goodrich petroleum corporation - RR DONNELLEY FINANCIAL

Credit Risks
Our exposure to non-payment or non-performance by our customers and counterparties presents a credit
risk. Generally, non-payment or non-performance results from a customer’s or counterparty’s inability to satisfy
obligations. We monitor the creditworthiness of our customers and counterparties and established credit limits
according to our credit policies and guidelines. We have the ability to require cash collateral as well as letters of
credit from our financial counterparties to mitigate our exposure above assigned credit thresholds. We routinely
exercise our contractual right to net realized gains against realized losses when settling with our financial
counterparties.
Future Commitments
The table below provides estimates of the timing of future payments that we are obligated to make based on
agreements in place at December 31, 2011 (in thousands). In addition to the contractual obligations presented in
the table below, our Consolidated Balance Sheet at December 31, 2011 reflects accrued interest on our bank debt
of $10.0 million payable in the first half of 2012. For additional information see Note 4—“Long-Term Debt” and
Note 10—“Commitments and Contingencies” in the Notes to Consolidated Financial Statements in Part II Item 8
of this Annual Report on Form 10-K.
Payment due by Period
Note Total 2012 2013 2014 2015
2016
and After
Contractual Obligations
Long term debt (1) ................ 4 $493,929 $ — $ — $218,500 $ — $275,429
Interest on convertible senior notes . . . 4 132,822 35,345 35,345 32,614 24,420 5,098
Office space leases ................ 9 8,204 1,044 1,142 1,104 983 3,931
Office equipment leases ............ 9 894 427 316 121 30 —
Drilling rigs & operations contracts . . . 9 13,216 13,055 60 60 41 —
Transportation contracts ............ 9 9,335 1,592 1,936 1,936 1,936 1,935
Total contractual obligations (2) ...... $658,400 $51,463 $38,799 $254,335 $27,410 $286,393
(1) The 2026 Notes have a provision at the end of years 5, 10 and 15, for the investors to demand payment on
these dates; the first such date was December 1, 2011; all but the remaining $0.4 million were redeemed.
The next ‘put’ date for the remaining 2026 Notes is December 1, 2016. The $218.5 million 5.0% convertible
senior notes have a provision by which on or after October 1, 2014, the Company may redeem all or a
portion of the notes for cash, and the investors may require the Company to repurchase the notes on each of
October 1, 2014, 2019 and 2024.
(2) This table does not include the estimated liability for dismantlement, abandonment and restoration costs of
oil and natural gas properties of $17.4 million. The Company records a separate liability for the fair value of
this asset retirement obligation. See Note 3—“Asset Retirement Obligation” in the Notes to Consolidated
Financial Statements in Part II Item 8 of this Form 10-K.
Summary of Critical Accounting Policies
The following summarizes several of our critical accounting policies. See a complete list in Note 1—
”Description of Business and Accounting Policies” in the Notes to Consolidated Financial Statements in Part II
Item 8 of this Annual Report on Form 10-K.
Proved Oil and Natural Gas Reserves
Proved reserves are defined by the SEC as those quantities of oil and natural gas which, by analysis of
geosciences and engineering data can be estimated with reasonable certainty to be economically producible from
a given date forward, from known reservoirs, and under existing economic conditions, operating methods, and
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