,380
|
|
|
(2,543,991
|
)
|
|
232,529
|
|
|||||
Long-term derivative instruments
|
3,530
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,530
|
|
|||||
Inventories
|
6,800
|
|
|
1,434
|
|
|
—
|
|
|
—
|
|
|
8,234
|
|
|||||
Other assets
|
13,018
|
|
|
4,020
|
|
|
—
|
|
|
—
|
|
|
17,038
|
|
|||||
Total other assets
|
2,746,488
|
|
|
5,454
|
|
|
53,380
|
|
|
(2,543,991
|
)
|
|
261,331
|
|
|||||
Total assets
|
$
|
6,244,725
|
|
|
$
|
3,284,537
|
|
|
$
|
53,380
|
|
|
$
|
(3,447,412
|
)
|
|
$
|
6,135,230
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Liabilities and Stockholders
’
Equity
|
|
|
|
|
|
|
|
|
|
||||||||||
Current liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Accounts payable and accrued liabilities
|
$
|
464,426
|
|
|
$
|
118,038
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
582,464
|
|
Accounts payable - intercompany
|
240,310
|
|
|
662,254
|
|
|
128
|
|
|
(902,692
|
)
|
|
—
|
|
|||||
Asset retirement obligation - current
|
120
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
120
|
|
|||||
Short-term derivative instruments
|
62,601
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
62,601
|
|
|||||
Current maturities of long-term debt
|
647
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
647
|
|
|||||
Total current liabilities
|
768,104
|
|
|
780,292
|
|
|
128
|
|
|
(902,692
|
)
|
|
645,832
|
|
|||||
Long-term derivative instruments
|
15,101
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
15,101
|
|
|||||
Asset retirement obligation - long-term
|
65,634
|
|
|
12,777
|
|
|
—
|
|
|
—
|
|
|
78,411
|
|
|||||
Deferred tax liability
|
3,046
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,046
|
|
|||||
Long-term debt, net of current maturities
|
2,100,825
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,100,825
|
|
|||||
Total liabilities
|
2,952,710
|
|
|
793,069
|
|
|
128
|
|
|
(902,692
|
)
|
|
2,843,215
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Stockholders’ equity:
|
|
|
|
|
|
|
|
|
|
||||||||||
Common stock
|
1,732
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,732
|
|
|||||
Paid-in capital
|
4,316,006
|
|
|
1,915,598
|
|
|
261,626
|
|
|
(2,177,224
|
)
|
|
4,316,006
|
|
|||||
Accumulated other comprehensive (loss) income
|
(46,354
|
)
|
|
—
|
|
|
(44,338
|
)
|
|
44,338
|
|
|
(46,354
|
)
|
|||||
Retained (deficit) earnings
|
(979,369
|
)
|
|
575,870
|
|
|
(164,036
|
)
|
|
(411,834
|
)
|
|
(979,369
|
)
|
|||||
Total stockholders’ equity
|
3,292,015
|
|
|
2,491,468
|
|
|
53,252
|
|
|
(2,544,720
|
)
|
|
3,292,015
|
|
|||||
Total liabilities and stockholders
’
equity
|
$
|
6,244,725
|
|
|
$
|
3,284,537
|
|
|
$
|
53,380
|
|
|
$
|
(3,447,412
|
)
|
|
$
|
6,135,230
|
|
|
December 31, 2017
|
||||||||||||||||||
|
Parent
|
|
Guarantors
|
|
Non-Guarantor
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
||||||||||
Current assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
67,908
|
|
|
$
|
31,649
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
99,557
|
|
Accounts receivable - oil and natural gas sales
|
112,686
|
|
|
34,087
|
|
|
—
|
|
|
—
|
|
|
146,773
|
|
|||||
Accounts receivable - joint interest and other
|
15,435
|
|
|
20,005
|
|
|
—
|
|
|
—
|
|
|
35,440
|
|
|||||
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
|
|
|
Three months ended September 30, 2018
|
||||||||||||||||||
|
Parent
|
|
Guarantors
|
|
Non-Guarantor
|
|
Eliminations
|
|
Consolidated
|
||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Total revenues
|
$
|
235,683
|
|
|
$
|
125,279
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
360,962
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Costs and expenses:
|
|
|
|
|
|
|
|
|
|
||||||||||
Lease operating expenses
|
16,502
|
|
|
5,823
|
|
|
—
|
|
|
—
|
|
|
22,325
|
|
|||||
Production taxes
|
4,505
|
|
|
4,843
|
|
|
—
|
|
|
—
|
|
|
9,348
|
|
|||||
Midstream gathering and processing
|
54,397
|
|
|
24,516
|
|
|
—
|
|
|
—
|
|
|
78,913
|
|
|||||
Depreciation, depletion and amortization
|
119,914
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
119,915
|
|
|||||
General and administrative
|
16,314
|
|
|
(467
|
)
|
|
1
|
|
|
—
|
|
|
15,848
|
|
|||||
Accretion expense
|
812
|
|
|
225
|
|
|
—
|
|
|
—
|
|
|
1,037
|
|
|||||
|
212,444
|
|
|
34,941
|
|
|
1
|
|
|
—
|
|
|
247,386
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
INCOME (LOSS) FROM OPERATIONS
|
23,239
|
|
|
90,338
|
|
|
(1
|
)
|
|
—
|
|
|
113,576
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
OTHER (INCOME) EXPENSE:
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest expense
|
34,254
|
|
|
(1,001
|
)
|
|
—
|
|
|
—
|
|
|
33,253
|
|
|||||
Interest income
|
(86
|
)
|
|
(6
|
)
|
|
—
|
|
|
—
|
|
|
(92
|
)
|
|||||
Litigation settlement
|
917
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
917
|
|
|||||
Gain on sale of equity method investments
|
(2,733
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,733
|
)
|
|||||
(Income) loss from equity method investments and investments in subsidiaries
|
(104,226
|
)
|
|
(1
|
)
|
|
275
|
|
|
91,094
|
|
|
(12,858
|
)
|
|||||
Other income
|
(37
|
)
|
|
(24
|
)
|
|
—
|
|
|
—
|
|
|
(61
|
)
|
|||||
|
(71,911
|
)
|
|
(1,032
|
)
|
|
275
|
|
|
91,094
|
|
|
18,426
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
INCOME (LOSS) BEFORE INCOME TAXES
|
95,150
|
|
|
91,370
|
|
|
(276
|
)
|
|
(91,094
|
)
|
|
95,150
|
|
|||||
INCOME TAX BENEFIT
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
NET INCOME (LOSS)
|
$
|
95,150
|
|
|
$
|
91,370
|
|
|
$
|
(276
|
)
|
|
$
|
(91,094
|
)
|
|
$
|
95,150
|
|
|
Three months ended September 30, 2017
|
||||||||||||||||||
|
Parent
|
|
Guarantors
|
|
Non-Guarantor
|
|
Eliminations
|
|
Consolidated
|
||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Total revenues
|
$
|
188,390
|
|
|
$
|
77,108
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
265,498
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Costs and expenses:
|
|
|
|
|
|
|
|
|
|
||||||||||
Lease operating expenses
|
16,019
|
|
|
4,001
|
|
|
—
|
|
|
—
|
|
|
20,020
|
|
|||||
Production taxes
|
4,052
|
|
|
1,367
|
|
|
—
|
|
|
—
|
|
|
5,419
|
|
|||||
Midstream gathering and processing
|
52,725
|
|
|
16,647
|
|
|
—
|
|
|
—
|
|
|
69,372
|
|
|||||
Depreciation, depletion and amortization
|
106,649
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
106,650
|
|
|||||
General and administrative
|
13,956
|
|
|
(892
|
)
|
|
1
|
|
|
—
|
|
|
13,065
|
|
|||||
Accretion expense
|
335
|
|
|
121
|
|
|
—
|
|
|
—
|
|
|
456
|
|
|||||
Acquisition expense
|
(5
|
)
|
|
38
|
|
|
—
|
|
|
—
|
|
|
33
|
|
|||||
|
193,731
|
|
|
21,283
|
|
|
1
|
|
|
—
|
|
|
215,015
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
(LOSS) INCOME FROM OPERATIONS
|
(5,341
|
)
|
|
55,825
|
|
|
(1
|
)
|
|
—
|
|
|
50,483
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
OTHER (INCOME) EXPENSE:
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest expense
|
27,914
|
|
|
(784
|
)
|
|
—
|
|
|
—
|
|
|
27,130
|
|
|||||
Interest income
|
(29
|
)
|
|
(8
|
)
|
|
—
|
|
|
—
|
|
|
(37
|
)
|
|||||
(Income) loss from equity method investments and investments in subsidiaries
|
(53,880
|
)
|
|
128
|
|
|
296
|
|
|
56,193
|
|
|
2,737
|
|
|||||
Other income
|
(344
|
)
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
(345
|
)
|
|||||
|
(26,339
|
)
|
|
(665
|
)
|
|
296
|
|
|
56,193
|
|
|
29,485
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
INCOME (LOSS) BEFORE INCOME TAXES
|
20,998
|
|
|
56,490
|
|
|
(297
|
)
|
|
(56,193
|
)
|
|
20,998
|
|
|||||
INCOME TAX EXPENSE
|
2,763
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,763
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
NET INCOME (LOSS)
|
$
|
18,235
|
|
|
$
|
56,490
|
|
|
$
|
(297
|
)
|
|
$
|
(56,193
|
)
|
|
$
|
18,235
|
|
|
Nine months ended September 30, 2018
|
||||||||||||||||||
|
Parent
|
|
Guarantors
|
|
Non-Guarantor
|
|
Eliminations
|
|
Consolidated
|
||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Total revenues
|
$
|
596,018
|
|
|
$
|
343,076
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
939,094
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Costs and expenses:
|
|
|
|
|
|
|
|
|
|
||||||||||
Lease operating expenses
|
46,926
|
|
|
17,217
|
|
|
—
|
|
|
—
|
|
|
64,143
|
|
|||||
Production taxes
|
13,309
|
|
|
10,552
|
|
|
—
|
|
|
—
|
|
|
23,861
|
|
|||||
Midstream gathering and processing
|
152,605
|
|
|
61,941
|
|
|
—
|
|
|
—
|
|
|
214,546
|
|
|||||
Depreciation, depletion, and amortization
|
352,846
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|
352,848
|
|
|||||
General and administrative
|
45,100
|
|
|
(2,148
|
)
|
|
3
|
|
|
—
|
|
|
42,955
|
|
|||||
Accretion expense
|
2,397
|
|
|
659
|
|
|
—
|
|
|
—
|
|
|
3,056
|
|
|||||
|
613,183
|
|
|
88,223
|
|
|
3
|
|
|
—
|
|
|
701,409
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
(LOSS) INCOME FROM OPERATIONS
|
(17,165
|
)
|
|
254,853
|
|
|
(3
|
)
|
|
—
|
|
|
237,685
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
OTHER (INCOME) EXPENSE:
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest expense
|
103,310
|
|
|
(2,388
|
)
|
|
—
|
|
|
—
|
|
|
100,922
|
|
|||||
Interest income
|
(144
|
)
|
|
(18
|
)
|
|
—
|
|
|
—
|
|
|
(162
|
)
|
|||||
Litigation settlement
|
917
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
917
|
|
|||||
Insurance proceeds
|
(231
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(231
|
)
|
|||||
Gain on sale of equity method investments
|
(28,349
|
)
|
|
(96,419
|
)
|
|
—
|
|
|
—
|
|
|
(124,768
|
)
|
|||||
(Income) loss from equity method investments and investments in subsidiaries
|
(387,991
|
)
|
|
(694
|
)
|
|
833
|
|
|
352,570
|
|
|
(35,282
|
)
|
|||||
Other (income) expense
|
(1,167
|
)
|
|
(34
|
)
|
|
—
|
|
|
1,000
|
|
|
(201
|
)
|
|||||
|
(313,655
|
)
|
|
(99,553
|
)
|
|
833
|
|
|
353,570
|
|
|
(58,805
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
INCOME (LOSS) BEFORE INCOME TAXES
|
296,490
|
|
|
354,406
|
|
|
(836
|
)
|
|
(353,570
|
)
|
|
296,490
|
|
|||||
INCOME TAX BENEFIT
|
(69
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(69
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
NET INCOME (LOSS)
|
$
|
296,559
|
|
|
$
|
354,406
|
|
|
$
|
(836
|
)
|
|
$
|
(353,570
|
)
|
|
$
|
296,559
|
|
|
Nine months ended September 30, 2017
|
||||||||||||||||||
|
Parent
|
|
Guarantors
|
|
Non-Guarantor
|
|
Eliminations
|
|
Consolidated
|
||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Total revenues
|
$
|
710,184
|
|
|
$
|
212,271
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
922,455
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Costs and expenses:
|
|
|
|
|
|
|
|
|
|
||||||||||
Lease operating expenses
|
49,891
|
|
|
10,153
|
|
|
—
|
|
|
—
|
|
|
60,044
|
|
|||||
Production taxes
|
10,799
|
|
|
3,665
|
|
|
—
|
|
|
—
|
|
|
14,464
|
|
|||||
Midstream gathering and processing
|
132,740
|
|
|
43,518
|
|
|
—
|
|
|
—
|
|
|
176,258
|
|
|||||
Depreciation, depletion, and amortization
|
254,884
|
|
|
3
|
|
|
—
|
|
|
—
|
|
|
254,887
|
|
|||||
General and administrative
|
39,882
|
|
|
(1,963
|
)
|
|
3
|
|
|
—
|
|
|
37,922
|
|
|||||
Accretion expense
|
908
|
|
|
240
|
|
|
—
|
|
|
—
|
|
|
1,148
|
|
|||||
Acquisition expense
|
—
|
|
|
2,391
|
|
|
—
|
|
|
—
|
|
|
2,391
|
|
|||||
|
489,104
|
|
|
58,007
|
|
|
3
|
|
|
—
|
|
|
547,114
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
INCOME (LOSS) FROM OPERATIONS
|
221,080
|
|
|
154,264
|
|
|
(3
|
)
|
|
—
|
|
|
375,341
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
OTHER (INCOME) EXPENSE:
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest expense
|
79,095
|
|
|
(4,298
|
)
|
|
—
|
|
|
—
|
|
|
74,797
|
|
|||||
Interest income
|
(913
|
)
|
|
(14
|
)
|
|
—
|
|
|
—
|
|
|
(927
|
)
|
|||||
Gain on sale of equity method investments
|
(12,523
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(12,523
|
)
|
|||||
(Income) loss from equity method investments and investments in subsidiaries
|
(124,446
|
)
|
|
2,586
|
|
|
869
|
|
|
154,459
|
|
|
33,468
|
|
|||||
Other (income) expense
|
(1,522
|
)
|
|
(241
|
)
|
|
—
|
|
|
900
|
|
|
(863
|
)
|
|||||
|
(60,309
|
)
|
|
(1,967
|
)
|
|
869
|
|
|
155,359
|
|
|
93,952
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
INCOME (LOSS) BEFORE INCOME TAXES
|
281,389
|
|
|
156,231
|
|
|
(872
|
)
|
|
(155,359
|
)
|
|
281,389
|
|
|||||
INCOME TAX EXPENSE
|
2,763
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,763
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
NET INCOME (LOSS)
|
$
|
278,626
|
|
|
$
|
156,231
|
|
|
$
|
(872
|
)
|
|
$
|
(155,359
|
)
|
|
$
|
278,626
|
|
|
Three months ended September 30, 2018
|
||||||||||||||||||
|
Parent
|
|
Guarantors
|
|
Non-Guarantor
|
|
Eliminations
|
|
Consolidated
|
||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income (loss)
|
$
|
95,150
|
|
|
$
|
91,370
|
|
|
$
|
(276
|
)
|
|
$
|
(91,094
|
)
|
|
$
|
95,150
|
|
Foreign currency translation adjustment
|
3,052
|
|
|
103
|
|
|
2,949
|
|
|
(3,052
|
)
|
|
3,052
|
|
|||||
Other comprehensive income (loss)
|
3,052
|
|
|
103
|
|
|
2,949
|
|
|
(3,052
|
)
|
|
3,052
|
|
|||||
Comprehensive income (loss)
|
$
|
98,202
|
|
|
$
|
91,473
|
|
|
$
|
2,673
|
|
|
$
|
(94,146
|
)
|
|
$
|
98,202
|
|
|
Three months ended September 30, 2017
|
||||||||||||||||||
|
Parent
|
|
Guarantors
|
|
Non-Guarantor
|
|
Eliminations
|
|
Consolidated
|
||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income (loss)
|
$
|
18,235
|
|
|
$
|
56,490
|
|
|
$
|
(297
|
)
|
|
$
|
(56,193
|
)
|
|
$
|
18,235
|
|
Foreign currency translation adjustment
|
6,832
|
|
|
158
|
|
|
6,674
|
|
|
(6,832
|
)
|
|
6,832
|
|
|||||
Other comprehensive income (loss)
|
6,832
|
|
|
158
|
|
|
6,674
|
|
|
(6,832
|
)
|
|
6,832
|
|
|||||
Comprehensive income (loss)
|
$
|
25,067
|
|
|
$
|
56,648
|
|
|
$
|
6,377
|
|
|
$
|
(63,025
|
)
|
|
$
|
25,067
|
|
|
Nine months ended September 30, 2018
|
||||||||||||||||||
|
Parent
|
|
Guarantors
|
|
Non-Guarantor
|
|
Eliminations
|
|
Consolidated
|
||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income (loss)
|
$
|
296,559
|
|
|
$
|
354,406
|
|
|
$
|
(836
|
)
|
|
$
|
(353,570
|
)
|
|
$
|
296,559
|
|
Foreign currency translation adjustment
|
(5,815
|
)
|
|
(70
|
)
|
|
(5,745
|
)
|
|
5,815
|
|
|
(5,815
|
)
|
|||||
Other comprehensive (loss) income
|
(5,815
|
)
|
|
(70
|
)
|
|
(5,745
|
)
|
|
5,815
|
|
|
(5,815
|
)
|
|||||
Comprehensive income (loss)
|
$
|
290,744
|
|
|
$
|
354,336
|
|
|
$
|
(6,581
|
)
|
|
$
|
(347,755
|
)
|
|
$
|
290,744
|
|
|
Nine months ended September 30, 2017
|
||||||||||||||||||
|
Parent
|
|
Guarantors
|
|
Non-Guarantor
|
|
Eliminations
|
|
Consolidated
|
||||||||||
|
|
||||||||||||||||||
Net income (loss)
|
$
|
278,626
|
|
|
$
|
156,231
|
|
|
$
|
(872
|
)
|
|
$
|
(155,359
|
)
|
|
$
|
278,626
|
|
Foreign currency translation adjustment
|
12,719
|
|
|
232
|
|
|
12,487
|
|
|
(12,719
|
)
|
|
12,719
|
|
|||||
Other comprehensive income (loss)
|
12,719
|
|
|
232
|
|
|
12,487
|
|
|
(12,719
|
)
|
|
12,719
|
|
|||||
Comprehensive income (loss)
|
$
|
291,345
|
|
|
$
|
156,463
|
|
|
$
|
11,615
|
|
|
$
|
(168,078
|
)
|
|
$
|
291,345
|
|
|
Nine months ended September 30, 2018
|
||||||||||||||||||
|
Parent
|
|
Guarantors
|
|
Non-Guarantor
|
|
Eliminations
|
|
Consolidated
|
||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Net cash provided by (used in) operating activities
|
$
|
416,833
|
|
|
$
|
192,123
|
|
|
$
|
(1
|
)
|
|
$
|
1
|
|
|
$
|
608,956
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net cash (used in) provided by investing activities
|
(344,330
|
)
|
|
(188,415
|
)
|
|
(2,318
|
)
|
|
2,318
|
|
|
(532,745
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Net cash (used in) provided by financing activities
|
(51,197
|
)
|
|
—
|
|
|
2,319
|
|
|
(2,319
|
)
|
|
(51,197
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Net increase in cash, cash equivalents and restricted cash
|
21,306
|
|
|
3,708
|
|
|
—
|
|
|
—
|
|
|
25,014
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash, cash equivalents and restricted cash at beginning of period
|
67,908
|
|
|
31,649
|
|
|
—
|
|
|
—
|
|
|
99,557
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash, cash equivalents and restricted cash at end of period
|
$
|
89,214
|
|
|
$
|
35,357
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
124,571
|
|
|
Nine months ended September 30, 2017
|
||||||||||||||||||
|
Parent
|
|
Guarantors
|
|
Non-Guarantor
|
|
Eliminations
|
|
Consolidated
|
||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Net cash provided by (used in) operating activities
|
$
|
310,624
|
|
|
$
|
181,108
|
|
|
$
|
(1
|
)
|
|
$
|
2
|
|
|
$
|
491,733
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net cash (used in) provided by investing activities
|
(2,034,554
|
)
|
|
(1,554,063
|
)
|
|
(1,843
|
)
|
|
1,408,980
|
|
|
(2,181,480
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Net cash provided by (used in) financing activities
|
354,143
|
|
|
1,407,137
|
|
|
1,845
|
|
|
(1,408,982
|
)
|
|
354,143
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Net (decrease) increase in cash, cash equivalents and restricted cash
|
(1,369,787
|
)
|
|
34,182
|
|
|
1
|
|
|
—
|
|
|
(1,335,604
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash, cash equivalents and restricted cash at beginning of period
|
1,458,882
|
|
|
1,993
|
|
|
—
|
|
|
—
|
|
|
1,460,875
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash, cash equivalents and restricted cash at end of period
|
$
|
89,095
|
|
|
$
|
36,175
|
|
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
125,271
|
|
16.
|
RECENT ACCOUNTING PRONOUNCEMENTS
|
17.
|
SUBSEQUENT EVENTS
|
ITEM 2.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
•
|
Production increased
31%
to
368,366
net million cubic feet of natural gas equivalent, or MMcfe, for the
nine months ended September 30, 2018
from
281,318
MMcfe for the
nine months ended September 30, 2017
. Our net daily production for the
nine months ended September 30, 2018
averaged
1,349.3
MMcfe per day and was comprised of approximately
89%
natural gas,
8%
natural gas liquids, or NGLs, and
3%
oil.
|
•
|
During the
nine months ended September 30, 2018
, we spud
23
gross (
19.6
net) wells in the Utica Shale, participated in an additional
28
gross (
6.9
net) wells that were drilled by other operators on our Utica Shale acreage and recompleted
47
gross and net wells on our Louisiana acreage. In addition, during the
nine months ended September 30, 2018
, we spud
12
gross (
11.0
net) wells in the SCOOP and participated in an additional
33
gross (
3.0
n
et) wells that were drilled by other operators on our SCOOP acreage. Of th
e
35
new w
ells we spud, at
September 30, 2018
, 32 were in various stages of completion and three were being drilled. In addition,
28
gross an
d net operated wells and
29
|
•
|
During the
nine months ended
September 30, 2018
, we reduced our unit lease operating expense by
19%
to
$0.17
per Mcfe from
$0.21
per Mcfe during the
nine months ended
September 30, 2017
.
|
•
|
During the
nine months ended
September 30, 2018
, we decreased our unit general and administrative expense by
8%
to
$0.12
per Mcfe from
$0.13
per Mcfe during the
nine months ended
September 30, 2017
.
|
•
|
During the
nine months ended
September 30, 2018
, we decreased our unit midstream gathering and processing expense by
8%
per Mcfe to
$0.58
per Mcfe from
$0.63
per Mcfe during the
nine months ended
September 30, 2017
.
|
•
|
In January 2018, our board of directors approved a stock repurchase program to acquire up to
$100.0 million
of our outstanding common stock, and in May 2018 expanded this program to acquire up to an additional
$100.0 million
of our common stock, during 2018 for a total of up to
$200.0 million
, which we believe underscores the confidence we have in our business model, financial performance and asset base. During the
nine months ended
September 30, 2018
, we purchased
10.5 million
shares of our outstanding common stock for a total of approximately
$110.0 million
.
|
•
|
On May 1, 2018, we sold our
25%
equity interest in Strike Force Midstream LLC, or Strike Force, to EQT Midstream Partners, LP for
$175.0 million
in cash.
|
•
|
On June 29, 2018, we sold
1,235,600
shares, and on July 30, 2018, we sold an additional
118,974
shares, of our Mammoth Energy common stock in an underwritten public offering and related partial exercise of the underwriters' option to purchase additional shares for net proceeds to us of approximately
$47.0 million
and $4.5 million, respectively. Following the sale of these shares, we owned
9,829,548
shares, or approximately
22.0%
, of Mammoth Energy’s outstanding common stock.
|
•
|
the quality and quantity of available data;
|
•
|
the interpretation of that data;
|
•
|
the accuracy of various mandated economic assumptions; and
|
•
|
the judgments of the individuals preparing the estimates.
|
•
|
A $13.3 million increase in natural gas, oil and NGL sales due to a favorable change in gains and losses from derivative instruments. Of the total change, $32.9 million was due to favorable changes in the fair value of our open derivative positions in each period, partially offset by a $19.6 million unfavorable change in settlements related to our
|
•
|
A
$47.8 million
increase
in natural gas sales without the impact of derivatives due to a
20%
increase
in natural gas sales volumes and a 2% increase in natural gas market prices.
|
•
|
A
$14.2 million
increase
in oil and condensate sales without the impact of derivatives due to a 50% increase in oil and condensate market prices, partially offset by a
3%
decrease
in oil and condensate sales volumes.
|
•
|
A
$20.2 million
increase
in natural gas liquids sales without the impact of derivatives due to a 30% increase in natural gas liquids market prices and a
23%
increase
in natural gas liquids sales volumes.
|
|
Three months ended September 30,
|
||||||
|
2018
|
|
2017
|
||||
|
($ In thousands)
|
||||||
Natural gas sales
|
|
|
|
||||
Natural gas production volumes (MMcf)
|
116,994
|
|
|
97,825
|
|
||
|
|
|
|
||||
Total natural gas sales
|
$
|
271,167
|
|
|
$
|
223,340
|
|
|
|
|
|
||||
Natural gas sales without the impact of derivatives ($/Mcf)
|
$
|
2.32
|
|
|
$
|
2.28
|
|
Impact from settled derivatives ($/Mcf)
|
$
|
0.08
|
|
|
$
|
0.13
|
|
Average natural gas sales price, including settled derivatives ($/Mcf)
|
$
|
2.40
|
|
|
$
|
2.41
|
|
|
|
|
|
||||
Oil and condensate sales
|
|
|
|
||||
Oil and condensate production volumes (MBbls)
|
665
|
|
|
685
|
|
||
|
|
|
|
||||
Total oil and condensate sales
|
$
|
45,682
|
|
|
$
|
31,459
|
|
|
|
|
|
||||
Oil and condensate sales without the impact of derivatives ($/Bbl)
|
$
|
68.73
|
|
|
$
|
45.90
|
|
Impact from settled derivatives ($/Bbl)
|
$
|
(14.76
|
)
|
|
$
|
4.36
|
|
Average oil and condensate sales price, including settled derivatives ($/Bbl)
|
$
|
53.97
|
|
|
$
|
50.26
|
|
|
|
|
|
||||
Natural gas liquids sales
|
|
|
|
||||
Natural gas liquids production volumes (MGal)
|
72,427
|
|
|
59,008
|
|
||
|
|
|
|
||||
Total natural gas liquids sales
|
$
|
53,776
|
|
|
$
|
33,559
|
|
|
|
|
|
||||
Natural gas liquids sales without the impact of derivatives ($/Gal)
|
$
|
0.74
|
|
|
$
|
0.57
|
|
Impact from settled derivatives ($/Gal)
|
$
|
(0.07
|
)
|
|
$
|
(0.03
|
)
|
Average natural gas liquids sales price, including settled derivatives ($/Gal)
|
$
|
0.67
|
|
|
$
|
0.54
|
|
|
|
|
|
||||
Natural gas, oil and condensate and natural gas liquids sales
|
|
|
|
||||
Natural gas equivalents (MMcfe)
|
131,328
|
|
|
110,367
|
|
||
|
|
|
|
||||
Total natural gas, oil and condensate and natural gas liquids sales
|
$
|
370,625
|
|
|
$
|
288,358
|
|
|
|
|
|
||||
Natural gas, oil and condensate and natural gas liquids sales without the impact of derivatives ($/Mcfe)
|
$
|
2.82
|
|
|
$
|
2.61
|
|
Impact from settled derivatives ($/Mcfe)
|
$
|
(0.04
|
)
|
|
$
|
0.13
|
|
Average natural gas, oil and condensate and natural gas liquids sales price, including settled derivatives ($/Mcfe)
|
$
|
2.78
|
|
|
$
|
2.74
|
|
|
|
|
|
||||
Production Costs:
|
|
|
|
||||
Average production costs (per Mcfe)
|
$
|
0.17
|
|
|
$
|
0.18
|
|
Average production taxes and midstream costs (per Mcfe)
|
$
|
0.67
|
|
|
$
|
0.68
|
|
Total production and midstream costs and production taxes (per Mcfe)
|
$
|
0.84
|
|
|
$
|
0.86
|
|
•
|
A $238.3 million decrease in natural gas, oil and NGL sales due to an unfavorable change in gains and losses from derivative instruments. Of the total change, $236.0 million was due to unfavorable changes in the fair value of our open derivative positions in each period. In addition, $2.3 million of this decrease was due to an unfavorable change in settlements related to our derivative positions. The loss from changes in fair value of our open derivative positions is primarily the result of the increase in the forward curve prices for natural gas, oil and NGLs from the previous reporting period.
|
•
|
A
$146.7 million
increase
in natural gas sales without the impact of derivatives due to a
32%
increase
in natural gas sales volumes, partially offset by a 6% decrease in natural gas market prices.
|
•
|
A
$55.3 million
increase
in oil and condensate sales without the impact of derivatives due to a 41% increase in oil and condensate market prices and a
17%
increase
in oil and condensate sales volumes.
|
•
|
A
$52.9 million
increase
in natural gas liquid sales without the impact of derivatives due to a 32% increase in natural gas liquids market prices and a
21%
increase
in natural gas liquids sales volumes.
|
|
Nine months ended September 30,
|
||||||
|
2018
|
|
2017
|
||||
|
($ In thousands)
|
||||||
Natural gas sales
|
|
|
|
||||
Natural gas production volumes (MMcf)
|
327,272
|
|
|
247,012
|
|
||
|
|
|
|
||||
Total natural gas sales
|
$
|
753,261
|
|
|
$
|
606,544
|
|
|
|
|
|
||||
Natural gas sales without the impact of derivatives ($/Mcf)
|
$
|
2.30
|
|
|
$
|
2.46
|
|
Impact from settled derivatives ($/Mcf)
|
$
|
0.14
|
|
|
$
|
0.03
|
|
Average natural gas sales price, including settled derivatives ($/Mcf)
|
$
|
2.44
|
|
|
$
|
2.49
|
|
|
|
|
|
||||
Oil and condensate sales
|
|
|
|
||||
Oil and condensate production volumes (MBbls)
|
2,166
|
|
|
1,849
|
|
||
|
|
|
|
||||
Total oil and condensate sales
|
$
|
140,687
|
|
|
$
|
85,338
|
|
|
|
|
|
||||
Oil and condensate sales without the impact of derivatives ($/Bbl)
|
$
|
64.96
|
|
|
$
|
46.15
|
|
Impact from settled derivatives ($/Bbl)
|
$
|
(10.28
|
)
|
|
$
|
2.92
|
|
Average oil and condensate sales price, including settled derivatives ($/Bbl)
|
$
|
54.68
|
|
|
$
|
49.07
|
|
|
|
|
|
||||
Natural gas liquids sales
|
|
|
|
||||
Natural gas liquids production volumes (MGal)
|
196,695
|
|
|
162,483
|
|
||
|
|
|
|
||||
Total natural gas liquids sales
|
$
|
141,883
|
|
|
$
|
88,985
|
|
|
|
|
|
||||
Natural gas liquids sales without the impact of derivatives ($/Gal)
|
$
|
0.72
|
|
|
$
|
0.55
|
|
Impact from settled derivatives ($/Gal)
|
$
|
(0.06
|
)
|
|
$
|
(0.01
|
)
|
Average natural gas liquids sales price, including settled derivatives ($/Gal)
|
$
|
0.66
|
|
|
$
|
0.54
|
|
|
|
|
|
||||
Natural gas, oil and condensate and natural gas liquids sales
|
|
|
|
||||
Gas equivalents (MMcfe)
|
368,366
|
|
|
281,318
|
|
||
|
|
|
|
||||
Total natural gas, oil and condensate and natural gas liquids sales
|
$
|
1,035,831
|
|
|
$
|
780,867
|
|
|
|
|
|
||||
Natural gas, oil and condensate and natural gas liquids sales without the impact of derivatives ($/Mcfe)
|
$
|
2.81
|
|
|
$
|
2.78
|
|
Impact from settled derivatives ($/Mcfe)
|
$
|
0.03
|
|
|
$
|
0.04
|
|
Average natural gas, oil and condensate and natural gas liquids sales price, including settled derivatives ($/Mcfe)
|
$
|
2.84
|
|
|
$
|
2.82
|
|
|
|
|
|
||||
Production Costs:
|
|
|
|
||||
Average production costs (per Mcfe)
|
$
|
0.17
|
|
|
$
|
0.21
|
|
Average production taxes and midstream costs (per Mcfe)
|
$
|
0.65
|
|
|
$
|
0.68
|
|
Total production and midstream costs and production taxes (per Mcfe)
|
$
|
0.82
|
|
|
$
|
0.89
|
|
ITEM 3.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
|
Location
|
Daily Volume (MMBtu/day)
|
|
Weighted
Average Price |
|||
Remaining 2018
|
NYMEX Henry Hub
|
1,010,000
|
|
|
$
|
3.01
|
|
2019
|
NYMEX Henry Hub
|
1,154,000
|
|
|
$
|
2.81
|
|
2020
|
NYMEX Henry Hub
|
204,000
|
|
|
$
|
2.77
|
|
|
Location
|
Daily Volume
(Bbls/day) |
|
Weighted
Average Price |
|||
Remaining 2018
|
ARGUS LLS
|
2,000
|
|
|
$
|
56.22
|
|
2019
|
ARGUS LLS
|
1,000
|
|
|
$
|
59.55
|
|
Remaining 2018
|
NYMEX WTI
|
4,500
|
|
|
$
|
53.72
|
|
2019
|
NYMEX WTI
|
4,000
|
|
|
$
|
58.28
|
|
|
Location
|
Daily Volume (MMBtu/day)
|
|
Weighted Average Price
|
|||
October 2018 - March 2019
|
NYMEX Henry Hub
|
50,000
|
|
|
$
|
3.13
|
|
April 2019 - December 2019
|
NYMEX Henry Hub
|
30,000
|
|
|
$
|
3.10
|
|
|
Location
|
Daily Volume (MMBtu/day)
|
|
Weighted Average Price
|
|||
Remaining 2018
|
Transco Zone 4
|
40,000
|
|
|
$
|
(0.05
|
)
|
2019
|
Transco Zone 4
|
60,000
|
|
|
$
|
(0.05
|
)
|
2020
|
Transco Zone 4
|
60,000
|
|
|
$
|
(0.05
|
)
|
ITEM 4.
|
CONTROLS AND PROCEDURES
|
ITEM 1.
|
LEGAL PROCEEDINGS
|
ITEM 1A.
|
RISK FACTORS
|
ITEM 2.
|
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
|
Period
|
|
Total number of shares purchased
|
|
Average price paid per share
|
|
Total number of shares purchased as part of publicly announced plans or programs
(1)
|
|
Approximate maximum dollar value of shares that may yet be purchased under the plans or programs
(2)
|
||||||
July 2018
|
|
400,597
|
|
|
$
|
12.48
|
|
|
400,597
|
|
|
$
|
90,003,000
|
|
August 2018
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
90,003,000
|
|
September 2018
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
90,003,000
|
|
Total
|
|
400,597
|
|
|
$
|
12.48
|
|
|
400,597
|
|
|
|
(1)
|
In January 2018, our board of directors approved a stock repurchase program to acquire up to $100.0 million of our outstanding common stock, and in May 2018 expanded this program authorizing us to acquire up to an additional $100.0 million of our outstanding common stock, during 2018 for a total of up to $200.0 million. The repurchase program does not require us to acquire any specific number of shares. This repurchase program is authorized to extend through December 31, 2018 and may be suspended from time to time, modified, extended or discontinued by our board of directors at any time.
|
||||||||
(2)
|
During the three months ended September 30, 2018, we repurchased and canceled approximately 0.4 million shares of our common stock at an average price of $12.48 per share for a total of $5.0 million. During the nine months ended September 30, 2018, we repurchased 10,505,469 shares under this program at a weighted average price of $10.47 per share.
|
ITEM 3.
|
DEFAULTS UPON SENIOR SECURITIES
|
ITEM 4.
|
MINE SAFETY DISCLOSURES
|
ITEM 5.
|
OTHER INFORMATION
|
ITEM 6.
|
EXHIBITS
|
Exhibit
Number
|
|
Description
|
|
|
|
3.1
|
|
|
|
|
|
3.2
|
|
|
|
|
|
3.3
|
|
|
|
|
|
3.4
|
|
|
|
|
|
3.5
|
|
|
|
|
|
3.6
|
|
|
|
|
|
4.1
|
|
|
|
|
|
4.5
|
|
|
|
|
|
4.6
|
|
|
|
|
|
4.7
|
|
|
|
|
|
4.8
|
|
|
|
|
|
4.9
|
|
|
|
|
|
10.1#
|
|
|
|
|
|
10.2*
|
|
|
|
|
|
10.3*+
|
|
|
|
|
|
31.1*
|
|
|
|
|
|
31.2*
|
|
|
|
|
|
32.1*
|
|
|
|
|
|
32.2*
|
|
|
|
|
|
101.INS*
|
|
XBRL Instance Document.
|
|
|
|
101.SCH*
|
|
XBRL Taxonomy Extension Schema Document.
|
|
|
|
101.CAL*
|
|
XBRL Taxonomy Extension Calculation Linkbase Document.
|
|
|
|
101.DEF*
|
|
XBRL Taxonomy Extension Definition Linkbase Document.
|
|
|
|
101.LAB*
|
|
XBRL Taxonomy Extension Labels Linkbase Document.
|
|
|
|
101.PRE*
|
|
XBRL Taxonomy Extension Presentation Linkbase Document.
|
*
|
Filed herewith.
|
#
|
Confidential treatment as to certain portions was granted with respect to this amendment and extended with respect to the original agreement by the SEC on September 17, 2018, which portions have been omitted and filed separately with the SEC.
|
+
|
Management contract, compensatory plan or arrangement.
|
GULFPORT ENERGY CORPORATION
|
||
|
|
|
By:
|
|
/s/ Keri Crowell
|
|
|
Keri Crowell
Chief Financial Officer
|
|
|
|
|
SELLER:
|
CUSTOMER:
|
Muskie Proppant, LLC
|
Gulfport Energy Corporation
|
By: /s/ Arty Straehla
Name: Arty Straehla
Title: CEO
|
By: /s/ Michael G. Moore
Name: Michael G. Moore
Title: CEO
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls over financial reporting.
|
|
/s/ Donnie Moore
|
|
Donnie Moore
|
|
Interim Chief Executive Officer
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls over financial reporting.
|
|
/s/ Keri Crowell
|
|
Keri Crowell
|
|
Chief Financial Officer
|
(1)
|
the
Quarterly Report
on Form
10-Q
of the Company for the
quarterly period
ended
September 30, 2018
(the “Report”) fully complies with the requirements of Section 13 (a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m(a) or 78o(d)); and
|
(2)
|
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
|
/s/ Donnie Moore
|
|
Donnie Moore
|
|
Interim Chief Executive Officer
|
(1)
|
the
Quarterly Report
on Form
10-Q
of the Company for the
quarterly period
ended
September 30, 2018
(the “Report”) fully complies with the requirements of Section 13 (a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m(a) or 78o(d)); and
|
(2)
|
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
|
/s/ Keri Crowell
|
|
Keri Crowell
|
|
Chief Financial Officer
|