| Related Party Transactions |
Related Party Transactions
Transactions between the subsidiaries of the Company and the following companies are included in Related Party Transactions: Gulfport; Grizzly Oil Sands ULC (“Grizzly”); El Toro Resources LLC (“El Toro”); Cementing and SR Energy (collectively, prior to the 2017 Stingray Acquisition, the “2017 Stingray Companies”); Everest Operations Management LLC (“Everest”); Elk City Yard LLC (“Elk City Yard”); Double Barrel Downhole Technologies LLC (“DBDHT”); Orange Leaf Holdings LLC (“Orange Leaf”); Caliber Investment Group LLC (“Caliber”); Dunvegan North Oilfield Services ULC (“Dunvegan”); Predator Drilling LLC (“Predator”); T&E Flow Services LLC (“T&E”); and Brim Equipment.
Following is a summary of related party transactions (in thousands):
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REVENUES |
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ACCOUNTS RECEIVABLE |
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Years Ended December 31, |
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At December 31, |
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2019 |
2018 |
2017 |
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2019 |
2018 |
Stingray Pressure Pumping and Gulfport |
(a) |
$ |
90,357 |
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$ |
96,013 |
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$ |
144,473 |
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$ |
5,950 |
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$ |
8,175 |
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Muskie and Gulfport |
(b) |
27,689 |
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25,050 |
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42,956 |
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1,141 |
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1,193 |
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SR Energy and Gulfport |
(c) |
8,772 |
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14,717 |
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10,129 |
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156 |
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1,658 |
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Aquahawk and Gulfport |
(d) |
828 |
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— |
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— |
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— |
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— |
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Panther and Gulfport |
(e) |
— |
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44 |
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3,253 |
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— |
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— |
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Cementing and Gulfport |
(f) |
— |
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5,853 |
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7,410 |
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— |
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— |
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Cobra Aviation/ARS/Leopard and Brim Equipment |
(g) |
2,093 |
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— |
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— |
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235 |
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— |
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Panther and El Toro |
(h) |
573 |
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918 |
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96 |
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— |
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64 |
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Other Relationships |
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1 |
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638 |
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703 |
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41 |
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74 |
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$ |
130,313 |
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$ |
143,233 |
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$ |
209,020 |
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$ |
7,523 |
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$ |
11,164 |
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a. |
Stingray Pressure Pumping provides pressure pumping, stimulation and related completion services to Gulfport. |
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b. |
Muskie has agreed to sell and deliver, and Gulfport has agreed to purchase, specified annual and monthly amounts of natural sand proppant, subject to certain exceptions specified in the agreement, and pay certain costs and expenses. |
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c. |
SR Energy provides rental services for Gulfport. |
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d. |
Aquahawk provides water transfer services for Gulfport pursuant to a master services agreement. |
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e. |
Panther performs drilling services for Gulfport pursuant to a master service agreement. |
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f. |
Cementing performs well cementing services for Gulfport. |
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g. |
Cobra Aviation, ARS and Leopard lease helicopters to Brim Equipment pursuant to aircraft lease and management agreements. |
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h. |
Panther provides directional drilling services for El Toro, an affiliate of Wexford, pursuant to a master service agreement. |
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COST OF REVENUE |
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ACCOUNTS PAYABLE |
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Years Ended December 31, |
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At December 31, |
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2019 |
2018 |
2017 |
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2019 |
2018 |
Cobra Aviation/ARS/Leopard and Brim Equipment |
(a) |
4,720 |
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— |
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— |
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433 |
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— |
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Cobra and T&E |
(b) |
— |
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4,042 |
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610 |
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— |
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— |
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Higher Power and T&E |
(b) |
— |
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1,603 |
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25 |
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— |
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— |
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Panther and DBDHT |
(c) |
— |
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240 |
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196 |
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240 |
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The Company and 2017 Stingray Companies |
(d) |
— |
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— |
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432 |
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— |
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— |
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Other Relationships |
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50 |
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— |
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145 |
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— |
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— |
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$ |
4,770 |
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$ |
5,885 |
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$ |
1,408 |
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$ |
433 |
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$ |
240 |
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SELLING, GENERAL AND ADMINISTRATIVE COSTS |
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The Company and Wexford |
(e) |
650 |
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992 |
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892 |
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1 |
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100 |
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The Company and Caliber |
(f) |
785 |
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648 |
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335 |
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7 |
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3 |
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Cobra Aviation/ARS/Leopard and Brim Equipment |
(a) |
233 |
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— |
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— |
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— |
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— |
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Other Relationships |
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179 |
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258 |
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254 |
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9 |
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27 |
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$ |
1,847 |
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$ |
1,898 |
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$ |
1,481 |
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$ |
17 |
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$ |
130 |
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CAPITAL EXPENDITURES |
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Leopard and Brim Equipment |
(a) |
420 |
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— |
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— |
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76 |
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— |
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Cobra and T&E |
(b) |
— |
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1,247 |
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629 |
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— |
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— |
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Higher Power and T&E |
(b) |
— |
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2,960 |
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1,380 |
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— |
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— |
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$ |
420 |
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$ |
4,207 |
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$ |
2,009 |
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$ |
76 |
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$ |
— |
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$ |
526 |
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$ |
370 |
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a. |
Cobra Aviation, ARS and Leopard lease helicopters to Brim Equipment pursuant to aircraft lease and management agreements. |
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b. |
Cobra and Higher Power purchased materials and services from T&E, an entity in which a member of management's family owned a minority interest. T&E ceased to be a related party as of September 30, 2018. |
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c. |
Panther rents rotary steerable equipment in connection with its directional drilling services from DBDHT, an affiliate of Wexford. |
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d. |
Prior to the 2017 Stingray Acquisition, the 2017 Stingray Companies provided certain services to the Company and, from time to time, the 2017 Stingray Companies paid for goods and services on behalf of the Company. |
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e. |
Wexford provides certain administrative and analytical services to the Company and, from time to time, the Company pays for goods and services on behalf of Wexford. |
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f. |
The Company leases office space from Caliber, an entity controlled by Wexford. |
On June 29, 2018, Gulfport and certain entities controlled by Wexford (the “Selling Stockholders”) completed an underwritten secondary public offering of 4,000,000 shares of the Company’s common stock at a purchase price to the Selling Stockholders of $38.01 per share. The Selling Stockholders granted the underwriters an option to purchase up to an aggregate of 600,000 additional shares of the Company's common stock at the same purchase price. This option was exercised, in part, and on July 30, 2018, the underwriters purchased an additional 385,000 shares of common stock from the Selling Stockholders at the same price per share. The Selling Stockholders received all proceeds from this offering. The Company incurred costs of approximately $1.0 million related to the secondary public offering during the year ended December 31, 2018.
On December 21, 2018, Cobra Aviation acquired all outstanding equity interest in ARS and purchased two commercial helicopters, spare parts, support equipment and aircraft documents from Brim Equipment. Following these transactions, and also on December 21, 2018, Cobra Aviation formed a joint venture with Wexford Investments named Brim Acquisitions to acquire all outstanding equity interests in Brim Equipment. Cobra Aviation owns a 49% economic interest and Wexford Investment owns a 51% economic interest in Brim Acquisitions, and each member contributed its pro rata portion of Brim Acquisitions' initial capital of $2.0 million. Cobra Aviation made additional investments in Brim Acquisitions totaling $0.7 million during the year ended December 31, 2019. Wexford Investments is an entity controlled by Wexford, which owns approximately 49% of the Company's outstanding common stock. ARS leases a helicopter to Brim Equipment and Cobra Aviation leases the two helicopters purchased as part of these transactions to Brim Equipment under the terms of aircraft lease and management agreements.
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