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Guarantor Subsidiaries
 12 Months Ended
Dec. 31, 2012
Guarantor And Nonguarantor Subsidiary Consolidating Financial Statements [Abstract]  
Guarantor And Nonguarantor Subsidiary Consolidating Financial Statements [Text Block]

Note 23 – Guarantor Subsidiaries

 

Certain of our wholly-owned domestic subsidiaries have, jointly and severally, fully and unconditionally guaranteed the 2018 Notes. Pursuant to SEC regulations, we have presented in columnar format the condensed consolidating financial information for Endeavour International Corporation, the guarantor subsidiaries on a combined basis, and all non-guarantor subsidiaries on a combined basis.

 

The subsidiary guarantees are unsecured obligations of each subsidiary guarantor and rank equally in right of payment with all senior indebtedness of that subsidiary guarantor and senior in right of payment to all subordinated indebtedness of that subsidiary guarantor. The subsidiary guarantees are effectively subordinated to any secured indebtedness of the subsidiary guarantor with respect to the assets securing the indebtedness. In addition, the subsidiary guarantees may be released in certain customary circumstances, including (i) the sale of all or substantially all of the properties or assets of a guarantor, (ii) the sale of the capital stock of a guarantor, (iii) the designation of a guarantor as an “Unrestricted Subsidiary,” (iv) upon legal defeasance of the 2018 Notes or satisfaction and discharge of the indentures governing the 2018 Notes, (v) upon the liquidation or dissolution of the guarantor or (vi) if the guarantor ceases to guarantee other of our indebtedness and ceases to be a material subsidiary, each of which is subject to important limitations in the indentures governing the 2018 Notes.

 

Condensed consolidating financial statements for our guarantor subsidiaries and non-guarantor subsidiaries are presented in the following tables:

 

As of December 31, 2012
   Endeavour International CorporationCombined Guarantor SubsidiariesCombined Non-Guarantor SubsidiariesEliminationsConsolidated
Cash and cash equivalents$ -$ 27,800$ 31,385$ -$ 59,185
Restricted cash  -  50  128  -  178
Accounts receivable  -  2,645  43,358  -  46,003
Current receivables due from affiliates  950,210  36,725  71,964  (1,058,899)  -
Prepaid expenses and other  -  508  20,487  -  20,995
 Current Assets  950,210  67,728  167,322  (1,058,899)  126,361
             
Property, plant and equipment, net  -  92,692  910,749  -  1,003,441
Goodwill  -  -  262,764  -  262,764
Long-term receivables due from affiliates  -  599,000  -  (599,000)  -
Investments in subsidiaries  57,662  120,058  -  (177,720)  -
Other assets  25,200  6,085  18,621  -  49,906
 Total Assets$ 1,033,072$ 885,563$ 1,359,456$ (1,835,619)$ 1,442,472
             
Accounts payable$ -$ 2,622$ 57,531$ -$ 60,153
Current maturities of debt  -  -  15,713  -  15,713
Current liabilites due to affiliates  34,509  987,664  36,726  (1,058,899)  -
Accrued expenses and other  27,549  1,516  61,035  -  90,100
 Current Liabilities  62,058  991,802  171,005  (1,058,899)  165,966
             
Long-term debt  676,413  -  167,380  -  843,793
Long-term liabilities due to affiliates  -  -  599,000  (599,000)  -
Deferred taxes  -  -  141,887  -  141,887
Other liabilities  3,032  562  144,098  -  147,692
 Total Liabilities  741,503  992,364  1,223,370  (1,657,899)  1,299,338
             
Series C convertible preferred stock  43,703  -  -  -  43,703
Stockholders' equity  247,866  (106,801)  136,086  (177,720)  99,431
 Total Liabilities and Equity$ 1,033,072$ 885,563$ 1,359,456$ (1,835,619)$ 1,442,472

As of December 31, 2011
   Endeavour International CorporationCombined Guarantor SubsidiariesCombined Non-Guarantor SubsidiariesEliminations (1)Consolidated
Cash and cash equivalents$ -$ 2,951$ 103,085$ -$ 106,036
Accounts receivable  -  4,141  4,508  -  8,649
Current receivables due from affiliates  388,676  45,305  11,142  (445,123)  -
Prepaid expenses and other  -  1,129  17,711  -  18,840
 Current Assets  388,676  53,526  136,446  (445,123)  133,525
             
Property, plant and equipment, net  -  127,739  421,457  -  549,196
Goodwill  -  -  211,886  -  211,886
Long-term receivables due from affiliates  -  99,000  57,250  (156,250)  -
Investments in subsidiaries  57,662  120,077  -  (177,739)  -
Other assets  5,414  6,083  18,887  -  30,384
 Total Assets$ 451,752$ 406,425$ 845,926$ (779,112)$ 924,991
             
Accounts payable$ -$ 17,655$ 44,620$ -$ 62,275
Current maturities of debt  10,000  -  2,350  -  12,350
Current liabilities due to affiliates  -  513,914  45,715  (559,629)  -
Accrued expenses and other  4,847  4,799  10,903  -  20,549
 Current Liabilities  14,847  536,368  103,588  (559,629)  95,174
             
Long-term debt  157,012  -  298,016  -  455,028
Long-term liabilities due to affiliates  -  (57,250)  99,000  (41,750)  -
Deferred taxes  -  -  108,762  6,997  115,759
Other liabilities  2,326  282  58,634  6  61,248
 Total Liabilities  174,185  479,400  668,000  (594,376)  727,209
             
Series C convertible preferred stock  43,703  -  -  -  43,703
Stockholders' equity  233,864  (72,975)  177,926  (184,736)  154,079
 Total Liabilities and Equity$ 451,752$ 406,425$ 845,926$ (779,112)$ 924,991

For the Year Ended December 31, 2012
   Endeavour International CorporationCombined Guarantor SubsidiariesCombined Non-Guarantor SubsidiariesEliminations (1)Consolidated
Revenue$ -$ 11,877$ 207,181$ -$ 219,058
Operating expenses  -  6,968  51,568  -  58,536
DD&A expense  -  8,603  57,961  -  66,564
Impairment of oil and gas properties  -  53,072  -  -  53,072
G&A expenses  2,629  9,887  8,569  -  21,085
Income (loss) from Operations  (2,629)  (66,653)  89,083  -  19,801
           
Derivatives:          
 Unrealized gains (losses) (705)  -  5,846  -  5,141
Interest expense  (54,241)  (951)  (67,673)  38,743  (84,122)
Letter of credit fees  -  -  (21,903)  -  (21,903)
Loss on early extinguishment of debt  -  -  (21,661)  -  (21,661)
Other income (expense)  -  33,796  (4,307)  (38,743)  (9,254)
Loss before taxes  (57,575)  (33,808)  (20,615)  -  (111,998)
Income tax expense  -  -  21,225  (6,997)  14,228
Net loss  (57,575)  (33,808)  (41,840)  6,997  (126,226)
Preferred stock dividends  1,823  -  -  -  1,823
Net loss to common shareholders$ (59,398)$ (33,808)$ (41,840)$ 6,997$ (128,049)

For the Year Ended December 31, 2011
   Endeavour International CorporationCombined Guarantor SubsidiariesCombined Non-Guarantor SubsidiariesEliminationsConsolidated
Revenue$ -$ 18,337$ 41,754$ -$ 60,091
Operating expenses  -  9,046  8,622  -  17,668
DD&A expense  -  11,490  14,988  -  26,478
Impairment of oil and gas properties  -  65,706  -  -  65,706
G&A expenses  2,198  10,789  4,866  -  17,853
Income (loss) from Operations  (2,198)  (78,694)  13,278  -  (67,614)
             
Derivatives:          
 Unrealized gains (losses) (2,642)  -  11,020  -  8,378
Interest expense  (10,623)  (3,964)  (38,894)  8,588  (44,893)
Loss on early extinguishment of debt  (402)  -  -  -  (402)
Other income (expense)  (211)  (678)  10,074  (8,588)  597
Loss before taxes  (16,076)  (83,336)  (4,522)  -  (103,934)
Income tax expense  -  3  27,058  -  27,061
Net loss  (16,076)  (83,339)  (31,580)  -  (130,995)
Preferred stock dividends  1,974  -  -  -  1,974
Net loss to common shareholders$ (18,050)$ (83,339)$ (31,580)$ -$ (132,969)

For the Year Ended December 31, 2010
   Endeavour International CorporationCombined Guarantor SubsidiariesCombined Non-Guarantor SubsidiariesEliminationsConsolidated
Revenue$ -$ 11,174$ 60,501$ -$ 71,675
Operating expenses  (19)  4,280  11,086  -  15,347
DD&A expense  -  6,202  22,692  -  28,894
Impairment of oil and gas properties  -  7,692  -  -  7,692
G&A expenses  2,629  11,465  4,321  -  18,415
Income (loss) from Operations  (2,610)  (18,465)  22,402  -  1,327
             
Derivatives:          
 Realized losses -  -  (11,753)  -  (11,753)
 Unrealized gains 2,258  -  10,033  -  12,291
Interest expense  (11,476)  (591)  (25,079)  2,554  (34,592)
Gain on sale of reserves in place  -  -  87,171  -  87,171
Other income (expense)  (1)  (93)  3,947  (2,554)  1,299
Income (loss) before taxes  (11,829)  (19,149)  86,721  -  55,743
Income tax benefit  -  -  (788)  -  (788)
Net income (loss)  (11,829)  (19,149)  87,509  -  56,531
Preferred stock dividends  2,227  -  -  -  2,227
Net income (loss) to common shareholders$ (14,056)$ (19,149)$ 87,509$ -$ 54,304

For the Year Ended December 31, 2012
   Endeavour International CorporationCombined Guarantor SubsidiariesCombined Non-Guarantor SubsidiariesEliminations (1)Consolidated
Cash Flows from Operating Activities:          
Net loss$ (57,575)$ (33,808)$ (41,840)$ 6,997$ (126,226)
Adjustments to reconcile net loss to           
 net cash provided by (used in) operations         
 DD&A expense -  8,603  57,961  -  66,564
 Impairment of oil and gas properties -  53,072  -  -  53,072
 Deferred tax benefit -  -  (10,597)  (6,997)  (17,594)
 Unrealized (gains) losses on derivatives 705  -  (5,846)  -  (5,141)
 Amortization of non-cash compensation 854  -  -  3,547  4,401
 Amortization of loan costs and discount 6,908  5  7,266  -  14,179
 Non-cash interest expense 445  -  8,239  -  8,684
 Loss on early extinguishment of debt  -  -  21,661    21,661
 Other 283  173  14,909  -  15,365
 Changes in operating assets and liabilities:         
  (Increase) decrease in receivables  -  1,495  (25,814)  -  (24,319)
  (Increase) decrease in other current assets -  (9,223)  8,631  -  (592)
  Increase (decrease) in liabilities  (493,026)  546,749  (21,617)  (3,547)  28,559
Net Cash Provided by (Used in)           
 Operating Activities  (541,406)  567,066  12,953  -  38,613
           
Cash Flows From Investing Activities:          
 Capital expenditures  -  (39,794)  (207,131)  -  (246,925)
 Acquisitions, net of cash acquired  -  (2,372)  (236,482)  -  (238,854)
 Proceeds from sales, net of cash  -  -  1,407  -  1,407
 Issuance of note receivable to affiliate  -  (500,000)  -  500,000  -
 Increase in restricted cash  -  (50)  (128)  -  (178)
Net Cash Used in Investing Activities  -  (542,216)  (442,334)  500,000  (484,550)
           
Cash Flows From Financing Activities:          
 Repayments of borrowings  (32,457)  -  (242,172)  -  (274,629)
 Borrowings under debt agreements, net          
  of debt discount  538,860  -  115,163  -  654,023
 Borrowings from affiliates  -  -  500,000  (500,000)  -
 Proceeds from issuance of common stock  60,805  -  -  -  60,805
 Dividends paid  (1,665)  -  -  -  (1,665)
 Payments for early extinguishment of debt  -  -  (7,248)  -  (7,248)
 Financing costs paid  (24,141)  -  (8,063)  -  (32,204)
 Other financing  4  -  -  -  4
Net Cash Provided by (Used in)           
 Financing Activities  541,406  -  357,680  (500,000)  399,086
           
Net Change in Cash and Cash Equivalents  -  24,849  (71,700)  -  (46,851)
Cash and Cash Equivalents, Beginning           
 of Period  -  2,951  103,085  -  106,036
Cash and Cash Equivalents, End of Period$ -$ 27,800$ 31,385$ -$ 59,185

For the Year Ended December 31, 2011
   Endeavour International CorporationCombined Guarantor SubsidiariesCombined Non-Guarantor SubsidiariesEliminationsConsolidated
Cash Flows from Operating Activities:          
Net loss$ (16,076)$ (83,339)$ (31,580)$ -$ (130,995)
Adjustments to reconcile net income (loss)           
 to net cash provided by (used in) operations         
 DD&A expense -  11,490  14,988  -  26,478
 Impairment of oil and gas properties -  65,706  -  -  65,706
 Deferred tax expense (benefit) -  -  21,116  -  21,116
 Unrealized (gains) losses on derivatives 2,642  -  (11,020)  -  (8,378)
 Amortization of non-cash compensation 624  -  -  3,073  3,697
 Amortization of loan costs and discount 1,049  (403)  11,588  -  12,234
 Loss on early extinguishment of debt  402  -  -  -  402
 Non-cash interest expense 880  -  11,931  -  12,811
 Other (82)  105  1,495  -  1,518
 Changes in operating assets and liabilities:         
  (Increase) decrease in receivables  -  (1,597)  1,066  -  (531)
  (Increase) decrease in other current assets 34  2,872  (16,234)  -  (13,328)
  Increase (decrease) in liabilities  (134,457)  95,725  11,732  (3,073)  (30,073)
Net Cash Provided by (Used in)           
 Operating Activities  (144,984)  90,559  15,082  -  (39,343)
           
Cash Flows From Investing Activities:          
 Capital expenditures  -  (80,279)  (84,783)  -  (165,062)
 Acquisitions, net of cash acquired  -  (8,027)  (25,048)  -  (33,075)
 (Increase) decrease in restricted cash  -  -  31,726  -  31,726
Net Cash Provided by (Used in)           
 Investing Activities  -  (88,306)  (78,105)  -  (166,411)
           
Cash Flows From Financing Activities:          
 Repayments of borrowings  (101,250)  -  (1,975)  -  (103,225)
 Borrowings under debt agreements, net          
  of debt discount  135,000  -  75,000  -  210,000
 Proceeds from issuance of common stock  118,444  -  -  -  118,444
 Dividends paid  (1,816)  -  -  -  (1,816)
 Financing costs paid  (5,926)  -  (5,475)  -  (11,401)
 Other financing  532  (11)  -  -  521
Net Cash Provided by Financing Activities  144,984  (11)  67,550  -  212,523
           
Net Increase in Cash and Cash Equivalents  -  2,242  4,527  -  6,769
Cash and Cash Equivalents, Beginning           
 of Period  -  709  98,558  -  99,267
Cash and Cash Equivalents, End of Period$ -$ 2,951$ 103,085$ -$ 106,036

For the Year Ended December 31, 2010
   Endeavour International CorporationCombined Guarantor SubsidiariesCombined Non-Guarantor SubsidiariesEliminationsConsolidated
Cash Flows from Operating Activities:          
Net loss$ (11,829)$ (19,149)$ 87,509$ -$ 56,531
Adjustments to reconcile net loss to           
 net cash provided by (used in) operations         
 DD&A expense -  6,202  22,692  -  28,894
 Impairment of oil and gas properties -  7,692  -  -  7,692
 Deferred tax expense (benefit) -  -  (3,367)  -  (3,367)
 Unrealized (gains) losses on derivatives (2,258)  -  (10,033)  -  (12,291)
 Gain on sale  -  -  (87,171)  -  (87,171)
 Amortization of non-cash compensation 689  -  -  3,003  3,692
 Amortization of loan costs and discount 537  -  9,725  -  10,262
 Non-cash interest expense 1,010  -  7,754  -  8,764
 Other 307  (20)  (2,373)  -  (2,086)
 Changes in operating assets and liabilities:         
  Decrease in receivables  -  (829)  7,561  -  6,732
  (Increase) decrease in other current assets 1,252  (4,907)  (1,013)  -  (4,668)
  Increase (decrease) in liabilities  (17,915)  85,445  (3,242)  (60,253)  4,035
Net Cash Provided by (Used in)           
 Operating Activities  (28,207)  74,434  28,042  (57,250)  17,019
           
Cash Flows From Investing Activities:          
 Capital expenditures  -  (34,036)  (57,971)  -  (92,007)
 Acquisitions, net of cash acquired  -  (42,542)  (1,184)  -  (43,726)
 Proceeds from sales, net of cash  -  1  108,315  -  108,316
 Issuance of note receivable to affiliate  -  -  (57,250)  57,250  -
 (Increase) decrease in restricted cash  -  2,450  (31,347)  -  (28,897)
Net Cash Provided by (Used in)           
 Investing Activities  -  (74,127)  (39,437)  57,250  (56,314)
           
Cash Flows From Financing Activities:          
 Repayments of borrowings  -  -  (75,342)  -  (75,342)
 Borrowings under debt agreements, net          
  of debt discount  -    185,000  -  185,000
 Proceeds from issuance of common stock  30,181  -  -  -  30,181
 Dividends paid  (2,070)  -  -  -  (2,070)
 Financing costs paid  -  -  (26,590)  -  (26,590)
 Other financing  96  -  -  -  96
Net Cash Provided by (Used in)           
 Financing Activities  28,207  -  83,068  -  111,275
           
Net Decrease in Cash and Cash Equivalents  -  307  71,673  -  71,980
Cash and Cash Equivalents, Beginning           
 of Period  -  402  26,885  -  27,287
Cash and Cash Equivalents, End of Period$ -$ 709$ 98,558$ -$ 99,267

  • The $7.0 million adjustment reflects the correction of an immaterial error in deferred income taxes that was corrected to beginning stockholder's equity as of January 1, 2010 in the separate financials of the non-guarantor subsidiaries but reflected in the current year statement of operations for Endeavour.