3. Revision of Previously Issued Financial Statements

During the preparation of the closing of our Arkoma divestiture (as defined in Note 4) in the third quarter 2017, it was determined that the carrying value of the Arkoma Assets (as defined in Note 4) were overstated resulting in a $13.9 million overstatement of the Impairment of oil and gas properties upon the change in classification of the Held for sale assets (as defined in Note 4) at June 30, 2017. This error also resulted in a $2.3 million understatement of the Liability under the tax receivable agreement. These errors resulted in the misstatement of our previously issued financial statements relating to the period ended June 30, 2017.

The following table presents the effect of the errors on our Consolidated Balance Sheet:


	June 30, 2017
(in thousands of dollars)	As corrected		As filed		Change
Assets
Current assets
Other current assets	$	11,198	$	11,381	$	(183)
Total current assets		101,524		101,707		(183)
Oil and gas properties, net, at cost under the successful efforts method		1,559,861		1,545,991		13,870
Total assets	$	1,739,706	$	1,726,019	$	13,687
Liabilities and Stockholders' Equity
Liability under tax receivable agreement	$	14,140	$	11,807	$	2,333
Total liabilities		889,081		886,748		2,333
Stockholders' equity
Retained (deficit) / earnings		(114,454)		(121,477)		7,023
Stockholders' equity		362,675		355,652		7,023
Non-controlling interest		398,662		394,331		4,331
Total stockholders’ equity		761,337		749,983		11,354
Total liabilities and stockholders' equity	$	1,739,706	$	1,726,019	$	13,687

The following tables separately present the effect of the errors on our Consolidated Statement of Operations for the three and six-month periods:


	Three months ended June 30, 2017
(in thousands of dollars except per share data)	As corrected		As filed		Change
Operating costs and expenses
Impairment of oil and gas properties	$	148,016	$	161,886	$	(13,870)
Total operating expenses		221,191		235,061		(13,870)
Operating income (loss)		(172,565)		(186,435)		13,870
Other income (expense)
Other income (expense)		27,501		29,834		(2,333)
Other income (expense), net		36,351		38,684		(2,333)
Income (loss) before income tax		(136,214)		(147,751)		11,537
Income tax provision (benefit)		(2,236)		(2,419)		183
Net income (loss)		(133,978)		(145,332)		11,354
Net income (loss) attributable to non-controlling interests		(51,762)		(56,093)		4,331
Net income (loss) attributable to controlling interests	$	(82,216)	$	(89,239)	$	7,023
Net income (loss) attributable to common shareholders	$	(84,182)	$	(91,205)	$	7,023

Earnings (loss) per share (1) :
Basic - Net income (loss) attributable to common shareholders	$	(1.28)	$	(1.39)	$	0.11
Diluted - Net income (loss) attributable to common shareholders	$	(1.28)	$	(1.39)	$	0.11

Weighted average Class A shares outstanding (1) :
Basic		65,681		65,681		—
Diluted		65,681		65,681		—


	Six months ended June 30, 2017
(in thousands of dollars except per share data)	As corrected		As filed		Change
Operating costs and expenses
Impairment of oil and gas properties	$	148,016	$	161,886	$	(13,870)
Total operating expenses		275,931		289,801		(13,870)
Operating income (loss)		(186,072)		(199,942)		13,870
Other income (expense)
Other income (expense)		28,081		30,414		(2,333)
Other income (expense), net		46,364		48,697		(2,333)
Income (loss) before income tax		(139,708)		(151,245)		11,537
Income tax provision (benefit)		(2,215)		(2,398)		183
Net income (loss)		(137,493)		(148,847)		11,354
Net income (loss) attributable to non-controlling interests		(53,890)		(58,221)		4,331
Net income (loss) attributable to controlling interests	$	(83,603)	$	(90,626)	$	7,023
Net income (loss) attributable to common shareholders	$	(87,596)	$	(94,619)	$	7,023

Earnings (loss) per share (1) :
Basic - Net income (loss) attributable to common shareholders	$	(1.37)	$	(1.48)	$	0.11
Diluted - Net income (loss) attributable to common shareholders	$	(1.37)	$	(1.48)	$	0.11

Weighted average Class A shares outstanding (1) :
Basic		63,948		63,948		—
Diluted		63,948		63,948		—

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(1) All share and earnings per share information presented has been recast to retrospectively adjust for the effects of the 0.087423 per share Special Stock Dividend, as defined in Note 12, “Stockholders’ and Mezzanine equity”, distributed on March 31, 2017.

The following table presents the effect of the errors on our Statement of Changes in Stockholders’ Equity:


	Six months ended June 30, 2017
	Retained				Total
	(Deficit)/		Non-controlling		Stockholders'
(amounts in thousands)	Earnings		Interest		Equity
As corrected - Net income (loss)	$	(83,603)	$	(53,890)	$	(137,493)
As filed - Net income (loss)	$	(90,626)	$	(58,221)		(148,847)
Change - Net income (loss)	$	7,023	$	4,331	$	11,354

As corrected - Balance at June 30, 2017	$	(114,454)	$	398,662	$	761,337
As filed - Balance at June 30, 2017	$	(121,477)	$	394,331	$	749,983
Change - Balance at June 30, 2017	$	7,023	$	4,331	$	11,354

The following table presents the effect of the errors on our Consolidated Statements of Cash Flows:


	Six months ended June 30, 2017
(in thousands of dollars)	As corrected		As filed		Change
Cash flows from operating activities
Net income (loss)	$	(137,493)	$	(148,847)	$	11,354
Adjustments to reconcile net income (loss) to net cash provided by operating activities
Impairment of oil and gas properties		148,016		161,886		(13,870)
Change in liability under tax receivable agreement		(28,266)		(30,599)		2,333
Changes in operating assets and liabilities
Other assets		(12,407)		(12,590)		183
Net cash provided by operations		21,478		21,478		—
Net increase (decrease) in cash		(28,388)		(28,388)		—
Cash
Beginning of period		34,642		34,642		—
End of period	$	6,254	$	6,254	$	—

We assessed the materiality of the errors on prior periods’ financial statements in accordance with SEC Staff Accounting Bulletin (“SAB”) Topic 1.M, Materiality, codified in ASC Topic 250, Presentation of Financial Statements, (“ASC 250”) and concluded that the errors were not material to any prior periods. The Company will revise our Consolidated Statement of Operations for the three and six-month periods ended June 30, 2017 and our Consolidated Statements of Cash Flows for the six months ended June 30, 2017 in future filings to correct the errors.