10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D. C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended September 30, 2019

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number: 001-12719

GOODRICH PETROLEUM CORPORATION

(Exact name of registrant as specified in its charter)

Delaware (State or other jurisdiction of incorporation or organization)	76-0466193 (I.R.S. Employer Identification No.)
801 Louisiana, Suite 700 Houston, Texas 77002 (Address of principal executive offices) (Zip Code) (Registrant’s telephone number, including area code): (713) 780-9494 Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading symbol	Name of each exchange on which registered
Common stock, par value $0.01 per share	GDP	NYSE American

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.    Yes  ☒    No  ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  ☒    No  ☐

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☒
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ☐    No  ☒

Indicate by check mark whether the Registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes  ☒    No  ☐

The Registrant had 12,312,750 shares of common stock outstanding on November 7, 2019.

1

GOODRICH PETROLEUM CORPORATION AND SUBSIDIARY

TABLE OF CONTENTS

		Page
PART I	FINANCIAL INFORMATION	3
ITEM 1	FINANCIAL STATEMENTS	3
	Consolidated Balance Sheets as of September 30, 2019 and December 31, 2018 (unaudited)	3
	Consolidated Statements of Operations for the three and nine months ended September 30, 2019 and 2018 (unaudited)	4
	Consolidated Statements of Cash Flows for the nine months ended September 30, 2019 and 2018 (unaudited)	5
	Consolidated Statements of Stockholders’ Equity for the three and nine months ended September 30, 2019 and 2018 (unaudited)	6
	Notes to Unaudited Consolidated Financial Statements	7
ITEM 2	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	22
ITEM 3	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	30
ITEM 4	CONTROLS AND PROCEDURES	31
PART II	OTHER INFORMATION	32
ITEM 1	LEGAL PROCEEDINGS	32
ITEM 1A	RISK FACTORS	32
ITEM 2	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	32
ITEM 6	EXHIBITS	33

2

PART I – FINANCIAL INFORMATION

Item 1—Financial Statements

GOODRICH PETROLEUM CORPORATION AND SUBSIDIARY

CONSOLIDATED BALANCE SHEETS

(In thousands, except share amounts)

(Unaudited)

	September 30, 2019			December 31, 2018
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	1,160		$	4,068
Accounts receivable, trade and other, net of allowance		930			744
Accrued oil and natural gas revenue		9,902			14,464
Fair value of oil and natural gas derivatives		9,213			803
Inventory		268			596
Prepaid expenses and other		373			533
Total current assets		21,846			21,208
PROPERTY AND EQUIPMENT:
Unevaluated properties		155			180
Oil and natural gas properties (full cost method)		284,420			206,097
Furniture, fixtures and equipment and other capital assets		4,400			1,360
		288,975			207,637
Less: Accumulated depletion, depreciation and amortization		(79,715	)		(42,447	)
Net property and equipment		209,260			165,190
Fair value of oil and natural gas derivatives		708			-
Deferred tax asset		393			786
Other		2,451			580
TOTAL ASSETS	$	234,658		$	187,764
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accounts payable	$	23,190		$	25,734
Accrued liabilities		22,371			16,518
Fair value of oil and natural gas derivatives		74			-
Total current liabilities		45,635			42,252
Long term debt, net		98,822			76,820
Accrued abandonment cost		3,964			3,791
Fair value of oil and natural gas derivatives		253			471
Other non-current liabilities		1,164			-
Total liabilities		149,838			123,334
Commitments and contingencies (See Note 9)
STOCKHOLDERS’ EQUITY:
Preferred stock: 10,000,000 shares $1.00 par value authorized, and none issued and outstanding		-			-
Common stock: $0.01 par value, 75,000,000 shares authorized, and 12,312,750 and 12,150,918 shares issued and outstanding as of September 30, 2019 and December 31, 2018, respectively		123			122
Treasury stock: 47,133 and zero shares as of September 30, 2019 and December 31, 2018, respectively		(547	)		-
Additional paid in capital		81,582			74,861
Accumulated earnings (deficit)		3,662			(10,553	)
Total stockholders’ equity		84,820			64,430
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	234,658		$	187,764

See accompanying notes to consolidated financial statements.

3

GOODRICH PETROLEUM CORPORATION AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share amounts)

(Unaudited)

	Three Months Ended September 30,			Three Months Ended September 30,			Nine Months Ended September 30,			Nine Months Ended September 30,
	2019			2018			2019			2018
REVENUES:
Oil and natural gas revenues	$	27,161		$	24,331		$	88,193		$	53,958
Other		4			89			(4	)		131
		27,165			24,420			88,189			54,089
OPERATING EXPENSES:
Lease operating expense		2,589			2,588			8,902			7,619
Production and other taxes		623			959			1,878			2,268
Transportation and processing		5,107			3,344			15,562			6,742
Depreciation, depletion and amortization		13,205			7,922			36,550			16,934
General and administrative		5,196			4,644			15,442			14,643
Other		228			(60	)		179			105
		26,948			19,397			78,513			48,311
Operating income		217			5,023			9,676			5,778
OTHER INCOME (EXPENSE):
Interest expense		(1,981	)		(3,105	)		(9,036	)		(8,510	)
Interest income and other expense		-			1			24			110
Gain (loss) on commodity derivatives not designated as hedges		3,752			(237	)		15,397			(3,392	)
Loss on early extinguishment of debt		-			-			(1,846	)		-
		1,771			(3,341	)		4,539			(11,792	)
Reorganization items, net		-			(16	)		-			(305	)
Income (loss) before income taxes		1,988			1,666			14,215			(6,319	)
Income tax benefit		-			-			-			-
Net income (loss)	$	1,988		$	1,666		$	14,215		$	(6,319	)
PER COMMON SHARE
Net income (loss) per common share - basic	$	0.16		$	0.14		$	1.16		$	(0.55	)
Net income (loss) per common share - diluted	$	0.14		$	0.12		$	1.02		$	(0.55	)
Weighted average shares of common stock outstanding - basic		12,257			11,762			12,208			11,538
Weighted average shares of common stock outstanding - diluted		14,040			14,046			14,497			11,538

See accompanying notes to consolidated financial statements.

4

GOODRICH PETROLEUM CORPORATION AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

	Nine Months Ended September 30,			Nine Months Ended September 30,
	2019			2018
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)	$	14,215		$	(6,319	)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depletion, depreciation and amortization		36,550			16,934
Right of use asset depreciation		939			-
(Gain) loss on commodity derivatives not designated as hedges		(15,397	)		3,392
Net cash received (paid) for settlement of derivative instruments		6,135			(737	)
Share-based compensation (non-cash)		4,765			4,764
Amortization of finance cost, debt discount, paid in-kind interest and accretion		6,340			7,981
Loss on early extinguishment of debt		1,846			-
Reorganization items (non-cash), net		-			305
Other		269			(23	)
Change in assets and liabilities:
Accounts receivable, trade and other, net of allowance		207			465
Accrued oil and natural gas revenue		4,562			(4,297	)
Prepaid expenses and other		192			(231	)
Accounts payable		(2,544	)		12,964
Accrued liabilities		(1,232	)		1,537
Net cash provided by operating activities		56,847			36,735
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures		(74,199	)		(85,105	)
Proceeds from sale of assets		1,334			26,920
Net cash used in investing activities		(72,865	)		(58,185	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Principal payments of bank borrowings		(49,500	)		(16,723	)
Proceeds from bank borrowings		110,400			15,000
Repayment of Convertible Second Lien Notes		(56,728	)		-
Proceeds from New 2L Notes		12,000			-
Issuance cost, net		(2,516	)		(53	)
Purchase of treasury stock and other		(546	)		(835	)
Net cash provided by (used in) financing activities		13,110			(2,611	)
Decrease in cash and cash equivalents		(2,908	)		(24,061	)
Cash and cash equivalents, beginning of period		4,068			25,992
Cash and cash equivalents, end of period	$	1,160		$	1,931
Supplemental disclosures of cash flow information:
Cash paid for reorganization items, net	$	-		$	866
Cash paid for interest	$	2,952		$	249
Increase in non-cash capital expenditures	$	5,052		$	1,527

See accompanying notes to consolidated financial statements.

5

GOODRICH PETROLEUM CORPORATION AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY/(DEFICIT)

(In thousands)

(Unaudited)

	Preferred Stock				Common Stock				Additional Paid-in		Treasury Stock						Accumulated			Total Stockholders’
	Shares		Value		Shares		Value		Capital		Shares			Value			Earnings (Deficit)			Equity
Balance at June 30, 2018		-	$	-		11,837	$	119	$	74,135		(76	)	$	(832	)	$	(20,288	)	$	53,134
Net income		-		-		-		-		-		-			-			1,666			1,666
Share-based compensation		-		-		-		-		1,774		-			-			-			1,774
Restricted stock vesting & other		-		-		1		-		-		-			(6	)		-			(6	)
Balance at September 30, 2018		-	$	-		11,838	$	119	$	75,909		(76	)	$	(838	)	$	(18,622	)	$	56,568
Balance at June 30, 2019		-	$	-		12,302	$	123	$	79,780		(47	)	$	(543	)	$	1,674		$	81,034
Net income		-		-		-		-		-		-			-			1,988			1,988
Share-based compensation		-		-		11		-		1,802		-			-			-			1,802
Treasury stock activity		-		-		-		-		-		-			(4	)		-			(4	)
Balance at September 30, 2019		-	$	-		12,313	$	123	$	81,582		(47	)	$	(547	)	$	3,662		$	84,820

	Preferred Stock				Common Stock				Additional Paid-in			Treasury Stock						Accumulated			Total Stockholders’
	Shares		Value		Shares		Value		Capital			Shares			Value			Earnings (Deficit)			Equity
Balance at December 31, 2017		-	$	-		10,771	$	108	$	68,446			-		$	-		$	(12,303	)	$	56,251
Net loss		-		-		-		-		-			-			-			(6,319	)		(6,319	)
Share-based compensation		-		-		-		-		5,308			-			-			-			5,308
Restricted stock vesting & other		-		-		205		2		2,224			(76	)		(838	)		-			1,388
Convertible Second Lien Notes warrant exercises		-		-		862		9		(5	)		-			-			-			4
Issuance cost		-		-		-		-		(64	)		-			-			-			(64	)
Balance at September 30, 2018		-	$	-		11,838	$	119	$	75,909			(76	)	$	(838	)	$	(18,622	)	$	56,568
Balance at December 31, 2018		-	$	-		12,151	$	122	$	74,861			-		$	-		$	(10,553	)	$	64,430
Net income		-		-		-		-		-			-			-			14,215			14,215
Share-based compensation		-		-		11		-		5,312			-			-			-			5,312
New 2L Notes conversion		-		-		-		-		1,429			-			-			-			1,429
Convertible Second Lien Notes warrant exercises		-		-		150		1		(20	)		-			-			-			(19	)
Treasury stock activity		-		-		1		-		-			(47	)		(547	)		-			(547	)
Balance at September 30, 2019		-	$	-		12,313	$	123	$	81,582			(47	)	$	(547	)	$	3,662		$	84,820

See accompanying notes to consolidated financial statements.

6

GOODRICH PETROLEUM CORPORATION AND SUBSIDIARY

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1—Description of Business and Significant Accounting Policies

Goodrich Petroleum Corporation (“Goodrich” and, together with its subsidiary, Goodrich Petroleum Company, L.L.C. (the “Subsidiary”), “we,” “our,” or the “Company”) is an independent oil and natural gas company engaged in the exploration, development and production of oil and natural gas on properties primarily in (i) Northwest Louisiana and East Texas, which includes the Haynesville Shale Trend, (ii) Southwest Mississippi and Southeast Louisiana, which includes the Tuscaloosa Marine Shale Trend (“TMS”), and (iii) South Texas, which includes the Eagle Ford Shale Trend.

Basis of Presentation

The consolidated financial statements of the Company included in this Quarterly Report on Form 10-Q have been prepared, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission and accordingly, certain information normally included in financial statements prepared in accordance with United States Generally Accepted Accounting Principles (“US GAAP”) has been condensed or omitted. This information should be read in conjunction with our consolidated financial statements and notes contained in our annual report on Form 10-K for the year ended December 31, 2018. Operating results for the three and nine months ended September 30, 2019 are not necessarily indicative of the results that may be expected for the full year or for any interim period.

Principles of Consolidation—The consolidated financial statements include the financial statements of the Company and the Subsidiary. Intercompany balances and transactions have been eliminated in consolidation. The consolidated financial statements reflect all normal recurring adjustments that, in the opinion of management, are necessary for a fair presentation. Certain data in prior periods’ financial statements have been adjusted to conform to the presentation of the current period. We have evaluated subsequent events through the date of this filing.

Use of Estimates— Our management has made a number of estimates and assumptions relating to the reporting of assets, liabilities, revenues and expenses and the disclosure of contingent assets and liabilities to prepare these consolidated financial statements in conformity with US GAAP.

Cash and Cash Equivalents—Cash and cash equivalents included cash on hand, demand deposit accounts and temporary cash investments with maturities of ninety days or less at the date of purchase.

Accounts Payable—Accounts payable consisted of the following amounts as of September 30, 2019 and December 31, 2018:

(In thousands)	September 30, 2019		December 31, 2018
Trade payables	$	8,051	$	8,633
Revenue payables		14,878		16,665
Prepayments from partners		-		132
Miscellaneous payables		261		304
Total Accounts payable	$	23,190	$	25,734

7

GOODRICH PETROLEUM CORPORATION AND SUBSIDIARY

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

Accrued Liabilities—Accrued liabilities consisted of the following amounts as of September 30, 2019 and December 31, 2018:

(In thousands)	September 30, 2019		December 31, 2018
Accrued capital expenditures	$	13,138	$	8,086
Accrued lease operating expense		857		1,100
Accrued production and other taxes		927		338
Accrued transportation and gathering		1,937		1,888
Accrued performance bonus		2,928		3,420
Accrued interest		185		443
Accrued office lease		1,386		598
Accrued general and administrative expense and other		1,013		645
Total Accrued liabilities	$	22,371	$	16,518

Inventory—Inventory consisted of equipment, casing and tubulars that are expected to be used in our capital drilling program. Inventory is carried on the Consolidated Balance Sheets at the lower of cost or market.

Property and Equipment—Under US GAAP, two acceptable methods of accounting for oil and natural gas properties are allowed. These are the Successful Efforts Method and the Full Cost Method. Entities engaged in the production of oil and natural gas have the option of selecting either method for application in the accounting for their properties. The principal differences between the two methods are in the treatment of exploration costs, the computation of depreciation, depletion and amortization (“DD&A”) expense and the assessment of impairment of oil and natural gas properties. We have elected to adopt the Full Cost Method of accounting. We believe that the true cost of developing a “portfolio” of reserves should reflect both successful and unsuccessful attempts at exploration and production. Application of the Full Cost Method better reflects the true economics of exploring for and developing our oil and gas reserves.

Under the Full Cost Method, we capitalize all costs associated with acquisitions, exploration, development and estimated abandonment costs. We capitalize internal costs that can be directly identified with the acquisition of leasehold, as well as drilling and completion activities, but do not include any costs related to production, general corporate overhead or similar activities. Unevaluated property costs are excluded from the amortization base until we make a determination as to the existence of proved reserves on the respective property or impairment. We review our unevaluated properties at the end of each quarter to determine whether the costs should be reclassified to proved oil and natural gas properties and thereby subject to DD&A and the full cost ceiling test. For the three months ended September 30, 2019 and 2018, we transferred less than $0.1 million and $5.7 million, respectively, from unevaluated properties to proved oil and natural gas properties. For the nine months ended September 30, 2019 and 2018, we transferred $0.2 million and $6.1 million, respectively, from unevaluated properties to proved oil and natural gas properties. Our sales of oil and natural gas properties are accounted for as adjustments to net proved oil and natural gas properties with no gain or loss recognized, unless the adjustment would significantly alter the relationship between capitalized costs and proved reserves.

Under the Full Cost Method, we amortize our investment in oil and natural gas properties through DD&A expense using the units of production (the “UOP”) method. An amortization rate is calculated based on total proved reserves converted to equivalent thousand cubic feet of natural gas (“Mcfe”) as the denominator and the net book value of evaluated oil and gas asset together with the estimated future development cost of the proved undeveloped reserves as the numerator. The rate calculated per Mcfe is applied against the periods' production also converted to Mcfe to arrive at the periods' DD&A expense.

Depreciation of furniture, fixtures and equipment, consisting of office furniture, computer hardware and software and leasehold improvements, is computed using the straight-line method over their estimated useful lives, which vary from three to five years.

Full Cost Ceiling Test—The Full Cost Method requires that at the conclusion of each financial reporting period, the present value of estimated future net cash flows from proved reserves (excluding cash flows related to estimated abandonment costs), be compared to the net capitalized costs of proved oil and natural gas properties, net of related deferred taxes. This comparison is referred to as a “ceiling test”. If the net capitalized costs of proved oil and natural gas properties exceed the estimated discounted future net cash flows from proved reserves, we are required to write-down the value of our oil and natural gas properties to the value of the discounted cash flows. Estimated future net cash flows from proved reserves are calculated based on a 12-month average pricing assumption.

There were no Full Cost Ceiling Test write-downs for the three or nine months ended September 30, 2019 or 2018.

8

GOODRICH PETROLEUM CORPORATION AND SUBSIDIARY

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

Fair Value Measurement—Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value of an asset should reflect its highest and best use by market participants, whether in-use or an in-exchange valuation premise. The fair value of a liability should reflect the risk of non-performance, which includes, among other things, our credit risk.

We use various methods, including the income approach and market approach, to determine the fair values of our financial instruments that are measured at fair value on a recurring basis, which depend on a number of factors, including the availability of observable market data over the contractual term of the underlying instrument. For some of our instruments, the fair value is calculated based on directly observable market data or data available for similar instruments in similar markets. For other instruments, the fair value may be calculated based on these inputs as well as other assumptions related to estimates of future settlements of these instruments. We separate our financial instruments into three levels (levels 1, 2 and 3) based on our assessment of the availability of observable market data and the significance of non-observable data used to determine the fair value of our instruments. Our assessment of an instrument can change over time based on the maturity or liquidity of the instrument, which could result in a change in the classification of the instruments between levels.

Each of these levels and our corresponding instruments classified by level are further described below:

• Level 1 Inputs— unadjusted quoted market prices in active markets for identical assets or liabilities. We have no Level 1 instruments;

• Level 2 Inputs— quotes that are derived principally from or corroborated by observable market data. Included in this level are our 2017 Senior Credit Facility and 2019 Senior Credit Facility (both as defined below) and commodity derivatives whose fair values are based on third-party quotes or available interest rate information and commodity pricing data obtained from third party pricing sources and our creditworthiness or that of our counter-parties; and

• Level 3 Inputs— unobservable inputs for the asset or liability, such as discounted cash flow models or valuations, based on our various assumptions and future commodity prices. Included in this level would be our initial measurement of asset retirement obligations.

As of September 30, 2019 and December 31, 2018, the carrying amounts of our cash and cash equivalents, trade receivables and payables represented fair value because of the short-term nature of these instruments.

Asset Retirement Obligations—Asset retirement obligations are related to the abandonment and site restoration requirements that result from the exploration and development of our oil and natural gas properties. We record the fair value of a liability for an asset retirement obligation in the period in which it is incurred and a corresponding increase in the carrying amount of the related long-lived asset. Accretion expense is included in “Depreciation, depletion and amortization” on our Consolidated Statements of Operations. See Note 3.

The estimated fair value of the Company’s asset retirement obligations at inception is determined by utilizing the income approach by applying a credit-adjusted risk-free rate, which takes into account the Company’s credit risk, the time value of money, and the current economic state, to the undiscounted expected abandonment cash flows. Given the unobservable nature of the inputs, the initial measurement of the asset retirement obligations was classified as Level 3 in the fair value hierarchy.

Revenue Recognition—Oil and natural gas revenues are generally recognized upon delivery of our produced oil and natural gas volumes to our customers. We record revenue in the month our production is delivered to the purchaser. However, settlement statements and payments for our oil and natural gas sales may not be received for up to 60 days after the date production is delivered, and as a result, we are required to estimate the amount of production delivered to the purchaser and the price that will be received for the sale of the product. We record a liability or an asset for natural gas balancing when we have sold more or less than our working interest share of natural gas production, respectively. As ofSeptember 30, 2019and December 31, 2018, the net liability for natural gas balancing was immaterial. Differences between actual production and net working interest volumes are routinely adjusted. See Note 2.

Derivative Instruments—We use derivative instruments such as swaps, collars, futures, forwards and options for purposes of hedging our exposure to fluctuations in the price of crude oil and natural gas. Accounting standards related to derivative instruments and hedging activities require that all derivative instruments subject to the requirements of those standards be measured at fair value and recognized as assets or liabilities in the balance sheet. We offset the fair value of our asset and liability positions with the same counter-party for each commodity type. Changes in fair value are required to be recognized in earnings unless specific hedge accounting criteria are met. All of our realized gain or losses on our derivative contracts are the result of cash settlements. We have not designated any of our derivative contracts as hedges; accordingly, changes in fair value are reflected in earnings. See Note 8.

9

GOODRICH PETROLEUM CORPORATION AND SUBSIDIARY

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

Income Taxes—We account for income taxes, as required, under the liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis and operating loss and tax credit carry-forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized.

We recognize, as required, the financial statement benefit of an uncertain tax position only after determining that the relevant tax authority would more likely than not sustain the position following an audit. For tax positions meeting the more likely-than-not threshold, the amount recognized in the financial statements is the largest benefit that has a greater than 50 percent likelihood of being realized upon ultimate settlement with the relevant tax authority. See Note 7.

Net Income or Net Loss Per Common Share—Basic income (loss) per common share is computed by dividing net income (loss) applicable to common stock for each reporting period by the weighted-average shares of common stock outstanding during the period. Diluted income (loss) per common share is computed by dividing net income (loss) applicable to common stock for each reporting period by the weighted average shares of common stock outstanding during the period, plus the effects of potentially dilutive restricted stock calculated using the treasury stock method and the potential dilutive effect of the conversion of convertible securities, such as warrants and convertible notes, into shares of our common stock. See Note 6.

Commitments and Contingencies—Liabilities for loss contingencies, including environmental remediation costs, arising from claims, assessments, litigation, fines and penalties, and other sources are recorded when it is probable that a liability has been incurred and the amount of the assessment and/or remediation can be reasonably estimated. Recoveries from third parties, when probable of realization, are separately recorded and are not offset against the related environmental liability. See Note 9.

Share-Based Compensation—We account for our share-based transactions using the fair value as of the grant date and recognize compensation expense over the requisite service period. We record our share-based compensation costs to general and administrative expense, lease operating expense or capitalized cost in proportion with the employees’ time supporting such activities. We recognized $5.3 million of share-based compensation cost in both the nine month periods ended September 30, 2019 and 2018, of which $0.5 million in each such period was capitalized. We recognized $1.8 million in both the three month periods ended September 30, 2019 and 2018, of which $0.2 million in each such period was capitalized. We recorded less than $0.1 million of share-based compensation cost to lease operating expense in each period presented.

Guarantee—As of September 30, 2019, Goodrich Petroleum Company LLC, the wholly owned subsidiary of Goodrich Petroleum Corporation, was the Subsidiary Guarantor of our New 2L Notes (as defined below). The parent company has no independent assets or operations, the guarantee is full and unconditional, and the parent has no subsidiaries other than Goodrich Petroleum Company LLC.

Debt Issuance Cost—The Company records debt issuance costs associated with its New 2L Notes (and previously with its Convertible Second Lien Notes, both as defined below) as a contra balance to long term debt, net in our Consolidated Balance Sheets, which is amortized straight-line over the life of the respective notes. Debt issuance costs associated with our revolving credit facility debt are recorded in other assets in our Consolidated Balance Sheets, which is amortized straight-line over the life of such debt.

New Accounting Pronouncements

On August 28, 2018, the Financial Accounting Standards Board issued Accounting Standards Update (“ASU”) 2018-13, Fair Value Measurements (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement (“Topic 820”). The amendments in this ASU modify the disclosure requirements on fair value measurements in Topic 820 including the removal, modification and addition of certain disclosure requirements. For all entities, the amendments in this ASU are effective for fiscal periods beginning after December 15, 2019, including interim periods therein. We do not expect a material impact from these amendments on our fair value measurement disclosures.

10

GOODRICH PETROLEUM CORPORATION AND SUBSIDIARY

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 2—Revenue Recognition

On January 1, 2018, we adopted ASU 2014-09, Revenue from Contracts with Customers, and the series of related ASU's that followed under Accounting Standards Codification (“ASC”) Topic 606 (collectively, “Topic 606”).Topic 606 did not change our pattern of timing of revenue recognition. Under Topic 606, revenue is generally recognized upon delivery of our produced oil and natural gas volumes to our customers. Our customer sales contracts include oil and natural gas sales. Under Topic 606, each unit (Mcf or barrel) of commodity product represents a separate performance obligation which is sold at variable prices, determinable on a monthly basis. The pricing provisions of our contracts are primarily tied to a market index with certain adjustments based on factors such as delivery, product quality and prevailing supply and demand conditions in the geographic areas in which we operate. We allocate the transaction price to each performance obligation and recognize revenue upon delivery of the commodity product when the customer obtains control. Control of our produced natural gas volumes passes to our customers at specific metered points indicated in our natural gas contracts. Similarly, control of our produced oil volumes passes to our customers when the oil is measured either by a trucking oil ticket or by a meter when entering an oil pipeline. The Company has no control over the commodities after those points and the measurement at those points dictates the amount on which the customer's payment is based. Our oil and natural gas revenue streams include volumes burdened by royalty and non-operated working interests. Our revenues are recorded and presented on our financial statements net of the royalty and non-operated working interests. Our revenue stream does not include any payments for services or ancillary items other than sale of oil and natural gas.

For further details on our revenue recognition policy, refer to Note 1—Revenue Recognition. As of September 30, 2019 and December 31, 2018, receivables from contracts with customers were $9.9 million and $14.5 million, respectively.

The following table presents our revenues disaggregated by revenue source and by operated and non-operated properties for the three and nine months ended September 30, 2019 and 2018:

	Three Months Ended September 30, 2019								Nine Months Ended September 30, 2019
(In thousands)	Oil Revenue		Gas Revenue		NGL Revenue		Total Oil and Natural Gas Revenues		Oil Revenue		Gas Revenue		NGL Revenue		Total Oil and Natural Gas Revenues
Operated	$	2,365	$	21,679	$	-	$	24,044	$	7,881	$	66,743	$	-	$	74,624
Non-operated		112		3,002		3		3,117		326		13,232		11		13,569
Total oil and natural gas revenues	$	2,477	$	24,681	$	3	$	27,161	$	8,207	$	79,975	$	11	$	88,193

	Three Months Ended September 30, 2018								Nine Months Ended September 30, 2018
(In thousands)	Oil Revenue		Gas Revenue		NGL Revenue		Total Oil and Natural Gas Revenues		Oil Revenue		Gas Revenue		NGL Revenue		Total Oil and Natural Gas Revenues
Operated	$	3,605	$	17,391	$	-	$	20,996	$	11,240	$	34,092	$	-	$	45,332
Non-operated		154		3,145		36		3,335		429		8,153		44		8,626
Total oil and natural gas revenues	$	3,759	$	20,536	$	36	$	24,331	$	11,669	$	42,245	$	44	$	53,958

11

GOODRICH PETROLEUM CORPORATION AND SUBSIDIARY

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 3—Asset Retirement Obligations

The reconciliation of the beginning and ending asset retirement obligation for the nine months ended September 30, 2019 is as follows (in thousands):

	Nine Months Ended September 30, 2019
Beginning balance as of December 31, 2018	$	3,791
Liabilities incurred		159
Liabilities settled		(4	)
Dispositions		(203	)
Accretion expense		221
Ending balance as of September 30, 2019	$	3,964
Current liability	$	-
Long term liability	$	3,964

NOTE 4—Debt

Debt consisted of the following balances as of September 30, 2019 and December 31, 2018 (in thousands):

	September 30, 2019				December 31, 2018
	Principal		Carrying Amount		Principal		Carrying Amount
2017 Senior Credit Facility	$	-	$	-	$	27,000	$	27,000
2019 Senior Credit Facility		87,900		87,900		-		-
Convertible Second Lien Notes (1)		-		-		53,691		49,820
New 2L Notes (2)		12,546		10,922		-		-
Total debt	$	100,446	$	98,822	$	80,691	$	76,820

(1) The debt discount was being amortized using the effective interest rate method based upon a maturity date of August 30, 2019 until the Convertible Second Lien Notes were fully paid off on May 29, 2019.

(2) The debt discount is being amortized using the effective interest rate method based upon a maturity date of May 31, 2021. The principal included $0.5 million of interest to be paid in-kind as of September 30, 2019. The carrying value included $1.3 million of unamortized debt discount as of September 30, 2019.

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GOODRICH PETROLEUM CORPORATION AND SUBSIDIARY

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

The following table summarizes the total interest expense for the three and nine months ended September 30, 2019 and 2018 including contractual interest expense, amortization of debt discount and financing costs (amounts in thousands, except effective interest rates):

	Three Months Ended September 30, 2019					Three Months Ended September 30, 2018					Nine Months Ended September 30, 2019					Nine Months Ended September 30, 2018
	Interest Expense		Effective Interest Rate			Interest Expense		Effective Interest Rate			Interest Expense		Effective Interest Rate			Interest Expense		Effective Interest Rate
2017 Senior Credit Facility	$	-		-		$	281	8.6		%	$	872		7.2	%	$	529		8.3	%
2019 Senior Credit Facility		1,377		6.2	%		-		-			2,072		6.1	%		-		-
Convertible Second Lien Notes (1)		-		-			2,824		24.4	%		5,304		24.1	%		7,981		24.7	%
New 2L Notes (2)		604		21.9	%		-		-			788		21.6	%		-		-
Total interest expense	$	1,981				$	3,105				$	9,036				$	8,510

(1) The Convertible Second Lien Notes had a coupon interest rate of 13.50%; however, the discount recorded due to the convertibility of the notes increased the effective interest rate to 24.1% for the nine months ended September 30, 2019 and 24.4% and 24.7%, respectively, for the three and nine months ended September 30, 2018. Interest expense for the three months ended September 30, 2018 included $1.1 million of debt discount amortization and $1.7 million of paid in-kind interest. Interest expense for the nine months ended September 30, 2019 included $2.3 million of debt discount amortization and $3.0 million of paid in-kind interest, and interest expense for the nine months ended September 30, 2018 included $2.9 million of debt discount amortization and $4.9 million of paid in-kind interest.

(2) The New 2L Notes have a coupon interest rate of 13.50%; however, the discount recorded due to the convertibility of the notes increased the effective interest rate to 21.9% and 21.6%, respectively, for the three and nine months ended September 30, 2019. Interest expense for the three and nine months ended September 30, 2019 included $0.1 million and $0.2 million of debt discount amortization, respectively, and $0.4 million and $0.5 million of accrued interest to be paid in-kind, respectively.

2017 Senior Credit Facility

On October 17, 2017, the Company entered into the Amended and Restated Senior Secured Revolving Credit Agreement (as amended, the “2017 Credit Agreement”) with the Subsidiary, as borrower, JPMorgan Chase Bank, N.A., as administrative agent, and certain lenders that are party thereto, which provided for revolving loans of up to the borrowing base then in effect (as amended, the “2017 Senior Credit Facility”). The 2017 Senior Credit Facility was set to mature on (a) October 17, 2021 or (b) December 30, 2019, if the Convertible Second Lien Notes had not been voluntarily redeemed, repurchased, refinanced or otherwise retired by December 30, 2019. The maximum credit amount under the 2017 Senior Credit Facility when it was paid off in full on May 14, 2019 was $250.0 million with a borrowing base of $75.0 million.

All amounts outstanding under the 2017 Senior Credit Facility bore interest at a rate per annum equal to, at the Company's option, either (i) the alternative base rate plus an applicable margin ranging from 1.75% to 2.75%, depending on the percentage of the borrowing base that was utilized, or (ii) adjusted LIBOR plus an applicable margin ranging from 2.75% to 3.75%, depending on the percentage of the borrowing base that was utilized. Undrawn amounts under the 2017 Senior Credit Facility were subject to a 0.50% commitment fee.

The obligations under the 2017 Credit Agreement were secured by a first lien security interest in substantially all of the assets of the Company and the Subsidiary.

On May 14, 2019, the 2017 Senior Credit Facility was paid off in full and amended, restated and refinanced into the 2019 Senior Credit Facility. In connection with the refinancing, we recorded a $0.2 million loss on early extinguishment of debt related to the remaining unamortized debt issuance costs.

13

GOODRICH PETROLEUM CORPORATION AND SUBSIDIARY

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

2019 Senior Credit Facility

On May 14, 2019, the Company entered into a Second Amended and Restated Senior Secured Revolving Credit Agreement (the “2019 Credit Agreement”) among the Company, the Subsidiary, as borrower (in such capacity, the “Borrower”), SunTrust Bank, as administrative agent (the “Administrative Agent”), and certain lenders that are party thereto, which provides for revolving loans of up to the borrowing base then in effect (the “2019 Senior Credit Facility”).

The 2019 Senior Credit Facility matures (a) May 14, 2024 or (b) the date that is 180 days prior to the “Maturity Date” as defined in the New 2L Notes Indenture (as defined below) as in effect on the date of issuance of the New 2L Notes if the New 2L Notes (as defined below) have not been voluntarily redeemed, repurchased, refinanced or otherwise retired by such date. The 2019 Senior Credit Facility provides for a maximum credit amount of $500 million subject to a borrowing base limitation, which originally was $115 million. The borrowing base was increased to $125 million in August of 2019 and is set to be redetermined thereafter in March and September of each calendar year, and is subject to additional adjustments from time to time, including for asset sales, elimination or reduction of hedge positions and incurrence of other debt. Additionally, each of the Borrower and the Administrative Agent may request one unscheduled redetermination of the borrowing base between scheduled redeterminations. The amount of the borrowing base is determined by the lenders at their sole discretion and consistent with their oil and gas lending criteria at the time of the relevant redetermination. The Borrower may also request the issuance of letters of credit under the 2019 Credit Agreement in an aggregate amount up to $10 million, which reduce the amount of available borrowings under the borrowing base in the amount of such issued and outstanding letters of credit.

All amounts outstanding under the 2019 Senior Credit Facility bear interest at a rate per annum equal to, at the Company’s option, either (i) the alternative base rate plus an applicable margin ranging from 1.50% to 2.50%, depending on the percentage of the borrowing base that is utilized, or (ii) adjusted LIBOR plus an applicable margin from 2.50% to 3.50%, depending on the percentage of the borrowing base that is utilized. Undrawn amounts under the 2019 Senior Credit Facility are subject to a commitment fee ranging from 0.375% to 0.50%, depending on the percentage of the borrowing base that is utilized. To the extent that a payment default exists and is continuing, all amounts outstanding under the 2019 Senior Credit Facility will bear interest at 2.0% per annum above the rate and margin otherwise applicable thereto. As of September 30, 2019, the interest rate on the borrowings from the 2019 Senior Credit Facility was 5.047%.

The obligations under the 2019 Credit Agreement are guaranteed by the Company and secured by a first lien security interest in substantially all of the assets of the Company and the Borrower.

The 2019 Credit Agreement contains certain customary representations and warranties, affirmative and negative covenants and events of default. If an event of default occurs and is continuing, the lenders may declare all amounts outstanding under the 2019 Senior Credit Facility to be immediately due and payable.

The 2019 Credit Agreement also contains certain financial covenants, including the maintenance of (i) a ratio of Net Funded Debt to EBITDAX not to exceed 4.00 to 1.00 as of the last day of any fiscal quarter, (ii) a current ratio (based on the ratio of current assets to current liabilities as defined in the 2019 Credit Agreement) not to be less than 1.00 to 1.00 and (iii) until no New 2L Notes remain outstanding, a ratio of Total Proved PV-10 attributable to the Company’s and Borrower’s Proved Reserves to Total Secured Debt (net of any Unrestricted Cash not to exceed $10 million) not to be less than 1.50 to 1.00 and minimum liquidity requirements.

On May 14, 2019, the Company utilized borrowings under the 2019 Senior Credit Facility to refinance its obligations under the 2017 Senior Credit Facility and to fund the Redemption (as defined below) of the Convertible Second Lien Notes.

As of September 30, 2019, the Company had a borrowing base of $125.0 million with $87.9 million of borrowings outstanding. The Company also had $2.4 million of unamortized debt issuance costs recorded as of September 30, 2019 related to the 2019 Senior Credit Facility.

As of September 30, 2019, the Company was in compliance with all covenants within the 2019 Senior Credit Facility.

14

GOODRICH PETROLEUM CORPORATION AND SUBSIDIARY

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

Convertible Second Lien Notes

In October 2016, the Company issued $40.0 million aggregate principal amount of the Company’s 13.50% Convertible Second Lien Senior Secured Notes due 2019 (the “Convertible Second Lien Notes”) along with 10-year costless warrants to acquire 2.5 million shares of common stock. Holders of the Convertible Second Lien Notes had a second priority lien on all assets of the Company, and holders of such warrants had a right to appoint two members to our Board of Directors (the “Board”) as long as such warrants were outstanding.

The Convertible Second Lien Notes were scheduled to mature on August 30, 2019 or six months after the maturity of our current revolving credit facility but in no event later than March 30, 2020. The Convertible Second Lien Notes bore interest at the rate of 13.50% per annum, payable quarterly in arrears on January 15, April 15, July 15 and October 15 of each year. The Company also had the option under certain circumstances to pay all or any portion of interest in-kind on the then outstanding principal amount of the Convertible Second Lien Notes by increasing the principal amount of the outstanding Convertible Second Lien Notes or by issuing additional second lien notes.

Upon issuance of the Convertible Second Lien Notes in October 2016, in accordance with accounting standards related to convertible debt instruments that may be settled in cash upon conversion as well as warrants on the debt instrument, we recorded a debt discount of $11.0 million, thereby reducing the $40.0 million carrying value upon issuance to $29.0 million and recorded an equity component of $11.0 million. The debt discount was amortized using the effective interest rate method based upon an original term through August 30, 2019. The Convertible Second Lien Notes were redeemed in full on May 29, 2019 for $56.7 million, using borrowings under the 2019 Senior Credit Facility. In connection with the redemption of the Convertible Second Lien Notes, we recorded a $1.6 million loss on early extinguishment of debt related to the remaining unamortized debt discount and debt issuance costs.

New Convertible Second Lien Notes 

On May 14, 2019, the Company and the Subsidiary entered into a purchase agreement with certain funds and accounts managed by Franklin Advisers, Inc., as investment manager (each such fund or account, together with its successors and assigns, a “New 2L Notes Purchaser”) pursuant to which the Company issued to the New 2L Notes Purchasers (the “New 2L Notes Offering”) $12.0 million aggregate principal amount of the Company’s 13.50% Convertible Second Lien Senior Secured Notes due 2021 (the “New 2L Notes”). The closing of the New 2L Notes Offering occurred on May 31, 2019. Proceeds from the sale of the New 2L Notes were primarily used to pay down outstanding borrowings under the 2019 Senior Credit Facility. Holders of the New 2L Notes have a second priority lien on all assets of the Company.

The New 2L Notes, as set forth in the indenture governing such notes (the “New 2L Notes Indenture”), are scheduled to mature on May 31, 2021. The New 2L Notes bear interest at the rate of 13.50% per annum, payable quarterly in arrears on January 15, April 15, July 15 and October 15 of each year. The Company may elect to pay all or any portion of interest in-kind on the then outstanding principal amount of the New 2L Notes by increasing the principal amount of the outstanding New 2L Notes. 

The New 2L Notes Indenture contains certain covenants pertaining to us and our Subsidiary, including delivery of financial reports; environmental matters; conduct of business; use of proceeds; operation and maintenance of properties; collateral and guarantee requirements; indebtedness; liens; dividends and distributions; limits on sales of assets and stock; business activities; transactions with affiliates; and changes of control. The New 2L Notes Indenture also contains a financial covenant which requires the maintenance of a Total Proved Asset Coverage Ratio not to be less than 1.50 to 1.00.

The New 2L Notes are convertible into the Company’s common stock at the conversion rate, which is the sum of the outstanding principal amount of New 2L Notes to be converted, including any accrued and unpaid interest, divided by the conversion price, which shall initially be $21.33, subject to certain adjustments as described in the New 2L Notes Indenture. Upon conversion, the Company must deliver, at its option, either (1) a number of shares of its common stock determined as set forth in the New 2L Notes Indenture, (2) cash or (3) a combination of shares of its common stock and cash; however, the Company’s ability to redeem the New 2L Notes with cash is subject to the terms of the 2019 Senior Credit Agreement.

15

GOODRICH PETROLEUM CORPORATION AND SUBSIDIARY

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

The New 2L Notes were issued and sold to the New 2L Notes Purchasers pursuant to an exemption from the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”), pursuant to Section 4(a)(2) thereunder. The Company has completed the registration with the U.S. Securities and Exchange Commission of the resale of the New 2L Notes and the shares of common stock issuable upon conversion of The New 2L Notes.

Upon issuance of the New 2L Notes on May 31, 2019, in accordance with accounting standards related to convertible debt instruments that may be settled in cash upon conversion, we recorded a debt discount of $1.4 million, thereby reducing the $12.0 million carrying value upon issuance to $10.6 million and recorded an equity component of $1.4 million. The equity component was valued using a binomial model. The debt discount is amortized using the effective interest rate method based upon an original term through May 31, 2021.

As of September 30, 2019, $1.3 million of debt discount and $0.4 million of debt issuance costs remained to be amortized on the New 2L Notes.

As of September 30, 2019, the Company was in compliance with all covenants within the New 2L Notes Indenture.

NOTE 5—Equity

During the three and nine months ended September 30, 2019, zero and 150,000, respectively, of the 10-year costless warrants associated with the Convertible Second Lien Notes were exercised. The Company received cash for the one cent par value for the issuance of the 150,000 common shares. As of September 30, 2019, no such warrants remain un-exercised. During the three and nine months ended September 30, 2019, the Company had vestings of its share-based compensation units representing a total fair value of $0.1 million and resulting in the issuance of approximately 12,000 common shares. During the three and nine months ended September 30, 2019, the Company paid less than $0.1 million and $0.5 million, respectively, in cash for the purchase of 352 and 47,133 Treasury shares, respectively, withheld from employees upon the vesting of restricted stock awards for the payment of taxes.

In connection with the issuance of the New 2L Notes, we recorded an equity component of $1.4 million. For further details, see Note 4.

During the three months ended September 30, 2018, no holders of the 10-year costless warrants associated with the Convertible Second Lien Notes exercised warrants. During the nine months ended September 30, 2018, certain holders of the 10-year costless warrants associated with the Convertible Second Lien Notes exercised 862,812 warrants for the issuance of an equal amount of our one cent par value common stock. The Company received cash for the one cent par value for the issuance of 315,937 common shares. As of September 30, 2018, 207,500 of such warrants remained un-exercised. The Company did not have a material vesting of its share-based compensation units during the three or nine months ended September 30, 2018.

16

GOODRICH PETROLEUM CORPORATION AND SUBSIDIARY

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 6—Net Income (Loss) Per Common Share

Net income (loss) applicable to common stock was used as the numerator in computing basic and diluted net income (loss) per common share for the three and nine months ended September 30, 2019 and 2018. The Company used the treasury stock method in determining the effects of potentially dilutive restricted stock. The following table sets forth information related to the computations of basic and diluted net income (loss) per common share:

	Three Months Ended September 30, 2019		Three Months Ended September 30, 2018		Nine Months Ended September 30, 2019		Nine Months Ended September 30, 2018
	(Amounts in thousands, except per share data)
Basic net income (loss) per common share:
Net income (loss) applicable to common stock	$	1,988	$	1,666	$	14,215	$	(6,319	)
Weighted average shares of common stock outstanding		12,257		11,762		12,208		11,538
Basic net income (loss) per common share	$	0.16	$	0.14	$	1.16	$	(0.55	)
Diluted net income (loss) per common share:
Net income (loss) applicable to common stock	$	1,988	$	1,666	$	14,215	$	(6,319	)
Interest, discount and amortization on New 2L Notes		-		-		565		-
Adjusted net income (loss) per common share	$	1,988	$	1,666	$	14,780	$	(6,319	)
Weighted average shares of common stock outstanding		12,257		11,762		12,208		11,538
Common shares issuable upon conversion of the New 2L Notes		-		-		588		-
Common shares issuable upon conversion of warrants of unsecured claim holders		1,285		1,396		1,285		-
Common shares issuable upon conversion of the Convertible Second Lien Notes associated warrants		-		208		-		-
Common shares issuable to unsecured claim holders		-		39		-		-
Common shares issuable on assumed conversion of restricted stock (4)		498		641		416		-
Diluted weighted average shares of common stock outstanding		14,040		14,046		14,497		11,538
Diluted net income (loss) per common share (1) (2) (3)	$	0.14	$	0.12	$	1.02	$	(0.55	)
(1) Common shares issuable on assumed conversion of share-based compensation for the periods in 2018 were not included in the computation of diluted net loss per common share since their inclusion would have been anti-dilutive. (4)		-		-		-		445
(2) Common shares issuable upon conversion of the Convertible Second Lien Notes or New 2L Notes were not included in the computation of diluted net loss per common share since their inclusion would have been anti-dilutive.		588		1,875		-		1,875
(3) Common shares issuable upon conversion of the warrants associated with the Convertible Second Lien Notes and unsecured claim holders for the periods in 2018 were not included in the computation of diluted net loss per common share since their inclusion would have been anti-dilutive.		-		-		-		1,642

(4) Common shares issuable on assumed conversion of share-based compensation assumes a payout of the Company's performance share awards at 100% of the initial units granted (or a ratio of one unit to one common share). The range of common stock shares which may be earned ranges from zero to 250% of the initial performance units granted.

17

GOODRICH PETROLEUM CORPORATION AND SUBSIDIARY

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 7—Income Taxes

We recorded no income tax expense or benefit for either the three or nine months ended September 30, 2019 or 2018. We recorded a valuation allowance for our net deferred tax asset at December 31, 2016. We recorded this valuation allowance at this date after an evaluation of all available evidence (including our history of net operating losses) that led to a conclusion that based upon the more-likely-than-not standard of the accounting literature, these deferred tax assets were unrecoverable. The valuation allowance was $84.1 million as of December 31, 2018, which resulted in a net non-current deferred tax asset of $0.8 million appearing on our statement of financial position as of December 31, 2018. The net $0.8 million deferred tax asset related to Alternative Minimum Tax (“AMT”) credits, which are expected to be fully refundable in tax years 2018 - 2021 regardless of the Company's regular tax liability. During the three months ended September 30, 2019, the Company reclassed $0.4 million from the deferred tax asset to accounts receivable representing the refund we expect to receive in connection with the monetization of the AMT credits in tax year 2018 leaving the remaining $0.4 million recorded as a deferred tax asset as of September 30, 2019. Considering the Company’s taxable income forecasts, our assessment of the realization of our deferred tax assets has not changed, and we continue to maintain a full valuation allowance for our net deferred tax assets as of September 30, 2019 aside from the deferred tax asset related to the AMT credits.

As of September 30, 2019, we have no unrecognized tax benefits. There were no significant changes to our tax position since December 31, 2018.

NOTE 8—Commodity Derivative Activities

We use commodity and financial derivative contracts to manage fluctuations in commodity prices. We are currently not designating our derivative contracts for hedge accounting. All derivative gains and losses are from our oil and natural gas derivative contracts and have been recognized in “Other income (expense)” on our Consolidated Statements of Operations.

The following table summarizes gains and losses we recognized on our oil and natural gas derivatives for the three and nine months ended September 30, 2019 and 2018:

	Three Months Ended September 30, 2019			Three Months Ended September 30, 2018			Nine Months Ended September 30, 2019		Nine Months Ended September 30, 2018
Oil and Natural Gas Derivatives (in thousands)
Gain (loss) on commodity derivatives not designated as hedges, settled	$	5,922		$	(196	)	$	6,135	$	(737	)
Gain (loss) on commodity derivatives not designated as hedges, not settled		(2,170	)		(41	)		9,262		(2,655	)
Total gain (loss) on commodity derivatives not designated as hedges	$	3,752		$	(237	)	$	15,397	$	(3,392	)

Commodity Derivative Activity

We enter into swap contracts, costless collars or other derivative agreements from time to time to manage commodity price risk for a portion of our production. Our policy is that all derivatives are approved by the Hedging Committee of our Board, and reviewed periodically by the Board.

Despite the measures taken by us to attempt to control price risk, we remain subject to price fluctuations for natural gas and crude oil sold in the spot market. Prices received for natural gas sold on the spot market are volatile due primarily to seasonality of demand and other factors beyond our control. Decreases in domestic crude oil and natural gas spot prices will have a material adverse effect on our financial position, results of operations and quantities of reserves recoverable on an economic basis. We routinely exercise our contractual right to net realized gains against realized losses when settling with our financial counter-parties. Neither our counter-parties nor we require any collateral upon entering into derivative contracts. We would have been at risk of losing $9.6 million had SunTrust Bank and RBC Capital Markets been unable to fulfill their obligations as of September 30, 2019.

18

GOODRICH PETROLEUM CORPORATION AND SUBSIDIARY

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

As of September 30, 2019, the open positions on our outstanding commodity derivative contracts, all of which were with SunTrust Bank and RBC Capital Markets, were as follows:

Contract Type	Average Daily Volume		Total Remaining Volume		Weighted Average Fixed Price		Fair Value at September 30, 2019 (In thousands)
Oil swaps (Bbls)
2019		300		27,600	$	51.08	$	(74	)
2020		221		80,945	$	59.02		599
2021 (through March 31, 2021)		200		18,000	$	56.58		112
Total oil							$	637
Natural Gas swaps (MMBtu)
2019		100,000		9,200,000	$	2.89	$	4,277
2020		52,000		18,897,000	$	2.67		4,382
2021 (through March 31, 2021)		43,000		3,839,000	$	2.64		7
Natural Gas collar (MMBtu)
2020		18,000		6,693,000		$2.40 - $2.625		615
2021 (through March 31, 2021)		27,000		2,430,000		$2.40 - $2.625		(324	)
Total natural gas							$	8,957
Total oil and natural gas							$	9,594

During the third quarter of 2019 we entered into the following contracts with SunTrust Bank and RBC Capital Markets:

Contract Type	Average Daily Volume		Weighted Average Fixed Price	Contract Start Date	Contract Termination
Natural gas swap (MMBtu)		24,748	$2.50	April 1, 2020	March 31, 2021
Natural gas collar (MMBtu)		24,995	$2.40 - $2.625	April 1, 2020	March 31, 2021

The following table summarizes the fair values of our derivative financial instruments that are recorded at fair value classified in each Level as of September 30, 2019 (in thousands). We measure the fair value of our commodity derivative contracts by applying the income approach. See Note 1—“Description of Business and Significant Accounting Policies” for our discussion regarding fair value, including inputs used and valuation techniques for determining fair values.

Description	Level 1		Level 2			Level 3		Total
Fair value of oil and natural gas derivatives - Current Assets	$	-	$	9,213		$	-	$	9,213
Fair value of oil and natural gas derivatives - Non-current Assets		-		708			-		708
Fair value of oil and natural gas derivatives - Current Liabilities		-		(74	)		-		(74	)
Fair value of oil and natural gas derivatives - Non-current Liabilities		-		(253	)		-		(253	)
Total	$	-	$	9,594		$	-	$	9,594

We enter into oil and natural gas derivative contracts under which we have netting arrangements with each counter-party. The following table discloses and reconciles the gross amounts to the amounts as presented on the Consolidated Balance Sheets as of September 30, 2019 and December 31, 2018:

	September 30, 2019									December 31, 2018
Fair Value of Oil and Natural Gas Derivatives	Gross			Amount			As			Gross			Amount			As
(in thousands)	Amount			Offset			Presented			Amount			Offset			Presented
Fair value of oil and natural gas derivatives - Current Assets	$	9,624		$	(411	)	$	9,213		$	2,893		$	(2,090	)	$	803
Fair value of oil and natural gas derivatives - Non-current Assets		2,072			(1,364	)		708			-			-			-
Fair value of oil and natural gas derivatives - Current Liabilities		(485	)		411			(74	)		(2,090	)		2,090			-
Fair value of oil and natural gas derivatives - Non-current Liabilities		(1,617	)		1,364			(253	)		(471	)		-			(471	)
Total	$	9,594		$	-		$	9,594		$	332		$	-		$	332

19

GOODRICH PETROLEUM CORPORATION AND SUBSIDIARY

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 9—Commitments and Contingencies

We are party to various lawsuits from time to time arising in the normal course of business, including, but not limited to, royalty, contract, personal injury, and environmental claims. We have established reserves as appropriate for all such proceedings and intend to vigorously defend these actions. Management believes, based on currently available information, that adverse results or judgments from such actions, if any, would not have been material to our consolidated financial position, results of operations or liquidity for the three and nine months ended September 30, 2019 and 2018.

NOTE 10—Leases

We adopted ASU 2016-02, Leases, on January 1, 2019, and we elected the transition relief package of practical expedients. We determine if an arrangement is or contains a lease at inception. Leases with an initial term of 12 months or less are not recorded on our Consolidated Balance Sheets. We lease our corporate office building in Houston, Texas. We recognize lease expense for this lease on a straight-line basis over the lease term. This operating lease is included in furniture, fixtures and equipment and other capital assets, accrued liabilities and other non-current liabilities on our Consolidated Balance Sheets. The operating lease asset and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term. As this lease did not provide an implicit rate, we used a collateralized incremental borrowing rate based on the information available at commencement date, including lease term, in determining the present value of future payments. The operating lease asset includes any lease payments made but excludes annual operating charges. Operating lease expense is recognized on a straight-line basis over the lease term and reported in general and administrative operating expense on our Consolidated Statements of Operations. We have also entered into leases for certain vehicles and other equipment which are immaterial to our financial statements and have therefore not been recorded on our Consolidated Balance Sheets.

The lease cost components for the three and nine months ended September 30, 2019 are classified as follows:

(in thousands)	Three Months Ended September 30, 2019		Nine Months Ended September 30, 2019		Consolidated Statements of Operations Classification
Building lease cost	$	368	$	1,124	General and administrative expense
Variable lease cost (1)		50		145	General and administrative expense
	$	418	$	1,269

(1) Includes building operating expenses.

The following are additional details related to our lease portfolio as of September 30, 2019:

(in thousands)	September 30, 2019			Consolidated Balance Sheets Classification
Lease asset, gross	$	2,922		Furniture, fixtures and equipment and other capital assets
Accumulated depreciation		(939	)	Accumulated depletion, depreciation and amortization
Lease asset, net	$	1,983
Current lease liability	$	1,386		Accrued liabilities
Non-current lease liability		1,164		Other non-current liabilities
Total lease liabilities	$	2,550

20

GOODRICH PETROLEUM CORPORATION AND SUBSIDIARY

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

The following table presents operating lease liability maturities as of September 30, 2019:

(in thousands)	September 30, 2019
2019	$	385
2020		1,540
2021		813
2022		-
2023		-
Thereafter		-
Total lease payments	$	2,738
Less imputed interest	$	188
Present value of lease liabilities	$	2,550

The future minimum obligations under operating leases in effect as of December 31, 2018 having a noncancelable term in excess of one year as determined prior to the adoption of ASU 842 are as follows:

(in thousands)	December 31, 2018
2019	$	3,753
2020		1,556
2021		513
2022		-
2023		-
Thereafter		-
Future minimum lease obligations	$	5,822

As of September 30, 2019, our office building operating lease has a weighted-average remaining lease term of 1.6 years and a weighted-average discount rate of 8.0 percent. Cash paid for amounts included in the measurement of operating lease liabilities was $0.4 million and $1.2 million for the three and nine months ended September 30, 2019, respectively.

NOTE 11—Dispositions

On March 1, 2019, the Company closed on the sale of working interests in certain non-core Haynesville Shale Trend oil and gas leases and related facilities in Caddo Parish, Louisiana for total consideration of $1.3 million, subject to customary post-closing adjustments. The disposition was recorded as a reduction to our oil and natural gas properties (full cost method) on our Consolidated Balance Sheets.

On May 21, 2018, the Company closed on the sale of working interests in certain oil and gas leases, including wells, facilities and leasehold acres, in our Tuscaloosa Marine Shale Trend operating area located in East and West Feliciana Parish, Louisiana for total consideration of approximately $3.3 million with an effective date of May 1, 2018. The disposition was subject to customary post-closing adjustments. The disposition was recorded as a reduction to our oil and natural gas properties (full cost method) on our Consolidated Balance Sheet.

On February 28, 2018, the Company closed, in two separate transactions, the sale of working interests in certain oil and gas leases, wells, units and facilities and certain net leasehold interests in a portion of its undeveloped acreage in the Angelina River Trend in Angelina and Nacogdoches Counties, Texas to BP America Production Company for total consideration of $23.0 million, with an effective date of January 1, 2018. The disposition was subject to customary post-closing adjustments. The disposition was recorded as a reduction to our oil and natural gas properties (full cost method) on our Consolidated Balance Sheet. The Company utilized the proceeds from these dispositions to pay down the outstanding balance of the 2017 Senior Credit Facility on March 2, 2018 and to fund our capital expenditures program.

The Company also sold other miscellaneous acreage during the three and nine months ended September 30, 2018 for $0.4 million and $0.7 million, respectively, which was also recorded as a reduction to our oil and natural gas properties (full cost method) on our Consolidated Balance Sheet.

21

Item 2—Management’s Discussion and Analysis of Financial Condition and Results of Operations

CAUTIONARY STATEMENT ABOUT FORWARD-LOOKING STATEMENTS

We have made in this report, and may from time to time otherwise make in other public filings, press releases and discussions with our management, forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), concerning our operations, economic performance and financial condition. These forward-looking statements include information concerning future production and reserves, schedules, plans, timing of development, contributions from oil and natural gas properties, marketing and midstream activities, and also include those statements accompanied by or that otherwise include the words “may,” “could,” “believes,” “expects,” “anticipates,” “intends,” “estimates,” “projects,” “predicts,” “target,” “goal,” “plans,” “objective,” “potential,” “should,” or similar expressions or variations on such expressions that convey the uncertainty of future events or outcomes. For such statements, we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. We have based these forward-looking statements on our current expectations and assumptions about future events. These statements are based on certain assumptions and analyses made by us in light of our experience and perception of historical trends, current conditions and expected future developments as well as other factors we believe are appropriate under the circumstances. Although we believe that the expectations reflected in such forward-looking statements are reasonable, we can give no assurance that such expectations will prove to be correct. These forward-looking statements speak only as of the date of this report, or if earlier, as of the date they were made; we undertake no obligation to publicly update or revise any forward-looking statements whether as a result of new information, future events or otherwise.

These forward-looking statements involve risk and uncertainties. Important factors that could cause actual results to differ materially from our expectations include, but are not limited to, the following:

• the market prices of oil and natural gas;

• volatility in the commodity-futures market;

• financial market conditions and availability of capital;

• future cash flows, credit availability and borrowings;

• sources of funding for exploration and development;

• our financial condition;

• our ability to repay our debt;

• the securities, capital or credit markets;

• planned capital expenditures;

• future drilling activity;

• uncertainties about the estimated quantities of our oil and natural gas reserves;

• production;

• hedging arrangements;

• litigation matters;

• pursuit of potential future acquisition opportunities;

• general economic conditions, either nationally or in the jurisdictions in which we are doing business;

• legislative or regulatory changes, including retroactive royalty or production tax regimes, hydraulic-fracturing regulation, drilling and permitting regulations, derivatives reform, changes in state and federal corporate taxes, environmental regulation, environmental risks and liability under federal, state and foreign and local environmental laws and regulations;

• the creditworthiness of our financial counter-parties and operation partners; and

• other factors discussed below and elsewhere in this Quarterly Report on Form 10-Q and in our other public filings, press releases and discussions with our management.

For additional information regarding known material factors that could cause our actual results to differ from projected results please read the rest of this report and Part I, “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2018.

22

Overview

Goodrich Petroleum Corporation (“Goodrich” and, together with its subsidiary, Goodrich Petroleum Company, L.L.C. (the "Subsidiary”), “we,” “our,” or the “Company”) is an independent oil and natural gas company engaged in the exploration, development and production of oil and natural gas on properties primarily in (i) Northwest Louisiana and East Texas, which includes the Haynesville Shale Trend, (ii) Southwest Mississippi and Southeast Louisiana, which includes the Tuscaloosa Marine Shale Trend (“TMS”), and (iii) South Texas, which includes the Eagle Ford Shale Trend.

We seek to increase shareholder value by growing our oil and natural gas reserves, production, revenues and cash flow from operating activities (“operating cash flow”). In our opinion, on a long term basis, growth in oil and natural gas reserves, cash flow and production on a cost-effective basis are the most important indicators of performance success for an independent oil and natural gas company.

We strive to increase our oil and natural gas reserves, production and cash flow through exploration and development activities. We develop an annual capital expenditure budget, which is reviewed and approved by our Board of Directors (the “Board”) on a quarterly basis and revised throughout the year as circumstances warrant. We take into consideration our projected operating cash flow, commodity prices for oil and natural gas and externally available sources of financing, such as bank debt, asset divestitures, issuance of debt and equity securities, and strategic joint ventures, when establishing our capital expenditure budget.

We place primary emphasis on our operating cash flow in managing our business. Management considers operating cash flow a more important indicator of our financial success than other traditional performance measures such as net income because operating cash flow considers only the cash expenses incurred during the period and excludes the non-cash impact of unrealized hedging gains (losses), non-cash general and administrative expenses and impairments.

Our revenues and operating cash flow depend on the successful development of our inventory of capital projects with available capital, the volume and timing of our production, as well as commodity prices for oil and natural gas. Such pricing factors are largely beyond our control; however, we employ commodity hedging techniques in an attempt to minimize the volatility of short term commodity price fluctuations on our earnings and operating cash flow.

Primary Operating Areas

Haynesville Shale Trend

Our relatively low risk development acreage in this trend is primarily centered in Caddo, DeSoto and Red River parishes, Louisiana and Angelina and Nacogdoches counties, Texas. We have acquired or farmed-in leases totaling approximately 38,000 gross (22,000 net) acres as of September 30, 2019 in the Haynesville Shale Trend. We completed and produced 1 gross (0.9 net) new well in the third quarter of 2019 and had 6 gross (3.4 net) wells in the drilling or completions phase as of September 30, 2019. Our net production volumes from our Haynesville Shale Trend wells represented approximately 98% of our total equivalent production on a Mcfe basis and substantially all of our natural gas production for the third quarter of 2019. We are focusing on increasing our natural gas production volumes through increased drilling in the Haynesville Shale Trend, where we plan to focus all of our remaining 2019 drilling efforts.

Tuscaloosa Marine Shale Trend

We have acquired approximately 48,000 gross (33,000 net) lease acres in the TMS as of September 30, 2019 with approximately 46,000 gross (32,000 net) acres held by production. We have 2 gross (1.7 net) TMS wells drilled and awaiting completion. Our net production volumes from our TMS wells represented approximately 2% of our total equivalent production on a Mcfe basis and substantially all of our total oil production for the third quarter of 2019. Despite no capital expenditures, we are seeking to maintain production through strategic expense workover operations in the TMS.

Eagle Ford Shale Trend

We have retained approximately 12,000 net acres of undeveloped leasehold in the Eagle Ford Shale Trend in Frio County, Texas as of September 30, 2019, which is prospective for future development or sale.

23

Results of Operations

The item that had the most material financial effect on our net income of $2.0 million for the three months ended September 30, 2019 was a $3.8 million gain on derivatives not designated as hedges. The majority of the gain was attributable to settlement of our natural gas derivative positions at prices lower than our fixed contract prices. The items that had the most material financial effect on our net income of $14.2 million for the nine months ended September 30, 2019, in addition to derivative settlement and mark-to-market gains, were oil and gas revenues, transportation and processing expense and depletion, depreciation and amortization expense. All these items increased compared to the nine months ended September 30, 2018, which is primarily attributable to production volume increases.

The Company recorded net income of $1.7 million for the three months ended September 30, 2018 and a net loss of $6.3 million for nine months ended September 30, 2018. The items that had the most material financial effect on our net loss of $6.3 million for the nine months ended September 30, 2018 were a $3.4 million loss on our commodity derivatives not designated as hedges, $4.7 million share-based compensation included in general and administrative expense and $8.5 million in interest expense. All but $1.3 million of these items are non-cash expenses.

We recognized operating income in each period presented due to our increasing revenues attributed to increased production volumes.

The following table reflects our summary operating information for the periods presented (in thousands, except for price and volume data). Because of normal production declines, increased or decreased drilling activity and the effects of acquisitions or divestitures, the historical information presented below should not be interpreted as indicative of future results.

Revenues from Operations

	Three Months Ended September 30,									Nine Months Ended September 30,
(In thousands, except for price and average daily production data)	2019		2018		Variance					2019		2018		Variance
Revenues:
Natural gas	$	24,684	$	20,572	$	4,112		20	%	$	79,986	$	42,289	$	37,697		89	%
Oil and condensate		2,477		3,759		(1,282	)	(34	)%		8,207		11,669		(3,462	)	(30	)%
Natural gas, oil and condensate		27,161		24,331		2,830		12	%		88,193		53,958		34,235		63	%
Net Production:
Natural gas (Mmcf)		12,257		7,479		4,778		64	%		33,622		15,601		18,021		116	%
Oil and condensate (MBbls)		42		52		(10	)	(19	)%		134		169		(35	)	(21	)%
Total (Mmcfe)		12,506		7,789		4,717		61	%		34,425		16,617		17,808		107	%
Average daily production (Mcfe/d)		135,936		84,663		51,273		61	%		126,097		60,868		65,229		107	%
Average realized sales price per unit:
Natural gas (per Mcf)	$	2.01	$	2.75	$	(0.74	)	(27	)%	$	2.38	$	2.71	$	(0.33	)	(12	)%
Natural gas (per Mcf) including the effect of realized gains/losses on derivatives	$	2.51	$	2.80	$	(0.29	)	(10	)%	$	2.58	$	2.77	$	(0.19	)	(7	)%
Oil and condensate (per Bbl)	$	59.67	$	72.29	$	(12.62	)	(17	)%	$	61.40	$	69.05	$	(7.65	)	(11	)%
Oil and condensate (per Bbl) including the effect of realized losses on derivatives	$	56.09	$	61.37	$	(5.28	)	(9	)%	$	57.52	$	59.25	$	(1.73	)	(3	)%
Average realized price (per Mcfe)	$	2.17	$	3.12	$	(0.95	)	(30	)%	$	2.56	$	3.25	$	(0.69	)	(21	)%

Natural gas, oil and condensate revenues increased by $2.8 million and $34.2 million, respectively for the three and nine months ended September 30, 2019compared to the same periods in 2018. The increase was primarily driven by increased natural gas production offset by lower realized commodity prices and decreased oil production. The increase in natural gas production volumes is attributed to one operated Haynesville Shale Trend well completed in the third quarter of 2019 and the continued production of an additional eight operated and six non-operated Haynesville Shale Trend wells completed since the third quarter of 2018. We have brought 8 gross (6.0 net) Haynesville Trend wells on production since September 30, 2018. For the three and nine months ended September 30, 2019, 91% of our oil and natural gas revenue was attributable to natural gas sales compared to 85% and 78%, respectively for the three and nine months ended September 30, 2018.

24

Operating Expenses

As described below, total operating expenses increased $7.6 million to $26.9 million for the three months ended September 30, 2019 and increased $30.2 million to $78.5 million for the nine months ended September 30, 2019, compared to the same periods in 2018. The increase in total operating expenses for the three and nine months ended September 30, 2019 was primarily due to the increase in the number of producing wells and an increase in depreciation, depletion and amortization and transportation expense discussed further below.

	Three Months Ended September 30,									Nine Months Ended September 30,
Operating Expenses (in thousands)	2019		2018		Variance					2019		2018		Variance
Lease operating expenses	$	2,589	$	2,588	$	1		0	%	$	8,902	$	7,619	$	1,283		17	%
Production and other taxes		623		959		(336	)	(35	)%		1,878		2,268		(390	)	(17	)%
Transportation and processing		5,107		3,344		1,763		53	%		15,562		6,742		8,820		131	%
Operating Expenses per Mcfe
Lease operating expenses	$	0.21	$	0.33	$	(0.12	)	(36	)%	$	0.26	$	0.46	$	(0.20	)	(43	)%
Production and other taxes	$	0.05	$	0.12	$	(0.07	)	(58	)%	$	0.05	$	0.14	$	(0.09	)	(64	)%
Transportation and processing	$	0.41	$	0.43	$	(0.02	)	(5	)%	$	0.45	$	0.41	$	0.04		10	%

Lease Operating Expense

Lease operating expense (“LOE”) remaining steady at $2.6 million and increased $1.3 million to $8.9 million, respectively, during the three and nine months ended September 30, 2019 compared to the same periods in 2018. The increase in LOE between years was totally attributable to increased production volumes which increased variable lease operating costs such as saltwater disposal and equipment rental expenses while fixed expenses remained relatively the same between periods. The per unit cost of production has been driven down to $0.21 per mcfe and $0.26 per mcfe, respectively, for the three and nine months ended September 30, 2019. Per unit LOE is expected to continue to decrease as we increase production in the Haynesville Shale Trend, which carries a much lower per unit LOE than the Company’s current per unit rate.

Production and Other Taxes

Production and other taxes includes severance and ad valorem taxes. Severance taxes were $0.4 million and $1.1 million respectively for the three and nine months ended September 30, 2019, which decreased by $0.4 million from the same periods in 2018. Severance taxes in 2018 were higher due to a non-recurring tax rate true-up associated with our non-operated take-in-kind natural gas volumes. Ad valorem taxes were $0.2 million and $0.8 million, respectively, for the three and nine months ended September 30, 2019, which was relatively unchanged from the same periods in 2018. The State of Louisiana has enacted an exemption from the existing 12.5% severance tax on oil and from the $0.111 per Mcf (from July 1, 2017 through June 30, 2018), $0.122 per Mcf (from July 1, 2018 through June 30, 2019) and $0.125 per Mcf (which began on July 1, 2019) severance tax on natural gas for horizontal wells with production commencing after July 31, 1994. The exemption is applicable until the earlier of (i) 24 months from the date of first sale of production or (ii) payout of the well. Our recently drilled Haynesville Shale Trend wells in Northwest Louisiana are benefiting from this exemption. Though ad valorem tax remained relatively unchanged between the periods presented, we expect ad valorem taxes to increase as our newly producing wells begin to be valued by the taxing jurisdictions. 

Transportation and Processing

Transportation and processing expense for the three and nine months ended September 30, 2019 increased compared to the same periods in 2018, reflecting increased production from our Haynesville Shale Trend wells. Our natural gas volumes from our operated wells generally carry less transportation cost per Mcf than wells we do not operate. Despite an increase in our operated natural gas production volumes between years, our cost per Mcfe decreased for the three months but increased for the three and nine months ended September 30, 2019 compared to 2018. This per unit increase for the nine months ended September 30, 2019 is partially attributed to the mix of oil and natural gas production volumes during the year as our oil production is decreasing and not burdened by transportation and processing cost. Additionally, the wells we have recently put on production are producing from leases that stipulate that the royalty is free from transportation cost; consequently, we currently are incurring a proportionately higher transportation cost on the production from those wells. 

25

	Three Months Ended September 30,										Nine Months Ended September 30,
Operating Expenses (in thousands):	2019		2018			Variance					2019		2018		Variance
Depreciation, depletion and amortization	$	13,205	$	7,922		$	5,282		67	%	$	36,550	$	16,934	$	19,616		116	%
General and administrative		5,196		4,644			552		12	%		15,442		14,643		799		5	%
Other		228		(60	)		288		480	%		179		105		74		70	%
Operating Expenses per Mcfe
Depreciation, depletion and amortization	$	1.06	$	1.02		$	0.04		4	%	$	1.06	$	1.02	$	0.04		4	%
General and administrative	$	0.42	$	0.60		$	(0.18	)	(30	)%	$	0.45	$	0.88	$	(0.43	)	(49	)%
Other	$	0.02	$	(0.01	)	$	0.03		300	%	$	0.01	$	0.01	$	-		0	%

Depreciation, Depletion and Amortization (“DD&A”)

DD&A expense is calculated on the Full Cost Method using the units of production (the “UOP”) method. The increase in DD&A expense was attributed primarily to increased production as well as an increased DD&A rate for the three and nine months ended September 30, 2019 as compared to the same period in 2018. The increased rate takes into account the estimated future cost of drilling and completing wells.

General and Administrative (“G&A”)

The Company recorded $5.2 million and $15.4 million respectively in G&A expense for the three and nine months ended September 30, 2019, which is an increase of $0.6 million and $0.8 million, respectively, compared to the same periods in 2018. G&A expense for 2019 included increased compensation expense and increased directors costs related to the increase in number of directors on our board of directors. We also incurred increased legal fees in 2019 due to preparation of the Notice of Stockholder Action by Written Consent and preparation of the annual Proxy, which provided for changes to the Original Certificate of Incorporation. The Written Consent and Proxy were filed with the Securities and Exchange Commission on June 24, 2019 and July 19, 2019, respectively. G&A expense for the three and nine months ended September 30, 2019 included non-cash expenses of $1.6 million and $4.7 million, respectively, for share-based compensation, which is virtually unchanged from the same periods in 2018.

Other Income (Expense)

	Three Months Ended September 30,											Nine Months Ended September 30,
Other income (expense) (in thousands):	2019			2018			Variance					2019			2018			Variance
Interest expense	$	(1,981	)	$	(3,105	)	$	1,124		(36	)%	$	(9,036	)	$	(8,510	)	$	(526	)	6	%
Interest income and other		-			1			(1	)	(100	)%		24			110			(86	)	(78	)%
Gain (loss) on commodity derivatives not designated as hedges		3,752			(237	)		3,989		1683	%		15,397			(3,392	)		18,789		554	%
Loss on early extinguishment of debt		-			-			-		0	%		(1,846	)		-			(1,846	)	(100	)%
Average funded borrowings adjusted for debt discount	$	95,761		$	58,196		$	37,565		65	%	$	92,641		$	51,077		$	41,564		81	%
Average funded borrowings	$	99,598		$	63,206		$	36,392		58	%	$	96,323		$	57,568		$	38,755		67	%

Interest Expense

Interest expense for the three and nine months ended September 30, 2019 reflected interest payable in cash of $1.2 million and $2.7 million, respectively, incurred on the 2017 Senior Credit Facility and 2019 Senior Credit Facility and non-cash interest of $0.7 million and $6.3 million, respectively, incurred primarily on the Company's Convertible Second Lien Notes and New 2L Notes, which included $0.4 million and $3.6 million, respectively, of paid in-kind interest and $0.3 million and $2.8 million, respectively, of debt discount and debt issuance cost amortization.

Interest expense for the three and nine months ended September 30, 2018 reflected cash interest of $0.3 million and $0.5 million, respectively, incurred on the 2017 Senior Credit Facility and non-cash interest of $2.8 million and $8.0 million, respectively, incurred on the Company's Convertible Second Lien Notes, which included $1.7 million and $4.9 million, respectively, of paid in-kind interest and $1.1 million and $2.9 million, respectively, of debt discount and debt issuance cost amortization.

Interest expense increased in the 2019 periods presented compared to the same periods in 2018 due to increased funded debt, mainly resulting from the accretion of the paid in-kind interest on our Convertible Second Lien Notes. On May 29, 2019, we redeemed our Convertible Second Lien Notes using borrowings from our 2019 Senior Credit Facility and recorded a $1.8 million loss on early extinguishment of debt. On May 31, 2019, we issued $12.0 million of new convertible second lien notes. The result of these transactions going forward will result in the Company incurring less interest expense overall but an increase in interest payable in cash.

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Gain (Loss) on Commodity Derivatives Not Designated as Hedges

 Gain on commodity derivatives not designated as hedges for the three months ended September 30, 2019 was comprised of $5.9 million gain on cash settlements during the period offset by a mark-to-market loss of $2.2 million, representing the change of the fair value of our natural gas derivative contracts from June 30, 2019. Gain on commodity derivatives not designated as hedges for the nine months ended September 30, 2019 was comprised of a mark-to-market gain of $9.3 million, representing the change of the fair value of our natural gas derivative contracts from December 31, 2018, and a $6.1 million gain on net cash settlements during the period. Natural gas futures prices continued to fall below our fixed contract prices in the third quarter of 2019 resulting in our derivative asset position. Since we do not apply hedge accounting on our derivatives contracts there can be large swings in our reported gain or losses between periods. Going forward, any increase in natural gas futures prices would result in recording of losses in future periods.

Loss on commodity derivatives not designated as hedges for the three and nine months ended September 30, 2018 was comprised of a mark-to-market loss of $0.1 million and $2.7 million, respectively, representing the change of the fair value of our open natural gas and oil derivative contracts, as well as a loss of $0.2 million and $0.7 million, respectively, on cash settlements of natural gas and oil derivative contracts.

Income Tax Benefit

We recorded no income tax expense or benefit for the three or nine months ended September 30, 2019. We recorded a valuation allowance for our net deferred tax asset at December 31, 2016. We recorded this valuation allowance at this date after an evaluation of all available evidence (including our history of net operating losses) that led to a conclusion that based upon the more-likely-than-not standard of the accounting literature, these deferred tax assets were unrecoverable.

The valuation allowance was $84.1 million as of December 31, 2018, which resulted in a net non-current deferred tax asset of $0.8 million appearing on our statement of financial position as of December 31, 2018. The net $0.8 million deferred tax asset related to Alternative Minimum Tax (“AMT”) credits, which are expected to be fully refundable in tax years 2018 - 2021 regardless of the Company's regular tax liability. During the three months ended September 30, 2019, the Company reclassed $0.4 million from the deferred tax asset to accounts receivable representing the refund we expect to receive in connection with the monetization of the AMT credits in tax year 2018 leaving the remaining $0.4 million recorded as a deferred tax asset as of September 30, 2019. Considering the Company’s taxable income forecasts, our assessment of the realization of our deferred tax assets has not changed, and we continue to maintain a full valuation allowance for our net deferred tax assets as of September 30, 2019 aside from the deferred tax asset related to the AMT credits.

Adjusted EBITDA

Adjusted EBITDA is a supplemental non-United States Generally Accepted Accounting Principle (“US GAAP”) financial measure that is used by management and external users of our consolidated financial statements, such as industry analysts, investors, lenders and rating agencies. The Company defines Adjusted EBITDA as earnings before interest expense, income and similar tax, DD&A, share-based compensation expense and impairment of oil and natural gas properties (if any). In calculating Adjusted EBITDA, gains/losses on reorganization and mark-to-market gains/losses on commodity derivatives not designated as hedges are also excluded. Other excluded items include adjustments resulting from the accounting for operating leases under Accounting Standards Codification (“ASC”) 842, interest income and any extraordinary non-cash gains or losses. Adjusted EBITDA is not a measure of net income (loss) as determined by US GAAP. Adjusted EBITDA should not be considered an alternative to net income (loss), as defined by US GAAP.

The following table presents a reconciliation of the non-US GAAP measure of Adjusted EBITDA to the US GAAP measure of net income (loss), its most directly comparable measure presented in accordance with US GAAP:

	Three Months Ended September 30,					Nine Months Ended September 30,
(In thousands)	2019		2018			2019			2018
Net income (loss) (US GAAP)	$	1,988	$	1,666		$	14,215		$	(6,319	)
Interest expense		1,981		3,105			9,036			8,510
Depreciation, depletion and amortization		13,205		7,922			36,550			16,934
Share-based compensation expense (non-cash)		1,617		1,597			4,765			4,763
(Gain) loss on commodity derivatives not designated as hedges, not settled		2,170		41			(9,262	)		2,655
Loss on early extinguishment of debt		-		-			1,846			-
Other items (1)		297		(45	)		855			54
Adjusted EBITDA	$	21,258	$	14,286		$	58,005		$	26,597

(1) Other items include $0.3 million, zero, $0.9 million and zero, respectively, from the impact of accounting for operating leases under ASC 842 as well as interest income, reorganization items and other non-recurring income and expense.

Management believes that this non-US GAAP financial measure provides useful information to investors because it is monitored and used by our management and widely used by professional research analysts in the valuation and investment recommendations of companies within the oil and natural gas exploration and production industry.

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Liquidity and Capital Resources

Overview

Our primary sources of cash during the first nine months of 2019 were cash on hand, cash from operating activities, net proceeds from borrowings on our senior credit facilities and proceeds from the sale of assets. We used cash primarily to fund capital expenditures. We currently plan to fund our operations and capital expenditures for the remainder of 2019 through a combination of cash on hand, cash from operating activities and borrowings under the 2019 Senior Credit Facility, although we may from time to time consider the funding alternatives described below.

On May 14, 2019, the Company entered into a Second Amended and Restated Senior Secured Revolving Credit Agreement (the “2019 Credit Agreement”) among the Company, the Subsidiary, as borrower (in such capacity, the “Borrower”), SunTrust Bank, as administrative agent (the “Administrative Agent”), and certain lenders that are party thereto, which provides for revolving loans of up to the borrowing base then in effect (the “2019 Senior Credit Facility”). The 2019 Senior Credit Facility amends, restates and refinances the obligations under our 2017 Credit Agreement.

The 2019 Senior Credit Facility matures (a) May 14, 2024 or (b) the date that is 180 days prior to the “Maturity Date” as defined in the indenture governing the New 2L Notes (the “New 2L Notes Indenture”) as in effect on the issuance date of the New 2L Notes if the New 2L Notes (as defined below) have not been voluntarily redeemed, repurchased, refinanced or otherwise retired by such date. The maximum credit amount under the 2019 Senior Credit Facility is $500 million with a current borrowing base of $125 million. The borrowing base is scheduled to be redetermined in March and September of each calendar year, and is subject to additional adjustments from time to time, including for asset sales, elimination or reduction of hedge positions and incurrence of other debt. Additionally, each of the Borrower and the Administrative Agent may request one unscheduled redetermination of the borrowing base between scheduled redeterminations. The amount of the borrowing base is determined by the lenders at their sole discretion and consistent with their oil and gas lending criteria at the time of the relevant redetermination. The Borrower may also request the issuance of letters of credit under the 2019 Credit Agreement in an aggregate amount up to $10 million, which reduce the amount of available borrowings under the borrowing base in the amount of such issued and outstanding letters of credit.

On May 14, 2019, the Company and the Subsidiary entered into a purchase agreement with certain funds and accounts managed by Franklin Advisers, Inc., as investment manager (each such fund or account, together with its successors and assigns, a “New 2L Notes Purchaser”) pursuant to which the Company issued to the New 2L Notes Purchasers (the “New 2L Notes Offering”) $12.0 million aggregate principal amount of the Company’s 13.50% Convertible Second Lien Senior Secured Notes due 2021 (the “New 2L Notes”). The closing of the New 2L Notes Offering occurred on May 31, 2019. Proceeds from the sale of the New 2L Notes were primarily used to pay down outstanding borrowings under the 2019 Senior Credit Facility. Holders of the New 2L Notes have a second priority lien on all assets of the Company.

The New 2L Notes, as set forth in the New 2L Notes Indenture, are scheduled to mature on May 31, 2021. The New 2L Notes bear interest at the rate of 13.50% per annum, payable quarterly in arrears on January 15, April 15, July 15 and October 15 of each year. The Company may elect to pay all or any portion of interest in-kind on the then outstanding principal amount of the New 2L Notes by increasing the principal amount of the outstanding New 2L Notes.

We exited the third quarter of 2019 with $1.2 million of cash on hand and $87.9 million of outstanding borrowings with $37.1 million of availability under the 2019 Senior Credit Facility borrowing base. Due to the timing of payment of our capital expenditures, we reflected a working capital deficit of $23.8 million as of September 30, 2019. To the extent we operate with a working capital deficit, we expect such deficit to be offset by liquidity available under our 2019 Senior Credit Facility.

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We continuously monitor our leverage position and coordinate our capital program with our expected cash flows and repayment of our projected debt. We will continue to evaluate funding alternatives as needed.

Alternatives available to us include:

• availability under the 2019 Senior Credit Facility;

• issuance of debt securities;

• joint ventures in our TMS and/or Haynesville Shale Trend acreage;

• sale of non-core assets; and

• issuance of equity securities if favorable conditions exist.

We have supported our cash flows with derivative contracts that covered approximately 76% of our natural gas sales volumes for the first nine months of 2019 and 65% of our oil volumes for the first nine months of 2019. For additional information on our derivative instruments see Note 8—“Commodity Derivative Activities” in the Notes to Consolidated Financial Statements under Part I, Item 1 of this Form 10-Q.

Cash Flows

The following table summarizes our cash flows for the periods indicated (in thousands):

	Three Months Ended September 30,						Nine Months Ended September 30,
	2019			2018			2019			2018
Cash flow statement information:
Net cash:
Provided by operating activities	$	15,594		$	24,080		$	56,847		$	36,735
Used in investing activities		(19,083	)		(32,005	)		(72,865	)		(58,185	)
Provided by (used in) financing activities		2,980			8,127			13,110			(2,611	)
Decrease in cash and cash equivalents	$	(509	)	$	202		$	(2,908	)	$	(24,061	)

Operating activities: Production from our wells, the price of oil and natural gas and operating costs represent the main drivers behind our cash flow from operations for the three and nine months ended September 30, 2019. Changes in working capital and net cash settlements related to our derivative contracts also impact cash flows. Net cash provided by operating activities for the three months ended September 30, 2019 was $15.6 million consisting of operating cash flows before working capital changes of $20.3 million reduced by negative working capital changes of $4.7 million. Net cash provided by operating activities for the three months ended September 30, 2019 was enhanced by $5.9 million net cash received from settled derivative contracts. Net cash provided by operating activities for the three months ended September 30, 2018 was $24.1 million including operating cash flows before working capital changes of $13.8 million reduced by net cash payments of $0.2 million in settlement of derivative contracts. Net cash provided by operating activities for the nine months ended September 30, 2019 was $56.8 million including operating cash flows before working capital changes of $55.7 million which included $6.1 million net cash received from settled derivative contracts. Net cash provided by operating activities for the nine months ended September 30, 2018 was $36.7 million including operating cash flows before working capital changes of $26.3 million reduced by net cash payments of $0.7 million in settlement of derivative contracts. Net cash provided by operating activities increased during the year to date period in 2019 compared to 2018 driven by revenue from production natural gas volume increases partially offset by lower realized commodity prices. The lower realized commodity prices were mitigated by our cash settled derivative contracts. 

Investing activities: Net cash used in investing activities was $72.9 million for the nine months ended September 30, 2019. We paid out cash amounts totaling $74.2 million for drilling and development operations during the period versus recorded capital expenditures of $80.0 million. The difference in capital expenditures and cash expended on capital projects for the year was attributed to a net capital accrual increase of $5.1 million and $0.7 million of capitalized non-cash internal costs. The period also reflects the receipt of $1.3 million in proceeds from the sales of non-core oil and gas properties. We conducted drilling operations on 12 wells and completed 6 wells all in the Haynesville Shale Trend during the nine months ended September 30, 2019, capitalizing $2.7 million in internal costs. Net cash used in investing activities was $19.1 million for the three months ended September 30, 2019 which reflected cash expended on capital projects. We recorded $25.5 million in capital expenditures in this period. The difference in capital expenditures and cash expended on capital projects for the three months ended September 30, 2019 was attributed to a net capital accrual increase of $6.1 million and $0.3 million of capitalized non-cash internal costs.

Financing activities: Net cash provided by financing activities for the three and nine months ended September 30, 2019 reflects primarily net borrowings under our revolving credit facilities as well as the payoff of the Convertible Second Lien Notes and issuance of the New 2L Notes along with associated issuance costs paid in connection with such transactions.

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Debt consisted of the following balances as of the dates indicated (in thousands):

	September 30, 2019				December 31, 2018
	Principal		Carrying Amount		Principal		Carrying Amount
2017 Senior Credit Facility	$	-	$	-	$	27,000	$	27,000
2019 Senior Credit Facility		87,900		87,900		-		-
Convertible Second Lien Notes (1)		-		-		53,691		49,820
New 2L Notes (2)		12,546		10,922		-		-
Total debt	$	100,446	$	98,822	$	80,691	$	76,820

(1) The debt discount was being amortized using the effective interest rate method based upon a maturity date of August 30, 2019 until the Convertible Second Lien Notes were fully paid off on May 29, 2019.

(2) The debt discount is being amortized using the effective interest rate method based upon a maturity date of May 31, 2021. The principal included $0.5 million of interest to be paid in-kind as of September 30, 2019. The carrying value included $1.3 million of unamortized debt discount as of September 30, 2019.

For additional information on our financing activities, see Note 4—“Debt” in the Notes to Consolidated Financial Statements under Part I, Item 1 of this Form 10-Q.

Off-Balance Sheet Arrangements

We do not currently have any off-balance sheet arrangements for any purpose.

Critical Accounting Policies and Estimates

Our discussion and analysis of our financial condition and results of operations are based on consolidated financial statements, which were prepared in accordance with US GAAP. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses. We believe that certain accounting policies affect the more significant judgments and estimates used in the preparation of our consolidated financial statements. Our Annual Report on Form 10-K for the year ended December 31, 2018 includes a discussion of our critical accounting policies and there have been no material changes to such policies during the three months ended September 30, 2019.

Item 3—Quantitative and Qualitative Disclosures about Market Risk

Our primary market risks are attributable to fluctuations in commodity prices and interest rates. These fluctuations can affect revenues and cash flow from operating, investing and financing activities. Our risk-management policies provide for the use of derivative instruments to manage these risks. The types of derivative instruments we utilize include futures, swaps, options and fixed-price physical-delivery contracts. The volume of commodity derivative instruments we utilize may vary from year to year and is governed by risk-management policies with levels of authority delegated by our Board. Both exchange and over-the-counter traded commodity derivative instruments may be subject to margin deposit requirements, and we may be required from time to time to deposit cash or provide letters of credit with exchange brokers or its counter-parties in order to satisfy these margin requirements.

For information regarding our accounting policies and additional information related to our derivative and financial instruments, see Note 1—“Description of Business and Significant Accounting Policies”, Note 4—“Debt” and Note 8—“Commodity Derivative Activities” in the Notes to Consolidated Financial Statements under Part I, Item 1 of this Quarterly Report on Form 10-Q.

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Commodity Price Risk

Our most significant market risk relates to fluctuations in crude oil and natural gas prices. Management expects the prices of these commodities to remain volatile and unpredictable. As these prices decline or rise significantly, revenues and cash flow will also decline or rise significantly. In addition, a non-cash write-down of our oil and natural gas properties may be required if future commodity prices experience a sustained and significant decline. We have entered into natural gas and oil derivative instruments in order to reduce the price risk associated with production for the remainder of 2019 of approximately 100,000 MMBtu and 300 barrels per day, respectively, for 2020 of 70,000 MMBtu and 221 barrels per day, respectively, and for the first quarter of 2021 for 70,000 MMBtu and 200 barrels per day, respectively. We did not enter into derivative instruments for trading purposes. Utilizing actual derivative contractual volumes, a hypothetical increase of 10% in the underlying commodity prices would have changed the natural gas asset position to a liability position with a change of $11.8 million and changed the derivative oil asset position to a liability position with a change of $0.6 million as of September 30, 2019. Likewise, a hypothetical decrease of 10% in the underlying commodity prices would have increased the derivative natural gas asset position by $12.0 million and increased the derivative oil asset position by $0.6 million as of September 30, 2019. Furthermore, a gain or loss would have been substantially offset by an increase or decrease, respectively, in the actual sales value of production covered by the derivative instruments.

Adoption of Comprehensive Financial Reform

The adoption of comprehensive financial reform legislation by the United States Congress could have an adverse effect on our ability to use derivative instruments to reduce the effect of commodity price, interest rate and other risks associated with our business. See Item 1A, “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2018.

Item 4—Controls and Procedures

Evaluation of Disclosure Controls and Procedures

We have established disclosure controls and procedures designed to ensure that material information required to be disclosed in our reports filed under the Exchange Act is recorded, processed, summarized and reported within the time periods specified by the Securities and Exchange Commission and that any material information relating to us is recorded, processed, summarized and reported to our management including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosures. In designing and evaluating our disclosure controls and procedures, our management recognizes that controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving desired control objectives. In reaching a reasonable level of assurance, our management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

As required by Rule 13a-15(b) under the Exchange Act, we have evaluated, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, the effectiveness of the design and operation of our disclosure controls and procedures (as defined in rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this report. Our Chief Executive Officer and Chief Financial Officer, based upon their evaluation as of September 30, 2019, the end of the period covered in this report, concluded that our disclosure controls and procedures were effective.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting that occurred during our most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II—OTHER INFORMATION

Item 1—Legal Proceedings

A discussion of our current legal proceedings is set forth in Part I, Item 1 under Note 9—“Commitments and Contingencies” to the Notes to Consolidated Financial Statements in this Quarterly Report on Form 10-Q.

As of September 30, 2019, we did not have any material outstanding and pending litigation.

Item 1A—Risk Factors

In addition to the other information set forth in this report, you should carefully consider the factors discussed in Part I, Item 1A. “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2018, which could materially affect our business, financial condition or future results. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially affect our business, financial condition or future results.

Item 2—Unregistered Sales of Equity Securities and Use of Proceeds

None.

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Item 6—Exhibits

3.1	Third Amended and Restated Certificate of Incorporation of Goodrich Petroleum Corporation, dated August 16, 2019, (Incorporated by reference to Exhibit 3.1 of the Company’s Registration Statement on Form 8-K (File No. 333-12719) filed on August 21, 2019).
3.2	Second Amended and Restated Bylaws of Goodrich Petroleum Corporation, dated October 12, 2016, (Incorporated by reference to Exhibit 4.2 of the Company’s Registration Statement on Form S-8 (File No. 333-214080) filed on October 12, 2016).
31.1*	Certification by Chief Executive Officer Pursuant to 15 U.S.C. Section 7241, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*	Certification by Chief Financial Officer Pursuant to 15 U.S.C. Section 7241, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1**	Certification by Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2**	Certification by Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS*	XBRL Instance Document
101.SCH*	XBRL Schema Document
101.CAL*	XBRL Calculation Linkbase Document
101.LAB*	XBRL Labels Linkbase Document
101.PRE*	XBRL Presentation Linkbase Document
101.DEF*	XBRL Definition Linkbase Document

*	Filed herewith
**	Furnished herewith

33

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	GOODRICH PETROLEUM CORPORATION (Registrant)
Date: November 7, 2019	By:	/S/ Walter G. Goodrich
		Walter G. Goodrich
		Chairman & Chief Executive Officer
Date: November 7, 2019	By:	/S/ Robert T. Barker
		Robert T. Barker
		Senior Vice President, Controller, Chief Accounting Officer and Chief Financial Officer

34

EX-31.1

Exhibit 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

PURSUANT TO RULE 13A-14(A) AND RULE 15D-14(A)

OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED

I, Walter G. Goodrich, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Goodrich Petroleum Corporation (the “registrant”);

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 7, 2019

/s/ Walter G. Goodrich

Walter G. Goodrich

Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER

PURSUANT TO RULE 13A-14(A) AND RULE 15D-14(A)

OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED

I, Robert T. Barker certify that:

1. I have reviewed this quarterly report on Form 10-Q of Goodrich Petroleum Corporation (the “registrant”);

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 7, 2019

/s/ Robert T. Barker

Robert T. Barker

Senior Vice President, Controller, Chief Accounting Officer and Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

UNDER SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002, 18 U.S.C. § 1350

In connection with the Quarterly Report of Goodrich Petroleum Corporation (the “Company”) on Form 10-Q for the quarter ended September 30, 2019 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Walter G. Goodrich, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Walter G. Goodrich

Walter G. Goodrich

Chief Executive Officer

November 7, 2019

This certification is provided pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by the Sarbanes-Oxley Act of 2002, be deemed filed by the Company or the certifying officer for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by it and furnished to the Securities and Exchange Commission or its staff upon request.

EX-32.2

Exhibit 32.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER

UNDER SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002, 18 U.S.C. § 1350

In connection with the Quarterly Report of Goodrich Petroleum Corporation (the “Company”) on Form 10-Q for the quarter ended September 30, 2019 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Robert T. Barker, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Robert T. Barker

Robert T. Barker

Senior Vice President, Controller, Chief Accounting Officer and Chief Financial Officer

November 7, 2019

This certification is provided pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by the Sarbanes-Oxley Act of 2002, be deemed filed by the Company or the certifying officer for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by it and furnished to the Securities and Exchange Commission or its staff upon request.

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Consolidated Statements of Stockholders' Equity/(Deficit) (Unaudited) - USD ($) $ in Thousands	Convertible Second Lien Notes [Member] Preferred Stock [Member]	Convertible Second Lien Notes [Member] Common Stock Outstanding [Member]	Convertible Second Lien Notes [Member] Additional Paid-in Capital [Member]	Convertible Second Lien Notes [Member] Treasury Stock [Member]	Convertible Second Lien Notes [Member] Retained Earnings [Member]	Convertible Second Lien Notes [Member]	New 2L Notes [Member] Preferred Stock [Member]	New 2L Notes [Member] Common Stock Outstanding [Member]	New 2L Notes [Member] Additional Paid-in Capital [Member]	New 2L Notes [Member] Treasury Stock [Member]	New 2L Notes [Member] Retained Earnings [Member]	New 2L Notes [Member]	Preferred Stock [Member]	Common Stock Outstanding [Member]	Additional Paid-in Capital [Member]	Treasury Stock [Member]	Retained Earnings [Member]	Total
Balance (in shares) at Dec. 31, 2017														10,771,000
Balance at Dec. 31, 2017														$ 108	$ 68,446		$ (12,303)	$ 56,251
Net income (loss)																	(6,319)	(6,319)
Share-based compensation															5,308			5,308
Restricted stock vesting & other (in shares)														205,000		(76,000)
Restricted stock vesting & other														$ 2	2,224	$ (838)		1,388
Conversion of convertible securities (in shares)		862,000
Conversion of convertible securities		$ 9	$ (5)			$ 4
Issuance cost															(64)			(64)
Balance (in shares) at Sep. 30, 2018														11,838,000		(76,000)
Balance at Sep. 30, 2018														$ 119	75,909	$ (838)	(18,622)	56,568
Balance (in shares) at Jun. 30, 2018														11,837,000		(76,000)
Balance at Jun. 30, 2018														$ 119	74,135	$ (832)	(20,288)	53,134
Net income (loss)																	1,666	1,666
Share-based compensation															1,774			1,774
Restricted stock vesting & other (in shares)														1,000
Restricted stock vesting & other																$ (6)		(6)
Balance (in shares) at Sep. 30, 2018														11,838,000		(76,000)
Balance at Sep. 30, 2018														$ 119	75,909	$ (838)	(18,622)	56,568
Balance (in shares) at Dec. 31, 2018														12,151,000
Balance at Dec. 31, 2018														$ 122	74,861		(10,553)	64,430
Net income (loss)																	14,215	14,215
Share-based compensation															5,312			5,312
Treasury stock activity																$ (547)		$ (547)
Conversion of convertible securities (in shares)		150,000
Conversion of convertible securities		$ 1	$ (20)			$ (19)			$ 1,429			$ 1,429
Treasury stock activity (in shares)														1,000		(47,000)		47,133
Balance (in shares) at Sep. 30, 2019														12,313,000		(47,000)
Balance at Sep. 30, 2019														$ 123	81,582	$ (547)	3,662	$ 84,820
Balance (in shares) at Jun. 30, 2019														12,302,000		(47,000)
Balance at Jun. 30, 2019														$ 123	79,780	$ (543)	1,674	81,034
Net income (loss)																	1,988	1,988
Share-based compensation															1,802			1,802
Share-based compensation (in shares)														11,000
Treasury stock activity																$ (4)		$ (4)
Treasury stock activity (in shares)																		352
Balance (in shares) at Sep. 30, 2019														12,313,000		(47,000)
Balance at Sep. 30, 2019														$ 123	$ 81,582	$ (547)	$ 3,662	$ 84,820

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Consolidated Balance Sheets (Current Period Unaudited) - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
CURRENT ASSETS:
Cash and cash equivalents	$ 1,160	$ 4,068
Accounts receivable, trade and other, net of allowance	930	744
Accrued oil and natural gas revenue	9,902	14,464
Fair value of oil and natural gas derivatives	9,213	803
Inventory	268	596
Prepaid expenses and other	373	533
Total current assets	21,846	21,208
PROPERTY AND EQUIPMENT:
Unevaluated properties	155	180
Oil and natural gas properties (full cost method)	284,420	206,097
Furniture, fixtures and equipment and other capital assets	4,400	1,360
	288,975	207,637
Less: Accumulated depletion, depreciation and amortization	(79,715)	(42,447)
Net property and equipment	209,260	165,190
Fair value of oil and natural gas derivatives	708
Deferred tax asset	393	786
Other	2,451	580
TOTAL ASSETS	234,658	187,764
CURRENT LIABILITIES:
Accounts payable	23,190	25,734
Accrued liabilities	22,371	16,518
Fair value of oil and natural gas derivatives	74
Total current liabilities	45,635	42,252
Long term debt, net	98,822	76,820
Accrued abandonment cost	3,964	3,791
Fair value of oil and natural gas derivatives	253	471
Other non-current liabilities	1,164
Total liabilities	149,838	123,334
Commitments and contingencies (See Note 9)
STOCKHOLDERS’ EQUITY:
Preferred stock: 10,000,000 shares $1.00 par value authorized, and none issued and outstanding	0	0
Common stock: $0.01 par value, 75,000,000 shares authorized, and 12,312,750 and 12,150,918 shares issued and outstanding as of September 30, 2019 and December 31, 2018, respectively	123	122
Treasury stock: 47,133 and zero shares as of September 30, 2019 and December 31, 2018, respectively	(547)
Additional paid in capital	81,582	74,861
Accumulated earnings (deficit)	3,662	(10,553)
Total stockholders’ equity	84,820	64,430
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$ 234,658	$ 187,764

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Note 9 - Commitments and Contingencies

9 Months Ended

Sep. 30, 2019

Notes to Financial Statements

Commitments and Contingencies Disclosure [Text Block]

NOTE

9—Commitments

and Contingencies

We are party to various lawsuits from time to time arising in the normal course of business, including, but

not

limited to, royalty, contract, personal injury, and environmental claims. We have established reserves as appropriate for all such proceedings and intend to vigorously defend these actions. Management believes, based on currently available information, that adverse results or judgments from such actions, if any, would

not

have been material to our consolidated financial position, results of operations or liquidity for the 

three

and

nine

months ended

September 30, 2019

 and

2018

.

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Note 5 - Equity

9 Months Ended

Sep. 30, 2019

Notes to Financial Statements

Stockholders' Equity Note Disclosure [Text Block]

NOTE

5—Equity

During the

three

and

nine

months ended

September 30, 2019

,

zero

and

150,000,

respectively, of the

10

-year costless warrants associated with the Convertible Second Lien Notes were exercised. The Company received cash for the

one

cent par value for the issuance of the

150,000

common shares. As of

September 30, 2019

,

no

such warrants remain un-exercised. During the 

three

and

nine

months ended

September 30, 2019

, the Company had vestings of its share-based compensation units representing a total fair value of

$0.1

million and resulting in the issuance of approximately

12,000

 common shares. During the 

three

and

nine

months ended

September 30, 2019

, the Company paid less than

$0.1

million and

$0.5

million, respectively, in cash for the purchase of

352

and

47,133

Treasury shares, respectively, withheld from employees upon the vesting of restricted stock awards for the payment of taxes.

In connection with the issuance of the New

2L

Notes, we recorded an equity component of

$1.4

million. For further details, see

Note

4

.

During the

three

months ended

September 30, 2018

,

no

holders of the

10

-year costless warrants associated with the Convertible Second Lien Notes exercised warrants. During the

nine

months ended

September 30, 2018

, certain holders of the

10

-year costless warrants associated with the Convertible Second Lien Notes exercised

862,812

warrants for the issuance of an equal amount of our

one

cent par value common stock. The Company received cash for th

e

one

cent par value for the issuance of

315,937

common shares. As of

September 30, 2018

,

207,500

of such warrants remained un-exercised. The Company did

not

have a material vesting of its share-based compensation units during the 

three

or

nine

months ended

September 30, 2018

.

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Note 1 - Description of Business and Significant Accounting Policies (Tables)

9 Months Ended

Sep. 30, 2019

Notes Tables

Schedule of Accounts Payable and Accrued Liabilities [Table Text Block]

(In thousands)	September 30, 2019		December 31, 2018
Trade payables	$	8,051	$	8,633
Revenue payables		14,878		16,665
Prepayments from partners		-		132
Miscellaneous payables		261		304
Total Accounts payable	$	23,190	$	25,734

(In thousands)	September 30, 2019		December 31, 2018
Accrued capital expenditures	$	13,138	$	8,086
Accrued lease operating expense		857		1,100
Accrued production and other taxes		927		338
Accrued transportation and gathering		1,937		1,888
Accrued performance bonus		2,928		3,420
Accrued interest		185		443
Accrued office lease		1,386		598
Accrued general and administrative expense and other		1,013		645
Total Accrued liabilities	$	22,371	$	16,518

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Note 4 - Debt - Components of Debt (Details) - USD ($) $ in Thousands	Oct. 11, 2019	Sep. 30, 2019		May 31, 2019	May 30, 2019	Dec. 31, 2018		Oct. 12, 2016
Principal		$ 100,446				$ 80,691
Carrying amount		98,822				76,820	[1]
The 2017 Senior Credit Facility [Member]
Principal						27,000
Carrying amount						27,000
The 2019 Senior Credit Facility [Member]
Principal		87,900
Carrying amount		87,900
Convertible Second Lien Notes [Member]
Principal			[1]			53,691	[1]	$ 40,000
Carrying amount	$ 40,000		[1]			49,820	[1]	$ 29,000
New Convertible Second Lien Notes, New 2L Notes [Member]
Principal		12,546	[2]	$ 12,000			[2]
Carrying amount		$ 10,922	[2]	$ 10,600	$ 12,000		[2]

[1] The debt discount was being amortized using the effective interest rate method based upon a maturity date of August 30, 2019 until the Convertible Second Lien Notes were fully paid off on May 29, 2019.

[2] The debt discount is being amortized using the effective interest rate method based upon a maturity date of May 31, 2021. The principal included $0.5 million of interest to be paid in-kind as of September 30, 2019. The carrying value included $1.3 million of unamortized debt discount as of September 30, 2019.

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Note 6 - Net Income (Loss) Per Common Share - Schedule of Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands		3 Months Ended		9 Months Ended
		Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Net income (loss) applicable to common stock		$ 1,988	$ 1,666	$ 14,215	$ (6,319)
Weighted average shares of common stock outstanding - basic (in shares)		12,257	11,762	12,208	11,538
Net income (loss) per common share - basic (in dollars per share)		$ 0.16	$ 0.14	$ 1.16	$ (0.55)
Interest, discount and amortization on New 2L Notes				$ 565
Adjusted net income (loss) per common share		$ 1,988	$ 1,666	$ 14,780	$ (6,319)
Common shares issuable to unsecured claim holders (in shares)			39
Common shares issuable on assumed conversion of restricted stock (4) (in shares)	[1]	498	641	416
Weighted average shares of common stock outstanding - diluted (in shares)		14,040	14,046	14,497	11,538
Net income (loss) per common share - diluted (in dollars per share)	[2],[3],[4]	$ 0.14	$ 0.12	$ 1.02	$ (0.55)
Share-based Payment Arrangement [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount (in shares)	[1]				445
Convertible Debt Securities [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount (in shares)		588	1,875		1,875
Warrant [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount (in shares)					1,642
Warrants Associated with Unsecured Claim Holders [Member]
Common shares issuable upon conversion of warrants (in shares)		1,285	1,396	1,285
Costless Warrants Associated with Convertible Second Lien Notes [Member]
Common shares issuable upon conversion of warrants (in shares)			208
New 2L Notes [Member]
Common shares issuable upon conversion of the New 2L Notes (in shares)				588

[1] Common shares issuable on assumed conversion of share-based compensation assumes a payout of the Company's performance share awards at 100% of the initial units granted (or a ratio of one unit to one common share). The range of common stock shares which may be earned ranges from zero to 250% of the initial performance units granted.

[2] Common shares issuable on assumed conversion of share-based compensation for the periods in 2018 were not included in the computation of diluted net loss per common share since their inclusion would have been anti-dilutive. (4)

[3] Common shares issuable upon conversion of the Convertible Second Lien Notes or New 2L Notes were not included in the computation of diluted net loss per common share since their inclusion would have been anti-dilutive.

[4] Common shares issuable upon conversion of the warrants associated with the Convertible Second Lien Notes and unsecured claim holders for the periods in 2018 were not included in the computation of diluted net loss per common share since their inclusion would have been anti-dilutive.

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Note 1 - Description of Business and Significant Accounting Policies - Accounts Payable and Accrued Liabilities (Details) - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
Trade payables	$ 8,051	$ 8,633
Revenue payables	14,878	16,665
Prepayments from partners		132
Miscellaneous payables	261	304
Total Accounts payable	23,190	25,734
Accrued capital expenditures	13,138	8,086
Accrued lease operating expense	857	1,100
Accrued production and other taxes	927	338
Accrued transportation and gathering	1,937	1,888
Accrued performance bonus	2,928	3,420
Accrued interest	185	443
Accrued office lease	1,386	598
Accrued general and administrative expense and other	1,013	645
Total Accrued liabilities	$ 22,371	$ 16,518

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Note 6 - Net Income (Loss) Per Common Share (Tables)

9 Months Ended

Sep. 30, 2019

Notes Tables

Schedule of Earnings Per Share, Basic and Diluted [Table Text Block]

	Three Months Ended September 30, 2019		Three Months Ended September 30, 2018		Nine Months Ended September 30, 2019		Nine Months Ended September 30, 2018
	(Amounts in thousands, except per share data)
Basic net income (loss) per common share:
Net income (loss) applicable to common stock	$	1,988	$	1,666	$	14,215	$	(6,319	)
Weighted average shares of common stock outstanding		12,257		11,762		12,208		11,538
Basic net income (loss) per common share	$	0.16	$	0.14	$	1.16	$	(0.55	)
Diluted net income (loss) per common share:
Net income (loss) applicable to common stock	$	1,988	$	1,666	$	14,215	$	(6,319	)
Interest, discount and amortization on New 2L Notes		-		-		565		-
Adjusted net income (loss) per common share	$	1,988	$	1,666	$	14,780	$	(6,319	)
Weighted average shares of common stock outstanding		12,257		11,762		12,208		11,538
Common shares issuable upon conversion of the New 2L Notes		-		-		588		-
Common shares issuable upon conversion of warrants of unsecured claim holders		1,285		1,396		1,285		-
Common shares issuable upon conversion of the Convertible Second Lien Notes associated warrants		-		208		-		-
Common shares issuable to unsecured claim holders		-		39		-		-
Common shares issuable on assumed conversion of restricted stock (4)		498		641		416		-
Diluted weighted average shares of common stock outstanding		14,040		14,046		14,497		11,538
Diluted net income (loss) per common share (1) (2) (3)	$	0.14	$	0.12	$	1.02	$	(0.55	)
(1) Common shares issuable on assumed conversion of share-based compensation for the periods in 2018 were not included in the computation of diluted net loss per common share since their inclusion would have been anti-dilutive. (4)		-		-		-		445
(2) Common shares issuable upon conversion of the Convertible Second Lien Notes or New 2L Notes were not included in the computation of diluted net loss per common share since their inclusion would have been anti-dilutive.		588		1,875		-		1,875
(3) Common shares issuable upon conversion of the warrants associated with the Convertible Second Lien Notes and unsecured claim holders for the periods in 2018 were not included in the computation of diluted net loss per common share since their inclusion would have been anti-dilutive.		-		-		-		1,642

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Note 8 - Commodity Derivative Activities - Derivative Table, Fair Value with Netting (Details) - Not Designated as Hedging Instrument [Member] - Commodity Contract [Member] - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
Derivative Asset, Gross Amount	$ 9,594	$ 332
Derivative Asset, Amount Offset
Derivative Asset, As Presented	9,594	332
Current Assets [Member]
Derivative Asset, Gross Amount	9,624	2,893
Derivative Asset, Amount Offset	(411)	(2,090)
Derivative Asset, As Presented	9,213	803
Non-current Assets [Member]
Derivative Asset, Gross Amount	2,072
Derivative Asset, Amount Offset	(1,364)
Derivative Asset, As Presented	708
Current Liabilities [Member]
Derivative Asset, Gross Amount	(485)	(2,090)
Derivative Asset, Amount Offset	411	2,090
Derivative Asset, As Presented	(74)
Non-current Liabilities [Member]
Derivative Asset, Gross Amount	(1,617)	(471)
Derivative Asset, Amount Offset	1,364
Derivative Asset, As Presented	$ (253)	$ (471)

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Note 10 - Leases - Lease Liability Maturities (Details) $ in Thousands	Sep. 30, 2019 USD ($)
2019	$ 385
2020	1,540
2021	813
2022
2023
Thereafter
Total lease payments	2,738
Less imputed interest	188
Present value of lease liabilities	$ 2,550

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Note 1 - Description of Business and Significant Accounting Policies (Details Textual) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Oil and Gas Property Full Cost Method Period Increase (Decrease)	$ 100	$ 5,700	$ 200	$ 6,100
Unamortized Costs Capitalized Less Related Deferred Income Taxes Exceed Ceiling Limitations, Expense	0	0	0	0
Share-based Payment Arrangement, Expensed and Capitalized, Amount, Total	1,800	1,800	5,300	5,300
Share-based Payment Arrangement, Amount Capitalized	200	200	$ 500	500
Minimum [Member]
Property, Plant and Equipment, Useful Life			3 years
Maximum [Member]
Property, Plant and Equipment, Useful Life			5 years
Maximum [Member] | Lease Operating Expense [Member]
Share-based Payment Arrangement, Expense	$ 100	$ 100	$ 100	$ 100

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Note 4 - Debt (Tables)

9 Months Ended

Sep. 30, 2019

Notes Tables

Schedule of Long-term Debt Instruments [Table Text Block]

	September 30, 2019				December 31, 2018
	Principal		Carrying Amount		Principal		Carrying Amount
2017 Senior Credit Facility	$	-	$	-	$	27,000	$	27,000
2019 Senior Credit Facility		87,900		87,900		-		-
Convertible Second Lien Notes (1)		-		-		53,691		49,820
New 2L Notes (2)		12,546		10,922		-		-
Total debt	$	100,446	$	98,822	$	80,691	$	76,820

Schedule of Interest Expense and Effective Interest on Liability Component [Table Text Block]

	Three Months Ended September 30, 2019					Three Months Ended September 30, 2018					Nine Months Ended September 30, 2019					Nine Months Ended September 30, 2018
	Interest Expense		Effective Interest Rate			Interest Expense		Effective Interest Rate			Interest Expense		Effective Interest Rate			Interest Expense		Effective Interest Rate
2017 Senior Credit Facility	$	-		-		$	281	8.6		%	$	872		7.2	%	$	529		8.3	%
2019 Senior Credit Facility		1,377		6.2	%		-		-			2,072		6.1	%		-		-
Convertible Second Lien Notes (1)		-		-			2,824		24.4	%		5,304		24.1	%		7,981		24.7	%
New 2L Notes (2)		604		21.9	%		-		-			788		21.6	%		-		-
Total interest expense	$	1,981				$	3,105				$	9,036				$	8,510

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Note 10 - Leases (Details Textual) $ in Millions	3 Months Ended	9 Months Ended
	Sep. 30, 2019 USD ($)	Sep. 30, 2019 USD ($)
Operating Lease, Weighted Average Remaining Lease Term	1 year 219 days	1 year 219 days
Operating Lease, Weighted Average Discount Rate, Percent	8.00%	8.00%
Operating Lease, Payments	$ 0.4	$ 1.2

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Note 10 - Leases - Minimum Noncancelable Operating Lease Obligations (Details) $ in Thousands	Dec. 31, 2018 USD ($)
2019	$ 3,753
2020	1,556
2021	513
2022
2023
Thereafter
Future minimum lease obligations	$ 5,822

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Note 1 - Description of Business and Significant Accounting Policies

9 Months Ended

Sep. 30, 2019

Notes to Financial Statements

Significant Accounting Policies [Text Block]

NOTE

1—Description

of Business and Significant Accounting Policies

Goodrich Petroleum Corporation (“Goodrich” and, together with its subsidiary, Goodrich Petroleum Company, L.L.C. (the “Subsidiary”), “we,” “our,” or the “Company”) is an independent oil and natural gas company engaged in the exploration, development and production of oil and natural gas on properties primarily in (i) Northwest Louisiana and East Texas, which includes the Haynesville Shale Trend, (ii) Southwest Mississippi and Southeast Louisiana, which includes the Tuscaloosa Marine Shale Trend (“TMS”), and (iii) South Texas, which includes the Eagle Ford Shale Trend.

Basis of Presentation

The consolidated financial statements of the Company included in this Quarterly Report on Form

10

-Q have been prepared, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission and accordingly, certain information normally included in financial statements prepared in accordance with United States Generally Accepted Accounting Principles (“US GAAP”) has been condensed or omitted. This information should be read in conjunction with our consolidated financial statements and notes contained in our annual report on Form

10

-K for the year ended 

December 31, 2018

. Operating results for the 

three

and

nine

months ended

September 30, 2019

are

not

necessarily indicative of the results that

may

be expected for the full year or for any interim period.

Principles of Consolidation

—The consolidated financial statements include the financial statements of the Company and the Subsidiary. Intercompany balances and transactions have been eliminated in consolidation. The consolidated financial statements reflect all normal recurring adjustments that, in the opinion of management, are necessary for a fair presentation. Certain data in prior periods’ financial statements have been adjusted to conform to the presentation of the current period. We have evaluated subsequent events through the date of this filing.

Use of Estimates

— Our management has made a number of estimates and assumptions relating to the reporting of assets, liabilities, revenues and expenses and the disclosure of contingent assets and liabilities to prepare these consolidated financial statements in conformity with US GAAP.

Cash and Cash Equivalents

—Cash and cash equivalents included cash on hand, demand deposit accounts and temporary cash investments with maturities of

ninety

days or less at the date of purchase.

Accounts Payable

—Accounts payable consisted of the following amounts as of 

September 30, 2019

and 

December 31, 2018

:

(In thousands)	September 30, 2019		December 31, 2018
Trade payables	$	8,051	$	8,633
Revenue payables		14,878		16,665
Prepayments from partners		-		132
Miscellaneous payables		261		304
Total Accounts payable	$	23,190	$	25,734

Accrued Liabilities

—Accrued liabilities consisted of the following amounts as of 

September 30, 2019

and 

December 31, 2018

:

(In thousands)	September 30, 2019		December 31, 2018
Accrued capital expenditures	$	13,138	$	8,086
Accrued lease operating expense		857		1,100
Accrued production and other taxes		927		338
Accrued transportation and gathering		1,937		1,888
Accrued performance bonus		2,928		3,420
Accrued interest		185		443
Accrued office lease		1,386		598
Accrued general and administrative expense and other		1,013		645
Total Accrued liabilities	$	22,371	$	16,518

Inventory

—Inventory consisted of equipment, casing and tubulars that are expected to be used in our capital drilling program. Inventory is carried on the Consolidated Balance Sheets at the lower of cost or market.

Property and Equipment

—Under US GAAP,

two

acceptable methods of accounting for oil and natural gas properties are allowed. These are the Successful Efforts Method and the Full Cost Method. Entities engaged in the production of oil and natural gas have the option of selecting either method for application in the accounting for their properties. The principal differences between the

two

methods are in the treatment of exploration costs, the computation of depreciation, depletion and amortization (“DD&A”) expense and the assessment of impairment of oil and natural gas properties. We have elected to adopt the Full Cost Method of accounting. We believe that the true cost of developing a “portfolio” of reserves should reflect both successful and unsuccessful attempts at exploration and production. Application of the Full Cost Method better reflects the true economics of exploring for and developing our oil and gas reserves.

Under the Full Cost Method, we capitalize all costs associated with acquisitions, exploration, development and estimated abandonment costs. We capitalize internal costs that can be directly identified with the acquisition of leasehold, as well as drilling and completion activities, but do

not

include any costs related to production, general corporate overhead or similar activities. Unevaluated property costs are

excluded from the amortization base until we make a determination as to the existence of proved reserves on the respective property or impairment. We review our unevaluated properties at the end of each quarter to determine whether the costs should be reclassified to proved oil and natural gas properties and thereby subject to DD&A and the full cost ceiling test. For the

three

months ended

September 30, 2019

and

2018

, we transferred less than 

$0.1

million and

$5.7

 million, respectively, from unevaluated properties to proved oil and natural gas properties. For the 

nine

months ended

September 30, 2019

and

2018

, we transferred

$0.2

million and

$6.1

 million, respectively, from unevaluated properties to proved oil and natural gas properties. Our sales of oil and natural gas properties are accounted for as adjustments to net proved oil and natural gas properties with

no

gain or loss recognized, unless the adjustment would significantly alter the relationship between capitalized costs and proved reserves.

Under the Full Cost Method, we amortize our investment in oil and natural gas properties through DD&A expense using the units of production (the “UOP”) method. An amortization rate is calculated based on total proved reserves converted to equivalent thousand cubic feet of natural gas (“Mcfe”) as the denominator and the net book value of evaluated oil and gas asset together with the estimated future development cost of the proved undeveloped reserves as the numerator. The rate calculated per Mcfe is applied against the periods' production also converted to Mcfe to arrive at the periods' DD&A expense.

Depreciation of furniture, fixtures and equipment, consisting of office furniture, computer hardware and software and leasehold improvements, is computed using the straight-line method over their estimated useful lives, which vary from

three

to

five

years.

Full Cost Ceiling Test

—The Full Cost Method requires that at the conclusion of each financial reporting period, the present value of estimated future net cash flows from proved reserves (excluding cash flows related to estimated abandonment costs), be compared to the net capitalized costs of proved oil and natural gas properties, net of related deferred taxes. This comparison is referred to as a “ceiling test”. If the net capitalized costs of proved oil and natural gas properties exceed the estimated discounted future net cash flows from proved

reserves, we are required to write-down the value of our oil and natural gas properties to the value of the discounted cash flows. Estimated future net cash flows from proved reserves are calculated based on a

12

-month average pricing assumption.

There were

no

Full Cost Ceiling Test write-downs for the

three

or

nine

months ended

September 30, 2019

or

2018

.

Fair Value Measurement

—Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value of an asset should reflect its highest and best use by market participants, whether in-use or an in-exchange valuation premise. The fair value of a liability should reflect the risk of non-performance, which includes, among other things, our credit risk.

We use various methods, including the income approach and market approach, to determine the fair values of our financial instruments that are measured at fair value on a recurring basis, which depend on a number of factors, including the availability of observable market data over the contractual term of the underlying instrument. For some of our instruments, the fair value is calculated based on directly observable market data or data available for similar instruments in similar markets. For other instruments, the fair value

may

be calculated based on these inputs as well as other assumptions related to estimates of future settlements of these instruments. We separate our financial instruments into

three

levels (levels

1,

2

and

3

) based on our assessment of the availability of observable market data and the significance of non-observable data used to determine the fair value of our instruments. Our assessment of an instrument can change over time based on the maturity or liquidity of the instrument, which could result in a change in the classification of the instruments between levels.

Each of these levels and our corresponding instruments classified by level are further described below:

• Level 1 Inputs— unadjusted quoted market prices in active markets for identical assets or liabilities. We have no Level 1 instruments;

• Level 2 Inputs— quotes that are derived principally from or corroborated by observable market data. Included in this level are our 2017 Senior Credit Facility and 2019 Senior Credit Facility (both as defined below) and commodity derivatives whose fair values are based on third -party quotes or available interest rate information and commodity pricing data obtained from third party pricing sources and our creditworthiness or that of our counter-parties; and

• Level 3 Inputs— unobservable inputs for the asset or liability, such as discounted cash flow models or valuations, based on our various assumptions and future commodity prices. Included in this level would be our initial measurement of asset retirement obligations.

As of

September 30, 2019

and

December 31, 2018

, the carrying amounts of our cash and cash equivalents, trade receivables and payables represented fair value because of the short-term nature of these instruments.

Asset Retirement Obligations

—Asset retirement obligations are related to the abandonment and site restoration requirements that result from the exploration and development of our oil and natural gas properties. We record the fair value of a liability for an asset retirement obligation in the period in which it is incurred and a corresponding increase in the carrying amount of the related long-lived asset. Accretion expense is included in “Depreciation, depletion and amortization” on our Consolidated Statements of Operations. See

Note

3

.

The estimated fair value of the Company’s asset retirement obligations at inception is determined by utilizing the income approach by applying a credit-adjusted risk-free rate, which takes into account the Company’s credit risk, the time value of money, and the current economic state, to the undiscounted expected abandonment cash flows. Given the unobservable nature of the inputs, the initial measurement of the asset retirement obligations was classified as Level

3

in the fair value hierarchy.

Revenue Recognition

—Oil and natural gas revenues are generally recognized upon delivery of our produced oil and natural gas volumes to our customers. We record revenue in the month our production is delivered to the purchaser. However, settlement statements and payments for our oil and natural gas sales

may

not

be received for up to

60

days after the date production is delivered, and as a result, we are required to estimate the amount of production delivered to the purchaser and the price that will be received for the sale of the product. We record a liability or an asse

t for natural gas balancing when we have sold more or less than our working interest share of natural gas production, respectively. As of

September 30, 2019

and

December 31, 2018

, the net liability for natural gas balancing was immaterial. Differences between actual production and net working interest volumes are routinely adjusted. See

Note

2

.

Derivative Instruments

—We use derivative instr

uments such as swaps, collars, futures, forwards and options for purposes of hedging our exposure to fluctuations in the price of crude oil and natural gas. Accounting standards related to derivative instruments and hedging activities require that all derivative instruments subject to the requirements of those standards be measured at fair value and recognized as assets or liabilities in the balance sheet. We offset the fair value of our asset and liability positions with the same counter-party for each commodity type. Changes in fair value are required to be recognized in earnings unless specific hedge accounting criteria are met. All of our realized gain or losses on our derivative contracts are the result of cash settlements. We have

not

designated any of our derivative contracts as hedges; accordingly, changes in fair value are reflected in earnings. See

Note

8

.

Income Taxes

—We account for income taxes, as required, under the liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis and operating loss and tax credit carry-forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than

not

that some portion or all of the deferred tax assets will

not

be realized.

We recognize, as required, the financial statement benefit of an uncertain tax position only after determining that the relevant tax authority would more likely than

not

sustain the position following an audit. For tax positions meeting the more likely-than-

not

threshold, the amount recognized in the financial statements is the largest benefit that has a greater than

50

percent likelihood of being realized upon ultimate settlement with the relevant tax authority. See

Note

7

.

Net Income or Net Loss Per Common Share—

Basic income (loss) per common share is computed by dividing net income (loss) applicable to common stock for each reporting period by the weighted-average shares of common stock outstanding during the period. Diluted income (loss) per common share is computed by dividing net income (loss) applicable to common stock for each reporting period by the weighted average shares of common stock outstanding during the period, plus the effects of potentially dilutive restricted stock calculated using the treasury stock method and the potential dilutive effect of the conversion of convertible securities, such as warrants and convertible notes, into shares of our common stock. See

Note

6

.

Commitments and Contingencies

—Liabilities for loss contingencies, including environmental remediation costs, arising from claims, assessments, litigation, fines and penalties, and other sources are recorded when it is probable that a liability has been incurred and the amount of the assessment and/or remediation can be reasonably estimated. Recoveries from

third

parties, when probable of realization, are separately recorded and are

not

offset against the related environmental liability. See

Note

9

.

Share-Based Compensation

—We account for our share-based transactions using the fair value as of the grant date and recognize compensation expense over the requisite service period. We record our share-based compensation costs to general and administrative expense, lease operating expense or capitalized cost in proportion with the employees’ time supporting such activities. We recognized

$5.3

million of share-based compensation cost in both the

nine

month periods ended

September 30, 2019

and

2018,

of which

$0.5

million in each such period was capitalized. We recognized

$1.8

million in both the

three

month periods ended

September 30, 2019

and

2018,

of which

$0.2

million in each such period was capitalized. We recorded less than

$0.1

million of share-based compensation cost to lease operating expense in each period presented.

Guarantee

—As of

September 30, 2019

, Goodrich Petroleum Company LLC, the wholly owned subsidiary of Goodrich Petroleum Corporation, was the Subsidiary Guarantor of our New

2L

Notes (as defined below). The parent company has

no

independent assets or operations, the guarantee is full and unconditional, and the parent has

no

subsidiaries other than Goodrich Petroleum Company LLC.

Debt Issuance Cost

—The Company records debt issuance costs associated with its New

2L

Notes (and previously with its Convertible Second Lien Notes, both as defined below) as a contra balance to long term debt, net in our Consolidated Balance Sheets, which is amortized straight-line over the life of the respective notes. Debt issuance costs associated with our revolving credit facility debt are recorded in other assets in our Consolidated Balance Sheets, which is amortized straight-line over the life of such debt.

New Accounting Pronouncements

On

August 28, 2018,

the Financial Accounting Standards Board issued Accounting Standards Update (“ASU”)

2018

-

13,

Fair Value Measurements (Topic

820

): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement (“Topic

820”

). The amendments in this ASU modify the disclosure requirements on fair value measurements in Topic

820

including the removal, modification and addition of certain disclosure requirements. For all entities, the amendments in this ASU are effective for fiscal periods beginning after

December 15, 2019,

including interim periods therein. We do

not

expect a material impact from these amendments on our fair value measurement disclosures.

XML

Consolidated Balance Sheets (Current Period Unaudited) (Parentheticals) - $ / shares	Sep. 30, 2019	Dec. 31, 2018
Preferred Stock, Par Value (in dollars per share)	$ 1	$ 1
Preferred Stock, Shares Authorized (in shares)	10,000,000	10,000,000
Preferred Stock, Shares Issued (in shares)	0	0
Preferred Stock, Shares Outstanding (in shares)	0	0
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized (in shares)	75,000,000	75,000,000
Common stock, shares issued (in shares)	12,312,750	12,150,918
Common stock, shares outstanding (in shares)	12,312,750	12,150,918
Treasury stock, shares (in shares)	47,133	0

XML

Significant Accounting Policies (Policies)

9 Months Ended

Sep. 30, 2019

Accounting Policies [Abstract]

Consolidation, Policy [Policy Text Block]

Principles of Consolidation

—The consolidated financial statements include the financial statements of the Company and the Subsidiary. Intercompany balances and transactions have been eliminated in consolidation. The consolidated financial statements reflect all normal recurring adjustments that, in the opinion of management, are necessary for a fair presentation. Certain data in prior periods’ financial statements have been adjusted to conform to the presentation of the current period. We have evaluated subsequent events through the date of this filing.

Basis of Accounting, Policy [Policy Text Block]

Basis of Presentation

The consolidated financial statements of the Company included in this Quarterly Report on Form

10

-Q have been prepared, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission and accordingly, certain information normally included in financial statements prepared in accordance with United States Generally Accepted Accounting Principles (“US GAAP”) has been condensed or omitted. This information should be read in conjunction with our consolidated financial statements and notes contained in our annual report on Form

10

-K for the year ended 

December 31, 2018

. Operating results for the 

three

and

nine

months ended

September 30, 2019

are

not

necessarily indicative of the results that

may

be expected for the full year or for any interim period.

Use of Estimates, Policy [Policy Text Block]

Use of Estimates

— Our management has made a number of estimates and assumptions relating to the reporting of assets, liabilities, revenues and expenses and the disclosure of contingent assets and liabilities to prepare these consolidated financial statements in conformity with US GAAP.

Cash and Cash Equivalents, Policy [Policy Text Block]

Cash and Cash Equivalents

—Cash and cash equivalents included cash on hand, demand deposit accounts and temporary cash investments with maturities of

ninety

days or less at the date of purchase.

Accounts Payable, Policy [Policy Text Block]

Accounts Payable

—Accounts payable consisted of the following amounts as of 

September 30, 2019

and 

December 31, 2018

:

(In thousands)	September 30, 2019		December 31, 2018
Trade payables	$	8,051	$	8,633
Revenue payables		14,878		16,665
Prepayments from partners		-		132
Miscellaneous payables		261		304
Total Accounts payable	$	23,190	$	25,734

Accrued Liabilities, Policy [Policy Text Block]

Accrued Liabilities

—Accrued liabilities consisted of the following amounts as of 

September 30, 2019

and 

December 31, 2018

:

(In thousands)	September 30, 2019		December 31, 2018
Accrued capital expenditures	$	13,138	$	8,086
Accrued lease operating expense		857		1,100
Accrued production and other taxes		927		338
Accrued transportation and gathering		1,937		1,888
Accrued performance bonus		2,928		3,420
Accrued interest		185		443
Accrued office lease		1,386		598
Accrued general and administrative expense and other		1,013		645
Total Accrued liabilities	$	22,371	$	16,518

Inventory, Policy [Policy Text Block]

Inventory

—Inventory consisted of equipment, casing and tubulars that are expected to be used in our capital drilling program. Inventory is carried on the Consolidated Balance Sheets at the lower of cost or market.

Property, Plant and Equipment, Policy [Policy Text Block]

Property and Equipment

—Under US GAAP,

two

acceptable methods of accounting for oil and natural gas properties are allowed. These are the Successful Efforts Method and the Full Cost Method. Entities engaged in the production of oil and natural gas have the option of selecting either method for application in the accounting for their properties. The principal differences between the

two

methods are in the treatment of exploration costs, the computation of depreciation, depletion and amortization (“DD&A”) expense and the assessment of impairment of oil and natural gas properties. We have elected to adopt the Full Cost Method of accounting. We believe that the true cost of developing a “portfolio” of reserves should reflect both successful and unsuccessful attempts at exploration and production. Application of the Full Cost Method better reflects the true economics of exploring for and developing our oil and gas reserves.

Under the Full Cost Method, we capitalize all costs associated with acquisitions, exploration, development and estimated abandonment costs. We capitalize internal costs that can be directly identified with the acquisition of leasehold, as well as drilling and completion activities, but do

not

include any costs related to production, general corporate overhead or similar activities. Unevaluated property costs are

excluded from the amortization base until we make a determination as to the existence of proved reserves on the respective property or impairment. We review our unevaluated properties at the end of each quarter to determine whether the costs should be reclassified to proved oil and natural gas properties and thereby subject to DD&A and the full cost ceiling test. For the

three

months ended

September 30, 2019

and

2018

, we transferred less than 

$0.1

million and

$5.7

 million, respectively, from unevaluated properties to proved oil and natural gas properties. For the 

nine

months ended

September 30, 2019

and

2018

, we transferred

$0.2

million and

$6.1

 million, respectively, from unevaluated properties to proved oil and natural gas properties. Our sales of oil and natural gas properties are accounted for as adjustments to net proved oil and natural gas properties with

no

gain or loss recognized, unless the adjustment would significantly alter the relationship between capitalized costs and proved reserves.

Under the Full Cost Method, we amortize our investment in oil and natural gas properties through DD&A expense using the units of production (the “UOP”) method. An amortization rate is calculated based on total proved reserves converted to equivalent thousand cubic feet of natural gas (“Mcfe”) as the denominator and the net book value of evaluated oil and gas asset together with the estimated future development cost of the proved undeveloped reserves as the numerator. The rate calculated per Mcfe is applied against the periods' production also converted to Mcfe to arrive at the periods' DD&A expense.

Depreciation of furniture, fixtures and equipment, consisting of office furniture, computer hardware and software and leasehold improvements, is computed using the straight-line method over their estimated useful lives, which vary from

three

to

five

years.

Full Cost or Successful Efforts, Policy [Policy Text Block]

Full Cost Ceiling Test

—The Full Cost Method requires that at the conclusion of each financial reporting period, the present value of estimated future net cash flows from proved reserves (excluding cash flows related to estimated abandonment costs), be compared to the net capitalized costs of proved oil and natural gas properties, net of related deferred taxes. This comparison is referred to as a “ceiling test”. If the net capitalized costs of proved oil and natural gas properties exceed the estimated discounted future net cash flows from proved

reserves, we are required to write-down the value of our oil and natural gas properties to the value of the discounted cash flows. Estimated future net cash flows from proved reserves are calculated based on a

12

-month average pricing assumption.

There were

no

Full Cost Ceiling Test write-downs for the

three

or

nine

months ended

September 30, 2019

or

2018

.

Fair Value of Financial Instruments, Policy [Policy Text Block]

Fair Value Measurement

—Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value of an asset should reflect its highest and best use by market participants, whether in-use or an in-exchange valuation premise. The fair value of a liability should reflect the risk of non-performance, which includes, among other things, our credit risk.

We use various methods, including the income approach and market approach, to determine the fair values of our financial instruments that are measured at fair value on a recurring basis, which depend on a number of factors, including the availability of observable market data over the contractual term of the underlying instrument. For some of our instruments, the fair value is calculated based on directly observable market data or data available for similar instruments in similar markets. For other instruments, the fair value

may

be calculated based on these inputs as well as other assumptions related to estimates of future settlements of these instruments. We separate our financial instruments into

three

levels (levels

1,

2

and

3

) based on our assessment of the availability of observable market data and the significance of non-observable data used to determine the fair value of our instruments. Our assessment of an instrument can change over time based on the maturity or liquidity of the instrument, which could result in a change in the classification of the instruments between levels.

Each of these levels and our corresponding instruments classified by level are further described below:

• Level 1 Inputs— unadjusted quoted market prices in active markets for identical assets or liabilities. We have no Level 1 instruments;

• Level 2 Inputs— quotes that are derived principally from or corroborated by observable market data. Included in this level are our 2017 Senior Credit Facility and 2019 Senior Credit Facility (both as defined below) and commodity derivatives whose fair values are based on third -party quotes or available interest rate information and commodity pricing data obtained from third party pricing sources and our creditworthiness or that of our counter-parties; and

• Level 3 Inputs— unobservable inputs for the asset or liability, such as discounted cash flow models or valuations, based on our various assumptions and future commodity prices. Included in this level would be our initial measurement of asset retirement obligations.

As of

September 30, 2019

and

December 31, 2018

, the carrying amounts of our cash and cash equivalents, trade receivables and payables represented fair value because of the short-term nature of these instruments.

Asset Retirement Obligation [Policy Text Block]

Asset Retirement Obligations

—Asset retirement obligations are related to the abandonment and site restoration requirements that result from the exploration and development of our oil and natural gas properties. We record the fair value of a liability for an asset retirement obligation in the period in which it is incurred and a corresponding increase in the carrying amount of the related long-lived asset. Accretion expense is included in “Depreciation, depletion and amortization” on our Consolidated Statements of Operations. See

Note

3

.

Revenue from Contract with Customer [Policy Text Block]

Revenue Recognition

—Oil and natural gas revenues are generally recognized upon delivery of our produced oil and natural gas volumes to our customers. We record revenue in the month our production is delivered to the purchaser. However, settlement statements and payments for our oil and natural gas sales

may

not

be received for up to

60

days after the date production is delivered, and as a result, we are required to estimate the amount of production delivered to the purchaser and the price that will be received for the sale of the product. We record a liability or an asse

t for natural gas balancing when we have sold more or less than our working interest share of natural gas production, respectively. As of

September 30, 2019

and

December 31, 2018

, the net liability for natural gas balancing was immaterial. Differences between actual production and net working interest volumes are routinely adjusted. See

Note

2

.

Derivatives, Policy [Policy Text Block]

Derivative Instruments

—We use derivative instr

uments such as swaps, collars, futures, forwards and options for purposes of hedging our exposure to fluctuations in the price of crude oil and natural gas. Accounting standards related to derivative instruments and hedging activities require that all derivative instruments subject to the requirements of those standards be measured at fair value and recognized as assets or liabilities in the balance sheet. We offset the fair value of our asset and liability positions with the same counter-party for each commodity type. Changes in fair value are required to be recognized in earnings unless specific hedge accounting criteria are met. All of our realized gain or losses on our derivative contracts are the result of cash settlements. We have

not

designated any of our derivative contracts as hedges; accordingly, changes in fair value are reflected in earnings. See

Note

8

.

Income Tax, Policy [Policy Text Block]

Income Taxes

—We account for income taxes, as required, under the liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis and operating loss and tax credit carry-forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than

not

that some portion or all of the deferred tax assets will

not

be realized.

We recognize, as required, the financial statement benefit of an uncertain tax position only after determining that the relevant tax authority would more likely than

not

sustain the position following an audit. For tax positions meeting the more likely-than-

not

threshold, the amount recognized in the financial statements is the largest benefit that has a greater than

50

percent likelihood of being realized upon ultimate settlement with the relevant tax authority. See

Note

7

.

Earnings Per Share, Policy [Policy Text Block]

Net Income or Net Loss Per Common Share—

Basic income (loss) per common share is computed by dividing net income (loss) applicable to common stock for each reporting period by the weighted-average shares of common stock outstanding during the period. Diluted income (loss) per common share is computed by dividing net income (loss) applicable to common stock for each reporting period by the weighted average shares of common stock outstanding during the period, plus the effects of potentially dilutive restricted stock calculated using the treasury stock method and the potential dilutive effect of the conversion of convertible securities, such as warrants and convertible notes, into shares of our common stock. See

Note

6

.

Commitments and Contingencies, Policy [Policy Text Block]

Commitments and Contingencies

—Liabilities for loss contingencies, including environmental remediation costs, arising from claims, assessments, litigation, fines and penalties, and other sources are recorded when it is probable that a liability has been incurred and the amount of the assessment and/or remediation can be reasonably estimated. Recoveries from

third

parties, when probable of realization, are separately recorded and are

not

offset against the related environmental liability. See

Note

9

.

Share-based Payment Arrangement [Policy Text Block]

Share-Based Compensation

—We account for our share-based transactions using the fair value as of the grant date and recognize compensation expense over the requisite service period. We record our share-based compensation costs to general and administrative expense, lease operating expense or capitalized cost in proportion with the employees’ time supporting such activities. We recognized

$5.3

million of share-based compensation cost in both the

nine

month periods ended

September 30, 2019

and

2018,

of which

$0.5

million in each such period was capitalized. We recognized

$1.8

million in both the

three

month periods ended

September 30, 2019

and

2018,

of which

$0.2

million in each such period was capitalized. We recorded less than

$0.1

million of share-based compensation cost to lease operating expense in each period presented.

Guarantee, Policy [Policy Text Block]

Guarantee

—As of

September 30, 2019

, Goodrich Petroleum Company LLC, the wholly owned subsidiary of Goodrich Petroleum Corporation, was the Subsidiary Guarantor of our New

2L

Notes (as defined below). The parent company has

no

independent assets or operations, the guarantee is full and unconditional, and the parent has

no

subsidiaries other than Goodrich Petroleum Company LLC.

Debt, Policy [Policy Text Block]

Debt Issuance Cost

—The Company records debt issuance costs associated with its New

2L

Notes (and previously with its Convertible Second Lien Notes, both as defined below) as a contra balance to long term debt, net in our Consolidated Balance Sheets, which is amortized straight-line over the life of the respective notes. Debt issuance costs associated with our revolving credit facility debt are recorded in other assets in our Consolidated Balance Sheets, which is amortized straight-line over the life of such debt.

New Accounting Pronouncements, Policy [Policy Text Block]

New Accounting Pronouncements

On

August 28, 2018,

the Financial Accounting Standards Board issued Accounting Standards Update (“ASU”)

2018

-

13,

Fair Value Measurements (Topic

820

): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement (“Topic

820”

). The amendments in this ASU modify the disclosure requirements on fair value measurements in Topic

820

including the removal, modification and addition of certain disclosure requirements. For all entities, the amendments in this ASU are effective for fiscal periods beginning after

December 15, 2019,

including interim periods therein. We do

not

expect a material impact from these amendments on our fair value measurement disclosures.

XML

Note 8 - Commodity Derivative Activities

9 Months Ended

Sep. 30, 2019

Notes to Financial Statements

Derivative Instruments and Hedging Activities Disclosure [Text Block]

NOTE

8—Commodity

Derivative Activities

We use commodity and financial derivative contracts to manage fluctuations in commodity prices. We are currently

not

designating our derivative contracts for hedge accounting. All derivative gains and losses are from our oil and natural gas derivative contracts and have been recognized in “Other income (expense)” on our Consolidated Statements of Operations.

The following table summarizes gains and losses we recognized on our oil and natural gas derivatives for the

three

and

nine

months ended

September 30, 2019

and

2018

:

	Three Months Ended September 30, 2019			Three Months Ended September 30, 2018			Nine Months Ended September 30, 2019		Nine Months Ended September 30, 2018
Oil and Natural Gas Derivatives (in thousands)
Gain (loss) on commodity derivatives not designated as hedges, settled	$	5,922		$	(196	)	$	6,135	$	(737	)
Gain (loss) on commodity derivatives not designated as hedges, not settled		(2,170	)		(41	)		9,262		(2,655	)
Total gain (loss) on commodity derivatives not designated as hedges	$	3,752		$	(237	)	$	15,397	$	(3,392	)

Commodity Derivative Activity

We enter into swap contracts, costless collars or other derivative agreements from time to time to manage commodity price risk for a portion of our production. Our policy is that all derivatives are approved by the Hedging Committee of our Board, and reviewed periodically by the Board.

Despite the measures taken by us to attempt to control price risk, we remain subject to price fluctuations for natural gas and crude oil sold in the spot market. Prices received for natural gas sold on the spot market are volatile due primarily to seasonality of demand and other factors beyond our control. Decreases in domestic crude oil and natural gas spot prices will have a material adverse effect on our financial position, results of operations and quantities of reserves recoverable on an economic basis. We routinely exercise our contractual right to net realized gains against realized losses when settling with our financial counter-parties. Neither our counter-parties nor we require any collateral upon entering into derivative contracts. We would have been at risk

of losing

$9.6

million had SunTrust Bank and RBC Capital Markets been unable to fulfill their obligations as of

September 30, 2019

.

As of

September 30, 2019

, the open positions on our outstanding commodity derivative contracts, all of which were with SunTrust Bank an

d RBC Capital Markets, wer

e as follows:

Contract Type	Average Daily Volume		Total Remaining Volume		Weighted Average Fixed Price		Fair Value at September 30, 2019 (In thousands)
Oil swaps (Bbls)
2019		300		27,600	$	51.08	$	(74	)
2020		221		80,945	$	59.02		599
2021 (through March 31, 2021)		200		18,000	$	56.58		112
Total oil							$	637
Natural Gas swaps (MMBtu)
2019		100,000		9,200,000	$	2.89	$	4,277
2020		52,000		18,897,000	$	2.67		4,382
2021 (through March 31, 2021)		43,000		3,839,000	$	2.64		7
Natural Gas collar (MMBtu)
2020		18,000		6,693,000		$2.40 - $2.625		615
2021 (through March 31, 2021)		27,000		2,430,000		$2.40 - $2.625		(324	)
Total natural gas							$	8,957
Total oil and natural gas							$	9,594

During the

third

quarter of

2019

 we entered into the following contracts with SunTrust Bank and RBC Capital Markets:

Contract Type	Average Daily Volume		Weighted Average Fixed Price	Contract Start Date	Contract Termination
Natural gas swap (MMBtu)		24,748	$2.50	April 1, 2020	March 31, 2021
Natural gas collar (MMBtu)		24,995	$2.40 - $2.625	April 1, 2020	March 31, 2021

The following table summarizes the fair values of our derivative financial instruments that are recorded at fair value classified in each Level as of 

September 30, 2019

(in thousands). We measure the fair value of our commodity derivative contracts by applying the income approach. See

Note

1—“Description

of Business and Significant Accounting Policies”

for our discussion regarding fair value, including inputs used and valuation techniques for determining fair values.

Description	Level 1		Level 2			Level 3		Total
Fair value of oil and natural gas derivatives - Current Assets	$	-	$	9,213		$	-	$	9,213
Fair value of oil and natural gas derivatives - Non-current Assets		-		708			-		708
Fair value of oil and natural gas derivatives - Current Liabilities		-		(74	)		-		(74	)
Fair value of oil and natural gas derivatives - Non-current Liabilities		-		(253	)		-		(253	)
Total	$	-	$	9,594		$	-	$	9,594

We enter into oil and natural gas derivative contracts under which we have netting arrangements with each counter-party. The following table discloses and reconciles the gross amounts to the amounts as presented on the Consolidated Balance Sheets as of 

September 30, 2019

and

December 31, 2018

:

	September 30, 2019									December 31, 2018
Fair Value of Oil and Natural Gas Derivatives	Gross			Amount			As			Gross			Amount			As
(in thousands)	Amount			Offset			Presented			Amount			Offset			Presented
Fair value of oil and natural gas derivatives - Current Assets	$	9,624		$	(411	)	$	9,213		$	2,893		$	(2,090	)	$	803
Fair value of oil and natural gas derivatives - Non-current Assets		2,072			(1,364	)		708			-			-			-
Fair value of oil and natural gas derivatives - Current Liabilities		(485	)		411			(74	)		(2,090	)		2,090			-
Fair value of oil and natural gas derivatives - Non-current Liabilities		(1,617	)		1,364			(253	)		(471	)		-			(471	)
Total	$	9,594		$	-		$	9,594		$	332		$	-		$	332

XML

Note 4 - Debt

9 Months Ended

Sep. 30, 2019

Notes to Financial Statements

Debt Disclosure [Text Block]

NOTE

4—Debt

Debt consisted of the following balances as of 

September 30, 2019

and

December 31, 2018

(in thousands):

	September 30, 2019				December 31, 2018
	Principal		Carrying Amount		Principal		Carrying Amount
2017 Senior Credit Facility	$	-	$	-	$	27,000	$	27,000
2019 Senior Credit Facility		87,900		87,900		-		-
Convertible Second Lien Notes (1)		-		-		53,691		49,820
New 2L Notes (2)		12,546		10,922		-		-
Total debt	$	100,446	$	98,822	$	80,691	$	76,820

(

1

) The debt discount was being amortized using the effective interest rate method based upon a maturity date of

August 30, 2019

until the Convertible Second Lien Notes were fully paid off on

May 29, 2019.

(

2

) The debt discount is being amortized using the effective interest rate method based upon a maturity date of

May 31, 2021.

The prin

cipal included 

$0.5

million of i

nterest to be paid in-kind as of 

September 30, 2019

. The carrying value included 

$1.3

million of unamortized debt discount as of 

September 30, 2019

.

The following table summarizes the total interest expense for the 

three

and

nine

months ended

September 30, 2019

and

2018

including contractual interest expense, amortization of debt discount and financing costs (amounts in thousands, except effective interest rates):

	Three Months Ended September 30, 2019					Three Months Ended September 30, 2018					Nine Months Ended September 30, 2019					Nine Months Ended September 30, 2018
	Interest Expense		Effective Interest Rate			Interest Expense		Effective Interest Rate			Interest Expense		Effective Interest Rate			Interest Expense		Effective Interest Rate
2017 Senior Credit Facility	$	-		-		$	281	8.6		%	$	872		7.2	%	$	529		8.3	%
2019 Senior Credit Facility		1,377		6.2	%		-		-			2,072		6.1	%		-		-
Convertible Second Lien Notes (1)		-		-			2,824		24.4	%		5,304		24.1	%		7,981		24.7	%
New 2L Notes (2)		604		21.9	%		-		-			788		21.6	%		-		-
Total interest expense	$	1,981				$	3,105				$	9,036				$	8,510

(

1

) The Convertible Second Lien Notes had a coupon interest rate of

13.50%;

however, the discount recorded due to the convertibility of the notes increased the effective interest rat

e to

24.1%

 fo

r the 

nine

months ended

September 30, 2019

and

24.4%

and

24.7%,

respectively, for the

three

and

nine

months ended

September 30, 2018

. I

nterest expense for the 

three

months ended

September 30, 2018

included

$1.1

 million of debt discount amortization and

$1.7

 million of paid in-kind interest. Interest expense for the

nine

months ended

September 30, 2019

 included

$2.3

million of debt discount amortization and

$3.0

million of paid in-kind interest, and interest expense for the

nine

months ended

September 30, 2018

 included

$2.9

 million of debt discount amortization and

$4.9

 million of paid in-kind interest.

(

2

) The New

2L

Notes have a coupon interest rate of

13.50%;

however, the discount recorded due to the convertibility of the notes increased the effective interest

rate to

21.9%

and

21.6%,

respectively, fo

r the

three

and

nine

months ended

September 30, 2019

. Interest expense for the 

three

and

nine

months ended

September 30, 2019

 includ

ed 

$0.1

 million and

$0.2

million of debt discount amortization, respectively, and

$0.4

million and

$0.5

million of

accrued interest to be paid in-kind, respectively.

2017

Senior Credit Facility

On

October 17, 2017,

the Company entered into the Amended and Restated Senior Secured Revolving Credit Agreement (as amended, the

“2017

Credit Agreement”) with the Subsidiary, as borrower, JPMorgan Chase Bank, N.A., as administrative agent, and certain lenders that are party thereto, which provided for revolving loans of up to the borrowing base then in effect (as amended, the

“2017

Senior Credit Facility”). The

2017

Senior Credit Facility was set to mature on (a)

October 17, 2021

or (b)

December 30, 2019,

if the Convertible Second Lien Notes had 

not

been voluntarily redeemed, repurchased, refinanced or otherwise retired by

December 30, 2019.

The maximum credit amount under the

2017

Senior Credit Facility when it was paid off in full on

May 14, 2019

was

$250.0

million with a borrowing base of

$75.0

million.

All amounts outstanding under the

2017

Senior Credit Facility bore interest at a rate per annum equal to, at the Company's option, either (i) the alternative base rate plus an applicable margin ranging from

1.75%

to

2.75%,

depending on the percentage of the borrowing base that was utilized, or (ii) adjusted LIBOR plus an applicable margin ranging from

2.75%

to

3.75%,

depending on the percentage of the borrowing base that was utilized. Undrawn amounts under the

2017

Senior Credit Facility were subject to a

0.50%

commitment fee.

The obligations under the

2017

Credit Agreement were secured by a

first

lien security interest in substantially all of the assets of the Company and the Subsidiary.

On

May 14, 2019,

the

2017

Senior Credit Facility was paid off in full and amended, restated and refinanced into the

2019

Senior Credit Facility. In connection with the refinancing, we recorded a

$0.2

million loss on early extinguishment of debt related to the remaining unamortized debt issuance costs.

2019

Senior Credit Facility

On

May 14, 2019,

the Company entered into a Second Amended and Restated Senior Secured Revolving Credit Agreement (the

“2019

Credit Agreement”) among the Company, the Subsidiary, as borrower (in such capacity, the “Borrower”), SunTrust Bank, as administrative agent (the “Administrative Agent”), and certain lenders that are party thereto, which provides for revolving loans of up to the borrowing base then in effect (the

“2019

Senior Credit Facility”).

The

2019

Senior Credit Facility matures (a) 

May 14, 2024

or (b) the date that is

180

days prior to the “Maturity Date” as defined in the New

2L

Notes Indenture (as defined below) as in effect on the date of issuance of the New

2L

Notes if the New

2L

Notes (as defined below) have

not

been voluntarily redeemed, repurchased, refinanced or otherwise retired by such date. The

2019

Senior Credit Facility provides for a maximum credit amount of

$500

million subject to a borrowing base limitation, which originally was

$115

million. The borrowing base was increased to

$125

million in

August

of

2019

and is set to be redetermined thereafter in

March

and

September

of each calendar year, and is subject to additional adjustments from time to time, including for asset sales, elimination or reduction of hedge positions and incurrence of other debt. Additionally, each of the Borrower and the Administrative Agent

may

request

one

unscheduled redetermination of the borrowing base between scheduled redeterminations. The amount of the borrowing base is determined by the lenders at their sole discretion and consistent with their oil and gas lending criteria at the time of the relevant redetermination. The Borrower

may

also request the issuance of letters of credit under the

2019

Credit Agreement in an aggregate amount up to

$10

 million, which reduce the amount of available borrowings under the borrowing base in the amount of such issued and outstanding letters of credit.

All amounts outstanding under the

2019

Senior Credit Facility bear interest at a rate per annum equal to, at the Company’s option, either (i) the alternative base rate plus an applicable margin ranging from

1.50%

to

2.50%,

depending on the percentage of the borrowing base that is utilized, or (ii) adjusted LIBOR plus an applicable margin from

2.50%

to

3.50%,

depending on the percentage of the borrowing base that is utilized. Undrawn amounts under the

2019

Senior Credit Facility are subject to a commitment fee ranging from

0.375%

to

0.50%,

depending on the percentage of the borrowing base that is utilized. To the extent that a payment default exists and is continuing, all amounts outstanding under the

2019

Senior Credit Facility will bear interest at

2.0%

per annum above the rate and margin otherwise applicable thereto. As of

September 30, 2019,

the interest rate on the borrowings from the

2019

Senior Credit Facility was

5.047%.

The obligations under the

2019

Credit Agreement are guaranteed by the Company and secured by a

first

lien security interest in substantially all of the assets of the Company and the Borrower.

The

2019

Credit Agreement contains certain customary representations and warranties, affirmative and negative covenants and events of default. If an event of default occurs and is continuing, the lenders

may

declare all amounts outstanding under the

2019

Senior Credit Facility to be immediately due and payable.

The

2019

Credit Agreement also contains certain financial covenants, including the maintenance of (i) a ratio of Net Funded Debt to EBITDAX

not

to exceed

4.00

to

1.00

as of the last day of any fiscal quarter, (ii) a current ratio (based on the ratio of current assets to current liabilities as defined in the

2019

Credit Agreement)

not

to be less than

1.00

to

1.00

and (iii) until

no

New

2L

Notes remain outstanding, a ratio of Total Proved PV-

10

 attributable to the Company’s and Borrower’s Proved Reserves to Total Secured Debt (net of any Unrestricted Cash

not

to exceed

$10

million)

not

to be less than

1.50

to

1.00

and minimum liquidity requirements.

On

May 14, 2019,

the Company utilized borrowings under the

2019

Senior Credit Facility to refinance its obligations under the

2017

Senior Credit Facility and to fund the Redemption (as defined below) of the Convertible Second Lien Notes.

As of 

September 30, 2019

, the Company had a borrowing base of

$125.0

million with

$87.9

 million of borrowings outstanding. The Company also

had

$2.4

 million of un

amortized debt issuance costs recorded as of 

September 30, 2019

related to the

2019

 Senior Credit Facility.

As of

September 30, 2019

, the Company was

in compliance with all covenants within the

2019

 Senior Credit Facility

.

Convertible Second Lien Notes

In

October 

2016,

the Company issued

$40.0

million aggregate principal amount of the Company’s

13.50%

Convertible Second Lien Senior Secured Notes due

2019

(the “Convertible Second Lien Notes”) along with

10

-year costless warrants to acquire

2.5

million shares of common stock. Holders of the Convertible Second Lien Notes had a

second

priority lien on all assets of the Company, and holders of such warrants had a right to appoint

two

members to our Board of Directors (the “Board”) as long as such warrants were outstanding.

The Convertible Second Lien Notes were scheduled to mature on

August 30, 2019

or

six

months after the maturity of our current revolving credit facility but in

no

event later than

March 30, 2020.

The Convertible Second Lien Notes bore interest at the rate of

13.50%

 per annum, payable quarterly in arrears on

January 

15,

 

April 

15,

 

July 

15

and

October 

15

of each year. T

he Company also had the option under certain circumstances to pay all or any portion of interest in-kind on the then outstanding principal amount of the Convertible Second Lien Notes by increasing the principal amount of the outstanding Convertible Second Lien Notes or by issuing additional

second

lien notes.

Upon issuance of the Convertible Second Lien Notes in

October 2016,

in accordance with accounting standards related to convertible debt instruments that

may

be settled in cash upon conversion as well as warrants on the debt instrument, we recorded a debt discount of

$11.0

million, thereby reducing the

$40.0

million carrying value upon issuance to

$29.0

million and recorded an equity component of

$11.0

million. The debt discount was amortized using the effective interest rate method based upon an original term through

August 

30,

2019.

The Convertible Second Lien Notes were redeemed in full on

May 29, 2019

for

$56.7

million, using borrowings under the

2019

Senior Credit Facility. In connection with the redemption of the Convertible Second Lien Notes, we recorded a

$1.6

million loss on early extinguishment of debt related to the remaining unamortized debt discount and debt issuance costs.

New Convertible Second Lien Notes

 

On

May 14, 2019,

the Company and the Subsidiary entered into a purchase agreement with certain funds and accounts managed by Franklin Advisers, Inc., as investment manager (each such fund or account, together with its successors and assigns, a “New

2L

Notes Purchaser”) pursuant to which the Company issued to the New

2L

Notes Purchasers (the “New

2L

Notes Offering”)

$12.0

million aggregate principal amount of the Company’s

13.50%

Convertible Second Lien Senior Secured Notes due

2021

(the “New

2L

Notes”). The closing of the New

2L

Notes Offering occurred on

May 31, 2019.

Proceeds from the sale of the New

2L

Notes were primarily used to pay down outstanding borrowings under the

2019

Senior Credit Facility. Holders of the New

2L

Notes have a

second

priority lien on all assets of the Company.

The New

2L

Notes, as set forth in the indenture governing such notes (the “New

2L

Notes Indenture”), are scheduled to mature on

May 31, 2021. 

The New

2L

Notes bear interest at the rate of

13.50%

 per annum, payable quarterly in arrears on

January 

15,

 

April 

15,

 

July 

15

and

October 

15

of each year. The Company

may

elect to pay all or any portion of interest in-kind on the then outstanding principal amount of the New

2L

Notes by increasing the principal amount of the outstanding New

2L

Notes. 

The New

2L

Notes Indenture contains certain covenants pertaining to us and our Subsidiary, including delivery of financial reports; environmental matters; conduct of business; use of proceeds; operation and maintenance of properties; collateral and guarantee requirements; indebtedness; liens; dividends and distributions; limits on sales of assets and stock; business activities; transactions with affiliates; and changes of control. The New

2L

Notes Indenture also contains a financial covenant which requires the maintenance of a Total Proved Asset Coverage Ratio 

not

to be less than

1.50

to

1.00.

The New

2L

Notes are convertible into the Company’s common stock at the conversion rate, which is the sum of the outstanding principal amount of New

2L

Notes to be converted, including any accrued and unpaid interest, divided by the conversion price, which shall initially be

$21.33,

subject to certain adjustments as described in the New

2L

Notes Indenture. Upon conversion, the Company must deliver, at its option, either (

1

) a number of shares of its common stock determined as set forth in the New

2L

Notes Indenture, (

2

) cash or (

3

) a combination of shares of its common stock and cash; however, the Company’s ability to redeem the New

2L

Notes with cash is subject to the terms of the

2019

Senior Credit Agreement.

The New

2L

Notes were issued and sold to the New

2L

Notes Purchasers pursuant to an exemption from the registration requirements of the Securities Act of

1933,

as amended (the “Securities Act”), pursuant to Section

4

(a)(

2

) thereunder. The Company has completed the registration with the U.S. Securities and Exchange Commission of the resale of the New

2L

Notes and the shares of common stock issuable upon conversion of The New

2L

Notes.

Upon issuance of the New

2L

 Notes on

May 31, 2019,

in accordance with accounting standards related to convertible debt instruments that

may

be settled in cash upon conversion, we recorded a debt discount of

$1.4

million, thereby reducing the

$12.0

million carrying value upon issuance to

$10.6

million and recorded an equity component of

$1.4

million. The equity component was valued using a binomial model. The debt discount is amortized using the effective interest rate method based upon an original term through

May 31, 2021.

As of 

September 30, 2019

,

$1.3

million of debt discount and

$0.4

million of debt i

ssuance costs remained to be amortized on the New

2L

Notes.

As of 

September 30, 2019

, the Company was in compliance with all covenants within the New

2L

Notes Indenture.

XML

Note 4 - Debt - Components of Debt, Interest Expense and Effective Interest Rate (Details) - USD ($) $ in Thousands		3 Months Ended		9 Months Ended
		Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Interest Expense		$ 1,981	$ 3,105	$ 9,036	$ 8,510
Effective Interest Rate
The 2017 Senior Credit Facility [Member]
Interest Expense			$ 281	$ 872	$ 529
Effective Interest Rate			8.60%	7.20%	8.30%
The 2019 Senior Credit Facility [Member]
Interest Expense		$ 1,377		$ 2,072
Effective Interest Rate		6.20%		6.10%
Convertible Second Lien Notes [Member]
Interest Expense	[1]		$ 2,824	$ 5,304	$ 7,981
Effective Interest Rate	[1]		24.40%	24.10%	24.70%
New Convertible Second Lien Notes, New 2L Notes [Member]
Interest Expense	[2]	$ 604		$ 788
Effective Interest Rate	[2]	21.90%		21.60%

[1] The Convertible Second Lien Notes had a coupon interest rate of 13.50%; however, the discount recorded due to the convertibility of the notes increased the effective interest rate to 24.1% for the nine months ended September 30, 2019 and 24.4% and 24.7%, respectively, for the three and nine months ended September 30, 2018. Interest expense for the three months ended September 30, 2018 included $1.1 million of debt discount amortization and $1.7 million of paid in-kind interest. Interest expense for the nine months ended September 30, 2019 included $2.3 million of debt discount amortization and $3.0 million of paid in-kind interest, and interest expense for the nine months ended September 30, 2018 included $2.9 million of debt discount amortization and $4.9 million of paid in-kind interest.

[2] he New 2L Notes have a coupon interest rate of 13.50%; however, the discount recorded due to the convertibility of the notes increased the effective interest rate to 21.9% and 21.6%, respectively, for the three and nine months ended September 30, 2019. Interest expense for the three and nine months ended September 30, 2019 included $0.1 million and $0.2 million of debt discount amortization, respectively, and $0.4 million and $0.5 million of accrued interest to be paid in-kind, respectively.

XML

Note 7 - Income Taxes (Details Textual) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018	Dec. 31, 2018
Income Tax Expense (Benefit), Total	$ 0	$ 0	$ 0	$ 0
Deferred Tax Assets, Valuation Allowance, Total					$ 84,100
Deferred Income Tax Assets, Net, Total	400		400		800
Deferred Tax Assets, Tax Credit Carryforwards, Alternative Minimum Tax					$ 800
Deferred Tax Assets Reclassified to Accounts Receivable	400
Unrecognized Tax Benefits, Ending Balance	$ 0		$ 0

XML

Note 8 - Commodity Derivative Activities (Tables)

9 Months Ended

Sep. 30, 2019

Notes Tables

Schedule of Realized and Unrealized Gains and Losses [Table Text Block]

	Three Months Ended September 30, 2019			Three Months Ended September 30, 2018			Nine Months Ended September 30, 2019		Nine Months Ended September 30, 2018
Oil and Natural Gas Derivatives (in thousands)
Gain (loss) on commodity derivatives not designated as hedges, settled	$	5,922		$	(196	)	$	6,135	$	(737	)
Gain (loss) on commodity derivatives not designated as hedges, not settled		(2,170	)		(41	)		9,262		(2,655	)
Total gain (loss) on commodity derivatives not designated as hedges	$	3,752		$	(237	)	$	15,397	$	(3,392	)

Schedule of Price Risk Derivatives [Table Text Block]

Contract Type	Average Daily Volume		Total Remaining Volume		Weighted Average Fixed Price		Fair Value at September 30, 2019 (In thousands)
Oil swaps (Bbls)
2019		300		27,600	$	51.08	$	(74	)
2020		221		80,945	$	59.02		599
2021 (through March 31, 2021)		200		18,000	$	56.58		112
Total oil							$	637
Natural Gas swaps (MMBtu)
2019		100,000		9,200,000	$	2.89	$	4,277
2020		52,000		18,897,000	$	2.67		4,382
2021 (through March 31, 2021)		43,000		3,839,000	$	2.64		7
Natural Gas collar (MMBtu)
2020		18,000		6,693,000		$2.40 - $2.625		615
2021 (through March 31, 2021)		27,000		2,430,000		$2.40 - $2.625		(324	)
Total natural gas							$	8,957
Total oil and natural gas							$	9,594

Contract Type	Average Daily Volume		Weighted Average Fixed Price	Contract Start Date	Contract Termination
Natural gas swap (MMBtu)		24,748	$2.50	April 1, 2020	March 31, 2021
Natural gas collar (MMBtu)		24,995	$2.40 - $2.625	April 1, 2020	March 31, 2021

Schedule of Derivative Instruments in Statement of Financial Position, Fair Value [Table Text Block]

Description	Level 1		Level 2			Level 3		Total
Fair value of oil and natural gas derivatives - Current Assets	$	-	$	9,213		$	-	$	9,213
Fair value of oil and natural gas derivatives - Non-current Assets		-		708			-		708
Fair value of oil and natural gas derivatives - Current Liabilities		-		(74	)		-		(74	)
Fair value of oil and natural gas derivatives - Non-current Liabilities		-		(253	)		-		(253	)
Total	$	-	$	9,594		$	-	$	9,594

Offsetting Liabilities [Table Text Block]

	September 30, 2019									December 31, 2018
Fair Value of Oil and Natural Gas Derivatives	Gross			Amount			As			Gross			Amount			As
(in thousands)	Amount			Offset			Presented			Amount			Offset			Presented
Fair value of oil and natural gas derivatives - Current Assets	$	9,624		$	(411	)	$	9,213		$	2,893		$	(2,090	)	$	803
Fair value of oil and natural gas derivatives - Non-current Assets		2,072			(1,364	)		708			-			-			-
Fair value of oil and natural gas derivatives - Current Liabilities		(485	)		411			(74	)		(2,090	)		2,090			-
Fair value of oil and natural gas derivatives - Non-current Liabilities		(1,617	)		1,364			(253	)		(471	)		-			(471	)
Total	$	9,594		$	-		$	9,594		$	332		$	-		$	332

XML

Note 2 - Revenue Recognition (Tables)

9 Months Ended

Sep. 30, 2019

Notes Tables

Disaggregation of Revenue [Table Text Block]

	Three Months Ended September 30, 2019								Nine Months Ended September 30, 2019
(In thousands)	Oil Revenue		Gas Revenue		NGL Revenue		Total Oil and Natural Gas Revenues		Oil Revenue		Gas Revenue		NGL Revenue		Total Oil and Natural Gas Revenues
Operated	$	2,365	$	21,679	$	-	$	24,044	$	7,881	$	66,743	$	-	$	74,624
Non-operated		112		3,002		3		3,117		326		13,232		11		13,569
Total oil and natural gas revenues	$	2,477	$	24,681	$	3	$	27,161	$	8,207	$	79,975	$	11	$	88,193

	Three Months Ended September 30, 2018								Nine Months Ended September 30, 2018
(In thousands)	Oil Revenue		Gas Revenue		NGL Revenue		Total Oil and Natural Gas Revenues		Oil Revenue		Gas Revenue		NGL Revenue		Total Oil and Natural Gas Revenues
Operated	$	3,605	$	17,391	$	-	$	20,996	$	11,240	$	34,092	$	-	$	45,332
Non-operated		154		3,145		36		3,335		429		8,153		44		8,626
Total oil and natural gas revenues	$	3,759	$	20,536	$	36	$	24,331	$	11,669	$	42,245	$	44	$	53,958

XML

Note 2 - Revenue Recognition (Details Textual) - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
Accrued Oil and Gas Revenue	$ 9,902	$ 14,464

XML

Note 8 - Commodity Derivative Activities - Reconciliation of Gross Amounts to Amounts as Presented on Consolidated Balance Sheets (Details) - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
Fair value of oil and natural gas derivatives - Current Assets	$ 9,213	$ 803
Fair value of oil and natural gas derivatives - Non-current Assets	708
Fair value of oil and natural gas derivatives - Current Liabilities	(74)
Fair value of oil and natural gas derivatives - Non-current Liabilities	(253)	$ (471)
Not Designated as Hedging Instrument [Member] | Commodity Contract [Member]
Fair value of oil and natural gas derivatives - Current Assets	9,213
Fair value of oil and natural gas derivatives - Non-current Assets	708
Fair value of oil and natural gas derivatives - Current Liabilities	(74)
Fair value of oil and natural gas derivatives - Non-current Liabilities	(253)
Total	9,594
Not Designated as Hedging Instrument [Member] | Commodity Contract [Member] | Fair Value, Inputs, Level 1 [Member]
Fair value of oil and natural gas derivatives - Current Assets
Fair value of oil and natural gas derivatives - Non-current Assets
Fair value of oil and natural gas derivatives - Current Liabilities
Fair value of oil and natural gas derivatives - Non-current Liabilities
Total
Not Designated as Hedging Instrument [Member] | Commodity Contract [Member] | Fair Value, Inputs, Level 2 [Member]
Fair value of oil and natural gas derivatives - Current Assets	9,213
Fair value of oil and natural gas derivatives - Non-current Assets	708
Fair value of oil and natural gas derivatives - Current Liabilities	(74)
Fair value of oil and natural gas derivatives - Non-current Liabilities	(253)
Total	9,594
Not Designated as Hedging Instrument [Member] | Commodity Contract [Member] | Fair Value, Inputs, Level 3 [Member]
Fair value of oil and natural gas derivatives - Current Assets
Fair value of oil and natural gas derivatives - Non-current Assets
Fair value of oil and natural gas derivatives - Current Liabilities
Fair value of oil and natural gas derivatives - Non-current Liabilities
Total

XML

Note 10 - Leases - Assets and Liabilities (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018
Accumulated depreciation	$ 939
Lease asset, net	1,983
Total lease liabilities	2,550
Furniture, Fixtures and Equipment and Other Capital Assets [Member]
Lease asset, gross	2,922
Accounts Payable and Accrued Liabilities [Member]
Current lease liability	1,386
Other Noncurrent Liabilities [Member]
Non-current lease liability	$ 1,164

XML

Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)	$ 14,215	$ (6,319)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation, depletion and amortization	36,550	16,934
Right of use asset depreciation	939
(Gain) loss on commodity derivatives not designated as hedges	(15,397)	3,392
Net cash received (paid) for settlement of derivative instruments	6,135	(737)
Share-based compensation (non-cash)	4,765	4,764
Amortization of finance cost, debt discount, paid in-kind interest and accretion	6,340	7,981
Loss on early extinguishment of debt	1,846
Reorganization items (non-cash), net		305
Other	269	(23)
Change in assets and liabilities:
Accounts receivable, trade and other, net of allowance	207	465
Accrued oil and natural gas revenue	4,562	(4,297)
Prepaid expenses and other	192	(231)
Accounts payable	(2,544)	12,964
Accrued liabilities	(1,232)	1,537
Net cash provided by operating activities	56,847	36,735
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures	(74,199)	(85,105)
Proceeds from sale of assets	1,334	26,920
Net cash used in investing activities	(72,865)	(58,185)
CASH FLOWS FROM FINANCING ACTIVITIES:
Principal payments of bank borrowings	(49,500)	(16,723)
Proceeds from bank borrowings	110,400	15,000
Repayment of Convertible Second Lien Notes	(56,728)
Proceeds from New 2L Notes	12,000
Issuance cost, net	(2,516)	(53)
Purchase of treasury stock and other	(546)	(835)
Net cash provided by (used in) financing activities	13,110	(2,611)
Decrease in cash and cash equivalents	(2,908)	(24,061)
Cash and cash equivalents, beginning of period	4,068	25,992
Cash and cash equivalents, end of period	1,160	1,931
Supplemental disclosures of cash flow information:
Cash paid for reorganization items, net		866
Cash paid for interest	2,952	249
Increase in non-cash capital expenditures	$ 5,052	$ 1,527

XML

Document And Entity Information - shares	9 Months Ended
	Sep. 30, 2019	Nov. 07, 2019
Document Information [Line Items]
Entity Registrant Name	GOODRICH PETROLEUM CORP
Entity Central Index Key	0000943861
Trading Symbol	gdp
Current Fiscal Year End Date	--12-31
Entity Filer Category	Non-accelerated Filer
Entity Current Reporting Status	Yes
Entity Emerging Growth Company	false
Entity Small Business	true
Entity Common Stock, Shares Outstanding (in shares)		12,312,750
Entity Shell Company	false
Document Type	10-Q
Document Period End Date	Sep. 30, 2019
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	Q3
Amendment Flag	false
Title of 12(b) Security	Common stock, par value $0.01 per share

XML

Note 3 - Asset Retirement Obligations

9 Months Ended

Sep. 30, 2019

Notes to Financial Statements

Asset Retirement Obligation Disclosure [Text Block]

NOTE

3—Asset

Retirement Obligations

The reconciliation of the beginning and ending asset retirement obligation for the 

nine

months ended

September 30, 2019

is as follows (in thousands):

	Nine Months Ended September 30, 2019
Beginning balance as of December 31, 2018	$	3,791
Liabilities incurred		159
Liabilities settled		(4	)
Dispositions		(203	)
Accretion expense		221
Ending balance as of September 30, 2019	$	3,964
Current liability	$	-
Long term liability	$	3,964

XML

Note 8 - Commodity Derivative Activities - Summary of Gains and Losses on Derivatives (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Gain (loss) on commodity derivatives not designated as hedges	$ 3,752	$ (237)	$ 15,397	$ (3,392)
Commodity Contract [Member]
Gain (loss) on commodity derivatives not designated as hedges, settled	5,922	(196)	6,135	(737)
Gain (loss) on commodity derivatives not designated as hedges, not settled	(2,170)	(41)	9,262	(2,655)
Gain (loss) on commodity derivatives not designated as hedges	$ 3,752	$ (237)	$ 15,397	$ (3,392)

XML

Note 4 - Debt (Details Textual) $ / shares in Units, $ in Thousands, shares in Millions							3 Months Ended			9 Months Ended
		May 31, 2019 USD ($) $ / shares	May 29, 2019 USD ($)	May 14, 2019 USD ($)	Oct. 17, 2017	Oct. 12, 2016 USD ($) shares	Sep. 30, 2019 USD ($)		Sep. 30, 2018 USD ($)	Sep. 30, 2019 USD ($)		Sep. 30, 2018 USD ($)	Oct. 11, 2019 USD ($)	Aug. 31, 2019 USD ($)	May 30, 2019 USD ($)	May 07, 2019 $ / shares	Dec. 31, 2018 USD ($)
Debt Instrument, Interest Rate During Period
Gain (Loss) on Extinguishment of Debt, Total										$ (1,846)
Debt Instrument, Face Amount							100,446			100,446							$ 80,691
Long-term Debt, Gross							98,822			98,822							76,820	[1]
Costless Warrants Associated with the Convertible Second Lien Notes [Member]
Warrants and Rights Outstanding, Term						10 years
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | shares						2.5
New Convertible Second Lien Notes, New 2L Notes [Member]
Long-term Debt Gross Paid in Kind Interest							500			500
Debt Instrument, Unamortized Discount, Total		$ 1,400					$ 1,300			$ 1,300
Debt Instrument, Interest Rate, Stated Percentage		13.50%					13.50%			13.50%
Debt Instrument, Interest Rate During Period	[2]						21.90%			21.60%
Amortization of Debt Discount (Premium)							$ 100			$ 200
Paid-in-Kind Interest							400			500
Debt Instrument, Covenant, Compliance Total Proved Asset Coverage Ratio		1.5
Debt Issuance Costs, Net, Total							400			400
Debt Instrument, Face Amount		$ 12,000					12,546	[3]		12,546	[3]							[3]
Long-term Debt, Gross		$ 10,600					$ 10,922	[3]		$ 10,922	[3]				$ 12,000			[3]
Debt Instrument, Convertible, Conversion Price | $ / shares		$ 21.33														$ 2
Debt Instrument, Convertible, Carrying Amount of Equity Component		$ 1,400
Convertible Second Lien Notes [Member]
Debt Instrument, Unamortized Discount, Total						$ 11,000
Debt Instrument, Interest Rate, Stated Percentage						13.50%	13.50%			13.50%
Debt Instrument, Interest Rate During Period	[4]								24.40%	24.10%		24.70%
Amortization of Debt Discount (Premium)									$ 1,100	$ 2,300		$ 2,900
Paid-in-Kind Interest									$ 1,700	3,000		$ 4,900
Gain (Loss) on Extinguishment of Debt, Total			$ (1,600)
Debt Instrument, Face Amount						$ 40,000		[1]			[1]						53,691	[1]
Long-term Debt, Gross						29,000		[1]			[1]		$ 40,000				49,820	[1]
Adjustments to Additional Paid in Capital, Convertible Debt with Conversion Feature						$ 11,000
Debt Conversion, Original Debt, Amount			$ 56,700
The 2017 Senior Credit Facility [Member]
Debt Instrument, Interest Rate During Period									8.60%	7.20%		8.30%
Line of Credit Facility, Maximum Borrowing Capacity				$ 250,000
Line of Credit Facility, Current Borrowing Capacity				75,000
Line of Credit Facility, Commitment Fee Percentage					0.50%
Gain (Loss) on Extinguishment of Debt, Total				(200)
Debt Instrument, Face Amount																	27,000
Long-term Debt, Gross																	27,000
The 2017 Senior Credit Facility [Member] | Minimum [Member] | Base Rate [Member]
Debt Instrument, Basis Spread on Variable Rate					1.75%
The 2017 Senior Credit Facility [Member] | Minimum [Member] | London Interbank Offered Rate (LIBOR) [Member]
Debt Instrument, Basis Spread on Variable Rate					2.75%
The 2017 Senior Credit Facility [Member] | Maximum [Member] | Base Rate [Member]
Debt Instrument, Basis Spread on Variable Rate					2.75%
The 2017 Senior Credit Facility [Member] | Maximum [Member] | London Interbank Offered Rate (LIBOR) [Member]
Debt Instrument, Basis Spread on Variable Rate					3.75%
The 2019 Senior Credit Facility [Member]
Debt Instrument, Interest Rate During Period							6.20%			6.10%
Line of Credit Facility, Maximum Borrowing Capacity				500,000
Line of Credit Facility, Current Borrowing Capacity				$ 115,000			$ 125,000			$ 125,000				$ 125,000
Line of Credit Facility, Interest Rate at Period End, Default Rate				2.00%
Line of Credit Facility, Interest Rate at Period End							5.047%			5.047%
Debt Instrument, Covenant Compliance Debt to EBITDAX				4
Debt Instrument, Covenant, Current Ratio				1
Debt Instrument, Covenant Compliance Unrestricted Cash, Maximum				$ 10,000
Debt Instrument, Covenant, Compliance Total Proved Asset Coverage Ratio				1.5
Long-term Line of Credit, Total							$ 87,900			$ 87,900
Debt Issuance Costs, Net, Total							2,400			2,400
Debt Instrument, Face Amount							87,900			87,900
Long-term Debt, Gross							$ 87,900			$ 87,900
The 2019 Senior Credit Facility [Member] | Letter of Credit [Member]
Line of Credit Facility, Maximum Borrowing Capacity				$ 10,000
The 2019 Senior Credit Facility [Member] | Minimum [Member]
Line of Credit Facility, Commitment Fee Percentage				0.375%
The 2019 Senior Credit Facility [Member] | Minimum [Member] | Base Rate [Member]
Debt Instrument, Basis Spread on Variable Rate				1.50%
The 2019 Senior Credit Facility [Member] | Minimum [Member] | London Interbank Offered Rate (LIBOR) [Member]
Debt Instrument, Basis Spread on Variable Rate				2.50%
The 2019 Senior Credit Facility [Member] | Maximum [Member]
Line of Credit Facility, Commitment Fee Percentage				0.50%
The 2019 Senior Credit Facility [Member] | Maximum [Member] | Base Rate [Member]
Debt Instrument, Basis Spread on Variable Rate				2.50%
The 2019 Senior Credit Facility [Member] | Maximum [Member] | London Interbank Offered Rate (LIBOR) [Member]
Debt Instrument, Basis Spread on Variable Rate				3.50%

[1] The debt discount was being amortized using the effective interest rate method based upon a maturity date of August 30, 2019 until the Convertible Second Lien Notes were fully paid off on May 29, 2019.

[2] he New 2L Notes have a coupon interest rate of 13.50%; however, the discount recorded due to the convertibility of the notes increased the effective interest rate to 21.9% and 21.6%, respectively, for the three and nine months ended September 30, 2019. Interest expense for the three and nine months ended September 30, 2019 included $0.1 million and $0.2 million of debt discount amortization, respectively, and $0.4 million and $0.5 million of accrued interest to be paid in-kind, respectively.

[3] The debt discount is being amortized using the effective interest rate method based upon a maturity date of May 31, 2021. The principal included $0.5 million of interest to be paid in-kind as of September 30, 2019. The carrying value included $1.3 million of unamortized debt discount as of September 30, 2019.

[4] The Convertible Second Lien Notes had a coupon interest rate of 13.50%; however, the discount recorded due to the convertibility of the notes increased the effective interest rate to 24.1% for the nine months ended September 30, 2019 and 24.4% and 24.7%, respectively, for the three and nine months ended September 30, 2018. Interest expense for the three months ended September 30, 2018 included $1.1 million of debt discount amortization and $1.7 million of paid in-kind interest. Interest expense for the nine months ended September 30, 2019 included $2.3 million of debt discount amortization and $3.0 million of paid in-kind interest, and interest expense for the nine months ended September 30, 2018 included $2.9 million of debt discount amortization and $4.9 million of paid in-kind interest.

XML

Note 6 - Net Income (Loss) Per Common Share (Details Textual)	9 Months Ended
	Sep. 30, 2019
Minimum [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Performance Award of Initial Units Granted, Percent	0.00%
Maximum [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Performance Award of Initial Units Granted, Percent	250.00%

XML

Note 10 - Leases

9 Months Ended

Sep. 30, 2019

Notes to Financial Statements

Lessee, Operating Leases [Text Block]

NOTE

10—Leases

We adopted ASU

2016

-

02,

Leases

, on

January 1, 2019,

and we elected the transition relief package of practical expedients. We determine if an arrangement is or contains a lease at inception. Leases with an initial term of

12

months or less are

not

recorded on our Consolidated Balance Sheets. We lease our corporate office building in Houston, Texas. We recognize lease expense for this lease on a straight-line basis over the lease term. This operating lease is included in furniture, fixtures and equipment and other capital assets, accrued liabilities and other non-current liabilities on our Consolidated Balance Sheets. The operating lease asset and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term. As this lease did

not

provide an implicit rate, we used a collateralized incremental borrowing rate based on the information available at commencement date, including lease term, in determining the present value of future payments. The operating lease asset includes any lease payments made but excludes annual operating charges. Operating lease expense is recognized on a straight-line basis over the lease term and reported in general and administrative operating expense on our Consolidated Statements of Operations. We have also entered into leases for certain vehicles and other equipment which are immaterial to our financial statements and have therefore

not

been recorded on our Consolidated Balance Sheets.

The lease cost components for the

three

and

nine

months ended

September 30, 2019

 are classified as follows:

(in thousands)	Three Months Ended September 30, 2019		Nine Months Ended September 30, 2019		Consolidated Statements of Operations Classification
Building lease cost	$	368	$	1,124	General and administrative expense
Variable lease cost (1)		50		145	General and administrative expense
	$	418	$	1,269

(

1

) Includes building operating expenses.

The following are additional details related to our lease portfolio as of

September 30, 2019

:

(in thousands)	September 30, 2019			Consolidated Balance Sheets Classification
Lease asset, gross	$	2,922		Furniture, fixtures and equipment and other capital assets
Accumulated depreciation		(939	)	Accumulated depletion, depreciation and amortization
Lease asset, net	$	1,983
Current lease liability	$	1,386		Accrued liabilities
Non-current lease liability		1,164		Other non-current liabilities
Total lease liabilities	$	2,550

The following table presents operating lease liability maturities as of

September 30, 2019

:

(in thousands)	September 30, 2019
2019	$	385
2020		1,540
2021		813
2022		-
2023		-
Thereafter		-
Total lease payments	$	2,738
Less imputed interest	$	188
Present value of lease liabilities	$	2,550

The future minimum obligations under operating leases in effect as of 

December 31, 2018

having a noncancelable term in excess of

one

year as determined prior to the adoption of ASU

842

are as follows:

(in thousands)	December 31, 2018
2019	$	3,753
2020		1,556
2021		513
2022		-
2023		-
Thereafter		-
Future minimum lease obligations	$	5,822

As of

September 30, 2019

, our office building operating lease has a weighted-average remaining lease

term of

1.6

years and a

weighted-average discount rate of

8.0

percent. Cash paid for amounts included in the measurement of operating lease liabili

ties was

$0.4

 million and

$1.2

 million for th

e 

three

and

nine

months ended

September 30, 2019

, respectively.

XML

Note 6 - Net Income (Loss) Per Common Share

9 Months Ended

Sep. 30, 2019

Notes to Financial Statements

Earnings Per Share [Text Block]

NOTE

6—Net

Income (Loss) Per Common Share

Net income (loss) applicable to common stock was used as the numerator in computing basic and diluted net income (loss) per common share for the 

three

and

nine

months ended

September 30, 2019

and

2018

. The Company used the treasury stock method in determining the effects of potentially dilutive restricted stock. The following table sets forth information related to the computations of basic and diluted net income (loss) per common share:

	Three Months Ended September 30, 2019		Three Months Ended September 30, 2018		Nine Months Ended September 30, 2019		Nine Months Ended September 30, 2018
	(Amounts in thousands, except per share data)
Basic net income (loss) per common share:
Net income (loss) applicable to common stock	$	1,988	$	1,666	$	14,215	$	(6,319	)
Weighted average shares of common stock outstanding		12,257		11,762		12,208		11,538
Basic net income (loss) per common share	$	0.16	$	0.14	$	1.16	$	(0.55	)
Diluted net income (loss) per common share:
Net income (loss) applicable to common stock	$	1,988	$	1,666	$	14,215	$	(6,319	)
Interest, discount and amortization on New 2L Notes		-		-		565		-
Adjusted net income (loss) per common share	$	1,988	$	1,666	$	14,780	$	(6,319	)
Weighted average shares of common stock outstanding		12,257		11,762		12,208		11,538
Common shares issuable upon conversion of the New 2L Notes		-		-		588		-
Common shares issuable upon conversion of warrants of unsecured claim holders		1,285		1,396		1,285		-
Common shares issuable upon conversion of the Convertible Second Lien Notes associated warrants		-		208		-		-
Common shares issuable to unsecured claim holders		-		39		-		-
Common shares issuable on assumed conversion of restricted stock (4)		498		641		416		-
Diluted weighted average shares of common stock outstanding		14,040		14,046		14,497		11,538
Diluted net income (loss) per common share (1) (2) (3)	$	0.14	$	0.12	$	1.02	$	(0.55	)
(1) Common shares issuable on assumed conversion of share-based compensation for the periods in 2018 were not included in the computation of diluted net loss per common share since their inclusion would have been anti-dilutive. (4)		-		-		-		445
(2) Common shares issuable upon conversion of the Convertible Second Lien Notes or New 2L Notes were not included in the computation of diluted net loss per common share since their inclusion would have been anti-dilutive.		588		1,875		-		1,875
(3) Common shares issuable upon conversion of the warrants associated with the Convertible Second Lien Notes and unsecured claim holders for the periods in 2018 were not included in the computation of diluted net loss per common share since their inclusion would have been anti-dilutive.		-		-		-		1,642

(

4

) Common shares issuable on assumed conversion of share-based compensation assumes a payout of the Company's performance share awards at

100%

of the initial units granted (or a ratio of

one

unit to

one

common share). The range of common stock shares which

may

be earned ranges from

zero

to

250%

of the initial performance units granted.

XML

Note 2 - Revenue Recognition

9 Months Ended

Sep. 30, 2019

Notes to Financial Statements

Revenue from Contract with Customer [Text Block]

NOTE

2—Revenue

Recognition

On

January 1, 2018,

we adopted ASU

2014

-

09,

Revenue from Contracts with Customers,

and the series of related ASU's that followed under

Accounting Standards Codification (

“

ASC”) Topic

606

(collectively, “Topic

606”

).Topic

606

did

not

change our pattern of timing of revenue recognition. Under Topic

606,

revenue is generally recognized upon delivery of our produced oil and natural gas volumes to our customers. Our customer sales contracts include oil and natural gas sales. Under Topic

606,

each unit (Mcf or barrel) of commodity product represents a separate performance obligation which is sold at variable prices, determinable on a monthly basis. The pricing provisions of our contracts are primarily tied to a market index with certain adjustments based on factors such as delivery, product quality and prevailing supply and demand conditions in the geographic areas in which we operate. We allocate the transaction price to each performance obligation and recognize revenue upon delivery of the commodity product when the customer obtains control. Control of our produced natural gas volumes passes to our customers at specific metered points indicated in our natural gas contracts. Similarly, control of our produced oil volumes passes to our customers when the oil is measured either by a trucking oil ticket or by a meter when entering an oil pipeline. The Company has

no

control over the commodities after those points and the measurement at those points dictates the amount on which the customer's payment is based. Our oil and natural gas revenue streams include volumes burdened by royalty and non-operated working interests. Our revenues are recorded and presented on our financial statements net of the royalty and non-operated working interests. Our revenue stream does

not

include any payments for services or ancillary items other than sale of oil and natural gas.

For further details on our revenue recognition policy, refer to

Note

1

—

Revenue Recognition

. As of 

September 30, 2019

and

December 31, 2018

, receivables from contracts with customers were

$9.9

million and

$14.5

 million, respectively.

The following table presents our revenues disaggregated by revenue source and by operated and non-operated properties for the 

three

and

nine

months ended

September 30, 2019

and

2018

:

	Three Months Ended September 30, 2019								Nine Months Ended September 30, 2019
(In thousands)	Oil Revenue		Gas Revenue		NGL Revenue		Total Oil and Natural Gas Revenues		Oil Revenue		Gas Revenue		NGL Revenue		Total Oil and Natural Gas Revenues
Operated	$	2,365	$	21,679	$	-	$	24,044	$	7,881	$	66,743	$	-	$	74,624
Non-operated		112		3,002		3		3,117		326		13,232		11		13,569
Total oil and natural gas revenues	$	2,477	$	24,681	$	3	$	27,161	$	8,207	$	79,975	$	11	$	88,193

	Three Months Ended September 30, 2018								Nine Months Ended September 30, 2018
(In thousands)	Oil Revenue		Gas Revenue		NGL Revenue		Total Oil and Natural Gas Revenues		Oil Revenue		Gas Revenue		NGL Revenue		Total Oil and Natural Gas Revenues
Operated	$	3,605	$	17,391	$	-	$	20,996	$	11,240	$	34,092	$	-	$	45,332
Non-operated		154		3,145		36		3,335		429		8,153		44		8,626
Total oil and natural gas revenues	$	3,759	$	20,536	$	36	$	24,331	$	11,669	$	42,245	$	44	$	53,958

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Consolidated Statements of Operations (Unaudited) - USD ($) shares in Thousands, $ in Thousands		3 Months Ended		9 Months Ended
		Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
REVENUES:
Revenues		$ 27,165	$ 24,420	$ 88,189	$ 54,089
OPERATING EXPENSES:
Lease operating expense		2,589	2,588	8,902	7,619
Production and other taxes		623	959	1,878	2,268
Transportation and processing		5,107	3,344	15,562	6,742
Depreciation, depletion and amortization		13,205	7,922	36,550	16,934
General and administrative		5,196	4,644	15,442	14,643
Other		228	(60)	179	105
		26,948	19,397	78,513	48,311
Operating income		217	5,023	9,676	5,778
OTHER INCOME (EXPENSE):
Interest expense		(1,981)	(3,105)	(9,036)	(8,510)
Interest income and other expense			1	24	110
Gain (loss) on commodity derivatives not designated as hedges		3,752	(237)	15,397	(3,392)
Loss on early extinguishment of debt				(1,846)
		1,771	(3,341)	4,539	(11,792)
Reorganization items, net			(16)		(305)
Income (loss) before income taxes		1,988	1,666	14,215	(6,319)
Income tax benefit		0	0	0	0
Net income (loss)		$ 1,988	$ 1,666	$ 14,215	$ (6,319)
PER COMMON SHARE
Net income (loss) per common share - basic (in dollars per share)		$ 0.16	$ 0.14	$ 1.16	$ (0.55)
Net income (loss) per common share - diluted (in dollars per share)	[1],[2],[3]	$ 0.14	$ 0.12	$ 1.02	$ (0.55)
Weighted average shares of common stock outstanding - basic (in shares)		12,257	11,762	12,208	11,538
Weighted average shares of common stock outstanding - diluted (in shares)		14,040	14,046	14,497	11,538
Oil and Gas [Member]
REVENUES:
Revenues		$ 27,161	$ 24,331	$ 88,193	$ 53,958
Service, Other [Member]
REVENUES:
Revenues		$ 4	$ 89	$ (4)	$ 131

[1] Common shares issuable on assumed conversion of share-based compensation for the periods in 2018 were not included in the computation of diluted net loss per common share since their inclusion would have been anti-dilutive. (4)

[2] Common shares issuable upon conversion of the Convertible Second Lien Notes or New 2L Notes were not included in the computation of diluted net loss per common share since their inclusion would have been anti-dilutive.

[3] Common shares issuable upon conversion of the warrants associated with the Convertible Second Lien Notes and unsecured claim holders for the periods in 2018 were not included in the computation of diluted net loss per common share since their inclusion would have been anti-dilutive.

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Note 3 - Asset Retirement Obligations - Schedule of Asset Retirement Obligations (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2019	Dec. 31, 2018
Balance	$ 3,791
Liabilities incurred	159
Liabilities settled	(4)
Dispositions	(203)
Accretion expense	221
Balance	3,964
Current liability	0
Long term liability	$ 3,964	$ 3,791

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Note 5 - Equity (Details Textual) - USD ($) $ / shares in Units, $ in Millions	3 Months Ended	9 Months Ended
	Sep. 30, 2019	Sep. 30, 2019	Sep. 30, 2018	May 31, 2019	Dec. 31, 2018
Common Stock, Par or Stated Value Per Share	$ 0.01	$ 0.01			$ 0.01
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period, Fair Value	$ 0.1	$ 0.1
Share-based Compensation Arrangement by Share-based Payment Award, Shares Issued in Period	12,000	12,000
Payments for Repurchase of Common Stock	$ 0.1	$ 0.5
Treasury Stock, Shares, Acquired	352	47,133
New Convertible Second Lien Notes, New 2L Notes [Member]
Debt Instrument, Convertible, Carrying Amount of Equity Component				$ 1.4
Costless Warrants Associated with Convertible Second Lien Notes [Member]
Class of Warrant or Right, Exercised During Period	0	150,000	862,812
Warrants and Rights Outstanding, Term	10 years	10 years
Common Stock, Par or Stated Value Per Share	$ 0.01	$ 0.01	$ 0.01
Stock Issued During Period, Shares, New Issues		150,000	315,937
Class of Warrant or Right, Outstanding	0	0	207,500

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Note 8 - Commodity Derivative Activities (Details Textual) $ in Millions	Sep. 30, 2019 USD ($)
Commodity Contract [Member]
Loss Contingency, Estimate of Possible Loss	$ 9.6

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Note 11 - Dispositions

9 Months Ended

Sep. 30, 2019

Notes to Financial Statements

Disposal Groups, Including Discontinued Operations, Disclosure [Text Block]

NOTE

11—Dispositions

On

March 1, 2019,

the Company closed on the sale of working interests in certain non-core Haynesville Shale Trend oil and gas leases and related facilities in Caddo Parish, Louisiana for total consideration of

$1.3

million, subject to customary post-closing adjustments. The disposition was recorded as a reduction to our oil and natural gas properties (full cost method) on our Consolidated Balance Sheets.

On

May 21, 2018,

the Company closed on the sale of working interests in certain oil and gas leases, including wells, facilities and leasehold acres, in our Tuscaloosa Marine Shale Trend operating area located in East and West Feliciana Parish, Louisiana for total consideration of approximately

$3.3

million with an effective date of

May 1, 2018.

The disposition was subject to customary post-closing adjustments. The disposition was recorded as a reduction to our oil and natural gas properties (full cost method) on our Consolidated Balance Sheet.

On

February 28, 2018,

the Company closed, in

two

separate transactions, the sale of working interests in certain oil and gas leases, wells, units and facilities and certain net leasehold interests in a portion of its undeveloped acreage in the Angelina River Trend in Angelina and Nacogdoches Counties, Texas to BP America Production Company for total consideration of

$23.0

million, with an effective date of

January 1, 2018.

The disposition was subject to customary post-closing adjustments. The disposition was recorded as a reduction to our oil and natural gas properties (full cost method) on our Consolidated Balance Sheet. The Company utilized the proceeds from these dispositions to pay down the outstanding balance of the

2017

Senior Credit Facility on

March 2, 2018

and to fund our capital expenditures program.

The Company also sold other miscellaneous acreage during the

three

and 

nine

months ended

September 30, 2018

fo

r

$0.4

million and

$0.7

million, respe

ctively, which was also recorded as a reduction to our oil and natural gas properties (full cost method) on our Consolidated Balance Sheet.

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Note 7 - Income Taxes

9 Months Ended

Sep. 30, 2019

Notes to Financial Statements

Income Tax Disclosure [Text Block]

NOTE

7—Income

Taxes

We record

ed

no

income tax expense or benefit for either the 

three

or

nine

months ended

September 30, 2019

or

2018

. We recorded a valuation allowance for our net deferred tax asset at

December 31, 2016.

We recorded this valuation allowance at this date after an evaluation of all available evidence (including our history of net operating losses) that led to a conclusion that based upon the more-likely-than-

not

standard of the accounting literature, these deferred tax assets were unrecov

erable. The valuation allowance was

$84.1

 million as of 

December 31, 2018

, which resulted in a net non-current deferred tax asset of

$0.8

 million appearing on our statement of financial position as of

December 31, 2018.

The net

$0.8

million deferred tax asset related to Alternative Minimum Tax (“AMT”) credits, which are expected to be fully refundable in tax years

2018

-

2021

regardless of the Company's regular tax liability. During the

three

months ended

September 30, 2019,

the Company reclassed

$0.4

million from the deferred tax asset to accounts receivable representing the refund we expect to receive in connection with the monetization of the AMT credits in tax year

2018

leaving the remaining

$0.4

million recorded as a deferred tax asset as of

September 30, 2019.

Considering the Company’s taxable income forecasts, our assessment of the realization of our deferred tax assets has

not

changed, and we continue to maintain a full valuation allowance for our net deferred tax assets as of 

September 30, 2019

aside from the deferred tax asset related to the AMT credits.

As of

September 30, 2019

, we have

no

unrecognized tax benefits. There were

no

significant changes to our tax position since

December 31, 2018

.

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Note 2 - Revenue Recognition - Disaggregation of Revenue (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Revenue from Contract with Customer	$ 27,165	$ 24,420	$ 88,189	$ 54,089
Oil Revenue [Member]
Revenue from Contract with Customer	2,477	3,759	8,207	11,669
Oil Revenue [Member] | Operated [Member]
Revenue from Contract with Customer	2,365	3,605	7,881	11,240
Oil Revenue [Member] | Non-operated [Member]
Revenue from Contract with Customer	112	154	326	429
Gas Revenue [Member]
Revenue from Contract with Customer	24,681	20,536	79,975	42,245
Gas Revenue [Member] | Operated [Member]
Revenue from Contract with Customer	21,679	17,391	66,743	34,092
Gas Revenue [Member] | Non-operated [Member]
Revenue from Contract with Customer	3,002	3,145	13,232	8,153
NGL Revenue [Member]
Revenue from Contract with Customer	3	36	11	44
NGL Revenue [Member] | Operated [Member]
Revenue from Contract with Customer
NGL Revenue [Member] | Non-operated [Member]
Revenue from Contract with Customer	3	36	11	44
Oil and Gas [Member]
Revenue from Contract with Customer	27,161	24,331	88,193	53,958
Oil and Gas [Member] | Operated [Member]
Revenue from Contract with Customer	24,044	20,996	74,624	45,332
Oil and Gas [Member] | Non-operated [Member]
Revenue from Contract with Customer	$ 3,117	$ 3,335	$ 13,569	$ 8,626

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Note 10 - Leases (Tables)

9 Months Ended

Sep. 30, 2019

Notes Tables

Lease, Cost [Table Text Block]

(in thousands)	Three Months Ended September 30, 2019		Nine Months Ended September 30, 2019		Consolidated Statements of Operations Classification
Building lease cost	$	368	$	1,124	General and administrative expense
Variable lease cost (1)		50		145	General and administrative expense
	$	418	$	1,269

Operating Lease, Assets and Liabilities [Table Text Block]

(in thousands)	September 30, 2019			Consolidated Balance Sheets Classification
Lease asset, gross	$	2,922		Furniture, fixtures and equipment and other capital assets
Accumulated depreciation		(939	)	Accumulated depletion, depreciation and amortization
Lease asset, net	$	1,983
Current lease liability	$	1,386		Accrued liabilities
Non-current lease liability		1,164		Other non-current liabilities
Total lease liabilities	$	2,550

Lessee, Operating Lease, Liability, Maturity [Table Text Block]

(in thousands)	September 30, 2019
2019	$	385
2020		1,540
2021		813
2022		-
2023		-
Thereafter		-
Total lease payments	$	2,738
Less imputed interest	$	188
Present value of lease liabilities	$	2,550

Schedule of Future Minimum Rental Payments for Operating Leases [Table Text Block]

(in thousands)	December 31, 2018
2019	$	3,753
2020		1,556
2021		513
2022		-
2023		-
Thereafter		-
Future minimum lease obligations	$	5,822

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Note 3 - Asset Retirement Obligations (Tables)

9 Months Ended

Sep. 30, 2019

Notes Tables

Schedule of Asset Retirement Obligations [Table Text Block]

	Nine Months Ended September 30, 2019
Beginning balance as of December 31, 2018	$	3,791
Liabilities incurred		159
Liabilities settled		(4	)
Dispositions		(203	)
Accretion expense		221
Ending balance as of September 30, 2019	$	3,964
Current liability	$	-
Long term liability	$	3,964

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Note 8 - Commodity Derivative Activities - Outstanding Commodity (Details) - Not Designated as Hedging Instrument [Member] $ in Thousands	9 Months Ended
	Sep. 30, 2019 USD ($) Boe MMBTU $ / item bbl
The 2019 Oil Swaps [Member]
Average Daily Volume, oil swaps (Barrel of Oil) | bbl	300
Total Volume, oil swaps (Barrel of Oil) | bbl	27,600
Weighted Average Fixed Price (in USD per Per Share)	51.08
Fair Value at Period End | $	$ (74)
The 2020 Oil Swaps [Member]
Average Daily Volume, oil swaps (Barrel of Oil) | bbl	221
Total Volume, oil swaps (Barrel of Oil) | bbl	80,945
Weighted Average Fixed Price (in USD per Per Share)	59.02
Fair Value at Period End | $	$ 599
Natural Gas Swap with RBC Capital Markets [Member]
Weighted Average Fixed Price (in USD per Per Share)	2.5
Average Daily Volume (Millions of British Thermal Unit) | MMBTU	24,748
The 2021 Oil Swaps [Member]
Average Daily Volume, oil swaps (Barrel of Oil) | bbl	200
Total Volume, oil swaps (Barrel of Oil) | bbl	18,000
Weighted Average Fixed Price (in USD per Per Share)	56.58
Fair Value at Period End | $	$ 112
Natural Gas Collar with SunTrust Bank and RBC Capital Markets [Member]
Average Daily Volume (Millions of British Thermal Unit) | MMBTU	24,995
Natural Gas Collar with SunTrust Bank and RBC Capital Markets [Member] | Minimum [Member]
Weighted Average Fixed Price (in USD per Per Share)	2.4
Natural Gas Collar with SunTrust Bank and RBC Capital Markets [Member] | Maximum [Member]
Weighted Average Fixed Price (in USD per Per Share)	2.65
Total Crude Oil [Member]
Fair Value at Period End | $	$ 637
The 2019 Natural Gas Swaps [Member]
Weighted Average Fixed Price (in USD per Per Share)	2.89
Fair Value at Period End | $	$ 4,277
Average Daily Volume (Millions of British Thermal Unit) | MMBTU	100,000
Total Volume (Millions of British Thermal Unit) | MMBTU	9,200,000
The 2020 Natural Gas Swaps [Member]
Weighted Average Fixed Price (in USD per Per Share)	2.67
Fair Value at Period End | $	$ 4,382
Average Daily Volume (Millions of British Thermal Unit) | MMBTU	52,000
Total Volume (Millions of British Thermal Unit) | MMBTU	18,897,000
The 2021 Natural Gas Swaps [Member]
Weighted Average Fixed Price (in USD per Per Share)	2.64
Fair Value at Period End | $	$ 7
Average Daily Volume (Millions of British Thermal Unit) | MMBTU	43,000
Total Volume (Millions of British Thermal Unit) | MMBTU	3,839,000
The 2020 Natural Gas Collar [Member]
Fair Value at Period End | $	$ 615
Average Daily Volume (Millions of British Thermal Unit) | MMBTU	18,000
Total Volume (Millions of British Thermal Unit) | Boe	6,693,000
The 2020 Natural Gas Collar [Member] | Minimum [Member]
Weighted Average Fixed Price (in USD per Per Share)	2.625
The 2020 Natural Gas Collar [Member] | Maximum [Member]
Weighted Average Fixed Price (in USD per Per Share)	2.4
The 2021 Natural Gas Collar [Member]
Fair Value at Period End | $	$ (324)
Average Daily Volume (Millions of British Thermal Unit) | MMBTU	27,000
Total Volume (Millions of British Thermal Unit) | Boe	2,430,000
The 2021 Natural Gas Collar [Member] | Minimum [Member]
Weighted Average Fixed Price (in USD per Per Share)	2.625
The 2021 Natural Gas Collar [Member] | Maximum [Member]
Weighted Average Fixed Price (in USD per Per Share)	2.4
Total Natural Gas [Member]
Fair Value at Period End | $	$ 8,957
Crude Oil and Natural Gas Swaps [Member]
Fair Value at Period End | $	$ 9,594

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Note 10 - Leases - Lease Cost and Information (Details) - USD ($) $ in Thousands		3 Months Ended	9 Months Ended
		Sep. 30, 2019	Sep. 30, 2019
		$ 418	$ 1,269
General and Administrative Expense [Member]
Building lease cost		368	1,124
Variable lease cost (1)	[1]	$ 50	$ 145

[1] Includes building operating expenses.

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Note 11 - Dispositions (Details Textual) - USD ($) $ in Thousands				3 Months Ended	9 Months Ended
	Mar. 01, 2019	May 21, 2018	Feb. 28, 2018	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Proceeds from Sale of Productive Assets, Total	$ 1,300	$ 3,300	$ 23,000		$ 1,334	$ 26,920
Other Miscellaneous Acreage [Member]
Proceeds from Sale of Productive Assets, Total				$ 400		$ 700