Annual report pursuant to Section 13 and 15(d)

Related Party Transactions

v3.19.1
Related Party Transactions
12 Months Ended
Dec. 31, 2018
Related Party Transactions [Abstract]  
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"); Diamondback E&P, LLC ("Diamondback"); 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"); and T&E Flow Services LLC ("T&E").

Following is a summary of related party transactions (in thousands):
 
 
REVENUES
 
ACCOUNTS RECEIVABLE
 
 
Years Ended December 31,
 
At December 31,
 
 
2018
2017
2016
 
2018
2017
Pressure Pumping and Gulfport
(a)
$
96,013

$
144,473

$
102,390

 
$
8,175

$
25,054

Muskie and Gulfport
(b)
25,050

42,956

25,783

 
1,193

1,947

Panther and Gulfport
(c)
44

3,253

3,011

 

872

Cementing and Gulfport
(d)
5,853

7,410


 

2,255

SR Energy and Gulfport
(e)
14,717

10,129


 
1,658

3,348

Panther and El Toro
(f)
918

96

172

 
64


Redback Energy and El Toro
(g)
92

216

530

 


Coil Tubing and El Toro
(h)
514

161

319

 


Other Relationships
 
32

326

725

 
74

312

 
 
$
143,233

$
209,020

$
132,930

 
$
11,164

$
33,788


a.
Pressure Pumping provides pressure pumping, stimulation and related completion services to Gulfport.
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.
c.
Panther performs drilling services for Gulfport pursuant to a master service agreement.
d.
Cementing performs well cementing services for Gulfport.
e.
SR Energy provides rental services for Gulfport.
f.
Panther provides directional drilling services for El Toro, an affiliate of Wexford, pursuant to a master service agreement.
g.
Redback Energy performs completion and production services for El Toro pursuant to a master service agreement.
h.
Coil Tubing provides El Toro services in connection with completion activities.
 
 
COST OF REVENUE
 
ACCOUNTS PAYABLE
 
 
Years Ended December 31,
 
At December 31,
 
 
2018
2017
2016
 
2018
2017
Cobra and T&E
(a)
4,042

610


 

457

Higher Power and T&E
(a)
1,603

25


 

3

Panther and DBDHT
(b)
240

196

49

 
240

77

The Company and 2017 Stingray Companies
(c)

432

724

 


Other Relationships
 

145

293

 

218

 
 
$
5,885

$
1,408

$
1,066

 
$
240

$
755

 
 
 
 
 
 
 
 
 
 
SELLING, GENERAL AND ADMINISTRATIVE COSTS
 
 
 
Consolidated and Everest
(d)
$
145

$
175

$
262

 
$
27

$
19

Consolidated and Wexford
(e)
992

892

394

 
100

150

Mammoth and Caliber
(f)
648

335


 
3

1

Other Relationships
 
113

79

102

 

2

 
 
$
1,898

$
1,481

$
758

 
$
130

$
172

 
 
 
 
 
 
 
 
 
 
CAPITAL EXPENDITURES
 
 
 
Cobra and T&E
(a)
1,247

629


 

66

Higher Power and T&E
(a)
2,960

1,380


 

385

 
 
$
4,207

$
2,009

$

 
$

$
451

 
 
 
 
 
 
$
370

$
1,378

a.
Cobra, Higher Power and Cobra Logistics purchase 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.
b.
Panther rents rotary steerable equipment in connection with its directional drilling services from DBDHT, an affiliate of Wexford.
c.
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.
d.
Everest, a subsidiary of Wexford, has historically provided office space and certain technical, administrative and payroll services to the Company and the Company has reimbursed Everest in amounts determined by Everest based on estimates of the amount of office space provided and the amount of employees’ time spent performing services for the Company.
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.
f.
Mammoth 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. 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.