Guarantor Subsidiaries

6 Months Ended

Jun. 30, 2015

General, Debtors Condensed Combined Financial Statements And Guarantor Subsidiaries [Abstract]

Note 16 – Guarantor Subsidiaries

Certain of our wholly-owned domestic subsidiaries have, jointly and severally, fully and unconditionally guaranteed the 2018 Notes. Pursuant to Securities and Exchange Commission (“SEC”) regulations, we have presented in columnar format the condensed consolidating financial information for EIC, the guarantor subsidiaries on a combined basis, and all non-guarantor subsidiaries on a combined basis.

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



As of June 30, 2015
	Endeavour International Corporation		Combined Guarantor Subsidiaries		Combined Non-Guarantor Subsidiaries		Eliminations		Consolidated
Cash and cash equivalents	$	-	$	18,408	$	30,106	$	-	$	48,514
Accounts receivable		-		3,487		49,381		-		52,868
Current receivables due from affiliates		511,034		83,036		104,408		(698,478)		-
Prepaid expenses and other current assets		-		4,484		21,941		-		26,425
Current Assets		511,034		109,415		205,836		(698,478)		127,807

Property and equipment, net		-		13,269		216,512		-		229,781
Restricted cash, long-term portion		-		-		101,110		-		101,110
Long-term receivables due from affiliates		554,000		500,000		-		(1,054,000)		-
Investments in subsidiaries		57,662		219,058		-		(276,720)		-
Other assets		-		9		62		-		71
Total Assets	$	1,122,696	$	841,751	$	523,520	$	(2,029,198)	$	458,769

Accounts payable	$	-	$	4,629	$	30,180	$	-	$	34,809
Current maturities of debt		-		-		434,112		-		434,112
Deferred revenue		-		-		40		-		40
Current liabilities due to affiliates		648		615,353		82,482		(698,483)		-
Asset retirement obligations, current portion		-		41		18,297		-		18,338
Accrued expenses and other		446		7,396		3,148		-		10,990
Current Liabilities		1,094		627,419		568,259		(698,483)		498,289

Long-term liabilities due to affiliates		-		554,000		500,000		(1,054,000)		-
Deferred taxes		-		-		34,480		-		34,480
Other liabilities		-		446		41,080		5		41,531
Total Liabilities Not Subject to Compromise		1,094		1,181,865		1,143,819		(1,752,478)		574,300

Liabilities Subject to Compromise		751,220		6,026		83,746		-		840,992

Series C convertible preferred stock		17,481		-		-		-		17,481
Stockholders' equity (deficit)		352,901		(346,140)		(704,045)		(276,720)		(974,004)
Total Liabilities and Equity	$	1,122,696	$	841,751	$	523,520	$	(2,029,198)	$	458,769



As of December 31, 2014
	Endeavour International Corporation		Combined Guarantor Subsidiaries		Combined Non-Guarantor Subsidiaries		Eliminations		Consolidated
Cash and cash equivalents	$	-	$	32,055	$	49,795	$	-	$	81,850
Accounts receivable		-		2,427		33,080		-		35,507
Current receivables due from affiliates		477,351		53,174		104,085		(634,610)		-
Prepaid expenses and other current assets		-		7,350		40,047		-		47,397
Current Assets		477,351		95,006		227,007		(634,610)		164,754

Property and equipment, net		-		35,529		433,980		-		469,509
Restricted cash, long term portion		-		-		100,241		-		100,241
Long-term receivables due from affiliates		554,000		500,000		-		(1,054,000)		-
Investments in subsidiaries		57,662		219,058		-		(276,720)		-
Other assets		-		10		62		-		72
Total Assets	$	1,089,013	$	849,603	$	761,290	$	(1,965,330)	$	734,576

Accounts payable	$	-	$	2,065	$	25,299	$	-	$	27,364
Current maturities of debt		-		-		432,181		-		432,181
Deferred revenue		-		-		14,157		-		14,157
Current liabilities due to affiliates		648		581,402		52,560		(634,610)		-
Asset retirement obligations, current portion		-		42		40,505		-		40,547
Accrued expenses and other		385		5,663		9,148		-		15,196
Current Liabilities		1,033		589,172		573,850		(634,610)		529,445

Long-term liabilities due to affiliates		-		554,000		500,000		(1,054,000)		-
Deferred taxes		-		-		56,670		-		56,670
Other liabilities		1		436		65,640				66,077
Total Liabilities Not Subject to Compromise		1,034		1,143,608		1,196,160		(1,688,610)		652,192

Liabilities Subject to Compromise		751,219		6,079		83,746		-		841,044

Series C convertible preferred stock		17,481		-		-		-		17,481
Stockholders' equity (deficit)		319,279		(300,084)		(518,616)		(276,720)		(776,141)
Total Liabilities and Equity	$	1,089,013	$	849,603	$	761,290	$	(1,965,330)	$	734,576


For the Three Months Ended June 30, 2015
	Endeavour International Corporation		Combined Guarantor Subsidiaries		Combined Non-Guarantor Subsidiaries		Eliminations		Consolidated
Revenue	$	-	$	2,313	$	69,505	$	-	$	71,818
Operating expenses		-		1,844		35,286		-		37,130
DD&A expense		-		975		53,617		-		54,592
Impairment of oil and gas properties		-		18,308		24,624		-		42,932
Insurance proceeds		-		-		(2,046)		-		(2,046)
G&A expense (income)		9		369		3,812		-		4,190
Loss from operations		(9)		(19,183)		(45,788)		-		(64,980)

Other Income (Expense):
Interest expense		-		(16,620)		(29,366)		31,620		(14,366)
Letter of credit fees		-		-		(62)		-		(62)
Financing and transaction costs		-		21		(4,409)		-		(4,388)
Reorganization items		-		(6,535)		-		-		(6,535)
Unrealized foreign currency gains		-		1		1,918		-		1,919
Other income (expense)		16,620		14,968		(683)		(31,620)		(715)
Income (loss) before income taxes		16,611		(27,348)		(78,390)		-		(89,127)

PRT expense		-		-		(1,500)		-		(1,500)
Total tax benefit		-		-		(1,500)		-		(1,500)

Net income (loss)		16,611		(27,348)		(76,890)		-		(87,627)

Preferred stock dividends		-		-		-		-		-

Net income (loss) to common shareholders	$	16,611	$	(27,348)	$	(76,890)	$	-	$	(87,627)



For the Three Months Ended June 30, 2014
	Endeavour International Corporation		Combined Guarantor Subsidiaries		Combined Non-Guarantor Subsidiaries		Eliminations		Consolidated
Revenue	$	-	$	1,729	$	43,128	$	-	$	44,857
Operating expenses		-		1,124		5,723		-		6,847
DD&A expense		-		703		31,548		-		32,251
G&A expense		891		1,226		3,123		-		5,240
Income (loss) from operations		(891)		(1,324)		2,734		-		519

Other Income (Expense):
Unrealized gains on derivatives		160		-		1,850		-		2,010
Interest expense		(21,161)		(16,066)		(25,824)		31,620		(31,431)
Letter of credit fees		-		-		(2,270)		-		(2,270)
Financing and transaction costs		(193)		(929)		(303)				(1,425)
Unrealized foreign currency gains (losses)		-		1		(4,512)		-		(4,511)
Other income		16,620		15,000		23		(31,620)		23
Loss before income taxes		(5,465)		(3,318)		(28,302)		-		(37,085)

PRT expense		-		-		2,243		-		2,243
Corporate tax benefit		-		-		(2,655)		-		(2,655)
Total tax benefit		-		-		(412)		-		(412)

Net loss		(5,465)		(3,318)		(27,890)		-		(36,673)

Preferred stock dividends		456		-		-		-		456

Net loss to common shareholders	$	(5,921)	$	(3,318)	$	(27,890)	$	-	$	(37,129)



For the Six Months Ended June 30, 2015
	Endeavour International Corporation		Combined Guarantor Subsidiaries		Combined Non-Guarantor Subsidiaries		Eliminations		Consolidated
Revenue	$	-	$	3,395	$	132,752	$	-	$	136,147
Operating expenses		-		3,134		58,142		-		61,276
DD&A expense		-		1,537		109,616		-		111,153
Impairment of oil and gas properties		-		28,386		104,633		-		133,019
Insurance proceeds		-		-		(10,472)		-		(10,472)
G&A expense (income)		43		(281)		7,000		-		6,762
Loss from operations		(43)		(29,381)		(136,167)		-		(165,591)

Other Income (Expense):
Interest expense		-		(33,240)		(58,717)		63,240		(28,717)
Letter of credit fees		-		-		(120)		-		(120)
Financing and transaction costs		-		(24)		(5,389)		-		(5,413)
Reorganization items		-		(13,401)		-		-		(13,401)
Unrealized foreign currency gains		-		-		1,922		-		1,922
Other income		33,240		29,989		(598)		(63,240)		(609)
Income (loss) before income taxes		33,197		(46,057)		(199,069)		-		(211,929)

PRT benefit		-		-		(13,641)		-		(13,641)
Total tax benefit		-		-		(13,641)		-		(13,641)

Net income (loss)		33,197		(46,057)		(185,428)		-		(198,288)

Preferred stock dividends		-		-		-		-		-

Net income (loss) to common shareholders	$	33,197	$	(46,057)	$	(185,428)	$	-	$	(198,288)



For the Six Months Ended June 30, 2014
	Endeavour International Corporation		Combined Guarantor Subsidiaries		Combined Non-Guarantor Subsidiaries		Eliminations		Consolidated
Revenue	$	-	$	3,678	$	135,343	$	-	$	139,021
Operating expenses		-		2,304		31,713		-		34,017
DD&A expense		-		1,425		75,795		-		77,220
G&A expense		1,886		4,936		3,267		-		10,089
Income (loss) from operations		(1,886)		(4,987)		24,568		-		17,695

Other Income (Expense):
Unrealized gains on derivatives		629		-		4,040		-		4,669
Interest expense		(41,781)		(32,108)		(52,259)		63,240		(62,908)
Letter of credit fees		-		-		(6,059)		-		(6,059)
Financing and transaction costs		(516)		(1,519)		(1,206)		-		(3,241)
Loss on early extinguishment of financing agreements		-		-		(3,543)		-		(3,543)
Litigation settlement expense		-		(19,034)		-		-		(19,034)
Unrealized foreign currency gains (losses)		-		1	-	(5,785)	-	-	-	(5,784)
Other income (expense)		33,240		29,995		(177)		(63,240)		(182)
Loss before income taxes		(10,314)		(27,652)		(40,421)		-		(78,387)

PRT expense		-		-		3,968		-		3,968
Corporate tax benefit		-		-		(811)		-		(811)
Total tax expense		-		-		3,157		-		3,157

Net loss		(10,314)		(27,652)		(43,578)		-		(81,544)

Preferred stock dividends		911		-		-		-		911

Net loss to common shareholders	$	(11,225)	$	(27,652)	$	(43,578)	$	-	$	(82,455)



For the Six Months Ended June 30, 2015
	Endeavour International Corporation		Combined Guarantor Subsidiaries		Combined Non-Guarantor Subsidiaries		Eliminations		Consolidated
Cash Flows from Operating Activities:
Net loss	$	33,197	$	(46,057)	$	(185,428)	$	-	$	(198,288)
Adjustments to reconcile net loss to
net cash provided by (used in) operations:
Depreciation, depletion and amortization		-		1,537		109,616		-		111,153
Impairment of oil and gas properties		-		28,386		104,633		-		133,019
Deferred tax benefit		-		-		(12,999)		-		(12,999)
Amortization of non-cash compensation		186		-		-		121		307
Amortization of loan costs and discount		-		-		4,357		-		4,357
Other		-		32		(377)		-		(345)
Changes in operating assets and liabilities:
(Increase) decrease in receivables		-		(1,060)		(16,301)		-		(17,361)
(Increase) decrease in other current assets		-		2,865		6,488		-		9,353
Increase (decrease) in liabilities		62		4,202		(45,598)		-		(41,334)
Net Cash Provided by (Used in)
Operating Activities		33,445		(10,095)		(35,609)		121		(12,138)

Cash Flows From Investing Activities:
Capital expenditures		-		(7,637)		(12,810)		118		(20,329)
Proceeds from insurance settlement		-		-		-		-		-
Increase in restricted cash		-		-		(869)		-		(869)
Net Cash Used in Investing Activities		-		(7,637)		(13,679)		118		(21,198)

Cash Flows From Financing Activities:
Intercompany cash management		(33,445)		4,085		29,599		(239)		-
Other financing		-		-		-		-		-
Net Cash Provided by (Used in)
Financing Activities		(33,445)		4,085		29,599		(239)		-

Net Change in Cash and Cash Equivalents		-		(13,647)		(19,689)		-		(33,336)
Cash and Cash Equivalents, Beginning
of Period		-		32,055		49,795		-		81,850
Cash and Cash Equivalents, End of Period	$	-	$	18,408	$	30,106	$	-	$	48,514



For the Six Months Ended June 30, 2014
	Endeavour International Corporation		Combined Guarantor Subsidiaries		Combined Non-Guarantor Subsidiaries		Eliminations		Consolidated
Cash Flows from Operating Activities:
Net loss	$	(10,314)	$	(27,652)	$	(43,578)	$	-	$	(81,544)
Adjustments to reconcile net loss to
net cash provided by (used in) operations:
Depreciation, depletion and amortization		-		1,425		75,795		-		77,220
Deferred tax expense (benefit)		-		-		(7,951)		-		(7,951)
Unrealized (gains) losses on derivatives		(629)		-		(4,040)		-		(4,669)
Amortization of non-cash compensation		130		-		-		1,993		2,123
Amortization of loan costs and discount		4,447		-		8,929		-		13,376
Non-cash interest expense		-		-		3,812		-		3,812
Loss on early extinguishment of debt		-		-		6,856		-		6,856
Litigation settlement expense		-		14,034		-		-		14,034
Other		-		1,684		4,921		-		6,605
Changes in operating assets and liabilities:
(Increase) decrease in receivables		-		(737)		21,439		-		20,702
(Increase) decrease in other current assets		(20)		(2,658)		(10,209)		-		(12,887)
Increase (decrease) in liabilities		(3,192)		8,664		16,781		-		22,253
Net Cash Provided by (Used in)
Operating Activities		(9,578)		(5,240)		72,755		1,993		59,930

Cash Flows From Investing Activities:
Capital expenditures		-		(6,283)		(33,641)		622		(39,302)
Proceeds from sales, net of cash		-		1,352		-		-		1,352
Proceeds from insurance settlement		-		-		12,606		-		12,606
Increase in restricted cash		-		-		(2,521)		-		(2,521)
Net Cash Used in Investing Activities		-		(4,931)		(23,556)		622		(27,865)

Cash Flows From Financing Activities:
Repayments of borrowings		-		-		(115,699)		-		(115,699)
Borrowings under debt agreements, net
of debt discount		17,500		-		123,125		-		140,625
Proceeds from issuance of common stock		12,336		-		-		-		12,336
Repayments of MPP		-		-		(10,833)		-		(10,833)
Intercompany cash management		(18,804)		9,797		11,622		(2,615)		-
Financing costs paid		(621)		-		(8,572)		-		(9,193)
Other financing		(833)		1		(2)		-		(834)
Net Cash Provided by (Used in)
Financing Activities		9,578		9,798		(359)		(2,615)		16,402

Net Change in Cash and Cash Equivalents		-		(373)		48,840		-		48,467
Cash and Cash Equivalents, Beginning
of Period		-		2,417		32,325		-		34,742
Cash and Cash Equivalents, End of Period	$	-	$	2,044	$	81,165	$	-	$	83,209

ENDEAVOUR INTERNATIONAL CORP 10-Q