gdpp20190331

10-Q 1 gdpp20210331b_10q.htm FORM 10-Q gdpp20190331_10q.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D. C. 20549

FORM 10-Q

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended March 31, 2021

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number: 001-12719

GOODRICH PETROLEUM CORPORATION

(Exact name of registrant as specified in its charter)

Delaware

(State or other jurisdiction of

incorporation or organization)

76-0466193

(I.R.S. Employer

Identification No.)

801 Louisiana, Suite 700

Houston, Texas 77002

(Address of principal executive offices) (Zip Code)

(Registrant’s telephone number, including area code): (713) 780-9494

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol	Name of each exchange on which registered
Common stock, par value $0.01 per share	GDP	NYSE American

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☒ No ☐

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐

Non-accelerated filer	☐	Smaller reporting company	☒

		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Indicate by check mark whether the Registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes ☒ No ☐

The Registrant had 13,402,291 shares of common stock outstanding on May 5, 2021.

		Page
PART I	FINANCIAL INFORMATION	3
ITEM 1	FINANCIAL STATEMENTS	3
	Consolidated Balance Sheets as of March 31, 2021 and December 31, 2020 (unaudited)	3
	Consolidated Statements of Operations for the three months ended March 31, 2021 and 2020 (unaudited)	4
	Consolidated Statements of Cash Flows for the three months ended March 31, 2021 and 2020 (unaudited)	5
	Consolidated Statements of Stockholders’ Equity for the three months ended March 31, 2021 and 2020 (unaudited)	6
	Notes to Unaudited Consolidated Financial Statements	7
ITEM 2	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	21
ITEM 3	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	30
ITEM 4	CONTROLS AND PROCEDURES	31

PART II	OTHER INFORMATION	32
ITEM 1	LEGAL PROCEEDINGS	32
ITEM 1A	RISK FACTORS	32
ITEM 2	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	32
ITEM 6	EXHIBITS	33

	March 31, 2021			December 31, 2020
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	1,178		$	1,360
Accounts receivable, trade and other, net of allowance		1,480			920
Accrued oil and natural gas revenue		12,711			10,179
Fair value of oil and natural gas derivatives		301			143
Inventory		130			130
Prepaid expenses and other		613			1,292
Total current assets		16,413			14,024
PROPERTY AND EQUIPMENT:
Unevaluated properties		460			240
Oil and natural gas properties (full cost method)		388,149			359,112
Furniture, fixtures and equipment and other capital assets		7,605			7,535
		396,214			366,887
Less: Accumulated depletion, depreciation and amortization		(187,780	)		(177,669	)
Net property and equipment		208,434			189,218
Other		1,786			1,835
TOTAL ASSETS	$	226,633		$	205,077
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accounts payable	$	34,608		$	27,811
Fair value of oil and natural gas derivatives		5,659			1,274
Accrued liabilities		12,457			12,866
Total current liabilities		52,724			41,951
Long term debt, net		116,459			110,159
Accrued abandonment cost		4,856			4,716
Fair value of oil and natural gas derivatives		2,221			3,871
Other non-current liabilities		2,712			2,810
Total liabilities		178,972			163,507
Commitments and contingencies (See Note 9)
STOCKHOLDERS’ EQUITY:
Preferred stock: 10,000,000 shares $1.00 par value authorized, and none issued and outstanding		-			-
Common stock: $0.01 par value, 75,000,000 shares authorized, and 13,402,291 and 13,392,625 shares issued as of March 31, 2021 and issued and outstanding as of December 31, 2020, respectively		134			134
Treasury stock (2,635 and zero shares, respectively)		(28	)		-
Additional paid in capital		84,458			82,842
Accumulated earnings (deficit)		(36,903	)		(41,406	)
Total stockholders’ equity		47,661			41,570
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	226,633		$	205,077

	Three Months Ended March 31,			Three Months Ended March 31,
	2021			2020
REVENUES:
Oil and natural gas revenues	$	31,872		$	22,983
Other		-			3
		31,872			22,986
OPERATING EXPENSES:
Lease operating expense		3,182			3,328
Production and other taxes		643			863
Transportation and processing		4,005			4,875
Depreciation, depletion and amortization		10,060			13,267
General and administrative		3,545			4,914
Other		(186	)		8
		21,249			27,255
Operating income (loss)		10,623			(4,269	)
OTHER INCOME (EXPENSE):
Interest expense		(1,916	)		(1,952	)
Interest income and other expense		-			119
Gain (loss) on commodity derivatives not designated as hedges		(3,269	)		9,138
Loss on early extinguishment of debt		(935	)		-
		(6,120	)		7,305

Income before income taxes		4,503			3,036
Income tax expense		-			-
Net income	$	4,503		$	3,036
PER COMMON SHARE
Net income per common share - basic	$	0.34		$	0.24
Net income per common share - diluted	$	0.30		$	0.22
Weighted average shares of common stock outstanding - basic		13,403			12,533
Weighted average shares of common stock outstanding - diluted		14,840			13,849

	Preferred Stock				Common Stock					Additional Paid-in		Treasury Stock						Accumulated Earnings			Total Stockholders’
	Shares		Value		Shares			Value		Capital		Shares			Value			(Deficit)			Equity
Balance at December 31, 2019		-	$	-		12,533		$	125	$	81,305		-		$	-		$	2,735		$	84,165
Net income		-		-		-			-		-		-			-			3,036			3,036
Share-based compensation		-		-		1			-		1,309		-			-			-			1,309
Treasury stock activity		-		-		-			-		-		-			(2	)		-			(2	)
Balance at March 31, 2020		-	$	-		12,534		$	125	$	82,614		-		$	(2	)	$	5,771		$	88,508

Balance at December 31, 2020		-	$	-		13,393		$	134	$	82,842		-		$	-		$	(41,406	)	$	41,570
Net income		-		-		-			-		-		-			-			4,503			4,503
Share-based compensation		-		-		(1	)		-		409		-			(1	)		-			408
UCC warrant exchange		-		-		10			-		-		-			-			-			-
Discount from 2023 Second Lien Notes (See Note 4)		-		-		-			-		1,207		-			-			-			1,207
Treasury stock activity		-		-		-			-		-		(3	)		(27	)		-			(27	)
Balance at March 31, 2021		-	$	-		13,402		$	134	$	84,458		(3	)	$	(28	)	$	(36,903	)	$	47,661

*(In thousands)*	March 31, 2021		December 31, 2020
Trade payables	$	18,411	$	12,190
Revenue payables		13,963		14,413
Prepayments from partners		1,797		664
Miscellaneous payables		437		544
Total Accounts payable	$	34,608	$	27,811

	Three Months Ended March 31, 2021								Three Months Ended March 31, 2020
(In thousands)	Oil Revenue		Gas Revenue		NGL Revenue		Total Oil and Natural Gas Revenues		Oil Revenue		Gas Revenue		NGL Revenue		Total Oil and Natural Gas Revenues

Operated	$	1,796	$	24,721	$	-	$	26,517	$	1,721	$	19,138	$	-	$	20,859
Non-operated		57		5,295		3		5,355		93		2,028		3		2,124
Total oil and natural gas revenues	$	1,853	$	30,016	$	3	$	31,872	$	1,814	$	21,166	$	3	$	22,983

	Three Months Ended March 31, 2021
Beginning balance at December 31, 2020	$	4,716
Liabilities incurred		57
Dispositions		-
Accretion expense		83
Ending balance at March 31, 2021	$	4,856
Current liability		-
Long term liability	$	4,856

	March 31, 2021				December 31, 2020
	Principal		Carrying Amount		Principal		Carrying Amount
2019 Senior Credit Facility (1)	$	87,400	$	87,400	$	96,400	$	96,400
2021/2022 Second Lien Notes (2)		-		-		14,811		13,759
2023 Second Lien Notes (3)		30,442		29,059		-		-
Total debt	$	117,842	$	116,459	$	111,211	$	110,159

	Three Months Ended March 31, 2021					Three Months Ended March 31, 2020
	Interest Expense		Effective Interest Rate			Interest Expense		Effective Interest Rate
2019 Senior Credit Facility	$	1,042		4.2	%	$	1,299		5.5	%
2021/2022 Second Lien Notes (1)		499		19.1	%		653		22.0	%
2023 Second Lien Notes (2)		375		20.4	%		-		-
Total interest expense	$	1,916				$	1,952

	Three Months Ended March 31, 2021		Three Months Ended March 31, 2020
	(Amounts in thousands, except per share data)
Basic net income per common share:
Net income applicable to common stock	$	4,503	$	3,036
Weighted average shares of common stock outstanding		13,403		12,533
Basic net income per common share	$	0.34	$	0.24

Diluted net income per common share:
Net income applicable to common stock	$	4,503	$	3,036
Weighted average shares of common stock outstanding		13,403		12,533
Common shares issuable upon exercise of warrants of unsecured claim holders		1,350		1,316
Common shares issuable on assumed vesting of restricted stock **		87		-
Diluted weighted average shares of common stock outstanding		14,840		13,849
Diluted net income per common share (1)	$	0.30	$	0.22

(1) Common shares issuable upon conversion of the 2023 Second Lien Notes and 2021/2022 Second Lien Notes, respectively, were not included in the computation of diluted net income per common share since their inclusion would have been anti-dilutive for the three months ended March 31, 2021 and 2020.		1,427		629

Contract Type	Average Daily Volume		Total Volume		Weighted Average Fixed Price	Fair Value at March 31, 2021 (In thousands)
Natural Gas swaps (MMBtu)
2021		70,000		19,250,000	$ 2.54		(3,547	)
2022 (through March 31, 2022)		70,000		6,300,000	$ 2.53		(2,417	)
Natural Gas collars (MMBtu)
2021		30,000		8,250,000	$2.40 - $3.52		375
2022 (through March 31, 2022)		30,000		2,700,000	$2.40 - $3.52		(71	)
Natural Gas basis swaps (MMBtu)
2021		50,000		13,750,000	NYMEX - $0.209		500
2022		50,000		18,250,000	NYMEX - $0.209		(578	)
2023		50,000		18,250,000	NYMEX - $0.209		(729	)
2024		50,000		18,300,000	NYMEX - $0.209		(1,112	)
Total natural gas						$	(7,579	)
Total oil and natural gas						$	(7,579	)

*(in thousands)*	March 31, 2021
2021	$	853
2022		637
2023		653
2024		661
Thereafter		1,592
Total lease payments	$	4,396
Less imputed interest		1,155
Present value of lease liabilities	$	3,241

	•	public health crises, such as the Coronavirus Disease 2019 (“COVID-19”) outbreak in 2020 and 2021, which has negatively impacted the global economy, and correspondingly, the price of oil and natural gas;
	•	the market prices of oil and natural gas;

	Three Months Ended March 31, 2021			Three Months Ended March 31, 2020
Oil and Natural Gas Derivatives (in thousands)
Gain (loss) on commodity derivatives not designated as hedges, settled	$	(692	)	$	5,969
Gain (loss) on commodity derivatives not designated as hedges, not settled		(2,577	)		3,169
Total gain (loss) on commodity derivatives not designated as hedges	$	(3,269	)	$	9,138

Description	Level 1		Level 2			Level 3		Total
Fair value of oil and natural gas derivatives - Current Assets	$	-	$	301		$	-	$	301
Fair value of oil and natural gas derivatives - Non-current Assets		-		-			-		-
Fair value of oil and natural gas derivatives - Current Liabilities		-		(5,659	)		-		(5,659	)
Fair value of oil and natural gas derivatives - Non-current Liabilities		-		(2,221	)		-		(2,221	)
Total	$	-	$	(7,579	)	$	-	$	(7,579	)

	March 31, 2021									December 31, 2020
Fair Value of Oil and Natural Gas Derivatives	Gross			Amount			As			Gross			Amount			As
(in thousands)	Amount			Offset			Presented			Amount			Offset			Presented
Fair value of oil and natural gas derivatives - Current Assets	$	1,876		$	(1,575	)	$	301		$	3,193		$	(3,050	)	$	143
Fair value of oil and natural gas derivatives - Non-current Assets		-			-			-			537			(537	)		-
Fair value of oil and natural gas derivatives - Current Liabilities		(7,234	)		1,575			(5,659	)		(4,324	)		3,050			(1,274	)
Fair value of oil and natural gas derivatives - Non-current Liabilities		(2,221	)		-			(2,221	)		(4,408	)		537			(3,871	)
Total	$	(7,579	)	$	-		$	(7,579	)	$	(5,002	)	$	-		$	(5,002	)

	Three Months Ended March 31,
(In thousands, except for price and average daily production data)	2021		2020		Variance
Revenues:
Natural gas	$	30,019	$	21,169	$	8,850		42	%
Oil and condensate		1,853		1,814		39		2	%
Natural gas, oil and condensate		31,872		22,983		8,889		39	%
Net Production:
Natural gas (Mmcf)		11,045		12,242		(1,197	)	(10	)%
Oil and condensate (MBbls)		32		38		(6	)	(16	)%
Total (Mmcfe)		11,237		12,471		(1,234	)	(10	)%
Average daily production (Mcfe/d)		124,857		137,042		(12,185	)	(9	)%
Average realized sales price per unit:
Natural gas (per Mcf)	$	2.72	$	1.73	$	0.99		57	%
Natural gas (per Mcf) including the effect of realized gains/losses on derivatives	$	2.66	$	2.19	$	0.47		21	%
Oil and condensate (per Bbl)	$	57.88	$	47.64	$	10.24		21	%
Oil and condensate (per Bbl) including the effect of realized losses on derivatives	$	57.18	$	56.23	$	0.95		2	%
Average realized price (per Mcfe)	$	2.84	$	1.84	$	1.00		54	%

	Three Months Ended March 31,
Operating Expenses (in thousands)	2021		2020		Variance
Lease operating expenses	$	3,182	$	3,328	$	(146	)	(4	)%
Production and other taxes		643		863		(220	)	(25	)%
Transportation and processing		4,005		4,875		(870	)	(18	)%
Operating Expenses per Mcfe
Lease operating expenses	$	0.28	$	0.27	$	0.01		4	%
Production and other taxes	$	0.06	$	0.07	$	(0.01	)	(14	)%
Transportation and processing	$	0.36	$	0.39	$	(0.03	)	(8	)%

	Three Months Ended March 31,
Operating Expenses (in thousands):	2021			2020		Variance
Depreciation, depletion and amortization	$	10,060		$	13,267	$	(3,207	)	(24	)%
General and administrative		3,545			4,914		(1,369	)	(28	)%
Other		(186	)		8		(194	)	(2,425	)%
Operating Expenses per Mcfe
Depreciation, depletion and amortization	$	0.90		$	1.06	$	(0.16	)	(15	)%
General and administrative	$	0.32		$	0.39	$	(0.07	)	(18	)%
Other	$	(0.02	)	$	-	$	(0.02	)	(100	)%

	Three Months Ended March 31,
Other income (expense) (in thousands):	2021			2020			Variance
Interest expense	$	(1,916	)	$	(1,952	)	$	(36	)	(2	)%
Interest income and other expense		-			119			(119	)	(100	)%
Gain (loss) on commodity derivatives not designated as hedges		(3,269	)		9,138			(12,407	)	(136	)%
Loss on early extinguishment of debt		(935	)		-			(935	)	(100	)%

Average funded borrowings adjusted for debt discount	$	114,148		$	102,456		$	11,692		11	%
Average funded borrowings	$	116,996		$	106,019		$	10,977		10	%

	•	issuance of debt securities;
	•	joint ventures in our TMS and/or Haynesville Shale Trend acreage;
	•	sale of non-core assets; and
	•	issuance of equity securities if favorable conditions exist.


3.1		Third Amended and Restated Certificate of Incorporation of Goodrich Petroleum Corporation, dated August 16, 2019, (Incorporated by reference to Exhibit 3.1 of the Company’s Form 8-K (File No. 333-12719) filed on August 21, 2019).
3.2		Second Amended and Restated Bylaws of Goodrich Petroleum Corporation, dated October 12, 2016, (Incorporated by reference to Exhibit 4.2 of the Company’s Registration Statement on Form S-8 (File No. 333-214080) filed on October 12, 2016).
4.1		In d enture, dated as of March 9, 2021, by and between Goodrich Petroleum Corporation, Goodrich Petroleum Company, L.L.C., as the Subsidiary Guarantor, and Wilmington Trust, National Association, as trustee and collateral agent, relating to the 13.50% Convertible Second Lien Senior Secured Notes due 2023. (Incorporated by reference to Exhibit 4.2 of the Company's Annual Report on Form 10-K (File No. 001-12719) filed on March 12, 2021.)
4.2		Registration Rights Agreement, dated as of March 9, 2021, by and among Goodrich Petroleum Corporation and Holders party thereto, relating to the 13.50% Convertible Second Lien Senior Secured Notes due 2023 (Incorporated by reference to Exhibit 4.3 of the Company's Annual Report on Form 10-K (File No. 001-12719) filed on March 12, 2021.)
10.1		Fourth Amendment to Second Amended and Restated Senior Secured Revolving Credit Agreement, dated as of March 9, 2021, among Goodrich Petroleum Corporation, as Parent Guarantor, Goodrich Petroleum Company, L.L.C., as Borrower, Truist Bank, as Administrative Agent, and the Lenders party thereto (Incorporated by reference to Exhibit 10.5 of the Company's Annual Report on Form 10-K (File No. 001-12719) filed on March 12, 2021).
22		Subsidiary Guarantors of Guaranteed Securities
		Goodrich Petroleum Company L.L.C. - Organized in the State of Louisiana.
31.1*		Certification by Chief Executive Officer Pursuant to 15 U.S.C. Section 7241, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*		Certification by Chief Financial Officer Pursuant to 15 U.S.C. Section 7241, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1**		Certification by Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2**		Certification by Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS*		XBRL Instance Document
101.SCH*		XBRL Schema Document
101.CAL*		XBRL Calculation Linkbase Document
101.LAB*		XBRL Labels Linkbase Document
101.PRE*		XBRL Presentation Linkbase Document
101.DEF*		XBRL Definition Linkbase Document

	GOODRICH PETROLEUM CORPORATION (Registrant)

Date: May 6, 2021	By:	/S/ Walter G. Goodrich
		Walter G. Goodrich
		Chairman & Chief Executive Officer


Date: May 6, 2021	By:	/S/ Kristen McWatters
		Kristen McWatters
		Senior Vice President, Chief Financial Officer, and Chief Accounting Officer

SEC Form 10-Q filed by Goodrich Petroleum Corporation