Company Quick10K Filing
Quick10K
Harvest Oil Gas
10-Q 2019-09-30 Quarter: 2019-09-30
10-Q 2019-06-30 Quarter: 2019-06-30
10-Q 2019-03-31 Quarter: 2019-03-31
10-K 2018-12-31 Annual: 2018-12-31
10-Q 2018-09-30 Quarter: 2018-09-30
10-Q 2018-06-30 Quarter: 2018-06-30
10-Q 2018-03-31 Quarter: 2018-03-31
10-K 2017-12-31 Annual: 2017-12-31
10-Q 2017-09-30 Quarter: 2017-09-30
10-Q 2017-06-30 Quarter: 2017-06-30
10-Q 2017-03-31 Quarter: 2017-03-31
10-K 2016-12-31 Annual: 2016-12-31
10-Q 2016-09-30 Quarter: 2016-09-30
10-Q 2016-06-30 Quarter: 2016-06-30
10-Q 2016-03-31 Quarter: 2016-03-31
10-K 2015-12-31 Annual: 2015-12-31
10-Q 2015-09-30 Quarter: 2015-09-30
10-Q 2015-06-30 Quarter: 2015-06-30
10-Q 2015-03-31 Quarter: 2015-03-31
10-K 2014-12-31 Annual: 2014-12-31
10-Q 2014-09-30 Quarter: 2014-09-30
10-Q 2014-06-30 Quarter: 2014-06-30
10-Q 2014-03-31 Quarter: 2014-03-31
10-K 2013-12-31 Annual: 2013-12-31
8-K 2019-11-14 Earnings, Exhibits
8-K 2019-10-04 Enter Agreement, Leave Agreement, Off-BS Arrangement, Regulation FD, Other Events, Exhibits
8-K 2019-09-10 M&A, Regulation FD, Exhibits
8-K 2019-08-14 Earnings, Exhibits
8-K 2019-07-29 Enter Agreement, Regulation FD, Exhibits
8-K 2019-05-30 Shareholder Vote
8-K 2019-05-15 Earnings, Exhibits
8-K 2019-04-02 M&A, Exhibits
8-K 2019-03-29 Earnings, Exhibits
8-K 2019-03-15 Officers, Regulation FD, Exhibits
8-K 2019-02-13 Enter Agreement, Regulation FD, Exhibits
8-K 2019-01-22 Regulation FD
8-K 2018-11-14 Earnings, Exhibits
8-K 2018-10-29 Officers, Regulation FD, Exhibits
8-K 2018-08-31 M&A, Exhibits
8-K 2018-08-15 Enter Agreement, Officers, Regulation FD, Exhibits
8-K 2018-05-17 Bankruptcy, Exhibits
FCB FCB Financial 2,885
SFDL Security Federal 102
QUES Quest Solution 18
USMN US Rare Earth Minerals 5
ACCA Acacia Diversified Holdings 1
LGTG Lightning Gaming 0
TXG 10x Genomics 0
STSA Satsuma Pharmaceuticals 0
MDLA Medallia 0
TFLG Trafalgar Resources 0
HRST 2019-09-30
Part I. Financial Information
Item 1. Financial Statements
Note 1. Organization and Nature of Business
Note 2. Emergence From Voluntary Reorganization Under Chapter 11
Note 3. Revenue
Note 4. Share–Based Compensation
Note 5. Divestitures
Note 6. Risk Management
Note 7. Fair Value Measurements
Note 8. Asset Retirement Obligations
Note 9. Long–Term Debt
Note 10. Leases
Note 11. Commitments and Contingencies
Note 12. Income Taxes
Note 13. Earnings per Share/Unit and Stockholders’ Equity
Note 14. Related Party Transactions
Note 15. Other Supplemental Information
Item 2. Management’S Discussion and Analysis of Financial Condition and Results of Operations
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Item 4. Controls and Procedures
Part II. Other Information
Item 1. Legal Proceedings
Item 1A. Risk Factors
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Item 3. Defaults Upon Senior Securities
Item 4. Mine Safety Disclosures
Item 5. Other Information
Item 6. Exhibits
EX-31.1 hrst-20190930ex311a58e0d.htm
EX-31.2 hrst-20190930ex312cbfc20.htm
EX-32.1 hrst-20190930ex3214c6f40.htm
EX-32.2 hrst-20190930ex32286ddcc.htm

Harvest Oil Gas Earnings 2019-09-30

HRST 10Q Quarterly Report

Balance SheetIncome StatementCash Flow

10-Q 1 hrst-20190930x10q.htm 10-Q hrst_Current_Folio_10Q

 

 

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 September 30, 2019

OR

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

Commission File Number

001‑33024

Harvest Oil & Gas Corp.

(Exact name of registrant as specified in its charter)

Delaware
(State or other jurisdiction
of incorporation or organization)

83–0656612
(I.R.S. Employer Identification No.)

 

 

1001 Fannin, Suite 750, Houston, Texas
(Address of principal executive offices)

77002
(Zip Code)

 

Registrant’s telephone number, including area code: (713) 651‑1144

Securities registered pursuant to Section 12(b) of the Act: None

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 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 such files).

YES ☑ NO

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a 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  

As of November 8, 2019, the registrant had 10,179,379 shares of common stock, par value of $0.01 per share, outstanding.

 

 

 

 

1

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

Harvest Oil & Gas Corp.
Condensed Consolidated Balance Sheets
(In thousands, except number of shares)
(Unaudited)

 

 

 

 

 

 

 

September 30, 

 

December 31, 

 

2019

    

2018

ASSETS

 

 

 

 

 

Current assets:

 

  

 

 

 

Cash and cash equivalents

$

98,348

 

$

6,313

Equity securities

 

 —

 

 

47,082

Accounts receivable:

 

  

 

 

 

Oil, natural gas and natural gas liquids revenues

 

21,538

 

 

40,176

Other

 

481

 

 

4,496

Derivative asset

 

8,745

 

 

15,452

Other current assets

 

406

 

 

2,314

Total current assets

 

129,518

 

 

115,833

 

 

 

 

 

 

Oil and natural gas properties, net of accumulated depreciation, depletion and amortization; September 30, 2019, $19,362; December 31, 2018, $12,950

 

142,471

 

 

405,688

Assets held for sale

 

9,284

 

 

 —

Long–term derivative asset

 

1,933

 

 

8,499

Other assets

 

6,679

 

 

4,474

Total assets

$

289,885

 

$

534,494

 

 

 

 

 

 

LIABILITIES AND EQUITY

 

  

 

 

 

 

 

 

 

 

 

Current liabilities:

 

  

 

 

 

Accounts payable and accrued liabilities

$

24,143

 

$

26,146

Derivative liability

 

 —

 

 

1,165

Other current liabilities

 

684

 

 

 —

Total current liabilities

 

24,827

 

 

27,311

 

 

 

 

 

 

Asset retirement obligations

 

101,374

 

 

117,529

Long–term debt, net

 

 —

 

 

115,000

Liabilities held for sale

 

2,759

 

 

 —

Other long–term liabilities

 

1,638

 

 

1,036

 

 

 

 

 

 

Commitments and contingencies (Note 11)

 

  

 

 

 

 

 

 

 

 

 

Mezzanine equity

 

135

 

 

79

 

 

 

 

 

 

Stockholders’ equity:

 

 

 

 

 

Common stock – $0.01 par value; 65,000,000 shares authorized; 10,213,888 shares issued and 10,179,379 shares outstanding as of September 30, 2019; 10,054,816 shares issued and 10,042,468 shares outstanding as of  December 31, 2018

 

102

 

 

100

Additional paid-in capital

 

251,834

 

 

249,717

Treasury stock at cost – 34,509 shares at September 30, 2019; 12,348 shares at December 31, 2018

 

(542)

 

 

(247)

Retained earnings (accumulated deficit)

 

(92,242)

 

 

23,969

Total stockholders’ equity

 

159,152

 

 

273,539

Total liabilities and equity

$

289,885

 

$

534,494

 

 

See accompanying notes to unaudited condensed consolidated financial statements.

2

 

Harvest Oil & Gas Corp.
Condensed Consolidated Statements of Operations
(In thousands, except per share data)
(Unaudited)

 

 

 

 

 

 

 

 

Three Months Ended

 

 

September 30, 

 

 

2019

 

2018

 

Revenues:

 

  

 

 

  

 

Oil, natural gas and natural gas liquids revenues

$

22,870

 

$

68,407

 

Transportation and marketing–related revenues

 

379

 

 

559

 

Total revenues

 

23,249

 

 

68,966

 

 

 

 

 

 

 

 

Operating costs and expenses:

 

  

 

 

  

 

Lease operating expenses

 

19,614

 

 

28,281

 

Cost of purchased natural gas

 

255

 

 

393

 

Dry hole and exploration costs

 

36

 

 

21

 

Production taxes

 

1,634

 

 

2,973

 

Accretion expense on obligations

 

1,995

 

 

2,345

 

Depreciation, depletion and amortization

 

1,367

 

 

7,860

 

General and administrative expenses

 

7,771

 

 

7,673

 

Impairment of oil and natural gas properties

 

16,325

 

 

2,565

 

Gain on sales of oil and natural gas properties

 

(661)

 

 

(28)

 

Total operating costs and expenses

 

48,336

 

 

52,083

 

 

 

 

 

 

 

 

Operating income (loss)

 

(25,087)

 

 

16,883

 

 

 

 

 

 

 

 

Other income (expense), net:

 

  

 

 

 

 

Gain (loss) on derivatives, net

 

5,718

 

 

(26,423)

 

Interest expense

 

(501)

 

 

(3,967)

 

Gain on equity securities

 

 —

 

 

4,830

 

Other income (expense), net

 

341

 

 

(111)

 

Total other income (expense), net

 

5,558

 

 

(25,671)

 

 

 

 

 

 

 

 

Reorganization items, net

 

 —

 

 

(972)

 

 

 

 

 

 

 

 

Loss before income taxes

 

(19,529)

 

 

(9,760)

 

 

 

 

 

 

 

 

Income tax benefit

 

 —

 

 

 —

 

 

 

 

 

 

 

 

Net loss

$

(19,529)

 

$

(9,760)

 

 

 

 

 

 

 

 

Basic and diluted earnings per share:

 

  

 

 

  

 

Net loss

$

(1.93)

 

$

(0.97)

 

 

 

 

 

 

 

 

Weighted average common shares outstanding:

 

 

 

 

 

 

Basic

 

10,131

 

 

10,028

 

Diluted

 

10,131

 

 

10,028

 

 

 

See accompanying notes to unaudited condensed consolidated financial statements.

3

Harvest Oil & Gas Corp.
Condensed Consolidated Statements of Operations
(In thousands, except per share/unit data)
(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

Successor

 

 

Predecessor

 

 

Nine Months

 

Four Months

 

 

 

 

 

Ended

 

Ended

 

 

Five Months

 

 

September 30,

 

September 30,

 

 

Ended

 

    

2019

    

2018

    

 

May 31, 2018

Revenues:

 

 

  

 

 

  

 

 

 

  

Oil, natural gas and natural gas liquids revenues

 

$

96,285

 

$

89,942

 

 

$

110,307

Transportation and marketing–related revenues

 

 

1,397

 

 

744

 

 

 

724

Total revenues

 

 

97,682

 

 

90,686

 

 

 

111,031

 

 

 

 

 

 

 

 

 

 

 

Operating costs and expenses:

 

 

  

 

 

  

 

 

 

  

Lease operating expenses

 

 

64,568

 

 

37,656

 

 

 

45,372

Cost of purchased natural gas

 

 

969

 

 

522

 

 

 

557

Dry hole and exploration costs

 

 

75

 

 

64

 

 

 

122

Production taxes

 

 

5,277

 

 

3,943

 

 

 

5,343

Accretion expense on obligations

 

 

6,373

 

 

3,134

 

 

 

3,176

Depreciation, depletion and amortization

 

 

10,712

 

 

10,590

 

 

 

46,196

General and administrative expenses

 

 

20,794

 

 

9,702

 

 

 

15,648

Restructuring costs

 

 

 —

 

 

 —

 

 

 

5,211

Impairment of oil and natural gas properties

 

 

115,604

 

 

2,565

 

 

 

 3

(Gain) loss on sales of oil and natural gas properties

 

 

(679)

 

 

(47)

 

 

 

 5

Total operating costs and expenses

 

 

223,693

 

 

68,129

 

 

 

121,633

 

 

 

 

 

 

 

 

 

 

 

Operating income (loss)

 

 

(126,011)

 

 

22,557

 

 

 

(10,602)

 

 

 

 

 

 

 

 

 

 

 

Other income (expense), net:

 

 

  

 

 

  

 

 

 

  

Gain (loss) on derivatives, net

 

 

5,374

 

 

(30,655)

 

 

 

444

Interest expense

 

 

(3,335)

 

 

(5,166)

 

 

 

(13,652)

Gain on equity securities

 

 

4,593

 

 

4,830

 

 

 

 —

Other income (expense), net

 

 

3,168

 

 

(84)

 

 

 

776

Total other income (expense), net

 

 

9,800

 

 

(31,075)

 

 

 

(12,432)

 

 

 

 

 

 

 

 

 

 

 

Reorganization items, net

 

 

 —

 

 

(1,780)

 

 

 

(587,325)

 

 

 

 

 

 

 

 

 

 

 

Loss before income taxes

 

 

(116,211)

 

 

(10,298)

 

 

 

(610,359)

 

 

 

 

 

 

 

 

 

 

 

Income tax expense

 

 

 —

 

 

 —

 

 

 

(166)

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

$

(116,211)

 

$

(10,298)

 

 

$

(610,525)

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted earnings per share / unit:

 

 

  

 

 

  

 

 

 

  

Net loss

 

$

(11.53)

 

$

(1.03)

 

 

$

(12.12)

 

 

 

 

 

 

 

 

 

 

 

Weighted average common shares / units outstanding:

 

 

 

 

 

 

 

 

 

 

Basic

 

 

10,080

 

 

10,021

 

 

 

49,369

Diluted

 

 

10,080

 

 

10,021

 

 

 

49,369

 

 

See accompanying notes to unaudited condensed consolidated financial statements.

4

Harvest Oil & Gas Corp.
Condensed Consolidated Statement of Changes in Owners’ Equity (Predecessor)
(In thousands)
(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

Common

 

General Partner

 

Owners’

 

Unitholders

 

Interest

 

Equity

Balance, December 31, 2017 (Predecessor)

$

648,371

 

$

(20,359)

 

$

628,012

Equity–based compensation

 

575

 

 

12

 

 

587

Net loss

 

(15,140)

 

 

(309)

 

 

(15,449)

Balance, March 31, 2018 (Predecessor)

 

633,806

 

 

(20,656)

 

 

613,150

Contribution from general partner

 

 —

 

 

40

 

 

40

Equity–based compensation

 

3,133

 

 

64

 

 

3,197

Net loss

 

(583,174)

 

 

(11,902)

 

 

(595,076)

Issuance of common stock to Predecessor common unitholders

 

(11,967)

 

 

 —

 

 

(11,967)

Issuance of warrants to Predecessor common unitholders

 

(9,345)

 

 

 —

 

 

(9,345)

Cancellation of Predecessor common unitholders

 

(32,453)

 

 

 —

 

 

(32,453)

Cancellation of Predecessor general partner interest

 

 —

 

 

32,454

 

 

32,454

Balance, May 31, 2018 (Predecessor)

$

 —

 

$

 —

 

$

 —

 

 

Condensed Consolidated Statement of Stockholders’ Equity (Successor)
(In thousands)
(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Retained

 

 

 

 

 

 

 

 

Additional

 

 

 

 

Earnings

 

Total

 

Common Stock

 

Paid-in

 

Treasury

 

(Accumulated

 

Stockholders’

 

Shares

 

Amount

 

Capital

 

Stock

 

Deficit)

 

Equity

Issuance of successor common stock

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

to holders of the Senior Notes

9,500

 

$

95

 

$

227,271

 

$

 —

 

$

 —

 

$

227,366

Issuance of successor common stock

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

to predecessor common unitholders

500

 

 

 5

 

 

11,962

 

 

 

 

 

 —

 

 

11,967

Issuance of warrants

 —

 

 

 —

 

 

9,345

 

 

 —

 

 

 —

 

 

9,345

Balance, May 31, 2018 (Successor)

10,000

 

 

100

 

 

248,578

 

 

 —

 

 

 —

 

 

248,678

Net loss

 —

 

 

 —

 

 

 —

 

 

 —

 

 

(538)

 

 

(538)

Balance, June 30, 2018 (Successor)

10,000

 

 

100

 

 

248,578

 

 

 —

 

 

(538)

 

 

248,140

Net loss

 —

 

 

 —

 

 

 —

 

 

 —

 

 

(9,760)

 

 

(9,760)

Share-based compensation

 —

 

 

 —

 

 

1,094

 

 

 —

 

 

 —

 

 

1,094

Restricted shares vested

55

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

 —

Purchase of treasury stock

(12)

 

 

 —

 

 

 —

 

 

(247)

 

 

 —

 

 

(247)

Balance, September 30, 2018 (Successor)

10,043

 

$

100

 

$

249,672

 

$

(247)

 

$

(10,298)

 

$

239,227

 

5

Condensed Consolidated Statement of Stockholders’ Equity (Successor)
(In thousands)
(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Retained

 

 

 

 

 

 

 

 

Additional

 

 

 

 

Earnings

 

Total

 

Common Stock

 

Paid-in

 

Treasury

 

(Accumulated

 

Stockholders’

 

Shares

 

Amount

 

Capital

 

Stock

 

Deficit)

 

Equity

Balance, December 31, 2018 (Successor)

10,043

 

$

100

 

$

249,717

 

$

(247)

 

$

23,969

 

$

273,539

Net loss

 —

 

 

 —

 

 

 —

 

 

 —

 

 

(35,775)

 

 

(35,775)

Share–based compensation

 —

 

 

 —

 

 

61

 

 

 —

 

 

 —

 

 

61

Balance, March 31, 2019 (Successor)

10,043

 

 

100

 

 

249,778

 

 

(247)

 

 

(11,806)

 

 

237,825

Net loss

 —

 

 

 —

 

 

 —

 

 

 —

 

 

(60,907)

 

 

(60,907)

Share–based compensation

 —

 

 

 —

 

 

637

 

 

 —

 

 

 —

 

 

637

Restricted shares vested

87

 

 

 1

 

 

(1)

 

 

 —

 

 

 —

 

 

 —

Purchase of treasury stock

(12)

 

 

 —

 

 

 —

 

 

(167)

 

 

 —

 

 

(167)

Balance, June 30, 2019 (Successor)

10,118

 

 

101

 

 

250,414

 

 

(414)

 

 

(72,713)

 

 

177,388

Net loss

 —

 

 

 —

 

 

 —

 

 

 —

 

 

(19,529)

 

 

(19,529)

Share–based compensation

 —

 

 

 —

 

 

1,421

 

 

 —

 

 

 —

 

 

1,421

Restricted shares vested

72

 

 

 1

 

 

(1)

 

 

 —

 

 

 —

 

 

 —

Purchase of treasury stock

(11)

 

 

 —

 

 

 —

 

 

(128)

 

 

 —

 

 

(128)

Balance, September 30, 2019 (Successor)

10,179

 

$

102

 

$

251,834

 

$

(542)

 

$

(92,242)

 

$

159,152

 

 

See accompanying notes to unaudited condensed consolidated financial statements.

6

Harvest Oil & Gas Corp.
Condensed Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

Successor

 

 

Predecessor

 

Nine Months

 

Four Months

 

 

Five Months

 

Ended

 

Ended

 

 

Ended

 

September 30, 2019

 

September 30, 2018

    

 

May 31, 2018

Cash flows from operating activities:

 

  

 

 

  

 

 

 

  

Net loss

$

(116,211)

 

$

(10,298)

 

 

$

(610,525)

Adjustments to reconcile net loss to net cash flows provided by operating activities:

 

 

 

 

  

 

 

 

  

Accretion expense on obligations

 

6,373

 

 

3,134

 

 

 

3,176

Depreciation, depletion and amortization

 

10,712

 

 

10,590

 

 

 

46,196

Share-based compensation cost

 

2,184

 

 

1,144

 

 

 

3,784

Impairment of oil and natural gas properties

 

115,604

 

 

2,565

 

 

 

 3

(Gain) loss on sales of oil and natural gas properties

 

(679)

 

 

(47)

 

 

 

 5

Gain on equity securities

 

(4,593)

 

 

(4,830)

 

 

 

 —

(Gain) loss on derivatives, net

 

(5,374)

 

 

30,655

 

 

 

(444)

Cash settlements of derivative contracts

 

17,483

 

 

(1,847)

 

 

 

3,099

Reorganization items, net

 

 —

 

 

 —

 

 

 

573,304

Other

 

1,571

 

 

780

 

 

 

248

Changes in operating assets and liabilities:

 

  

 

 

  

 

 

 

  

Accounts receivable

 

21,637

 

 

(2,014)

 

 

 

(3,518)

Other current assets

 

1,909

 

 

314

 

 

 

1,853

Accounts payable and accrued liabilities

 

(4,061)

 

 

(4,183)

 

 

 

4,405

Other, net

 

(2,531)

 

 

(38)

 

 

 

69

Net cash flows provided by operating activities

 

44,024

 

 

25,925

 

 

 

21,655

 

 

 

 

 

 

 

 

 

 

Cash flows from investing activities:

 

  

 

 

  

 

 

 

  

Additions to oil and natural gas properties

 

(2,096)

 

 

(22,307)

 

 

 

(29,727)

Reimbursements related to oil and natural gas properties

 

2,124

 

 

1,091

 

 

 

652

Proceeds from sale of oil and natural gas properties

 

111,575

 

 

136,483

 

 

 

 3

Proceeds from sale of equity securities

 

51,675

 

 

 —

 

 

 

 —

Other

 

38

 

 

16

 

 

 

26

Net cash flows provided by (used in) investing activities

 

163,316

 

 

115,283

 

 

 

(29,046)

 

 

 

 

 

 

 

 

 

 

Cash flows from financing activities:

 

  

 

 

  

 

 

 

  

Repayment of long–term debt borrowings

 

(115,000)

 

 

(164,000)

 

 

 

 —

Long-term debt borrowings

 

 —

 

 

 —

 

 

 

34,000

Loan costs incurred

 

 —

 

 

 —

 

 

 

(2,813)

Purchase of treasury stock

 

(295)

 

 

(247)

 

 

 

 —

Contributions from general partner

 

 —

 

 

 —

 

 

 

40

Other

 

(10)

 

 

 —

 

 

 

 —

Net cash flows provided by (used in) financing activities

 

(115,305)

 

 

(164,247)

 

 

 

31,227

 

 

 

 

 

 

 

 

 

 

Increase (decrease) in cash, cash equivalents and restricted cash

 

92,035

 

 

(23,039)

 

 

 

23,836

Cash, cash equivalents and restricted cash – beginning of period

 

6,313

 

 

28,732

 

 

 

4,896

Cash, cash equivalents and restricted cash – end of period

$

98,348

 

$

5,693

 

 

$

28,732

 

 

See accompanying notes to unaudited condensed consolidated financial statements.

7

Harvest Oil & Gas Corp.
Notes to Unaudited Condensed Consolidated Financial Statements

NOTE 1. ORGANIZATION AND NATURE OF BUSINESS

Nature of Operations

Harvest Oil & Gas Corp., a Delaware corporation, is the successor reporting company to EV Energy Partners, L.P. (“EVEP”) pursuant to Rule 15d‑5 of the Securities Exchange Act of 1934, as amended. As used herein, the terms “Successor”, “Harvest”, or the “Company” refer to Harvest Oil & Gas Corp. and its consolidated subsidiaries as a whole or on an individual basis, depending on the context in which the statements are made. When referring to the “Predecessor” or the “Partnership” in reference to the period prior to the emergence from bankruptcy, the intent is to refer to EVEP, the predecessor that was dissolved following the Effective Date (as defined below) of the Plan (as defined below) and its consolidated subsidiaries as a whole or on an individual basis, depending on the context in which the statements are made.

Unless the context requires otherwise, references to: (i) the “Predecessor’s general partner” and “EV Energy GP” refer to EV Energy GP, L.P., a Delaware limited partnership, the Predecessor’s general partner, which was dissolved following the Effective Date of the Plan; (ii) “EV Management” refers to EV Management, LLC, a Delaware limited liability company, the former general partner of the Predecessor’s general partner; and (iii) “EnerVest” refers to EnerVest, Ltd., a Texas limited partnership, the owner of EV Management.

Harvest is an independent oil and natural gas company that was formed in 2018, in connection with the reorganization of the Predecessor. The Predecessor was publicly traded from September 2006 to June 2018. As discussed further in Note 2, on April 2, 2018, EVEP and 13 affiliated debtors (collectively, the “Debtors”) each filed a voluntary petition (the cases commenced thereby, the “Chapter 11 proceedings”) for relief under Chapter 11 of Title 11 of the United States Bankruptcy Code (“Chapter 11”) for bankruptcy protection in the United States Bankruptcy Court for the District of Delaware (the “Bankruptcy Court”) via Case No. 18‑10814. The Debtors requested that their cases be jointly administered under Case No. 18‑10814 to pursue the prepackaged plan of reorganization. During the pendency of the Chapter 11 proceedings, EVEP continued to operate its businesses and manage its properties under the jurisdiction of the Bankruptcy Court and in accordance with the applicable provisions of the Bankruptcy Code and orders of the Bankruptcy Court as a “Debtors-in-Possession”. On May 17, 2018, the Bankruptcy Court entered an order (the “Confirmation Order”) confirming the Debtors’ First Modified Joint Prepackaged Plan of Reorganization (as amended, modified and supplemented from time to time, the “Plan”). The Plan became effective on June 4, 2018 (the “Effective Date”), when all remaining conditions to the effectiveness of the Plan were satisfied and the Company emerged from bankruptcy.

The Company operates one reportable segment engaged in the development and production of oil and natural gas properties, and all of its operations are located in the United States. As a result of the ongoing review of the Company’s asset base in order to maximize shareholder value, the Company has divested, and is in the process of divesting, certain assets and, in the future, may look to divest additional assets or all of its remaining assets and use the proceeds to return capital to shareholders. As of September 30, 2019, the oil and natural gas properties of Harvest are located in the Barnett Shale, the Appalachian Basin (which includes the Utica Shale), Michigan, the Mid–Continent areas in Oklahoma, Texas, Kansas and Louisiana, the Permian Basin and the Monroe Field in Northern Louisiana.

Basis of Presentation

The Company’s unaudited condensed consolidated financial statements included herein have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Accordingly, certain information and disclosures normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been condensed or omitted. The Company believes that the presentations and disclosures herein are adequate to make the information not misleading. The unaudited condensed consolidated financial statements reflect all adjustments (consisting of normal recurring adjustments) necessary for a fair presentation of the interim periods. The results of operations for the interim periods are not necessarily indicative of the results of operations to be expected for the full year. These interim financial statements should be read in conjunction

8

with the audited consolidated financial statements and the related notes included in Harvest’s Annual Report on Form 10–K for the year ended December 31, 2018.

All intercompany accounts and transactions have been eliminated in consolidation. In the Notes to Unaudited Condensed Consolidated Financial Statements, all dollar, share and unit amounts in tabulations are in thousands of dollars, shares and units, respectively, unless otherwise indicated.

Bankruptcy Accounting

The unaudited condensed consolidated financial statements have been prepared as if the Company is a going concern and reflect the application of Accounting Standards Codification 852 Reorganizations (“ASC 852”). ASC 852 requires that the financial statements, for periods subsequent to the Chapter 11 filing, distinguish transactions and events that are directly associated with the reorganization from the ongoing operations of the business. Accordingly, certain expenses, gains and losses that were realized or incurred related to the bankruptcy proceedings are recorded in “Reorganization items, net” on the Company’s condensed consolidated statements of operations.

The following table summarizes the components of reorganization items, net included in the accompanying unaudited condensed consolidated statements of operations:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Successor

 

 

Predecessor

 

    

Three Months

    

Nine Months

 

Three Months

 

Four Months

  

  

Five Months

 

 

Ended

 

Ended

 

Ended

 

Ended

 

 

Ended

 

 

September 30,

 

September 30,

 

September 30,

 

September 30,

 

 

May 31,

 

 

2019

 

2019

 

2018

 

2018