Exhibit 99.1

 

Press Release    LOGO

Gulfport Energy Corporation Reports First Quarter 2020 Financial and Operating Results

OKLAHOMA CITY (May 7, 2020) Gulfport Energy Corporation (NASDAQ: GPOR) (“Gulfport” or the “Company”) today reported financial and operational results for the three-months ended March 31, 2020 and provided an update on its 2020 activities. Key highlights are as follows:

 

   

Reduced total long-term debt by approximately $79.6 million as of March 31, 2020 when compared to December 31, 2019 primarily through discounted bond repurchases

 

   

Improved drilling efficiencies as measured by spud to total depth drilling days on a normalized basis in the Utica Shale and SCOOP by 11% and 32%, respectively, versus full year 2019 levels

 

   

Reported net loss of $517.5 million, or $3.24 per diluted share

 

   

Reported adjusted net income (non-GAAP) of $16.6 million, or $0.10 per diluted share

 

   

Generated adjusted EBITDA (non-GAAP) of $128.3 million 2020

 

   

Reported cash provided by operating activities of $130.8 million

 

   

Generated operating cash flow (non-GAAP), excluding working capital changes, of $86.7 million

 

   

Improved 2020 and 2021 gas hedge portfolio with 495 BBtu per day of remaining 2020 natural gas production hedged at an average swap price of $2.88 per MMBtu and 250 BBtu per day of 2021 natural gas production hedged with costless collars at an average floor price of $2.46 per MMBtu and an average ceiling price of $2.81 per MMBtu

 

   

Completed semi-annual borrowing base redetermination and revolving credit facility redetermined at $700 million, providing adequate liquidity to fund our 2020 capital plan at current strip pricing

See the supplemental tables at the end of this press release for a reconciliation of non-GAAP measures including adjusted net income, EBITDA, adjusted EBITDA, and operating cash flow.

Chief Executive Officer and President, David M. Wood, commented, “During these unprecedented times, our focus is on the health and safety of our employees while continuing to execute on our 2020 capital budget we laid out in February. We remain committed to exercising capital discipline, maximizing cash flow generation, reducing costs and ensuring strong liquidity through the remainder of 2020.”


Mr. Wood continued, “Our continued focus on increasing efficiencies and reducing costs led to solid progress during the first quarter of 2020. As planned, Gulfport’s 2020 capital program is heavily weighted to the first half of 2020 and as a result, we are well positioned to generate positive free cash flow during the second half of the year.”

Continued Debt Reduction

As of May 1, 2020, the Company had repurchased $73.3 million aggregate principal amount of unsecured senior notes for $22.8 million in cash during 2020. Since initiating the debt repurchase program in mid-2019, Gulfport had repurchased $263.4 million aggregate principal amount of unsecured senior notes for $161.6 million cash representing a total discount capture of $101.8 million and an annual cash interest reduction of approximately $11 million.

Balance Sheet and Liquidity

Gulfport completed its spring borrowing base redetermination effective May 1, 2020 and the borrowing base was redetermined at $700 million. Pro forma for the revised borrowing base, the Company’s liquidity at May 1, 2020 totaled approximately $269.0 million, comprised of the $700 million borrowing base plus approximately $3.8 million in cash on hand less $326.8 million outstanding letters of credit and $108.0 million of revolver draw as of May 1, 2020.

The revised $700 million borrowing base provides adequate liquidity to finance the Company’s projected 2020 capital plan.

Production and Realized Prices

Gulfport’s net daily production for the first quarter of 2020 averaged approximately 1,054 MMcfe per day. For the first quarter of 2020, Gulfport’s net daily production mix was comprised of approximately 90% natural gas, 7% natural gas liquids (“NGL”) and 3% oil.


GULFPORT ENERGY CORPORATION

PRODUCTION SCHEDULE

(Unaudited)

 

     Three months ended  
     March 31,  
     2020      2019  

Production Volumes:

     

Natural gas (MMcf)

     86,059        102,079  

Oil (MBbls)

     532        612  

NGL (MGal)

     46,518        55,830  

Gas equivalent (MMcfe)

     95,896        113,726  

Gas equivalent (Mcfe per day)

     1,053,799        1,263,617  

Average Realized Prices

     

(after deducts for transportation costs and before the impact of derivatives):

     

Natural gas (per Mcf)

   $ 1.26      $ 2.70  

Oil (per Bbl)

   $ 43.53      $ 53.10  

NGL (per Gal)

   $ 0.36      $ 0.58  

Gas equivalent (per Mcfe)

   $ 1.55      $ 3.00  

Average Realized Prices:

     

(after deducts for transportation costs and including cash-settlement of derivatives):

 

Natural gas (per Mcf)

   $ 1.97      $ 2.45  

Oil (per Bbl)

   $ 61.39      $ 53.13  

NGL (per Gal)

   $ 0.37      $ 0.59  

Gas equivalent (per Mcfe)

   $ 2.29      $ 2.78  

The table below summarizes Gulfport’s first quarter of 2020 production by asset area:


GULFPORT ENERGY CORPORATION

PRODUCTION BY AREA

(Unaudited)

 

     Three months ended  
     March 31,  
     2020      2019  

Utica Shale

     

Natural gas (MMcf)

     71,505        85,700  

Oil (MBbls)

     54        66  

NGL (MGal)

     12,221        23,336  

Gas equivalent (MMcfe)

     73,575        89,428  

SCOOP

     

Natural gas (MMcf)

     14,550        16,366  

Oil (MBbls)

     471        398  

NGL (MGal)

     34,297        32,480  

Gas equivalent (MMcfe)

     22,274        23,394  

Other

     

Natural gas (MMcf)

     4        13  

Oil (MBbls)

     7        148  

NGL (MGal)

     —          15  

Gas equivalent (MMcfe)

     47        904  

2020 Capital Expenditures

For the three-month period ended March 31, 2020, Gulfport’s incurred total capital expenditures were $135.3 million. Gulfport’s incurred total capital expenditures includes approximately $127.3 million of operated drilling and completion (“D&C”) capital expenditures, $3.4 million of non-operated D&C expenditures and $4.6 million of land capital expenditures. The Company’s 2020 capital program is heavily weighted in first half of 2020 and the Company expects to generate positive cash flow during the second half of 2020.

Operational Update

For the three-month period ended March 31, 2020, key operational updates include:

 

   

Spud 7 gross and net operated wells in the Utica Shale and 5 gross (4.3 net) operated wells in the SCOOP and had 3 gross wells in various stages of drilling at the end of the first quarter of 2020

 

   

Completed 15 gross and net operated wells in the Utica Shale and 4 gross (3.8 net) operated wells in the SCOOP during the first quarter of 2020 and had 3 gross wells in various stages of completion at the end of the first quarter of 2020


   

Turned-to-sales 4 gross (3.8 net) operated wells in the SCOOP during the first quarter of 2020 and 3 gross and net operated wells in the Utica Shale after March 19, 2020

The table below summarizes Gulfport’s activity for the three-month period ended March 31, 2020:

GULFPORT ENERGY CORPORATION

ACTIVITY SUMMARY

(Unaudited)

 

     Three months ended         
     March 31,      Guidance  
     2020      2020  

Net Wells Spud

     

Utica - Operated

     7.0        15  

SCOOP - Operated

     4.3        8  
  

 

 

    

Total

     11.3     

Net Wells Turned-to-Sales

     

Utica - Operated

     3.0        18  

SCOOP - Operated

     3.8        4  
  

 

 

    

Total

     6.8     

Utica Shale

In the Utica Shale, during the first quarter of 2020, Gulfport spud 7 gross and net operated wells. The wells drilled during this period had an average lateral length of approximately 10,200 feet. Normalizing to an 8,000 foot lateral length, Gulfport’s average drilling days from spud to rig release totaled approximately 17.7 days, an improvement of 11% from the 2019 average and the best average quarter to date the Company has experienced in the play. In addition, Gulfport turned-to-sales 3 gross (3.0 net) operated wells with an average stimulated lateral length of approximately 15,100 feet.

At present, Gulfport has one operated drilling rig running in the play and expects to continue with this level of activity through October 2020.

SCOOP

In the SCOOP, during the first quarter of 2020, Gulfport spud five gross (4.3 net) operated wells. The wells drilled during this period had an average lateral length of approximately 9,500 feet. Normalizing to a 7,500 foot lateral length, Gulfport’s average drilling days from spud to rig release totaled approximately 37.4 days, an improvement of 32% from the 2019 average and similar to the Utica Shale, the best average quarter to date the Company has experienced since entering the play. In addition, Gulfport turned-to-sales four gross (3.8 net) operated wells with an average stimulated lateral length of approximately 6,500 feet.


At present, Gulfport has one operated drilling rig running in the play and expects to continue with this level of activity for the remainder of 2020.

2020 Capital Budget and Production Guidance

Based on continued efficiencies, service cost deflation and actual results to date, Gulfport currently forecasts 2020 total capital expenditures to be at or below the low end of the previously provided range of $285 million to $310 million.

Because of the sharp decline in oil prices since early March 2020, as well as the current outlook for low oil prices throughout the second quarter of 2020, Gulfport plans to shut in a minimal amount production over the next few months, including a large number of vertical wells in the SCOOP. The Company expects these shut ins to impact its production by less than 20 MMcfe per day. Gulfport also anticipates some of its non-operated production may be negatively impacted by voluntary shut-ins due to low prices. In addition, the COVID-19 pandemic creates risks of delays in new drilling and completion activities that could negatively impact Gulfport, its non-operated partners or its service providers. Finally, Gulfport is actively exploring opportunities to potentially defer near-term production to later periods in 2020 or early 2021 when gas prices are materially higher in an effort to maximize returns and cash flow. Considering all of these factors, Gulfport’s previously provided production guidance for full year 2020 should no longer be relied upon.

Gulfport reaffirms its previously provided 2020 forecasted realizations and projected operating costs guidance.


Derivatives

Gulfport regularly hedges a portion of its expected production to lock in prices and returns that provide certainty of cash flow to execute on its capital plans. The table below details the Company’s hedging positions as of May 7, 2020:

GULFPORT ENERGY CORPORATION

COMMODITY DERIVATIVES - HEDGE POSITION

(Unaudited)

 

     2Q2020      3Q2020      4Q2020         

Natural Gas:

           

Swap Contracts (NYMEX)

           

Volume (BBtupd)

     774        345        370     

Price ($ per MMBtu)

   $ 2.91      $ 2.91      $ 2.80     

Basis Swap Contracts (OGT)

           

Volume (BBtupd)

     10        10        10     

Differential ($ per MMBtu)

   $ (0.54    $ (0.54    $ (0.54   

Basis Swap Contracts (Transco Zone 4)

           

Volume (BBtupd)

     60        60        60     

Differential ($ per MMBtu)

   $ (0.05    $ (0.05    $ (0.05   

Oil:

           

Swap Contracts (WTI)

           

Volume (Bblpd)

     —          2,000        2,000     

Price ($ per Bbl)

   $ —        $ 35.60      $ 35.60     

NGL:

           

C3 Propane Swap Contracts

           

Volume (Bblpd)

     500        500        500     

Price ($ per Gal)

   $ 0.52      $ 0.52      $ 0.52     
     2020(1)      2021      2022      2023  

Natural Gas:

           

Swap Contracts (NYMEX)

           

Volume (BBtupd)

     495        —          —          —    

Price ($ per MMBtu)

   $ 2.88      $ —        $ —        $ —    

Collars (NYMEX)

           

Volume (BBtupd)

     —          250        —          —    


Weighted Average Floor Purchase Price ($ per MMBtu)

   $ —        $ 2.46      $ —        $ —    

Weighted Average Ceiling Sold Price ($ per MMBtu)

   $ —        $ 2.81      $ —        $ —    

Call Option Contracts (NYMEX)

           

Volume (BBtupd)

     —          —          628        628  

Price ($ per MMBtu)

   $ —        $ —        $ 2.90      $ 2.90  

Basis Swap Contracts (OGT)

           

Volume (BBtupd)

     10        —          —          —    

Differential ($ per MMBtu)

   $ (0.54    $ —        $ —        $ —    

Basis Swap Contracts (Transco Zone 4)

           

Volume (BBtupd)

     60        —          —          —    

Differential ($ per MMBtu)

   $ (0.05    $ —        $ —        $ —    

Oil:

           

Swap Contracts (WTI)

           

Volume (Bblpd)

     1,338        —          —          —    

Price ($ per Bbl)

   $ 35.60      $ —        $ —        $ —    

NGL:

           

C3 Propane Swap Contracts

           

Volume (Bblpd)

     500        —          —          —    

Price ($ per Gal)

   $ 0.52      $ —        $ —        $ —    

 

(1)

April 1 - December 31, 2020

Presentation

An updated presentation has been posted to the Company’s website. The presentation can be found at www.gulfportenergy.com under the “Company Information” section on the “Investor Relations” page. Information on the Company’s website does not constitute a portion of this press release.

Conference Call

Gulfport will host its first quarter of 2020 earnings conference call on Friday, May 8, 2020 at 9:00 a.m. Central Time.

Interested parties may listen to the call via Gulfport’s website at www.gulfportenergy.com or by calling toll-free at 866-373-3408 or 412-902-1039 for international callers. A replay of the call will be available for two weeks at 877-660-6853 or 201-612-7415 for international callers. The replay passcode is 13695468. The webcast will also be available for two weeks on the Company’s website and can be accessed on the Company’s “Investor Relations” page.


About Gulfport

Gulfport Energy is an independent natural gas and oil company focused on the exploration and development of natural gas and oil properties in North America and is one of the largest producers of natural gas in the contiguous United States. Headquartered in Oklahoma City, Gulfport holds significant acreage positions in the Utica Shale of Eastern Ohio and the SCOOP Woodford and SCOOP Springer plays in Oklahoma. In addition, Gulfport holds non-core assets that include an approximately 22% equity interest in Mammoth Energy Services, Inc. (NASDAQ: TUSK) and has a position in the Alberta Oil Sands in Canada through its 25% interest in Grizzly Oil Sands ULC. For more information, please visit www.gulfportenergy.com.

Forward Looking Statements

This press release includes “forward-looking statements” for purposes of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934. All statements, other than statements of historical facts, included in this press release that address activities, events or developments that Gulfport expects or anticipates will or may occur in the future, including such things as the expected impact of the COVID-19 pandemic on our business, our industry and the global economy, production and financial guidance, future capital expenditures (including the amount and nature thereof), business strategy and measures to implement strategy, repurchases of our outstanding debt, the timing and completion of asset sales, competitive strength, goals, expansion and growth of Gulfport’s business and operations, plans, market conditions, references to future success, reference to intentions as to future matters and other such matters are forward-looking statements. These statements are based on certain assumptions and analyses made by Gulfport in light of its experience and its perception of historical trends, current conditions and expected future developments as well as other factors it believes are appropriate in the circumstances. However, whether actual results and developments will conform with Gulfport’s expectations and predictions is subject to a number of risks and uncertainties, general economic, market, credit or business conditions that might affect the timing and amount of the repurchase program; the opportunities (or lack thereof) that may be presented to and pursued by Gulfport; Gulfport’s ability to identify, complete and integrate acquisitions of properties and businesses; Gulfport’s ability to achieve the anticipated benefits of its strategic initiatives; competitive actions by other oil and gas companies; changes in laws or regulations; and other factors, many of which are beyond the control of Gulfport. Information concerning these and other factors can be found in the Company’s filings with the Securities and Exchange Commission (“SEC”), including its Forms 10-K, 10-Q and 8-K. Consequently, all of the forward-looking statements made in this press release are qualified by these cautionary statements and there can be no assurances that the actual results or developments anticipated by Gulfport will be realized, or even if realized, that they will have the expected consequences to or effects on Gulfport, its business or operations. Gulfport has no intention, and disclaims any obligation, to update or revise any forward-looking statements, whether as a result of new information, future results or otherwise.


Investors should note that Gulfport announces financial information in SEC filings, press releases and public conference calls. Gulfport may use the Investors section of its website (www.gulfportenergy.com) to communicate with investors. It is possible that the financial and other information posted there could be deemed to be material information. The information on Gulfport’s website is not part of this filing.

Investor Contact:

Jessica Antle – Director, Investor Relations

jantle@gulfportenergy.com

405-252-4550

Media Contact

Reevemark

Paul Caminiti / Hugh Burns / Nicholas Leasure

212-433-4600


GULFPORT ENERGY CORPORATION

CONSOLIDATED BALANCE SHEETS

 

     March 31, 2020     December 31, 2019  
     (Unaudited)        
     (In thousands, except share data)  
Assets     

Current assets:

    

Cash and cash equivalents

   $ 1,633     $ 6,060  

Accounts receivable—oil and natural gas sales

     74,099       121,210  

Accounts receivable—joint interest and other

     42,547       47,975  

Prepaid expenses and other current assets

     11,848       4,431  

Short-term derivative instruments

     171,755       126,201  
  

 

 

   

 

 

 

Total current assets

     301,882       305,877  
  

 

 

   

 

 

 

Property and equipment:

    

Oil and natural gas properties, full-cost accounting, $1,608,640 and $1,686,666 excluded from amortization in 2020 and 2019, respectively

     10,667,532       10,595,735  

Other property and equipment

     96,882       96,719  

Accumulated depletion, depreciation, amortization and impairment

     (7,859,873     (7,228,660
  

 

 

   

 

 

 

Property and equipment, net

     2,904,541       3,463,794  
  

 

 

   

 

 

 

Other assets:

    

Equity investments

     6,225       32,044  

Long-term derivative instruments

     —         563  

Deferred tax asset

     —         7,563  

Operating lease assets

     10,186       14,168  

Operating lease assets—related parties

     —         43,270  

Other assets

     41,453       15,540  
  

 

 

   

 

 

 

Total other assets

     57,864       113,148  
  

 

 

   

 

 

 

Total assets

   $ 3,264,287     $ 3,882,819  
  

 

 

   

 

 

 
Liabilities and Stockholders’ Equity     

Current liabilities:

    

Accounts payable and accrued liabilities

   $ 437,453     $ 415,218  

Short-term derivative instruments

     67       303  

Current portion of operating lease liabilities

     9,873       13,826  

Current portion of operating lease liabilities—related parties

     —         21,220  

Current maturities of long-term debt

     688       631  
  

 

 

   

 

 

 

Total current liabilities

     448,081       451,198  
  

 

 

   

 

 

 

Long-term derivative instruments

     70,829       53,135  

Asset retirement obligation

     59,444       60,355  

Uncertain tax position liability

     3,209       3,127  

Non-current operating lease liabilities

     313       342  

Non-current operating lease liabilities—related parties

     —         22,050  

Long-term debt, net of current maturities

     1,898,362       1,978,020  
  

 

 

   

 

 

 

Total liabilities

     2,480,238       2,568,227  
  

 

 

   

 

 

 

Commitments and contingencies

    

Preferred stock, $0.01 par value; 5,000,000 shares authorized (30,000 authorized as redeemable 12% cumulative preferred stock, Series A), and none issued and outstanding

     —         —    

Stockholders’ equity:

    

Common stock - $.01 par value, 200,000,000 shares authorized, 159,841,930 issued and outstanding at March 31, 2020 and 159,710,955 at December 31, 2019

     1,598       1,597  

Paid-in capital

     4,209,578       4,207,554  

Accumulated other comprehensive loss

     (61,863     (46,833

Accumulated deficit

     (3,365,264     (2,847,726
  

 

 

   

 

 

 

Total stockholders’ equity

     784,049       1,314,592  
  

 

 

   

 

 

 

Total liabilities and stockholders’ equity

   $ 3,264,287     $ 3,882,819  
  

 

 

   

 

 

 


GULFPORT ENERGY CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

 

     Three months ended March 31,  
     2020     2019  
     (In thousands, except share data)  

Revenues:

    

Natural gas sales

   $ 108,547     $ 276,016  

Oil and condensate sales

     23,151       32,482  

Natural gas liquid sales

     16,913       32,125  

Net gain (loss) on natural gas, oil and NGL derivatives

     98,266       (20,045
  

 

 

   

 

 

 
     246,877       320,578  
  

 

 

   

 

 

 

Costs and expenses:

    

Lease operating expenses

     15,986       19,807  

Production taxes

     4,799       7,921  

Midstream gathering and processing expenses

     57,896       70,282  

Depreciation, depletion and amortization

     78,028       118,433  

Impairment of oil and natural gas properties

     553,345       —    

General and administrative expenses

     16,169       10,057  

Accretion expense

     741       1,067  
  

 

 

   

 

 

 
     726,964       227,567  
  

 

 

   

 

 

 

(LOSS) INCOME FROM OPERATIONS

     (480,087     93,011  
  

 

 

   

 

 

 

OTHER EXPENSE (INCOME):

    

Interest expense

     32,990       35,621  

Interest income

     (152     (152

Gain on debt extinguishment

     (15,322     —    

Loss (income) from equity method investments, net

     10,789       (4,273

Other expense (income)

     1,856       (427
  

 

 

   

 

 

 
     30,161       30,769  
  

 

 

   

 

 

 

(LOSS) INCOME BEFORE INCOME TAXES

     (510,248     62,242  

INCOME TAX EXPENSE

     7,290       —    
  

 

 

   

 

 

 

NET (LOSS) INCOME

   $ (517,538   $ 62,242  
  

 

 

   

 

 

 

NET (LOSS) INCOME PER COMMON SHARE:

    

Basic

   $ (3.24   $ 0.38  
  

 

 

   

 

 

 

Diluted

   $ (3.24   $ 0.38  
  

 

 

   

 

 

 

Weighted average common shares outstanding—Basic

     159,760,222       162,823,997  

Weighted average common shares outstanding—Diluted

     159,760,222       163,099,409  


GULFPORT ENERGY CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

 

     Three months ended March 31,  
     2020     2019  
     (In thousands)  

Cash flows from operating activities:

    

Net (loss) income

   $ (517,538   $ 62,242  

Adjustments to reconcile net (loss) income to net cash provided by operating activities:

    

Depletion, depreciation and amortization

     78,028       118,433  

Impairment of oil and natural gas properties

     553,345       —    

Loss (income) from equity investments

     10,789       (4,132

Gain on debt extinguishment

     (15,322     —    

Net (gain) loss on derivative instruments

     (98,266     20,045  

Cash receipts (payments) on settled derivative instruments

     70,733       (24,836

Deferred income tax expense

     7,290       —    

Other, net

     3,223       5,508  

Changes in operating assets and liabilities:

    

Decrease in accounts receivable—oil and natural gas sales

     47,111       65,204  

Decrease (increase) in accounts receivable—joint interest and other

     6,001       (2,083

(Decrease) increase in accounts payable and accrued liabilities

     (7,637     1,366  

Other, net

     (6,919     (1,982
  

 

 

   

 

 

 

Net cash provided by operating activities

     130,838       239,765  
  

 

 

   

 

 

 

Cash flows from investing activities:

    

Additions to oil and natural gas properties

     (113,744     (241,391

Proceeds from sale of oil and natural gas properties

     44,383       52  

Additions to other property and equipment

     (539     (3,848

Proceeds from sale of other property and equipment

     91       56  

Contributions to equity method investments

     —         (432
  

 

 

   

 

 

 

Net cash used in investing activities

     (69,809     (245,563
  

 

 

   

 

 

 

Cash flows from financing activities:

    

Principal payments on borrowings

     (180,106     (150,151

Borrowings on line of credit

     125,000       150,000  

Repurchases of senior notes

     (10,204     —    

Payments for repurchases of stock under approved stock repurchase program

     —         (28,212

Other, net

     (146     (140
  

 

 

   

 

 

 

Net cash used in financing activities

     (65,456     (28,503
  

 

 

   

 

 

 

Net decrease in cash, cash equivalents and restricted cash

     (4,427     (34,301

Cash, cash equivalents and restricted cash at beginning of period

     6,060       52,297  
  

 

 

   

 

 

 

Cash, cash equivalents and restricted cash at end of period

   $ 1,633     $ 17,996  
  

 

 

   

 

 

 

Supplemental disclosure of cash flow information:

    

Interest payments

   $ 14,034     $ 15,266  
  

 

 

   

 

 

 

Income tax receipts

   $ —       $ (1,794
  

 

 

   

 

 

 

Supplemental disclosure of non-cash transactions:

    

Capitalized stock-based compensation

   $ 934     $ 1,114  
  

 

 

   

 

 

 

Asset retirement obligation capitalized

   $ 381     $ 1,952  
  

 

 

   

 

 

 

Asset retirement obligation removed due to divestiture

   $ (2,033   $ —    
  

 

 

   

 

 

 

Interest capitalized

   $ 187     $ 766  
  

 

 

   

 

 

 

Fair value of contingent consideration asset on date of divestiture

   $ 23,090     $ —    
  

 

 

   

 

 

 

Foreign currency translation (loss) gain on equity method investments

   $ (15,030   $ 3,801  
  

 

 

   

 

 

 


Explanation and Reconciliation of Non-GAAP Financial Measures

EBITDA is a non-GAAP financial measure equal to net (loss) income, the most directly comparable GAAP financial measure, plus interest expense, income tax (benefit) expense, accretion expense, depreciation, depletion and amortization and impairment of oil and gas properties. Adjusted EBITDA is a non-GAAP financial measure equal to EBITDA less non-cash derivative loss (gain), rig terminations fees, gain on debt extinguishment, non-recurring general and administrative expenses and (income) loss from equity method investments. Cash flow from operating activities before changes in operating assets and liabilities is a non-GAAP financial measure equal to cash provided by operating activity before changes in operating assets and liabilities and inclusive of capitalized expenses incurred during the given period. Free cash flow is a non-GAAP measure defined as cash flow from operating activities before changes in operating assets and liabilities (as defined above) less capital expenditures incurred. Adjusted net income is a non-GAAP financial measure equal to pre-tax net (loss) income less non-cash derivative loss (gain), impairment of oil and gas properties, rig terminations fees, gain on debt extinguishment, non-recurring general and administrative expenses and (income) loss from equity method investments. The Company has presented EBITDA, adjusted EBITDA, adjusted net income, cash flow from operating activities before changes in operating assets and liabilities and free cash flow because it uses these measures as an integral part of its internal reporting to evaluate its performance and the performance of its senior management. These measures are considered important indicators of the operational strength of the Company’s business and eliminate the uneven effect of considerable amounts of non-cash depletion, depreciation of tangible assets and amortization of certain intangible assets. A limitation of these measures, however, is that they do not reflect the periodic costs of certain capitalized tangible and intangible assets used in generating revenues in the Company’s business. Management evaluates the costs of such tangible and intangible assets and the impact of related impairments through other financial measures, such as capital expenditures, investment spending and return on capital. Therefore, the Company believes that these measures provide useful information to its investors regarding its performance and overall results of operations. EBITDA, adjusted EBITDA, adjusted net income, cash flow from operating activities before changes in operating assets and liabilities and free cash flow are not intended to be performance measures that should be regarded as an alternative to, or more meaningful than, either net income as an indicator of operating performance or to cash flows from operating activities as a measure of liquidity. In addition, EBITDA, adjusted EBITDA, adjusted net income and cash flow from operating activities before changes in operating assets and liabilities are not intended to represent funds available for reinvestment or other discretionary uses, and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with GAAP. The EBITDA, adjusted EBITDA, adjusted net income, cash flow from operating activities before changes in operating assets and liabilities and free cash flow presented


in this press release may not be comparable to similarly titled measures presented by other companies, and may not be identical to corresponding measures used in the Company’s various agreements.

GULFPORT ENERGY CORPORATION

RECONCILIATION OF EBITDA

(Unaudited)

 

     Three months ended March 31,  
     2020      2019  
     (In thousands)  

Net (loss) income

   $ (517,538    $ 62,242  

Interest expense

     32,990        35,621  

Income tax expense

     7,290        —    

Accretion expense

     741        1,067  

Depreciation, depletion and amortization

     78,028        118,433  

Impairment of oil and gas properties

     553,345        —    
  

 

 

    

 

 

 

EBITDA

   $ 154,856      $ 217,363  
  

 

 

    

 

 

 


GULFPORT ENERGY CORPORATION

RECONCILIATION OF ADJUSTED EBITDA

(Unaudited)

 

     Three months ended March 31,  
     2020      2019  
     (In thousands)  

EBITDA

   $ 154,856      $ 217,363  

Adjustments:

     

Non-cash derivative gain

     (28,914      (4,791

Non-cash derivative loss on contingent payments

     1,381        —    

Rig termination fees

     1,649        —    

Gain on debt extinguishment

     (15,322      —    

Non-recurring general and administrative expenses

     3,905        538  

Loss (income) from equity method investments

     10,789        (4,273
  

 

 

    

 

 

 

Adjusted EBITDA

   $ 128,344      $ 208,837  
  

 

 

    

 

 

 

GULFPORT ENERGY CORPORATION

RECONCILIATION OF CASH FLOW

(Unaudited)

 

     Three months ended March 31,  
     2020      2019  
     (In thousands)  

Cash provided by operating activity

   $ 130,838      $ 239,765  

Adjustments:

     

Changes in operating assets and liabilities

     (38,556      (62,505

Capitalized expenses incurred(1)

     (5,618      (8,461
  

 

 

    

 

 

 

Operating cash flow

   $ 86,664      $ 168,799  

Capital expenditures incurred(2)

     (135,305      (274,946
  

 

 

    

 

 

 

Free cash flow

   $ (48,641    $ (106,147
  

 

 

    

 

 

 

 

(1)

Includes capitalized general and administrative expense incurred and capitalized interest expenses incurred

(2)

Incurred capital expenditures and cash capital expenditures may vary from period to period due to the cash payment cycle


GULFPORT ENERGY CORPORATION

RECONCILIATION OF ADJUSTED NET INCOME

(Unaudited)

 

     Three months ended March 31,  
     2020      2019  
     (In thousands, except share data)  

(Loss) income before income taxes

   $ (510,248    $ 62,242  

Adjustments:

     

Non-cash derivative gain

     (28,914      (4,791

Non-cash derivative loss on contingent payments

     1,381        —    

Impairment of oil and gas properties

     553,345        —    

Rig termination fees

     1,649        —    

Gain on debt extinguishment

     (15,322      —    

Non-recurring general and administrative expenses

     3,905        538  

Loss (income) from equity method investments

     10,789        (4,273
  

 

 

    

 

 

 

Pre-tax net income excluding adjustments

   $ 16,585      $ 53,716  
  

 

 

    

 

 

 

Adjusted net income

   $ 16,585      $ 53,716  
  

 

 

    

 

 

 

Adjusted net income per common share:

     

Basic

   $ 0.10      $ 0.33  
  

 

 

    

 

 

 

Diluted

   $ 0.10      $ 0.33  
  

 

 

    

 

 

 

Basic weighted average shares outstanding

     159,760,222        162,823,997  

Diluted weighted average shares outstanding

     161,312,645        163,099,409