UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
| x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT 1934 |
For the quarterly period ended March 31, 2004
Or
| ¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT 1934 |
For the transition period from to
Commission File Number: 1-7940
Goodrich Petroleum Corporation
(Exact name of registrant as specified in its charter)
| Delaware | 76-0466193 | |
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer ID. No.) |
| 808 Travis Street, Suite 1320, Houston, Texas | 77002 | |
| (Address of principal executive offices) | (Zip Code) |
(713) 780-9494
(Registrant’s telephone number, including area code)
None
(Former name, former address and former fiscal year, if changed since last report.)
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. x Yes ¨ No
Indicate by checkmark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). ¨ Yes x No
At May 12, 2004, there were 19,127,289 shares of Goodrich Petroleum Corporation common stock outstanding.
GOODRICH PETROLEUM CORPORATION
INDEX TO FORM 10-Q
March 31, 2004
| Page No. | ||
| PART 1 - FINANCIAL INFORMATION | ||
| Item 1. Financial Statements. |
||
| Consolidated Balance Sheets March 31, 2004 (Unaudited) and December 31, 2003 |
3-4 | |
| Consolidated Statements of Operations (Unaudited) Three Months Ended March 31, 2004 and 2003 |
5 | |
| Consolidated Statements of Cash Flows (Unaudited) Three Months Ended March 31, 2004 and 2003 |
6 | |
| 7 | ||
| 8-15 | ||
| Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations. |
16-20 | |
| Item 3. Quantitative and Qualitative Disclosures About Market Risk |
21 | |
| Item 4. Controls and Procedures |
23 | |
| PART II - OTHER INFORMATION |
||
| Item 1. Legal Proceedings. |
24 | |
| Item 2. Changes in Securities. |
24 | |
| Item 3. Defaults Upon Senior Securities. |
24 | |
| Item 4. Submission of Matters to a Vote of Security Holders. |
24 | |
| Item 5. Other Information. |
24 | |
| 24 | ||
2
GOODRICH PETROLEUM CORPORATION AND SUBSIDIARIES
Consolidated Balance Sheets
| March 31, 2004 |
December 31, 2003 |
|||||||
| (unaudited) | ||||||||
| ASSETS |
||||||||
| CURRENT ASSETS |
||||||||
| Cash and cash equivalents |
$ | 1,861,543 | $ | 1,488,852 | ||||
| Cash held temporarily for stockholders |
3,886,988 | 3,886,988 | ||||||
| Accounts receivable |
||||||||
| Trade and other, net of allowance |
5,113,224 | 3,500,095 | ||||||
| Accrued oil and gas revenue |
2,465,290 | 2,829,082 | ||||||
| Prepaid insurance and other |
219,738 | 351,527 | ||||||
| Total current assets |
13,546,783 | 12,056,544 | ||||||
| PROPERTY AND EQUIPMENT |
||||||||
| Oil and gas properties (successful efforts method) |
124,431,418 | 118,682,309 | ||||||
| Furniture, fixtures and equipment |
726,172 | 661,842 | ||||||
| 125,157,590 | 119,344,151 | |||||||
| Less accumulated depletion, depreciation and amortization |
(47,155,859 | ) | (44,381,223 | ) | ||||
| Net property and equipment |
78,001,731 | 74,962,928 | ||||||
| OTHER ASSETS |
||||||||
| Restricted cash |
2,039,000 | 2,039,000 | ||||||
| Other |
112,427 | 124,096 | ||||||
| Total other assets |
2,151,427 | 2,163,096 | ||||||
| TOTAL ASSETS |
$ | 93,699,941 | $ | 89,182,568 | ||||
See notes to consolidated financial statements.
3
GOODRICH PETROLEUM CORPORATION AND SUBSIDIARIES
Consolidated Balance Sheets (Continued)
| March 31, 2004 |
December 31, 2003 |
|||||||
| (unaudited) | ||||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY |
||||||||
| CURRENT LIABILITIES |
||||||||
| Accounts payable |
$ | 8,477,017 | $ | 6,707,583 | ||||
| Accrued liabilities |
1,718,745 | 1,483,329 | ||||||
| Liability for funds held temporarily for stockholders |
3,886,988 | 3,886,988 | ||||||
| Fair value of oil and gas derivatives |
2,466,081 | 1,257,442 | ||||||
| Fair value of interest rate derivatives |
235,985 | 277,938 | ||||||
| Current portion of other non-current liabilities |
91,605 | 91,600 | ||||||
| Total current liabilities |
16,876,421 | 13,704,880 | ||||||
| LONG TERM DEBT |
19,000,000 | 20,000,000 | ||||||
| OTHER NON-CURRENT LIABILITIES |
||||||||
| Production payment payable and other |
563,680 | 704,643 | ||||||
| Accrued abandonment costs |
6,718,899 | 6,509,586 | ||||||
| Fair value of interest rate derivatives |
391,144 | — | ||||||
| Deferred taxes |
828,925 | 204,465 | ||||||
| Total liabilities |
44,379,069 | 41,123,574 | ||||||
| STOCKHOLDERS’ EQUITY |
||||||||
| Preferred stock; authorized 10,000,000 shares: Series A convertible preferred stock, par value $1.00 per share; issued and outstanding 791,968 shares (liquidation preference $10 per share, aggregating to $7,919,680) |
791,968 | 791,968 | ||||||
| Common stock, par value $0.20 per share; authorized 50,000,000 shares; issued and outstanding 18,506,355 and 18,130,011 shares |
3,701,271 | 3,626,002 | ||||||
| Additional paid-in capital |
54,540,321 | 53,359,023 | ||||||
| Accumulated deficit |
(6,372,331 | ) | (8,338,403 | ) | ||||
| Unamortized restricted stock awards |
(1,377,630 | ) | (381,598 | ) | ||||
| Accumulated other comprehensive income |
(1,962,727 | ) | (997,998 | ) | ||||
| Total stockholders’ equity |
49,320,872 | 48,058,994 | ||||||
| TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY |
$ | 93,699,941 | $ | 89,182,568 | ||||
See notes to consolidated financial statements.
4
GOODRICH PETROLEUM CORPORATION AND SUBSIDIARIES
Consolidated Statements of Operations
(Unaudited)
| Three Months Ended March 31, |
|||||||
| 2004 |
2003 |
||||||
| (restated) | |||||||
| REVENUES |
|||||||
| Oil and gas revenues |
$ | 10,826,526 | $ | 6,747,283 | |||
| Other |
98,739 | 331,197 | |||||
| Total revenues |
10,925,265 | 7,078,480 | |||||
| EXPENSES |
|||||||
| Lease operating expense |
1,548,818 | 1,757,185 | |||||
| Production taxes |
695,072 | 530,904 | |||||
| Depletion, depreciation and amortization |
2,753,847 | 2,061,323 | |||||
| Exploration |
936,825 | 553,472 | |||||
| General and administrative |
1,505,406 | 1,538,444 | |||||
| Interest expense |
216,931 | 235,497 | |||||
| Total costs |
7,656,899 | 6,676,825 | |||||
| GAIN (LOSS) ON SALE OF ASSETS |
— | (21,082 | ) | ||||
| INCOME BEFORE INCOME TAXES |
3,268,366 | 380,573 | |||||
| Income taxes |
1,143,928 | 133,198 | |||||
| NET INCOME BEFORE CUMULATIVE EFFECT |
2,124,438 | 247,375 | |||||
| CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING PRINCIPLE NET OF TAX |
— | (205,293 | ) | ||||
| NET INCOME |
2,124,438 | 42,082 | |||||
| Preferred stock dividends |
158,365 | 158,366 | |||||
| NET INCOME (LOSS) APPLICABLE TO COMMON STOCK |
$ | 1,966,073 | $ | (116,284 | ) | ||
| NET INCOME PER SHARE - BASIC |
|||||||
| NET INCOME BEFORE CUMULATIVE EFFECT |
$ | 0.12 | $ | 0.01 | |||
| CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING |
— | (0.01 | ) | ||||
| NET INCOME |
$ | 0.12 | $ | 0.00 | |||
| NET INCOME (LOSS) APPLICABLE TO COMMON STOCK |
$ | 0.11 | $ | (0.01 | ) | ||
| NET INCOME PER SHARE - DILUTED |
|||||||
| NET INCOME BEFORE CUMULATIVE EFFECT |
$ | 0.10 | $ | 0.01 | |||
| CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING |
— | (0.01 | ) | ||||
| NET INCOME |
$ | 0.10 | $ | 0.00 | |||
| NET INCOME (LOSS) APPLICABLE TO COMMON STOCK |
$ | 0.09 | $ | (0.01 | ) | ||
| AVERAGE COMMON SHARES OUTSTANDING - BASIC |
18,413,570 | 17,971,341 | |||||
| AVERAGE COMMON SHARES OUTSTANDING - DILUTED |
20,796,148 | 20,112,090 | |||||
See notes to consolidated financial statements.
5
GOODRICH PETROLEUM CORPORATION AND SUBSIDIARIES
Consolidated Statements of Cash Flows
(Unaudited)
| Three Months Ended March 31, |
||||||||
| 2004 |
2003 |
|||||||
| (restated) | ||||||||
| OPERATING ACTIVITIES |
||||||||
| Net income |
$ | 2,124,438 | $ | 42,082 | ||||
| Adjustments to reconcile net income to cash provided by operating activities |
||||||||
| Depletion, depreciation and amortization |
2,753,847 | 2,061,323 | ||||||
| Deferred income taxes |
1,143,928 | 22,656 | ||||||
| Amortization of leasehold costs |
201,334 | 178,210 | ||||||
| Non-cash charge for stock issued for cancelled options |
— | 403,006 | ||||||
| Cumulative effect of change in accounting principle |
— | 315,835 | ||||||
| Loss on sale of assets |
— | 21,082 | ||||||
| Other non-cash items |
64,293 | 55,058 | ||||||
| Net change in: |
||||||||
| Accounts receivable |
(1,249,337 | ) | 469,217 | |||||
| Prepaid insurance and other |
131,789 | 300,269 | ||||||
| Accounts payable |
1,769,434 | (3,278,285 | ) | |||||
| Accrued liabilities |
235,416 | 37,553 | ||||||
| Net cash provided by operating activities |
7,175,142 | 628,006 | ||||||
| INVESTING ACTIVITIES |
||||||||
| Capital expenditures |
(5,682,514 | ) | (4,218,516 | ) | ||||
| Proceeds from sale of assets |
— | 266,996 | ||||||
| Net cash used in investing activities |
(5,682,514 | ) | (3,951,520 | ) | ||||
| FINANCING ACTIVITIES |
||||||||
| Principal payments of bank borrowings |
(1,000,000 | ) | — | |||||
| Proceeds from bank borrowings |
— | 1,500,000 | ||||||
| Exercise of stock warrants |
122,897 | — | ||||||
| Production payments |
(84,468 | ) | (99,381 | ) | ||||
| Preferred stock dividends |
(158,366 | ) | (158,366 | ) | ||||
| Net cash provided by (used in) financing activities |
(1,119,937 | ) | 1,242,253 | |||||
| NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS |
372,691 | (2,081,261 | ) | |||||
| CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD |
1,488,852 | 3,351,380 | ||||||