gpor-20240331

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)


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

For the quarterly period ended March 31, 2024


☐			TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number 001-19514

Gulfport Energy Corporation

(Exact name of registrant as specified in its charter)


Delaware		86-3684669
(State or other jurisdiction of incorporation or organization)		(I.R.S Employer Identification Number)
713 Market Drive
Oklahoma City,	Oklahoma	73114
(Address of principal executive offices)		(Zip Code)

(405) 252-4600

(Registrant telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, $0.0001 par value per share

GPOR

The New York Stock Exchange

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 ý No ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (Section 232.405 of this chapter) during the preceding 12 months (or such shorter period that the registrant was required to submit such files). Yes ý No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See 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 ý 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 ý

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 ý No ¨

As of April 25, 2024, 18,121,730 shares of the registrant’s common stock were outstanding.

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GULFPORT ENERGY CORPORATION

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		Page
PART I FINANCIAL INFORMATION

Item 1.	Consolidated Financial Statements (Unaudited):	4

	Consolidated Balance Sheets	4

	Consolidated Statements of Operations	5

	Consolidated Statements of Stockholders’ Equity	6

	Consolidated Statements of Cash Flows	7

	Notes to Consolidated Financial Statements	8

	1. Summary of Signific ant Accounting Policies	8

	2. Property and Equipment	10

	3. L o ng-Term Debt	11

	4. Mezzanine Equity	12

	5. Equity	13

	6. Stock-Based Compensation	14

	7. Restructuring Costs	16

	8. Earnings Per Share	16

	9. Commitments and Contingencies	17

	10. Derivative Instruments	18

	11. Fair Value Measurements	21

	12. Revenue from Contracts with Customers	24

	13. Leases	24

	14. Income Taxes	26

	15. Related Party Transactions	26

	16. Subsequent Events	26

Item 2.	Management’s Discussion and Analysis of Financial Conditions and Results of Operations	27

	2024 Operation and Financial Highlights	28

	2024 Production and Drilling Activity	28

	Comparison of Quarter-to-Date	29



	Liquidity and Capital Resources	34

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	37

Item 4.	Controls and Procedures	38

PART II OTHER INFORMATION

Item 1.	Legal Proceedings	39

Item 1A.	Risk Factors	39

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	39

Item 3.	Defaults Upon Senior Securities	39

Item 4.	Mine Safety Disclosures	39

Item 5.	Other Information	39

Item 6.	Exhibits	40

Signatures		41

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DEFINITIONS


Unless the context otherwise indicates, references to “us,” “we,” “our,” “ours,” “Gulfport,” the “Company” and “Registrant” refer to Gulfport Energy Corporation and its consolidated subsidiaries. All monetary values, other than per unit and per share amounts, are stated in thousands of U.S. dollars unless otherwise specified. In addition, the following are other abbreviations and definitions of certain terms used within this Quarterly Report on Form 10-Q:

1145 Indenture. Agreement dated May 17, 2021 between the Company, UMB Bank, National Association, as trustee, and the guarantors party thereto, under section 1145 of the Bankruptcy Code for our 8.0% Senior Notes due 2026.

2026 Senior Notes. 8.0% Senior Notes due 2026.

4(a)(2) Indenture. Certain eligible holders made an election entitling such holders to receive senior notes issued pursuant to an indenture, dated as of May 17, 2021, by and among the Company, UMB Bank, National Association, as trustee, and the guarantors party thereto, under Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”) as opposed to its share of the up to $550 million aggregate principal amount of our Senior Notes due 2026. The 4(a)(2) Indenture’s terms are substantially similar to the terms of the 1145 Indenture. The primary differences between the terms of the 4(a)(2) Indenture and the terms of the 1145 Indenture are that (i) affiliates of the Issuer holding 4(a)(2) Notes are permitted to vote in determining whether the holders of the required principal amount of indenture securities have concurred in any direction or consent under the 4(a)(2) Indenture, while affiliates of the Issuer holding 1145 Notes will not be permitted to vote on such matters under the 1145 Indenture, (ii) the covenants of the 1145 Indenture (other than the payment covenant) require that the Issuer comply with the covenants of the 4(a)(2) Indenture, as amended, and (iii) the 1145 Indenture requires that the 1145 Securities be redeemed pro rata with the 4(a)(2) Securities and that the 1145 Indenture be satisfied and discharged if the 4(a)(2) Indenture is satisfied and discharged.

ASC. Accounting Standards Codification.

Bbl. One stock tank barrel, or 42 U.S. gallons liquid volume, used herein in reference to crude oil or other liquid hydrocarbons.

Board of Directors (Board). The board of directors of Gulfport Energy Corporation.

Btu. British thermal unit, which represents the amount of energy needed to heat one pound of water by one degree Fahrenheit and can be used to describe the energy content of fuels.

Completion. The process of treating a drilled well followed by the installation of permanent equipment for the production of natural gas, oil and NGL.

Credit Facility. The Existing Credit Facility, as amended by the Joinder, Commitment Increase and Borrowing Base Redetermination Agreement, and Third Amendment to Credit Agreement dated as of May 1, 2023 and reaffirmed as of October 31, 2023.

DD&A. Depreciation, depletion and amortization.

Disputed Claims Reserve. Reserve used to settle any pending claims of unsecured creditors that were in dispute as of the effective date of the Plan.

Emergence Date. Gulfport filed for voluntary reorganization under Chapter 11 of the Bankruptcy Code on November 13, 2020, and subsequently operated as a debtor-in-possession, in accordance with applicable provisions of the Bankruptcy Code, until its emergence on May 17, 2021.

Existing Credit Facility. The Third Amended and Restated Credit Agreement with JPMorgan Chase Bank, N.A. as administrative agent and various lender parties, providing for a senior secured reserve-based revolving credit facility effective as of October 14, 2021, as amended to date.

GAAP. Accounting principles generally accepted in the United States of America.

Gross Acres or Gross Wells. Refers to the total acres or wells in which a working interest is owned.

Guarantors. All existing consolidated subsidiaries that guarantee the Company's Credit Facility or certain other debt.

Incentive Plan. Gulfport Energy Corporation Stock Incentive Plan effective on the Emergence Date.

Indentures. Collectively, the 1145 Indenture and the 4(a)(2) Indenture governing the 2026 Senior Notes.

LIBOR. London Interbank Offered Rate.

LOE. Lease operating expenses.

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Marcellus. Refers to the Marcellus Play that includes the hydrocarbon bearing rock formations commonly referred to as the Marcellus formation located in the Appalachian Basin of the United States and Canada. Our acreage is located primarily in Belmont County in eastern Ohio.

MBbl. One thousand barrels of crude oil, condensate or natural gas liquids.

Mcf. One thousand cubic feet of natural gas.

Mcfe. One thousand cubic feet of natural gas equivalent, with one barrel of NGL and crude oil being equivalent to 6,000 cubic feet of natural gas.

MMBtu. One million British thermal units.

MMcf. One million cubic feet of natural gas.

MMcfe. One million cubic feet of natural gas equivalent, with one barrel of NGL and crude oil being equivalent to 6,000 cubic feet of natural gas.

Natural Gas Liquids (NGL). Hydrocarbons in natural gas that are separated from the gas as liquids through the process of absorption, condensation, adsorption or other methods in gas processing or cycling plants. Natural gas liquids primarily include ethane, propane, butane, isobutene, pentane, hexane and natural gasoline.

Net Acres or Net Wells. Refers to the sum of fractional working interests owned in gross acres or gross wells.

NYMEX. New York Mercantile Exchange.

Parent. Gulfport Energy Corporation.

Plan. The Amended Joint Chapter 11 Plan of Reorganization of Gulfport Energy Corporation and Its Debtor Subsidiaries.

Repurchase Program. A stock repurchase program to acquire up to $650 million of Gulfport's outstanding common stock. It is authorized to extend through December 31, 2024, and may be suspended from time to time, modified, extended or discontinued by the Board of Directors at any time.

SCOOP. Refers to the South Central Oklahoma Oil Province, a term used to describe a defined area that encompasses many of the top hydrocarbon producing counties in Oklahoma within the Anadarko basin. The SCOOP Play mainly targets the Devonian to Mississippian aged Woodford, Sycamore and Springer formations. Our acreage is primarily in Garvin, Grady and Stephens Counties.

SEC. The United States Securities and Exchange Commission.

SOFR. Secured Overnight Financing Rate.

Utica. Refers to the Utica Play that includes the hydrocarbon bearing rock formations commonly referred to as the Utica formation located in the Appalachian Basin of the United States and Canada. Our acreage is located primarily in Belmont, Harrison, Jefferson and Monroe Counties in eastern Ohio.

Working Interest (WI). The operating interest which gives the owner the right to drill, produce and conduct operating activities on the property and a share of production.

WTI. Refers to West Texas Intermediate.

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Cautionary Note Regarding Forward-Looking Statements

This Form 10-Q may include forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and the Private Securities Litigation Reform Act of 1995, that are subject to risks and uncertainties. These statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. In some cases, you can identify forward looking statements by terms such as “may,” “will,” “should,” “could,” “would,” “expects,” “plans,” “anticipates,” “intends,” “believes,” “estimates,” “projects,” “predicts,” “potential” and similar expressions intended to identify forward-looking statements. All statements, other than statements of historical facts, included in this Form 10-Q that address activities, events or developments that we expect or anticipate will or may occur in the future, including the expected impact of the war in Ukraine and the conflict in the Middle East on our business, our industry and the global economy, estimated future production and net revenues from oil and gas reserves and the present value thereof, future capital expenditures (including the amount and nature thereof), share repurchases, business strategy and measures to implement strategy, competitive strength, goals, expansion and growth of our business and operations, plans, references to future success, reference to intentions as to future matters and other such matters are forward-looking statements.

These forward-looking statements are largely based on our expectations and beliefs concerning future events, which reflect estimates and assumptions made by our management. These estimates and assumptions reflect our best judgment based on currently known market conditions and other factors relating to our operations and business environment, all of which are difficult to predict and many of which are beyond our control.

Although we believe our estimates and assumptions to be reasonable, they are inherently uncertain and involve a number of risks and uncertainties that are beyond our control. In addition, management's assumptions about future events may prove to be inaccurate. Management cautions all readers that the forward-looking statements contained in this Form 10-Q are not guarantees of future performance, and we cannot assure any reader that those statements will be realized or the forward-looking events and circumstances will occur. Actual results may differ materially from those anticipated or implied in the forward-looking statements due to the factors listed in Item 1A. “Risk Factors” and Item 7. “Management's Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2023 and elsewhere in this Form 10-Q. All forward-looking statements speak only as of the date of this Form 10-Q.

All forward-looking statements, expressed or implied, included in this Quarterly Report are expressly qualified in their entirety by this cautionary statement. This cautionary statement should also be considered in connection with any subsequent written or oral forward-looking statements that we or persons acting on our behalf may issue.

Except as otherwise required by applicable law, we disclaim any duty to update any forward-looking statements, all of which are expressly qualified by the statements in this section, to reflect events or circumstances after the date of this Quarterly Report.

We may use the Investors section of our 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 our website is not part of this Quarterly Report on Form 10-Q.

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GULFPORT ENERGY CORPORATION

CONSOLIDATED BALANCE SHEETS

(In thousands)

(Unaudited)


	March 31, 2024		December 31, 2023
Assets
Current assets:
Cash and cash equivalents	$	8,209	$	1,929
Accounts receivable—oil, natural gas, and natural gas liquids sales	85,022		122,479
Accounts receivable—joint interest and other	26,366		22,221
Prepaid expenses and other current assets	5,334		16,951
Short-term derivative instruments	228,579		233,226
Total current assets	353,510		396,806
Property and equipment:
Oil and natural gas properties, full-cost method
Proved oil and natural gas properties	3,033,571		2,904,519
Unproved properties	207,644		204,233
Other property and equipment	9,984		9,165
Total property and equipment	3,251,199		3,117,917
Less: accumulated depletion, depreciation and amortization	(945,646)		(865,618)
Total property and equipment, net	2,305,553		2,252,299
Other assets:
Long-term derivative instruments	45,617		47,566
Deferred tax asset	510,303		525,156
Operating lease assets	11,099		14,299
Other assets	28,000		31,487
Total other assets	595,019		618,508
Total assets	$	3,254,082	$	3,267,613
Liabilities, Mezzanine Equity and Stockholders’ Equity
Current liabilities:
Accounts payable and accrued liabilities	$	290,144	$	309,532
Short-term derivative instruments	37,607		21,963
Current portion of operating lease liabilities	9,949		12,959
Total current liabilities	337,700		344,454
Non-current liabilities:
Long-term derivative instruments	16,547		18,602
Asset retirement obligation	30,710		29,941
Non-current operating lease liabilities	1,150		1,340
Long-term debt	636,442		667,382
Total non-current liabilities	684,849		717,265
Total liabilities	$	1,022,549	$	1,061,719
Commitments and contingencies (Note 9)
Mezzanine equity:
Preferred stock - $0.0001 par value, 110.0 thousand shares authorized, 44.2 thousand issued and outstanding at March 31, 2024, and 44.2 thousand issued and outstanding at December 31, 2023	44,203		44,214
Stockholders’ equity:
Common stock - $0.0001 par value, 42.0 million shares authorized, 18.1 million issued and outstanding at March 31, 2024, and 18.3 million issued and outstanding at December 31, 2023	2		2
Additional paid-in capital	288,450		315,726
Common stock held in reserve, 0 shares at March 31, 2024 and 62.0 thousand shares at December 31, 2023	—		(1,996)
Retained earnings	1,898,878		1,847,948
Total stockholders’ equity	$	2,187,330	$	2,161,680
Total liabilities, mezzanine equity and stockholders’ equity	$	3,254,082	$	3,267,613

See accompanying notes to consolidated financial statements.

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GULFPORT ENERGY CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands)

(Unaudited)


	Three Months Ended March 31, 2024		Three Months Ended March 31, 2023
REVENUES:
Natural gas sales	$	188,286	$	282,534
Oil and condensate sales	21,701		30,714
Natural gas liquid sales	28,106		39,912
Net gain on natural gas, oil and NGL derivatives	45,136		378,061
Total revenues	283,229		731,221
OPERATING EXPENSES:
Lease operating expenses	16,808		19,862
Taxes other than income	8,260		10,695
Transportation, gathering, processing and compression	86,619		87,617
Depreciation, depletion and amortization	80,023		79,094
General and administrative expenses	9,198		8,733
Restructuring costs	—		1,869
Accretion expense	555		764
Total operating expenses	201,463		208,634
INCOME FROM OPERATIONS	81,766		522,587
OTHER EXPENSE (INCOME):
Interest expense	15,003		13,756
Other, net	(125)		(14,223)
Total other expense (income)	14,878		(467)
INCOME BEFORE INCOME TAXES	66,888		523,054
INCOME TAX EXPENSE:
Current	—		—
Deferred	14,853		—
Total income tax expense	14,853		—
NET INCOME	$	52,035	$	523,054
Dividends on preferred stock	(1,105)		(1,307)
Participating securities - preferred stock	(7,532)		(86,221)
NET INCOME ATTRIBUTABLE TO COMMON STOCKHOLDERS	$	43,398	$	435,526
NET INCOME PER COMMON SHARE:
Basic	$	2.39	$	23.08
Diluted	$	2.34	$	22.90
Weighted average common shares outstanding—Basic	18,193		18,868
Weighted average common shares outstanding—Diluted	18,604		19,049

See accompanying notes to consolidated financial statements.

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GULFPORT ENERGY CORPORATION

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(In thousands)

(Unaudited)


	Common Stock			Common Stock Held in Reserve			Treasury Stock		Paid-in Capital		Retained Earnings		Total Stockholders’ Equity
	Shares	Amount		Shares	Amount
Balance at January 1, 2023	19,097	$	2	(62)	$	(1,996)	$	(286)	$	449,243	$	381,872	$	828,835
Net income	—	—		—	—		—		—		523,054		523,054
Stock compensation	—	—		—	—		—		3,069		—		3,069
Repurchase of common stock under Repurchase Program	(457)	—		—	—		(201)		(33,001)		—		(33,202)
Issuance of restricted stock, net of shares withheld for income taxes	3	—		—	—		—		(287)		—		(287)
Dividends on preferred stock	—	—		—	—		—		—		(1,307)		(1,307)
Balance at March 31, 2023	18,643	$	2	(62)	$	(1,996)	$	(487)	$	419,024	$	903,619	$	1,320,162


	Common Stock			Common Stock Held in Reserve			Treasury Stock		Paid-in Capital		Retained Earnings		Total Stockholders’ Equity
	Shares	Amount		Shares	Amount
Balance at January 1, 2024	18,288	$	2	(62)	$	(1,996)	$	—	$	315,726	$	1,847,948	$	2,161,680
Net income	—	—		—	—		—		—		52,035		52,035
Conversion of preferred stock	1	—		—	—		—		11		—		11
Stock compensation	—	—		—	—		—		3,587		—		3,587
Repurchase of common stock under Repurchase Program	(210)	—		—	—		—		(29,788)		—		(29,788)
Issuance of common stock held in reserve	—	—		62	1,996		—		—		—		1,996
Issuance of restricted stock, net of shares withheld for income taxes	10	—		—	—		—		(1,086)		—		(1,086)
Dividends on preferred stock	—	—		—	—		—		—		(1,105)		(1,105)
Balance at March 31, 2024	18,089	$	2	—	$	—	$	—	$	288,450	$	1,898,878	$	2,187,330

See accompanying notes to consolidated financial statements.

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GULFPORT ENERGY CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)


	Three Months Ended March 31, 2024		Three Months Ended March 31, 2023
Cash flows from operating activities:
Net income	$	52,035	$	523,054
Adjustments to reconcile net income to net cash provided by operating activities:
Depletion, depreciation and amortization	80,023		79,094
Net gain on derivative instruments	(45,136)		(378,061)
Net cash receipts on settled derivative instruments	65,322		367
Deferred income tax expense	14,853		—
Stock-based compensation expense	2,403		2,205
Other, net	1,568		2,637
Changes in operating assets and liabilities, net	16,954		74,759
Net cash provided by operating activities	188,022		304,055
Cash flows from investing activities:
Additions to oil and natural gas properties	(118,146)		(130,400)
Proceeds from sale of oil and natural gas properties	—		2,463
Other, net	(806)		(644)
Net cash used in investing activities	(118,952)		(128,581)
Cash flows from financing activities:
Principal payments on Credit Facility	(303,000)		(313,000)
Borrowings on Credit Facility	272,000		168,000
Debt issuance costs and loan commitment fees	(107)		(7)
Dividends on preferred stock	(1,105)		(1,307)
Repurchase of common stock under Repurchase Program	(14,491)		(32,672)
Repurchase of common stock under Repurchase Program - related party	(15,002)		—
Shares exchanged for tax withholdings	(1,085)		(287)
Net cash used in financing activities	(62,790)		(179,273)
Net change in cash and cash equivalents	6,280		(3,799)
Cash and cash equivalents at beginning of period	1,929		7,259
Cash and cash equivalents at end of period	$	8,209	$	3,460

See accompanying notes to consolidated financial statements.

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GULFPORT ENERGY CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Description of Company

Gulfport Energy Corporation (the "Company" or "Gulfport") is an independent natural gas-weighted exploration and production company focused on the production of natural gas, crude oil and NGL in the United States. The Company's principal properties are located in eastern Ohio targeting the Utica and Marcellus and in central Oklahoma targeting the SCOOP Woodford and Springer formations.

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements of Gulfport were prepared in accordance with GAAP and the rules and regulations of the SEC.

This Quarterly Report on Form 10-Q (this “Form 10-Q”) relates to the financial position and periods as of and for the three months ended March 31, 2024, and the three months ended March 31, 2023. The Company's annual report on Form 10-K for the year ended December 31, 2023, should be read in conjunction with this Form 10-Q. The accompanying unaudited consolidated financial statements reflect all normal recurring adjustments which, in the opinion of management, are necessary for a fair statement of our condensed consolidated financial statements and accompanying notes and include the accounts of our wholly-owned subsidiaries. Intercompany accounts and balances have been eliminated. The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern.

Recently Issued Accounting Pronouncements and Disclosure Rules

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (Topic 280). The amendments require disclosure for each reportable segment, the significant expense categories and amounts that are regularly provided to the chief operating decision-maker (CODM) and included in each reported measure of a segment’s profit or loss. Additionally, this ASU enhances interim disclosure requirements and provides new segment disclosure requirements for entities with a single reportable segment. ASU 2023-07 is effective retrospectively for fiscal years beginning after December 15, 2023, and for interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. The Company is currently evaluating the impact of this standard on our disclosures.

In December 2023, the FASB issued ASU 2023-09, Income Taxes: Improvements to Income Tax Disclosures (Topic 740). The amendment requires annual disclosure of additional categories of information about federal, state, and foreign income taxes in the rate reconciliation table and to provide more details about the reconciling items in some categories if the items meet a quantitative threshold. Additionally, the amendment requires disclosure of annual income taxes paid (net of refunds received) disaggregated by federal, state, and foreign taxes and to disaggregate the information by jurisdiction based on a quantitative threshold. ASU 2023-09 is effective for the Company’s annual reporting periods beginning after December 15, 2024, with early adoption permitted, and should be applied on a prospective basis, with a retrospective option. We are currently evaluating the effect that adoption of ASU 2023-09 will have on our disclosures.

In March 2024, the Securities and Exchange Commission ("SEC") issued final climate-related disclosure rules that will require disclosure of material climate-related risks and material direct greenhouse gas emissions from operations owned or controlled (Scope 1) and/or material indirect greenhouse gas emissions from purchased energy consumed in owned or controlled operations (Scope 2). Additionally, the rules require disclosure in the notes to the financial statements of the effects of severe weather events and other natural conditions, subject to certain materiality thresholds. The disclosure requirements will begin phasing in for reports and registration statements including financial information with respect to annual periods beginning in fiscal year 2025. We are in the process of analyzing the impact of the rules on our related disclosures.

Reclassification

Certain reclassifications have been made to prior period financial statements and related disclosures to conform to current period presentation. These reclassifications have no impact on previous reported total assets, total liabilities, net income or total operating cash flows.

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Accounts Payable and Accrued Liabilities

Accounts payable and accrued liabilities consisted of the following at March 31, 2024 and December 31, 2023 (in thousands):


	March 31, 2024		December 31, 2023
Revenue payable and suspense	$	129,138	$	148,598
Accounts payable	45,722		43,517
Accrued capital expenditures	32,690		38,322
Accrued transportation, gathering, processing and compression	31,796		32,849
Accrued contract rejection damages and shares held in reserve	—		1,996
Other accrued liabilities	50,798		44,250
Total accounts payable and accrued liabilities	$	290,144	$	309,532

Other, net

As part of its Chapter 11 Cases and restructuring efforts, the Company filed motions to reject certain firm transportation agreements between the Company and affiliates of TC Energy Corporation ("TC") and Rover Pipeline LLC ("Rover"). During the three months ended March 31, 2023, Gulfport finalized a settlement agreement with Rover that was approved by the Bankruptcy Court on February 21, 2023. Pursuant to the settlement agreement, Gulfport and Rover agreed that the firm transportation contracts between them would be rejected. As part of the settlement, Gulfport paid a $1.0 million administrative claim, which is included in Other, net. Additionally, on February 24, 2023, Gulfport received an additional $17.8 million interim distribution for its TC claim, which is also included in Other, net.

Supplemental Cash Flow and Non-Cash Information (in thousands)


	Three Months Ended March 31, 2024		Three Months Ended March 31, 2023
Supplemental disclosure of cash flow information:
Interest payments, net of amounts capitalized	$	3,124	$	2,353
Changes in operating assets and liabilities, net:
Accounts receivable - oil, natural gas and natural gas liquid sales	$	37,457	$	158,541
Accounts receivable - joint interest and other	(4,145)		(1,837)
Accounts payable and accrued liabilities	(16,656)		(82,671)
Prepaid expenses	299		764
Other assets	(1)		(38)
Total changes in operating assets and liabilities	$	16,954	$	74,759
Supplemental disclosure of non-cash transactions:
Capitalized stock-based compensation	$	1,183	$	864
Asset retirement obligation capitalized	$	214	$	—
Asset retirement obligation removed due to divestiture and settlements	$	—	$	(919)
Release of common stock held in reserve	$	1,996	$	—

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2.PROPERTY AND EQUIPMENT

The major categories of property and equipment and related accumulated DD&A are as follows (in thousands):


	March 31, 2024		December 31, 2023
Proved oil and natural gas properties	$	3,033,571	$	2,904,519
Unproved properties	207,644		204,233
Other depreciable property and equipment	9,598		8,779
Land	386		386
Total property and equipment	3,251,199		3,117,917
Accumulated DD&A	(945,646)		(865,618)
Property and equipment, net	$	2,305,553	$	2,252,299

Under the full cost method of accounting, the Company is required to perform a ceiling test each quarter. The test determines a limit, or ceiling, on the book value of the Company's oil and natural gas properties. At March 31, 2024 and 2023, the net book value of the Company's oil and gas properties was below the calculated ceiling. As a result, the Company did not record an impairment of its oil and natural gas properties for the three months ended March 31, 2024 or 2023.

Lower natural gas, oil and NGL prices can reduce the value of the Company’s assets. In addition to commodity prices, the Company’s production rates, levels of proved reserves, future development costs, transfers of unevaluated properties and other factors will determine its actual ceiling test calculation and impairment analysis in future periods. Given the decline of commodity prices in 2023 and 2024, non-cash impairments in future periods could occur if the trailing 12-month commodity prices decrease as compared to the average used in prior periods.

Certain general and administrative costs are capitalized to the full cost pool and represent management’s estimate of costs incurred directly related to exploration and development activities. All general and administrative costs not capitalized are charged to expense as they are incurred. Capitalized general and administrative costs were approximately $5.7 million and $5.1 million for the three months ended March 31, 2024 and 2023, respectively.

The Company evaluates the costs excluded from its amortization calculation at least annually. Individually insignificant unevaluated properties are grouped for evaluation and periodically transferred to evaluated properties over a timeframe consistent with their expected development schedule.

The following table summarizes the Company’s non-producing properties excluded from amortization by area (in thousands):


	March 31, 2024		December 31, 2023
Utica & Marcellus	$	182,034	$	177,888
SCOOP	25,610		26,345
Total unproved properties	$	207,644	$	204,233

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Asset Retirement Obligation

The following table provides a reconciliation of the Company’s asset retirement obligation for the three months ended March 31, 2024 and 2023 (in thousands):


	Three Months Ended March 31, 2024		Three Months Ended March 31, 2023
Asset retirement obligation, beginning of period	$	29,941	$	33,171
Liabilities incurred	214		—
Liabilities settled	—		(165)
Liabilities removed due to divestitures	—		(919)
Accretion expense	555		764
Total asset retirement obligation, end of period	$	30,710	$	32,851

3.LONG-TERM DEBT

Long-term debt consisted of the following items as of March 31, 2024 and December 31, 2023 (in thousands):


	March 31, 2024		December 31, 2023
8.0% senior unsecured notes due 2026	$	550,000	$	550,000
Credit Facility due 2027	87,000		118,000
Net unamortized debt issuance costs	(558)		(618)
Total debt, net	636,442		667,382
Less: current maturities of long-term debt	—		—
Total long-term debt, net	$	636,442	$	667,382

Credit Facility

On May 1, 2023, the Company entered into that certain Joinder, Commitment Increase and Borrowing Base Redetermination Agreement, and Third Amendment to Credit Agreement (the “Third Amendment”) which amended the Company’s Existing Credit Facility (as amended, the “Credit Facility”). The Third Amendment, among other things, (a) increased the aggregate elected commitment amounts under the Credit Facility from $700 million to $900 million, (b) increased the borrowing base under the Credit Facility from $1 billion to $1.1 billion, (c) increased the excess cash threshold under the Credit Facility from $45 million to $75 million, and (d) extended the maturity date under the Credit Facility from October 14, 2025 to the earlier of (i) four years from the closing date of the Third Amendment and (ii) the 91st day prior to the maturity date of the 2026 Senior Notes or any other permitted senior notes or any permitted refinancing debt under the Credit Facility having an aggregate outstanding principal amount equal to or exceeding $100 million; provided that such notes have not be refinanced, redeemed or repaid in full on or prior to such 91st day. On October 27, 2023, Gulfport completed its semi-annual borrowing base redetermination under its Credit Facility during which the borrowing base was reaffirmed at $1.1 billion with elected commitments remaining at $900 million.

The Credit Facility bears interest at a rate equal to, at the Company’s election, either (a) SOFR benchmark plus an applicable margin that varies from 2.75% to 3.75% per annum or (b) a base rate plus an applicable margin that varies from 1.75% to 2.75% per annum, based on borrowing base utilization. The Company is required to pay a commitment fee of 0.50% per annum on the average daily unused portion of the current aggregate commitments under the Credit Facility. The Company is also required to pay customary letter of credit and fronting fees.

The Credit Facility requires the Company to maintain as of the last day of each fiscal quarter (i) a net funded leverage ratio of less than or equal to 3.25 to 1.00, and (ii) a current ratio of greater than or equal to 1.00 to 1.00.

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The obligations under the Credit Facility, certain swap obligations and certain cash management obligations, are guaranteed by the Company and the wholly-owned domestic material subsidiaries of the Borrower (collectively, the “Guarantors” and, together with the Borrower, the “Loan Parties”) and secured by substantially all of the Loan Parties’ assets (subject to customary exceptions).

The Credit Facility also contains customary affirmative and negative covenants, including, among other things, as to compliance with laws (including environmental laws and anti-corruption laws), delivery of quarterly and annual financial statements and borrowing base certificates, conduct of business, maintenance of property, maintenance of insurance, entry into certain derivatives contracts, restrictions on the incurrence of liens, indebtedness, asset dispositions, restricted payments, and other customary covenants. These covenants are subject to a number of limitations and exceptions.

As of March 31, 2024, the Company had $87.0 million outstanding borrowings under the Credit Facility, $63.8 million in letters of credit outstanding and was in compliance with all covenants under the credit agreement.

For the three months ended March 31, 2024, the Credit Facility bore interest at a weighted average rate of 8.33%.

The borrowing base is redetermined semiannually on or around May 1 and November 1 of each year.

2026 Senior Notes

In May 2021, the Company issued $550 million aggregate principal amount of its 8.0% senior notes due 2026. The notes are guaranteed on a senior unsecured basis by each of the Company's subsidiaries that guarantee the Credit Facility. Interest on the 2026 Senior Notes is payable semi-annually, on June 1 and December 1 of each year. The 2026 Senior Notes were issued under the Indentures, dated as of May 17, 2021, by and among the Issuer, UMB Bank, National Association, as trustee, and the Guarantors and mature on May 17, 2026.

The covenants of the 1145 Indenture (other than the payment covenant) require that the Company comply with the covenants of the 4(a)(2) Indenture, as amended. The 4(a)(2) Indenture contains covenants limiting the Issuer’s and its restricted subsidiaries’ ability to (i) incur additional debt, (ii) pay dividends or distributions in respect of certain equity interests or redeem, repurchase or retire certain equity interests or subordinated indebtedness, (iii) make certain investments, (iv) create restrictions on distributions from restricted subsidiaries, (v) engage in specified sales of assets, (vi) enter into certain transactions among affiliates, (vii) engage in certain lines of business, (viii) engage in consolidations, mergers and acquisitions, (ix) create unrestricted subsidiaries and (x) incur or create liens. These covenants contain important exceptions, limitations and qualifications. At any time that the 2026 Senior Notes are rated investment grade, certain covenants will be terminated and cease to apply.

Capitalization of Interest

The Company capitalized $1.1 million and $0.8 million in interest expense for the three months ended March 31, 2024 and March 31, 2023, respectively.

Fair Value of Debt

At March 31, 2024, the carrying value of the outstanding debt represented by the 2026 Senior Notes was $549.4 million. Based on the quoted market prices (Level 1), the fair value of the 2026 Senior Notes was determined to be $560.0 million at March 31, 2024.

4.MEZZANINE EQUITY

The Company's amended and restated certificate of incorporation with the Delaware Secretary of State provides for, among other things, (i) the authority to issue 42 million shares of common stock with a par value of $0.0001 per share and (ii) the designation of 110,000 shares of preferred stock, with a par value of $0.0001 per share and a liquidation preference of $1,000 per share (the "Liquidation Preference").

Preferred Stock

In May 2021, the Company issued 55,000 shares of preferred stock.

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Holders of preferred stock are entitled to receive cumulative quarterly dividends at a rate of 10% per annum of the Liquidation Preference with respect to cash dividends and 15% per annum of the Liquidation Preference with respect to dividends paid in kind as additional shares of preferred stock (“PIK Dividends”). Gulfport currently has the option to pay either cash dividends or PIK Dividends on a quarterly basis.

Each holder of shares of preferred stock has the right (the “Conversion Right”), at its option and at any time, to convert all or a portion of the shares of preferred stock that it holds into a number of shares of common stock equal to the quotient obtained by dividing (x) the product obtained by multiplying (i) the Liquidation Preference times (ii) an amount equal to one (1) plus the Per Share Makewhole Amount (as defined in the Preferred Terms) on the date of conversion, by (y) $14.00 per share (as may be adjusted under the Preferred Terms). The shares of preferred stock outstanding at March 31, 2024, would convert to approximately 3.2 million shares of common stock if all holders of preferred stock exercised their Conversion Right.

Gulfport shall have the right, but not the obligation, to redeem all, but not less than all, of the outstanding shares of preferred stock by notice to the holders of preferred stock, at the greater of (i) the aggregate value of the preferred stock, calculated by the Current Market Price (as defined in the Preferred Terms) of the number of shares of common stock into which, subject to redemption, such preferred stock would have been converted if such shares were converted pursuant to the Conversion Right at the time of such redemption and (ii) (y) if the date of such redemption is on or prior to the three year anniversary of the Emergence Date, the sum of the Liquidation Preference plus the sum of all unpaid PIK Dividends through the three year anniversary of the Emergence Date, or (x) if the date of such redemption is after the three year anniversary of the Emergence Date, the Liquidation Preference (the “Redemption Price”).

Following the Emergence Date, if there is a Fundamental Change (as defined in the Preferred Terms), Gulfport is required to redeem all, but not less than all, of the outstanding shares of preferred stock by cash payment of the Redemption Price per share of preferred stock within three (3) business days of the occurrence of such Fundamental Change. Notwithstanding the foregoing, in the event of a redemption pursuant to the preceding sentence, if Gulfport lacks sufficient cash to redeem all outstanding shares of preferred stock, the Company is required to redeem a pro rata portion of each holder’s shares of preferred stock.

The preferred stock has no stated maturity and will remain outstanding indefinitely unless repurchased or redeemed by Gulfport or converted into common stock.

The preferred stock has been classified as mezzanine equity in the accompanying consolidated balance sheets due to the redemption features noted above.

Dividends and Conversions

During the three months ended March 31, 2024 and March 31, 2023, the Company paid $1.1 million and $1.3 million, respectively, of cash dividends to holders of our preferred stock.

The following table summarizes activity of the Company's preferred stock for the three months ended March 31, 2024 and March 31, 2023:


	Three Months Ended March 31, 2024	Three Months Ended March 31, 2023
Preferred stock, beginning of period	44,214	52,295
Conversion of preferred stock	(11)	—
Preferred stock, end of period	44,203	52,295

5.EQUITY

In May 2021, the Company filed an amended and restated certificate of incorporation with the Delaware Secretary of State to provide for, among other things, (i) the authority to issue 42 million shares of common stock with a par value of $0.0001 per share and (ii) the designation of 110,000 shares of preferred stock, with a par value of $0.0001 per share and a Liquidation Preference of $1,000 per share.

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Common Stock

In May 2021, Gulfport issued approximately 19.8 million shares of common stock and 1.7 million shares of common stock were issued to the Disputed Claims Reserve.

In January 2024, the remaining 62,000 shares in the Disputed Claims Reserve were issued to certain claimants. There are no remaining shares in the Disputed Claims Reserve as of March 31, 2024.

Share Repurchase Program

In November 2021 the Company's Board of Directors approved the Repurchase Program to acquire up to $100 million of common stock, which was subsequently increased to $650 million and extended through December 31, 2024. Purchases under the Repurchase Program may be made from time to time in open market or privately negotiated transactions, and will be subject to available liquidity, market conditions, credit agreement restrictions, applicable legal requirements, contractual obligations and other factors. The Repurchase Program does not require the Company to acquire any specific number of shares of common stock. The Company intends to purchase shares under the Repurchase Program with available funds while maintaining sufficient liquidity to fund its capital development program. The Repurchase Program may be suspended from time to time, modified, extended or discontinued by the Board of Directors at any time. During the three months ended March 31, 2024, the Company repurchased 210,075 shares for $29.5 million at a weighted average price of $140.39 per share. As of March 31, 2024, the Company has repurchased 4.6 million shares for $429.1 million at a weighted average price of $93.77 per share since the inception of the Repurchase Program.

6.STOCK-BASED COMPENSATION

In May 2021, the Board of Directors adopted the Incentive Plan with a share reserve equal to 2.8 million shares of common stock. The Incentive Plan provides for the grant of incentive stock options, nonstatutory stock options, restricted stock, restricted stock units, stock appreciation rights, dividend equivalents and performance awards or any combination of the foregoing. The Company has granted both restricted stock units and performance vesting restricted stock units to employees and directors pursuant to the Incentive Plan, as discussed below. During the three months ended March 31, 2024 and 2023, the Company's stock-based compensation expense was $3.6 million and $2.6 million, of which the Company capitalized $1.2 million and $0.9 million, respectively, relating to its exploration and development efforts. Stock compensation expense, net of the amounts capitalized, is included in general and administrative expenses in the accompanying consolidated statements of operations. As of March 31, 2024, the Company has awarded an aggregate of approximately 438,453 restricted stock units and approximately 322,320 performance vesting restricted stock units under the Incentive Plan.

The vesting for certain share-based awards was accelerated in the first three months of 2023 in conjunction with the restructuring activities described in Note 7 and is included in restructuring costs in the accompanying consolidated statement of operations.

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The following tables summarizes activity for the three months ended March 31, 2024 and 2023:


	Number of Unvested Restricted Stock Units	Weighted Average Grant Date Fair Value		Number of Unvested Performance Vesting Restricted Stock Units	Weighted Average Grant Date Fair Value
Unvested shares as of January 1, 2024	193,602	$	83.89	255,578	$	54.40
Granted	69,436	152.54		58,346	156.00
Vested	(17,720)	75.96		—	—
Forfeited/canceled	(747)	99.88		—	—
Unvested shares as of March 31, 2024	244,571	$	103.91	313,924	$	73.28


	Number of Unvested Restricted Stock Units	Weighted Average Grant Date Fair Value		Number of Unvested Performance Vesting Restricted Stock Units	Weighted Average Grant Date Fair Value
Unvested shares as of January 1, 2023	197,772	$	77.49	190,804	$	52.15
Granted	43,415	77.84		68,726	56.57
Vested	(11,608)	70.86		—	—
Forfeited/canceled	(971)	87.68		(5,069)	47.67
Unvested shares as of March 31, 2023	228,608	$	77.85	254,461	$	53.43

Restricted Stock Units

Restricted stock units awarded under the Incentive Plan generally vest over a period of 3 or 4 years in the case of employees and 1 or 4 years in the case of directors upon the recipient meeting applicable service requirements. Stock-based compensation expense is recorded ratably over the service period. The grant date fair value of restricted stock units represents the closing market price of the Company's common stock on the date of the grant. Unrecognized compensation expense as of March 31, 2024, was $19.3 million. The expense is expected to be recognized over a weighted average period of 2.28 years.

Performance Vesting Restricted Stock Units

The Company has awarded performance vesting restricted stock units to certain of its executive officers under the Incentive Plan. The number of shares of common stock issued pursuant to the award will be based on a combination of (i) the Company's total shareholder return ("TSR") and (ii) the Company's relative total shareholder return ("RTSR") for the performance period. Participants will earn from 0% to 200% of the target award based on the Company's TSR and RTSR ranking compared to the TSR of the companies in the Company's designated peer group at the end of the performance period. Awards will be earned and vested at the end of a three-year performance period, subject to earlier termination of the performance period in the event of a change in control. The grant date fair values were determined using the Monte Carlo simulation method and are being recorded ratably over the performance period.

The table below summarizes the assumptions used in the Monte Carlo simulation to determine the grant date fair value of awards granted during the three months ended March 31, 2024 and March 31, 2023:


Grant date	January 24, 2023	March 3, 2023	March 1, 2024
Forecast period (years)	3	3	3
Risk-free interest rates	3.88%	4.64%	4.36%
Implied equity volatility	87.2%	86.4%	46.70%
Stock price on the date of grant	$72.99	$82.20	$142.00

Unrecognized compensation expense as of March 31, 2024, related to performance vesting restricted shares was $12.9 million. The expense is expected to be recognized over a weighted average period of 2.36 years.

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7.RESTRUCTURING COSTS

During the three months ended March 31, 2023, Gulfport recognized $1.9 million in personnel-related restructuring expenses associated with changes in the organizational structure and leadership team resulting from the appointment of Gulfport's new CEO in January 2023. Of these expenses, $0.5 million resulted from accelerated vesting of certain share-based grants, which are non-cash charges.

8.EARNINGS PER SHARE

Basic income or loss per share attributable to common stockholders is computed as (i) net income or loss less (ii) dividends paid to holders of preferred stock less (iii) net income or loss attributable to participating securities divided by (iv) weighted average basic shares outstanding. Diluted net income or loss per share attributable to common stockholders is computed as (i) basic net income or loss attributable to common stockholders plus (ii) diluted adjustments to income allocable to participating securities divided by (iii) weighted average diluted shares outstanding. The "if-converted" method is used to determine the dilutive impact for the Company's convertible preferred stock and the treasury stock method is used to determine the dilutive impact of unvested restricted stock.

There were 411,224 and 180,811 shares of restricted stock that were considered dilutive for the three months ended March 31, 2024 and 2023, respectively. There were 3.2 million and 3.7 million shares of potential common shares issuable due to the Company's preferred stock for the three months ended March 31, 2024 and 2023, respectively.

Reconciliations of the components of basic and diluted net income per common share are presented in the table below (in thousands):


	Three Months Ended March 31, 2024		Three Months Ended March 31, 2023

Net income	$	52,035	$	523,054
Dividends on preferred stock	(1,105)		(1,307)
Participating securities - preferred stock(1)	(7,532)		(86,221)
Net income attributable to common stockholders	$	43,398	$	435,526
Re-allocation of participating securities	143		684
Diluted net income attributable to common stockholders	$	43,541	$	436,210
Basic Shares	18,193		18,868
Dilutive Shares	18,604		19,049
Basic EPS	$	2.39	$	23.08
Dilutive EPS	$	2.34	$	22.90

_____________________

(1) Preferred stock represents participating securities because it participates in any dividends on shares of common stock on a pari passu, pro rata basis. However, preferred stock does not participate in undistributed net losses.

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9.COMMITMENTS AND CONTINGENCIES

Commitments

Firm Transportation and Gathering Agreements

The Company has contractual commitments with midstream and pipeline companies for future gathering and transportation of natural gas from the Company's producing wells to downstream markets. Under certain of these agreements, the Company has minimum daily volume commitments. The Company is also obligated under certain of these arrangements to pay a demand charge for firm capacity rights on pipeline systems regardless of the amount of pipeline capacity utilized by the Company. If the Company does not utilize the capacity, it often can release it to other counterparties, thus reducing the cost of these commitments. Working interest owners and royalty interest owners, where appropriate, will be responsible for their proportionate share of these costs. Commitments related to future firm transportation and gathering agreements are not recorded as obligations in the accompanying consolidated balance sheets; however, costs associated with utilized future firm transportation and gathering agreements are reflected in the Company's estimates of proved reserves.

A summary of these commitments at March 31, 2024, are set forth in the table below (in thousands):


Remaining 2024	$	166,230
2025	137,728
2026	134,257
2027	136,425
2028	136,581
Thereafter	600,031
Total	$	1,311,252

Other Operational Commitments

The Company entered into various contractual commitments to purchase inventory and other material to be used in future activities. The Company's commitment to purchase these materials spans 2024, with approximately $19.3 million remaining.

Contingencies

The Company is involved in a number of litigation and regulatory proceedings including those described below. Many of these proceedings are in early stages, and many of them seek or may seek damages and penalties, the amount of which is indeterminate. The Company's total accrued liabilities in respect of litigation and regulatory proceedings is determined on a case-by-case basis and represents an estimate of probable losses after considering, among other factors, the progress of each case or proceeding, its experience and the experience of others in similar cases or proceedings, and the opinions and views of legal counsel. Significant judgment is required in making these estimates and their final liabilities may ultimately be materially different. In accordance with ASC Topic 450, Contingencies, an accrual is recorded for a material loss contingency when its occurrence is probable and damages are reasonably estimable based on the anticipated most likely outcome or the minimum amount within a range of possible outcomes.

Litigation and Regulatory Proceedings

The Company, along with other oil and gas companies, have been named as a defendant in a number of lawsuits where Plaintiffs assert their respective leases are limited to the Utica/Marcellus shale geological formations and allege that Defendants have willfully trespassed and illegally produced oil, natural gas, and other hydrocarbon products beyond these respective formations. They also allege that Defendants engaged in conversion and were unjustly enriched. Plaintiffs seek the full value of any production from below the Utica/Marcellus shale formations, unspecified damages from the diminution of value to their mineral estate, unspecified punitive damages, and the payment of reasonable attorney fees, legal expenses, and interest. On April 27, 2021, the Bankruptcy Court for the Southern District of Texas approved a settlement agreement in which the plaintiffs fully released the Company from all claims that accrued and any damages related to the period before the effective date of the Company’s Chapter 11 plan, which occurred on May 17, 2021. The plaintiffs are continuing to pursue alleged damages after May 17, 2021.

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Business Operations

The Company is involved in various lawsuits and disputes incidental to its business operations, including commercial disputes, personal injury claims, royalty claims, property damage claims and contract actions.

Environmental Contingencies

The nature of the oil and gas business carries with it certain environmental risks for Gulfport and its subsidiaries. Gulfport and its subsidiaries have implemented various policies, programs, procedures, training and audits to reduce and mitigate environmental risks. The Company conducts periodic reviews, on a company-wide basis, to assess changes in its environmental risk profile. Environmental reserves are established for environmental liabilities for which economic losses are probable and reasonably estimable. The Company manages its exposure to environmental liabilities in acquisitions by using an evaluation process that seeks to identify pre-existing contamination or compliance concerns and address the potential liability. Depending on the extent of an identified environmental concern, it may, among other things, exclude a property from the transaction, require the seller to remediate the property to its satisfaction in an acquisition or agree to assume liability for the remediation of the property.

Other Matters

Based on management’s current assessment, they are of the opinion that no pending or threatened lawsuit or dispute relating to its business operations is likely to have a material adverse effect on their future consolidated financial position, results of operations or cash flows. The final resolution of such matters could exceed amounts accrued, however, and actual results could differ materially from management’s estimates.

10.DERIVATIVE INSTRUMENTS

Natural Gas, Oil and NGL Derivative Instruments

The Company seeks to mitigate risks related to unfavorable changes in natural gas, oil and NGL prices, which are subject to significant and often volatile fluctuation, by entering into over-the-counter fixed price swaps, basis swaps, costless collars and various types of option contracts. These contracts allow the Company to mitigate the impact of declines in future natural gas, oil and NGL prices by effectively locking in a floor price for a certain level of the Company’s production. However, these hedge contracts also limit the benefit to the Company in periods of favorable price movements.

The volume of production subject to commodity derivative instruments and the mix of the instruments are frequently evaluated and adjusted by management in response to changing market conditions. Gulfport may enter into commodity derivative contracts up to limitations set forth in its Credit Facility. The Company generally enters into commodity derivative contracts for approximately 30% to 70% of its forecasted current year annual production by the end of the first quarter of each fiscal year. The Company typically enters into commodity derivative contracts for the next 12 to 36 months. Gulfport does not enter into commodity derivative contracts for speculative purposes.

The Company does not currently have any commodity derivative transactions that have margin requirements or collateral provisions that would require payments prior to the scheduled settlement dates. The Company's commodity derivative contract counterparties are typically financial institutions and energy trading firms with investment-grade credit ratings. Gulfport routinely monitors and manages its exposure to counterparty risk by requiring specific minimum credit standards for all counterparties, actively monitoring counterparties' public credit ratings and avoiding the concentration of credit exposure by transacting with multiple counterparties. The Company has master netting agreements with some counterparties that allow the offsetting of receivables and payables in a default situation. As of March 31, 2024, our commodity derivative contracts were spread among 12 counterparties.

Fixed price swaps require that the Company receive a fixed price and pay a floating market price to the counterparty for the hedged commodity. They are settled monthly based on differences between the fixed price specified in the contract and the referenced settlement price. When the referenced settlement price is less than the price specified in the contract, the Company receives an amount from the counterparty based on the price difference multiplied by the volume. Similarly, when the referenced settlement price exceeds the price specified in the contract, the Company pays the counterparty an amount based on the price difference multiplied by the volume.

The Company has entered into natural gas, crude oil and NGL fixed price swap contracts based off the NYMEX Henry Hub, NYMEX WTI and Mont Belvieu C3 indices. Below is a summary of the Company’s open fixed price swap positions as of March 31, 2024.


	Index	Daily Volume	Weighted Average Price
Natural Gas		(MMBtu/d)	($/MMBtu)
Remaining 2024	NYMEX Henry Hub	376,836	$	3.85
2025	NYMEX Henry Hub	200,000	$	3.94
2026	NYMEX Henry Hub	30,000	$	3.62

Oil		(Bbl/d)	($/Bbl)
Remaining 2024	NYMEX WTI	500	$	77.50

NGL		(Bbl/d)	($/Bbl)
Remaining 2024	Mont Belvieu C3	2,500	$	30.25
2025	Mont Belvieu C3	2,000	$	30.09

Each two-way costless collar has a set floor and ceiling price for the hedged production. They are settled monthly based on differences between the floor and ceiling prices specified in the contract and the referenced settlement price. If the applicable monthly price indices are outside of the ranges set by the floor and ceiling prices in the collar contracts, the Company will cash-settle the difference with the hedge counterparty. When the referenced settlement price is less than the floor price in the contract, the Company receives an amount from the counterparty based on the price difference multiplied by the hedged contract volume. Similarly, when the referenced settlement price exceeds the ceiling price specified in the contract, the Company pays the counterparty an amount based on the price difference multiplied by the hedged contract volume. No payment is due from either party if the referenced settlement price is within the range set by the floor and ceiling prices.

The Company has entered into natural gas and crude oil costless collars based off the NYMEX Henry Hub and NYMEX WTI indices. Below is a summary of the Company's costless collar positions as of March 31, 2024.


	Index	Daily Volume	Weighted Average Floor Price		Weighted Average Ceiling Price
Natural Gas		(MMBtu/d)	($/MMBtu)		($/MMBtu)
Remaining 2024	NYMEX Henry Hub	225,000	$	3.36	$	5.14
2025	NYMEX Henry Hub	180,000	$	3.39	$	4.33

Oil		(Bbl/d)	($/Bbl)		($/Bbl)
Remaining 2024	NYMEX WTI	1,000	$	62.00	$	80.00

From time to time, the Company has sold natural gas call options in exchange for a premium, and used the associated premiums received to enhance the fixed price for a portion of the fixed price natural gas swaps. Each sold call option has an established ceiling price. If at the time of settlement the referenced settlement price exceeds the ceiling price, the Company pays its counterparty an amount equal to the difference between the referenced settlement price and the price ceiling multiplied by the hedged contract volumes. No payment is due from either party if the referenced settlement price is below the price ceiling. Below is a summary of the Company's open sold call option positions as of March 31, 2024.


	Index	Daily Volume	Weighted Average Price
Natural Gas		(MMBtu/d)	($/MMBtu)
Remaining 2024	NYMEX Henry Hub	202,000	$	3.33
2025	NYMEX Henry Hub	193,315	$	5.80

In addition, the Company has entered into natural gas basis swap positions. These instruments are arrangements that guarantee a fixed price differential to NYMEX Henry Hub from a specified delivery point. The Company receives the fixed price differential and pays the floating market price differential to the counterparty for the hedged commodity. As of March 31, 2024, the Company had the following natural gas basis swap positions open:


	Gulfport Pays	Gulfport Receives	Daily Volume	Weighted Average Fixed Spread
Natural Gas			(MMBtu/d)	($/MMBtu)
Remaining 2024	Rex Zone 3	NYMEX Plus Fixed Spread	150,000	$	(0.15)
Remaining 2024	NGPL TXOK	NYMEX Plus Fixed Spread	70,000	$	(0.31)
Remaining 2024	TETCO M2	NYMEX Plus Fixed Spread	196,618	$	(0.92)
2025	NGPL TXOK	NYMEX Plus Fixed Spread	30,000	$	(0.27)
2025	TETCO M2	NYMEX Plus Fixed Spread	120,000	$	(0.98)

Balance Sheet Presentation

The Company reports the fair value of derivative instruments on the consolidated balance sheets as derivative instruments under current assets, noncurrent assets, current liabilities and noncurrent liabilities on a gross basis. The Company determines the current and noncurrent classification based on the timing of expected future cash flows of individual trades. The following table presents the fair value of the Company’s derivative instruments on a gross basis at March 31, 2024 and December 31, 2023 (in thousands):


	March 31, 2024		December 31, 2023
Short-term derivative asset	$	228,579	$	233,226
Long-term derivative asset	45,617		47,566
Short-term derivative liability	(37,607)		(21,963)
Long-term derivative liability	(16,547)		(18,602)
Total commodity derivative position	$	220,042	$	240,227

Gains and Losses

The following table presents the gain and loss recognized in net gain (loss) on natural gas, oil and NGL derivatives in the accompanying consolidated statements of operations for the three months ended March 31, 2024 and 2023 (in thousands):


	Net gain (loss) on derivative instruments
	Three Months Ended March 31, 2024		Three Months Ended March 31, 2023
Natural gas derivatives - fair value (losses) gains	$	(11,479)	$	374,148
Natural gas derivatives - settlement gains (losses)	66,451		(173)
Total gains on natural gas derivatives	54,972		373,975

Oil and condensate derivatives - fair value (losses) gains	(2,460)		4,733
Oil and condensate derivatives - settlement gains (losses)	12		(443)
Total (losses) gains on oil and condensate derivatives	(2,448)		4,290

NGL derivatives - fair value losses	(6,247)		(1,186)
NGL derivatives - settlement (losses) gains	(1,141)		982
Total losses on NGL derivatives	(7,388)		(204)

Total gains on natural gas, oil and NGL derivatives	$	45,136	$	378,061

Offsetting of Derivative Assets and Liabilities

As noted above, the Company records the fair value of derivative instruments on a gross basis. The following tables present the gross amounts of recognized derivative assets and liabilities in the consolidated balance sheets and the amounts that are subject to offsetting under master netting arrangements with counterparties, all at fair value (in thousands):


	As of March 31, 2024
	Gross Assets (Liabilities) Presented in the Consolidated Balance Sheets		Gross Amounts Subject to Master Netting Agreements		Net Amount
Derivative assets	$	274,196	$	(48,216)	$	225,980
Derivative liabilities	$	(54,154)	$	48,216	$	(5,938)


	As of December 31, 2023
	Gross Assets (Liabilities) Presented in the Consolidated Balance Sheets		Gross Amounts Subject to Master Netting Agreements		Net Amount
Derivative assets	$	280,792	$	(30,866)	$	249,926
Derivative liabilities	$	(40,565)	$	30,866	$	(9,699)

Concentration of Credit Risk

By using derivative instruments that are not traded on an exchange, the Company is exposed to the credit risk of its counterparties. Credit risk is the risk of loss from counterparties not performing under the terms of the derivative instrument. When the fair value of a derivative instrument is positive, the counterparty is expected to owe the Company, which creates credit risk. To minimize the credit risk in derivative instruments, it is the Company’s policy to enter into derivative contracts only with counterparties that are creditworthy financial institutions deemed by management as competent and competitive market makers. The Company’s derivative contracts are spread between multiple counterparties to lessen its exposure to any individual counterparty. Additionally, the Company uses master netting agreements to minimize credit risk exposure. The creditworthiness of the Company’s counterparties is subject to periodic review. None of the Company’s derivative instrument contracts contain credit-risk related contingent features. Other than as provided by the Company’s revolving credit facility, the Company is not required to provide credit support or collateral to any of its counterparties under its derivative instruments, nor are the counterparties required to provide credit support to the Company.

11.FAIR VALUE MEASUREMENTS

The Company records certain financial and non-financial assets and liabilities on the balance sheet at fair value. Fair value is the price that would be received to sell an asset or paid to transfer a liability (exit price) in an orderly transaction between market participants at the measurement date. Market or observable inputs are the preferred sources of values, followed by assumptions based on hypothetical transactions in the absence of market inputs. Fair value measurements are classified and disclosed in one of the following categories:

Level 1 – Quoted prices (unadjusted) in active markets for identical assets and liabilities that the Company has the ability to access at the measurement date.

Level 2 – Quoted prices in active markets for similar assets and liabilities, quoted prices for identical or similar instruments in markets that are not active and model-derived valuations whose inputs are observable or whose significant value drivers are observable.

Level 3 – Significant inputs to the valuation model are unobservable.

Valuation techniques that maximize the use of observable inputs are favored. Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the placement of assets and liabilities within the levels of the fair value hierarchy. Reclassifications of fair value between Level 1, Level 2 and Level 3 of the fair value hierarchy, if applicable, are made at the end of each quarter.

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Financial assets and liabilities

The following tables summarize the Company’s financial and non-financial assets and liabilities by valuation level as of March 31, 2024 and December 31, 2023 (in thousands):


	March 31, 2024
	Level 1		Level 2		Level 3
Assets:
Derivative instruments	$	—	$	274,196	$	—
Contingent consideration arrangement	—		—		2,900
Total assets	$	—	$	274,196	$	2,900
Liabilities:
Derivative instruments	$	—	$	54,154	$	—


	December 31, 2023
	Level 1		Level 2		Level 3
Assets:
Derivative instruments	$	—	$	280,792	$	—
Contingent consideration arrangement	—		—		2,900
Total assets	$	—	$	280,792	$	2,900
Liabilities:
Derivative instruments	$	—	$	40,565	$	—

The Company estimates the fair value of all derivative instruments using industry-standard models that consider various assumptions, including current market and contractual prices for the underlying instruments, implied volatility, time value, nonperformance risk, as well as other relevant economic measures. Substantially all of these inputs are observable in the marketplace throughout the full term of the instrument and can be supported by observable data.

The Company's SCOOP water infrastructure sale, which closed in the first quarter of 2020, included a contingent consideration arrangement. As of March 31, 2024, the fair value of the contingent consideration was $2.9 million, of which $0.3 million is included in prepaid expenses and other assets and $2.6 million is included in other assets in the accompanying consolidated balance sheets. The fair value of the contingent consideration arrangement is calculated using discounted cash flow techniques and is based on internal estimates of the Company's future development program and water production levels. Given the unobservable nature of the inputs, the fair value measurement of the contingent consideration arrangement is deemed to use Level 3 inputs. The Company records changes in fair value in earnings. The Company did not recognize a gain or loss for the three months ended March 31, 2024, and recognized a $1.2 million loss for the three months ended March 31, 2023 with respect to this contingent consideration arrangement. These fair value changes are included in other expense (income) in the accompanying consolidated statements of operations.

Non-financial assets and liabilities

The initial measurement of asset retirement obligations at fair value is calculated using discounted cash flow techniques and based on internal estimates of future retirement costs associated with oil and gas properties. Given the unobservable nature of the inputs, including plugging costs and reserve lives, the initial measurement of the asset retirement obligation liability is deemed to use Level 3 inputs. See Note 2 for further discussion of the Company’s asset retirement obligations.

Fair value of other financial instruments

The carrying amounts on the accompanying consolidated balance sheet for cash and cash equivalents, accounts receivable, and accounts payable and accrued liabilities are carried at cost, which approximates market value due to their short-term nature. Long-term debt related to the Company's Credit Facility is carried at cost, which approximates market value based on the borrowing rates currently available to the Company with similar terms and maturities.

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12.REVENUE FROM CONTRACTS WITH CUSTOMERS

Revenue Recognition

The Company’s revenues are primarily derived from the sale of natural gas, oil, condensate and NGL. These sales are recognized in the period that the performance obligations are satisfied. The Company generally considers the delivery of each unit (MMBtu or Bbl) to be separately identifiable and represents a distinct performance obligation that is satisfied at the time control of the product is transferred to the customer. Revenue is measured based on consideration specified in the contract with the customer, and excludes any amounts collected on behalf of third parties. These contracts typically include variable consideration that is based on pricing tied to market indices and volumes delivered in the current month. As such, this market pricing may be constrained (i.e., not estimable) at the inception of the contract but will be recognized based on the applicable market pricing, which will be known upon transfer of the goods to the customer. The payment date is usually within 30 days of the end of the calendar month in which the commodity is delivered.

Gathering, processing and compression fees attributable to gas processing, as well as any transportation fees, including firm transportation fees, incurred to deliver the product to the purchaser, are presented as transportation, gathering, processing and compression expense in the accompanying consolidated statements of operations.

Transaction Price Allocated to Remaining Performance Obligations

A significant number of the Company's product sales are short-term in nature generally through evergreen contracts with contract terms of one year or less. These contracts typically automatically renew under the same provisions. For those contracts, the Company has utilized the practical expedient allowed in the revenue accounting standard that exempts the Company from disclosure of the transaction price allocated to remaining performance obligations if the performance obligation is part of a contract that has an original expected duration of one year or less.

For product sales that have a contract term greater than one year, the Company has utilized the practical expedient that exempts the Company from disclosure of the transaction price allocated to remaining performance obligations if the variable consideration is allocated entirely to a wholly unsatisfied performance obligation. Under these sales contracts, each unit of product generally represents a separate performance obligation; therefore, future volumes are wholly unsatisfied, and disclosure of the transaction price allocated to remaining performance obligations is not required. Currently, the Company's product sales that have a contractual term greater than one year have no long-term fixed consideration.

Contract Balances

Receivables from contracts with customers are recorded when the right to consideration becomes unconditional, generally when control of the product has been transferred to the customer. Receivables from contracts with customers were $85.0 million and $122.5 million as of March 31, 2024 and December 31, 2023, respectively, and are reported in accounts receivable - oil and natural gas sales, and natural gas liquids sales in the accompanying consolidated balance sheets. The Company currently has no assets or liabilities related to its revenue contracts, including no upfront or rights to deficiency payments.

Prior-Period Performance Obligations

The Company records revenue in the month production is delivered to the purchaser. However, settlement statements for certain sales may be received for 30 to 90 days after the date production is delivered, and as a result, the Company is required to estimate the amount of production that was delivered to the purchaser and the price that will be received for the sale of the product. The differences between the estimates and the actual amounts for product sales is recorded in the month that payment is received from the purchaser. For each of the periods presented, revenue recognized in the reporting periods related to performance obligations satisfied in prior reporting periods was not material.

13.LEASES

Nature of Leases

The Company has operating leases on certain equipment with remaining lease durations in excess of one year. The Company recognizes a right-of-use asset and lease liability on the balance sheet for all leases with lease terms of greater than one year. Short-term leases that have an initial term of one year or less are not capitalized.

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The Company has entered into contracts for drilling rigs with varying terms with third parties to ensure operational continuity, cost control and rig availability in its operations. The Company has concluded its drilling rig contracts are operating leases as the assets are identifiable and the Company has the right to control the identified assets. At March 31, 2024, the Company had one active long-term drilling rig contract.

The Company rents office space for its corporate headquarters, field locations and certain other equipment from third parties, which expire at various dates through 2026. These agreements are typically structured with non-cancelable terms of one year to five years. The Company has determined these agreements represent operating leases with a lease term that equals the primary non-cancelable contract term. The Company has included any renewal options that it has determined are reasonably certain of exercise in the determination of the lease terms.

Discount Rate

As most of the Company's leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The Company's incremental borrowing rate reflects the estimated rate of interest that it would pay to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment.

Future amounts due under operating lease liabilities as of March 31, 2024 were as follows (in thousands):


Remaining 2024	$	10,036
2025	836
2026	561
2027	10
2028	—
Total lease payments	$	11,443
Less: imputed interest	(344)
Total	$	11,099

Lease costs incurred for the three months ended March 31, 2024 and 2023, consisted of the following (in thousands):


	Three Months Ended March 31, 2024		Three Months Ended March 31, 2023
Operating lease cost	$	3,403	$	3,443
Variable lease cost	—		—
Short-term lease cost	9,951		9,248
Total lease cost(1)	$	13,354	$	12,691

_____________________

(1) The majority of the Company's total lease cost was capitalized to the full cost pool, and the remainder was included in either lease operating expenses or general and administrative expenses in the accompanying consolidated statements of operations.

Supplemental cash flow information related to leases was as follows (in thousands):


	Three Months Ended March 31, 2024		Three Months Ended March 31, 2023
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases	$	4,982	$	2,038

The weighted-average remaining lease term as of March 31, 2024 was 1.03 years. The weighted-average discount rate used to determine the operating lease liability as of March 31, 2024 was 6.68%.

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14.INCOME TAXES

The Company records its quarterly tax provision based on an estimate of the annual effective tax rate expected to apply to continuing operations for the various jurisdictions in which it operates. The tax effects of certain items, such as tax rate changes, significant unusual or infrequent items, and certain changes in the assessment of the realizability of deferred taxes, are recognized as discrete items in the period in which they occur and are excluded from the estimated annual effective tax rate.

The Company's effective income tax rate was 22.4% and 0% for the three months ended March 31, 2024 and 2023 respectively. The higher effective tax rate for the three months ended March 31, 2024 is primarily related to the valuation allowance the Company had in place at March 31, 2023.

At each reporting period, the Company weighs all available positive and negative evidence to determine whether its deferred tax assets are more likely than not to be realized. A valuation allowance for deferred tax assets, including net operating losses, is recognized when it is more likely than not that some or all of the benefit from the deferred tax assets will not be realized. To assess that likelihood, the Company uses estimates and judgment regarding future taxable income and considers the tax laws in the jurisdiction where such taxable income is generated, to determine whether a valuation allowance is required. Such evidence can include current financial position, results of operations, both actual and forecasted, the reversal of deferred tax liabilities and tax planning strategies as well as the current and forecasted business economics of the oil and gas industry. Based upon the Company’s analysis, the Company currently believes that it is more likely than not that a portion of the Company's federal and state deferred tax assets will be utilized. The Company has an $85.8 million valuation allowance associated with its federal and state deferred tax assets.

The Company will continue to evaluate both the positive and negative evidence on a quarterly basis in determining the need for a valuation allowance with respect to the deferred assets. Changes in positive and negative evidence, including differences between estimated and actual results, could result in changes in the valuation of the deferred tax assets that could have a material impact on the consolidated financial statements. Changes in existing tax laws could also affect actual tax results and the realization of deferred tax assets over time.

15.RELATED PARTY TRANSACTIONS

Share Repurchase Program

On March 19, 2024, the Company purchased 97,219 shares of its common stock from Silver Point Capital, L.P. for approximately $15.0 million. The repurchase is part of the Company's existing share Repurchase Program. Upon closing of the transaction on March 19, 2024, the repurchased common stock was cancelled.

16.SUBSEQUENT EVENTS

Credit Facility Redetermination

On April 18, 2024, the Company completed its semi-annual borrowing base redetermination during which the borrowing base was reaffirmed at $1.1 billion with elected commitments remaining at $900 million.

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ITEM 2.MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Introduction

Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A) is intended to provide the reader of the financial statements with a narrative from the perspective of management on the financial condition, results of operations, liquidity and certain other factors that may affect the Company's operating results. MD&A should be read in conjunction with the financial statements and related Notes included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

The following information updates the discussion of Gulfport’s financial condition provided in its Annual Report on Form 10-K for the year ended December 31, 2023 (“2023 Form 10-K”), and analyzes the changes in the results of operations between the periods of January 1, 2024 through March 31, 2024 and January 1, 2023 through March 31, 2023. For definitions of commonly used natural gas and oil terms found in this Quarterly Report on Form 10-Q, please refer to the “Definitions” provided in this report.

Overview

Gulfport is an independent natural gas-weighted exploration and production company with assets primarily located in the Appalachia and Anadarko basins. Our principal properties are located in eastern Ohio targeting the Utica and Marcellus and in central Oklahoma targeting the SCOOP Woodford and Springer formations. Our strategy is to develop our assets in a safe, environmentally responsible manner, while generating sustainable cash flow, improving margins and operating efficiencies and returning capital to shareholders. To accomplish these goals, we allocate capital to projects we believe offer the highest rate of return and we deploy leading drilling and completion techniques and technologies in our development efforts.

Recent Developments

Credit Facility

On April 18, 2024, Gulfport completed its semi-annual borrowing base redetermination under its Credit Facility during which the borrowing base was reaffirmed at $1.1 billion with elected commitments remaining at $900 million.

Share Repurchase Program

During the three months ended March 31, 2024, the Company repurchased 210,075 shares for $29.5 million at a weighted average price of $140.39 per share. As of March 31, 2024, the Company repurchased 4.6 million shares for $429.1 million at a weighted average price of $93.77 per share since the inception of the Repurchase Program.

Impact of the War in Ukraine and the conflict in the Middle East

The invasion of Ukraine by Russia and the sanctions imposed in response to the crisis have increased volatility in the global financial markets and are expected to have further global economic consequences, including disruptions of the global energy markets and the amplification of inflation and supply chain constraints. Other armed conflicts, including the ongoing conflict in the Middle East, may result in further disruptions in the global economic environment. The ultimate impact of the war in Ukraine and the conflict in the Middle East will depend on future developments and the timing and extent to which normal economic and operating conditions resume.

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2024 Operational and Financial Highlights

During the first quarter of 2024, we had the following notable achievements:

•Reported total net production of 1,053.7 MMcfe per day.

•Turned to sales five gross (4.98 net) operated wells.

•Generated $188.0 million of operating cash flows.

•Reduced outstanding Credit Facility borrowings by $31.0 million as compared to December 31, 2023.

•Repurchased 210,075 shares for $29.5 million at a weighted average price of $140.39 per share.

•Exited the quarter with total liquidity of $757.4 million.

2024 Production and Drilling Activity

Production Volumes


	Three Months Ended March 31, 2024	Three Months Ended March 31, 2023
Natural gas (Mcf/day)
Utica & Marcellus	811,357	718,815
SCOOP	162,207	225,592
Total	973,564	944,408
Oil and condensate (Bbl/day)
Utica & Marcellus	1,348	590
SCOOP	1,980	4,139
Total	3,329	4,729
NGL (Bbl/day)
Utica & Marcellus	1,981	2,690
SCOOP	8,050	11,406
Total	10,031	14,096
Combined (Mcfe/day)
Utica & Marcellus	831,333	738,498
SCOOP	222,389	318,861
Total	1,053,722	1,057,359
Totals may not sum or recalculate due to rounding.

Our total net production averaged approximately 1,053.7 MMcfe per day during the three months ended March 31, 2024, as compared to 1,057.4 MMcfe per day during the three months ended March 31, 2023. Production per day remained consistent largely as a result of our 2023 and 2024 development programs.

Utica/Marcellus. We spud five gross (4.66 net) wells targeting the Utica formation during the three months ended March 31, 2024. In addition, we commenced sales on five gross (4.98 net) operated Utica wells.

As of April 25, 2024, we had one operated drilling rig running in Ohio drilling the Utica formation.

SCOOP. We did not spud or commence sales on any operated wells in the SCOOP during the three months ended March 31, 2024.

As of April 25, 2024, we had one operated drilling rig running in the SCOOP.

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RESULTS OF OPERATIONS

Comparison of the Three Month Periods Ended March 31, 2024 and 2023

Natural Gas, Oil and Condensate and NGL Production and Pricing (sales totals in thousands)

The following table summarizes our natural gas, oil and condensate and NGL production, and related pricing for the three months ended March 31, 2024 as compared to the three months ended March 31, 2023. Some totals below may not sum or recalculate due to rounding.


	Three Months Ended March 31, 2024		Three Months Ended March 31, 2023
Natural gas sales
Natural gas production volumes (MMcf)	88,594		84,997
Natural gas production volumes (MMcf) per day	974		944
Total sales	$	188,286	$	282,534
Average price without the impact of derivatives ($/Mcf)	$	2.13	$	3.32
Impact from settled derivatives ($/Mcf)	$	0.75	$	—
Average price, including settled derivatives ($/Mcf)	$	2.88	$	3.32

Oil and condensate sales
Oil and condensate production volumes (MBbl)	303		426
Oil and condensate production volumes (MBbl) per day	3		5
Total sales	$	21,701	$	30,714
Average price without the impact of derivatives ($/Bbl)	$	71.64	$	72.16
Impact from settled derivatives ($/Bbl)	$	0.04	$	(1.04)
Average price, including settled derivatives ($/Bbl)	$	71.68	$	71.12

NGL sales
NGL production volumes (MBbl)	913		1,269
NGL production volumes (MBbl) per day	10		14
Total sales	$	28,106	$	39,912
Average price without the impact of derivatives ($/Bbl)	$	30.79	$	31.46
Impact from settled derivatives ($/Bbl)	$	(1.25)	$	0.77
Average price, including settled derivatives ($/Bbl)	$	29.54	$	32.23

Natural gas, oil and condensate and NGL sales
Natural gas equivalents (MMcfe)	95,889		95,162
Natural gas equivalents (MMcfe) per day	1,054		1,057
Total sales	$	238,093	$	353,160
Average price without the impact of derivatives ($/Mcfe)	$	2.48	$	3.71
Impact from settled derivatives ($/Mcfe)	$	0.68	$	—
Average price, including settled derivatives ($/Mcfe)	$	3.16	$	3.71

Production Costs:
Average lease operating expenses ($/Mcfe)	$	0.18	$	0.21
Average taxes other than income ($/Mcfe)	$	0.09	$	0.11
Average transportation, gathering, processing and compression ($/Mcfe)	$	0.90	$	0.92
Total lease operating expenses, taxes other than income and midstream costs ($/Mcfe)	$	1.16	$	1.24

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Natural Gas, Oil and Condensate and NGL Sales (in thousands)


	Three Months Ended March 31, 2024		Three Months Ended March 31, 2023		% Change
Natural gas	$	188,286	$	282,534	(33)	%
Oil and condensate	21,701		30,714		(29)	%
NGL	28,106		39,912		(30)	%
Natural gas, oil and condensate and NGL sales	$	238,093	$	353,160	(33)	%

The decrease in natural gas sales without the impact of derivatives when comparing the three months ended March 31, 2024, to the three months ended March 31, 2023 was due to a 36% decrease in realized prices, partially offset by a 4% increase in sales volumes. The realized price change was primarily driven by the decrease in the average Henry Hub gas index from $3.42 per Mcf in the three months ended March 31, 2023, to $2.24 per Mcf during the three months ended March 31, 2024. The 4% increase in natural gas production was primarily due to our 2023 and 2024 development programs in the Utica/Marcellus partially offset by natural declines and limited activity in the SCOOP.

The decrease in oil and condensate sales without the impact of derivatives when comparing the three months ended March 31, 2024, to the three months ended March 31, 2023, was due to a 29% decrease in sales volumes, partially offset by a 1% decrease in realized prices. The 29% decrease in oil and condensate production was primarily due to natural declines and limited 2023 development activity in the SCOOP.

The decrease in NGL sales without the impact of derivatives when comparing the three months ended March 31, 2024, to the three months ended March 31, 2023, was due to a 2% decrease in realized prices and a 28% decrease in NGL sales volumes. The realized price change was driven by the decrease in the average Mont Belvieu NGL index from $35.24 per barrel in the three months ended March 31, 2023, to $34.67 per barrel during the three months ended March 31, 2024. The 28% decrease in NGL production was primarily due to natural declines and limited 2023 development activity in the SCOOP.

Natural Gas, Oil and NGL Derivatives (in thousands)


	Three Months Ended March 31, 2024		Three Months Ended March 31, 2023
Natural gas derivatives - fair value (losses) gains	$	(11,479)	$	374,148
Natural gas derivatives - settlement gains (losses)	66,451		(173)
Total gains on natural gas derivatives	54,972		373,975

Oil and condensate derivatives - fair value (losses) gains	(2,460)		4,733
Oil and condensate derivatives - settlement gains (losses)	12		(443)
Total (losses) gains on oil and condensate derivatives	(2,448)		4,290

NGL derivatives - fair value losses	(6,247)		(1,186)
NGL derivatives - settlement (losses) gains	(1,141)		982
Total losses on NGL derivatives	(7,388)		(204)

Total gains on natural gas, oil and NGL derivatives	$	45,136	$	378,061

We recognize fair value changes on our natural gas, oil and NGL derivative instruments in each reporting period. The changes in fair value resulted from new positions and settlements that occurred during each period, as well as the relationship between contract prices and the associated forward curves. The significant change in the total gain (loss) for the three months ended March 31, 2024 compared to the three months ended March 31, 2023, was primarily the result of changes in futures pricing for oil, natural gas, and NGLs during each period. See Note 10 of our consolidated financial statements for hedged volumes and pricing.

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Lease Operating Expenses (in thousands, except per unit)


	Three Months Ended March 31, 2024		Three Months Ended March 31, 2023		% Change
Lease operating expenses
Utica & Marcellus	$	10,764	$	12,635	(15)	%
SCOOP	6,044		7,227		(16)	%
Total lease operating expenses	$	16,808	$	19,862	(15)	%

Lease operating expenses per Mcfe
Utica & Marcellus	$	0.14	$	0.19	(25)	%
SCOOP	0.30		0.25		19	%
Total lease operating expenses per Mcfe	$	0.18	$	0.21	(16)	%

The decrease in our total and per unit LOE for the three months ended March 31, 2024 compared to the three months ended March 31, 2023, was primarily the result of a decrease in water hauling, surface rental and labor expenses throughout our SCOOP operations and non-operated expenses in Utica/Marcellus.

Taxes Other Than Income (in thousands, except per unit)


	Three Months Ended March 31, 2024		Three Months Ended March 31, 2023		% Change
Production taxes	$	5,047	$	8,052	(37)	%
Property taxes	2,609		1,845		41	%
Other	604		798		(24)	%
Total taxes other than income	$	8,260	$	10,695	(23)	%
Total taxes other than income per Mcfe	$	0.09	$	0.11	(23)	%

The decrease in total and per unit taxes other than income for the three months ended March 31, 2024 compared to the three months ended March 31, 2023, was primarily related to a decrease in production taxes resulting from the decrease in our natural gas, oil and NGL revenues excluding the impact of hedges discussed above.

Transportation, Gathering, Processing and Compression (in thousands, except per unit)


	Three Months Ended March 31, 2024		Three Months Ended March 31, 2023		% Change
Transportation, gathering, processing and compression	$	86,619	$	87,617	(1)	%
Transportation, gathering, processing and compression per Mcfe	$	0.90	$	0.92	(2)	%

Transportation, gathering, processing and compression for the three months ended March 31, 2024 compared to the three months ended March 31, 2023, decreased on a per unit basis primarily as a result of lower minimum volume commitments.

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Depreciation, Depletion and Amortization (in thousands, except per unit)


	Three Months Ended March 31, 2024		Three Months Ended March 31, 2023		% Change
Depreciation, depletion and amortization of oil and gas properties	$	79,681	$	78,768	1	%
Depreciation, depletion and amortization of other property and equipment	342		326		5	%
Total depreciation, depletion and amortization	$	80,023	$	79,094	1	%
Depreciation, depletion and amortization per Mcfe	$	0.83	$	0.83	—	%

The total and per unit depreciation, depletion and amortization of our oil and gas properties for the three months ended March 31, 2024 compared to the three months ended March 31, 2023, remained consistent primarily due to our drilling and development activities during 2023 and 2024.

General and Administrative Expenses (in thousands, except per unit)


	Three Months Ended March 31, 2024		Three Months Ended March 31, 2023		% Change
General and administrative expenses, gross	$	18,442	$	17,075	8	%
Reimbursed from third parties	(3,538)		(3,219)		10	%
Capitalized general and administrative expenses	(5,706)		(5,123)		11	%
General and administrative expenses, net	$	9,198	$	8,733	5	%
General and administrative expenses, net per Mcfe	$	0.10	$	0.09	5	%

The increase in general and administrative expenses for the three months ended March 31, 2024 compared to March 31, 2023, was primarily driven by increases in employee headcount and compensation.

Restructuring costs

Interest Expense (in thousands, except per unit)


	Three Months Ended March 31, 2024		Three Months Ended March 31, 2023		% Change
Interest on 2026 Senior Notes	$	11,000	$	11,000	—	%
Interest expense on Credit Facility	3,721		3,025		23	%
Amortization of loan costs	945		528		79	%
Capitalized interest	(1,131)		(824)		37	%
Other	468		27		1628	%
Total interest expense	$	15,003	$	13,756	9	%
Interest expense per Mcfe	$	0.16	$	0.14	8	%

Interest expense on our Credit Facility increased 23% for the three months ended March 31, 2024 compared to the three months ended March 31, 2023, as a result of a higher average balance outstanding and increased interest rates resulting from the current inflationary environment. Amortization of loan costs increased by 79% for the three months ended March 31, 2024 compared to the three months ended March 31, 2023, as a result of the Third Amendment to the Credit Facility which increased the elected commitments and borrowing base. See Note 3 of our consolidated financial statements for further details of our Credit Facility. The Company also capitalized $1.1 million in interest expense for the three months ended March 31, 2024 compared to $0.8 million for the three months ended March 31, 2023.

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Other, net (in thousands)


	Three Months Ended March 31, 2024		Three Months Ended March 31, 2023		% Change
Other, net	$	(125)	$	(14,223)	(99)	%

Income Taxes

We recorded income tax expense of $14.9 million for the three months ended March 31, 2024. We did not record any income tax expense for the three months ended March 31, 2023, as a result of maintaining a full valuation allowance against our net deferred tax asset. See Note 14 of our consolidated financial statements for further discussion of our income tax benefit.

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Liquidity and Capital Resources

Overview. We strive to maintain sufficient liquidity to ensure financial flexibility, withstand commodity price volatility, fund our development projects, operations and capital expenditures and return capital to shareholders. We utilize derivative contracts to reduce the financial impact of commodity price volatility and provide a level of certainty to the Company's cash flows. We generally fund our operations, planned capital expenditures and any share repurchases with cash flow from our operating activities, cash on hand, and borrowings under our Credit Facility. Additionally, we may access debt and equity markets and sell properties to enhance our liquidity. There is no guarantee that the debt or equity capital markets will be available to us on acceptable terms or at all.

For the three months ended March 31, 2024, our primary sources of capital resources and liquidity have consisted of internally generated cash flows from operations, and our primary uses of cash have been for development of our oil and natural gas properties, share repurchases and payments on our preferred stock.

We believe our annual free cash flow generation, borrowing capacity under the Credit Facility and cash on hand will provide sufficient liquidity to fund our operations, capital expenditures, interest expense and share repurchases during the next 12 months and the foreseeable future.

To the extent actual operating results, realized commodity prices or uses of cash differ from our assumptions, our liquidity could be adversely affected. See Note 3 of our consolidated financial statements for further discussion of our debt obligations, including the principal and carrying amounts of our senior notes.

As of March 31, 2024, we had $8.2 million of cash and cash equivalents, $87.0 million outstanding borrowings under our Credit Facility, $63.8 million of letters of credit outstanding, and $550 million of outstanding 2026 Senior Notes. Our total principal amount of funded debt as of March 31, 2024 was $637.0 million.

As of April 25, 2024 we had $3.6 million of cash and cash equivalents, $43.0 million in borrowings under our Credit Facility, $63.8 million of letters of credit outstanding, and $550 million of outstanding 2026 Senior Notes.

Debt. In May 2021, we issued our 2026 Senior Notes. The 2026 Senior Notes are guaranteed on a senior unsecured basis by each of the Company's subsidiaries that guarantee the Credit Facility.

Additionally, on May 1, 2023, the Company entered into that certain Joinder, Commitment Increase and Borrowing Base Redetermination Agreement, and Third Amendment to Credit Agreement (the “Third Amendment”) which amended the Company’s Existing Credit Facility (as amended, the “Credit Facility”). The Third Amendment, among other things, (a) increased the aggregate elected commitment amounts under the Credit Facility from $700 million to $900 million, (b) increased the borrowing base under the Credit Facility from $1 billion to $1.1 billion, (c) increased the excess cash threshold under the Credit Facility from $45 million to $75 million, and (d) extended the maturity date under the Credit Facility from October 14, 2025 to the earlier of (i) May 1, 2027 and (ii) the 91st day prior to the maturity date of the 2026 Senior Notes or any other permitted senior notes or any permitted refinancing debt under the Credit Facility having an aggregate outstanding principal amount equal to or exceeding $100 million; provided that such notes have not been refinanced, redeemed or repaid in full on or prior to such 91st day. On October 27, 2023, Gulfport completed its semi-annual borrowing base redetermination under its Credit Facility during which the borrowing base was reaffirmed at $1.1 billion with elected commitments remaining at $900 million.

See Note 3 of our consolidated financial statements for additional discussion of our outstanding debt.

Dividends on Preferred Stock. As discussed in Note 4 of our consolidated financial statements, holders of preferred stock are entitled to receive cumulative quarterly dividends at a rate of 10% per annum of the Liquidation Preference with respect to cash dividends and 15% per annum of the Liquidation Preference with respect to dividends paid in kind as additional shares of preferred stock (“PIK Dividends”). We currently have the option to pay either cash dividends or PIK Dividends on a quarterly basis.

During the three months ended March 31, 2024, the Company paid $1.1 million of cash dividends to holders of our preferred stock compared to $1.3 million during the three months ended March 31, 2023.

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Supplemental Guarantor Financial Information. The 2026 Senior Notes are guaranteed on a senior unsecured basis by all existing consolidated subsidiaries that guarantee our Credit Facility or certain other debt (the “Guarantors”). The 2026 Senior Notes are not guaranteed by Grizzly Holdings or Mule Sky, LLC (the “Non-Guarantors”). The Guarantors are 100% owned by the Parent, and the guarantees are full, unconditional, joint and several. There are no significant restrictions on the ability of the Parent or the Guarantors to obtain funds from each other in the form of a dividend or loan. The guarantees rank equally in the right of payment with all of the senior indebtedness of the subsidiary guarantors and senior in the right of payment to any future subordinated indebtedness of the subsidiary guarantors. The 2026 Senior Notes and the guarantees are effectively subordinated to all of our and the subsidiary guarantors' secured indebtedness (including all borrowings and other obligations under our amended and restated credit agreement) to the extent of the value of the collateral securing such indebtedness, and structurally subordinated to all indebtedness and other liabilities of any of our subsidiaries that do not guarantee the 2026 Senior Notes.

SEC Regulation S-X Rule 13-01 requires the presentation of "Summarized Financial Information" to replace the "Condensed Consolidating Financial Information" required under Rule 3-10. Rule 13-01 allows the omission of Summarized Financial Information if assets, liabilities and results of operations of the Guarantors are not materially different than the corresponding amounts presented in our consolidated financial statements. The Parent and Guarantor subsidiaries comprise our material operations. Therefore, we concluded that the presentation of the Summarized Financial Information is not required as our Summarized Financial Information of the Guarantors is not materially different from our consolidated financial statements.

Derivatives and Hedging Activities. Our results of operations and cash flows are impacted by changes in market prices for natural gas, oil and NGL. To mitigate a portion of the exposure to adverse market changes, we have entered into various derivative instruments. Our natural gas, oil and NGL derivative activities, when combined with our sales of natural gas, oil and NGL, allow us to predict with greater certainty the total revenue we will receive. See Item 3 Quantitative and Qualitative Disclosures About Market Risk for further discussion on the impact of commodity price risk on our financial position. Additionally, see Note 10 of our consolidated financial statements for further discussion of derivatives and hedging activities.

Capital Expenditures. Our capital expenditures have historically been related to the execution of our drilling and completion activities in addition to certain lease acquisition activities. Our capital investment strategy is focused on prudently developing our existing properties to generate sustainable cash flow considering current and forecasted commodity prices. For the three months ended March 31, 2024, the Company's incurred capital expenditures totaled $124.4 million, of which $106.4 million related to drilling and completion activities, $18.0 million related to maintenance leasehold and land investment.

Our drilling and completion capital expenditures for 2024 are currently estimated to be in the range of $330 million to $360 million. Also, we currently expect to spend approximately $50 million to $60 million in 2024 for maintenance leasehold and land investment, which is focused on near-term drilling programs and facilitating increases in our working interests and lateral footage in units we plan to drill in 2024, 2025 and 2026. We expect this capital program to result in approximately 1,045 to 1,080 MMcfe per day of production in 2024.

Sources and Uses of Cash

The following table presents the major changes in cash and cash equivalents for the three months ended March 31, 2024 and 2023 (in thousands):


	Three Months Ended March 31, 2024		Three Months Ended March 31, 2023
Net cash provided by operating activities	$	188,022	$	304,055
Additions to oil and natural gas properties	(118,146)		(130,400)
Debt activity, net	(31,000)		(145,000)
Repurchases of common stock	(29,493)		(32,672)
Dividends on preferred stock	(1,105)		(1,307)
Other	(1,998)		1,525
Net change in cash and cash equivalents	$	6,280	$	(3,799)
Cash and cash equivalents at end of period	$	8,209	$	3,460

Net cash provided by operating activities. Net cash flow provided by operating activities was $188.0 million for the three months ended March 31, 2024, as compared to $304.1 million for the three months ended March 31, 2023. The decrease was primarily the result of decreases in natural gas revenues.

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Additions to oil and natural gas properties. During the three months ended March 31, 2024, we spud five gross (4.66 net) operated wells and commenced sales from five gross (4.98 net) operated wells targeting the Utica formation for a total incurred cost of approximately $94.1 million. During the three months ended March 31, 2024, we did not spud or commence sales on any operated wells in the SCOOP and had one operated drilling rig running for a total incurred cost of approximately $9.6 million.

Drilling and completion costs discussed above reflect incurred costs while drilling and completion costs presented in the table below reflect cash payments for drilling and completions. Incurred capital expenditures and cash capital expenditures may vary from period to period due to the cash payment cycle. Cash capital expenditures for the three months ended March 31, 2024 and 2023, were as follows (in thousands):


	Three Months Ended March 31, 2024		Three Months Ended March 31, 2023
Oil and Natural Gas Property Cash Expenditures:
Drilling and completion costs	$	93,685	$	105,181
Leasehold acquisitions	18,360		20,131
Other	6,101		5,088
Total oil and natural gas property expenditures	$	118,146	$	130,400

Debt activity, net. In the three months ended March 31, 2024, the Company had $272.0 million and $303.0 million in borrowings and repayments, respectively, on its Credit Facility. As of April 25, 2024 the Company had $43.0 million in borrowings outstanding on its Credit Facility.

Repurchases of common stock. During the three months ended March 31, 2024, the Company repurchased 210,075 shares for approximately $29.5 million under the Repurchase Program at a weighted average price of $140.39 per share. For the same period in 2023, the Company repurchased 459,087 shares for $32.9 million at a weighted average price of $71.61 per share. As of April 25, 2024, we repurchased 4,576,515 shares for approximately $429.1 million under the Repurchase Program at a weighted average price of $93.77 per share.

Dividends on preferred stock. During the three months ended March 31, 2024, the Company paid $1.1 million of cash dividends to holders of our preferred stock compared to $1.3 million in the three months ended March 31, 2023.

Contractual and Commercial Obligations

We have various contractual obligations in the normal course of our operations and financing activities, as discussed in Note 9 of our consolidated financial statements. There have been no other material changes to our contractual obligations from those disclosed in our Annual Report on Form 10-K for the year ended December 31, 2023.

Off-balance Sheet Arrangements

We may enter into off-balance sheet arrangements and transactions that can give rise to material off-balance sheet obligations. As of March 31, 2024, our material off-balance sheet arrangements and transactions include $63.8 million in letters of credit outstanding against our Credit Facility and $43.6 million in surety bonds issued. Both the letters of credit and surety bonds are being used as financial assurance, primarily on certain firm transportation agreements. Additionally, the Company entered into various contractual commitments to purchase inventory and other material to be used in future activities. The Company's commitment to purchase these materials spans 2024, with approximately $19.3 million remaining. There are no other transactions, arrangements or other relationships with unconsolidated entities or other persons that are reasonably likely to materially affect our liquidity or availability of our capital resources. See Note 9 of our consolidated financial statements for further discussion of the various financial guarantees we have issued.

Critical Accounting Policies and Estimates

As of March 31, 2024, there have been no significant changes in our critical accounting policies from those disclosed in our 2023 Annual Report on Form 10-K.

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ITEM 3.			QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Natural Gas, Oil and Natural Gas Liquids Derivative Instruments. Our results of operations and cash flows are impacted by changes in market prices for natural gas, oil and NGL. To mitigate a portion of our exposure to adverse price changes, we have entered into various derivative instruments. Our natural gas, oil and NGL derivative activities, when combined with our sales of natural gas, oil and NGL, allow us to predict with greater certainty the revenue we will receive. We believe our derivative instruments continue to be highly effective in achieving our risk management objectives.

Our general strategy for protecting short-term cash flow and attempting to mitigate exposure to adverse natural gas, oil and NGL price changes is to hedge into strengthening natural gas, oil and NGL futures markets when prices reach levels that management believes provide reasonable rates of return on our invested capital. Information we consider in forming an opinion about future prices includes general economic conditions, industrial output levels and expectations, producer breakeven cost structures, liquefied natural gas trends, oil and natural gas storage inventory levels, industry decline rates for base production and weather trends. Executive management is involved in all risk management activities and the board of directors reviews our derivative program at its quarterly board meetings.

We use derivative instruments to achieve our risk management objectives, including swaps, options and costless collars. All of these are described in more detail below. We typically use swaps for a large portion of the oil and natural gas price risk we hedge. We have also sold calls in the past to take advantage of premiums associated with market price volatility.

We determine the notional volume potentially subject to derivative contracts by reviewing our overall estimated future production levels, which are derived from extensive examination of existing producing reserve estimates and estimates of estimated production from new drilling. Production forecasts are updated at least monthly and adjusted if necessary to actual results and activity levels. We do not enter into derivative contracts for volumes in excess of our share of forecasted production, and if production estimates were lowered for future periods and derivative instruments are already executed for some volume above the new production forecasts, the positions are typically reversed. The actual fixed prices on our derivative instruments is derived from the reference prices from third-party indices such as NYMEX. All of our commodity derivative instruments are net settled based on the difference between the fixed price as stated in the contract and the floating-price, resulting in a net amount due to or from the counterparty.

We review our derivative positions continuously and if future market conditions change and prices are at levels we believe could jeopardize the effectiveness of a position, we will mitigate this risk by either negotiating a cash settlement with our counterparty, restructuring the position or entering a new trade that effectively reverses the current position. The factors we consider in closing or restructuring a position before the settlement date are identical to those we review when deciding to enter the original derivative position.

We have determined the fair value of our derivative instruments utilizing established index prices, volatility curves, discount factors and option pricing models. These estimates are compared to counterparty valuations for reasonableness. Derivative transactions are also subject to the risk that counterparties will be unable to meet their obligations. This non-performance risk is considered in the valuation of our derivative instruments, but to date has not had a material impact on the values of our derivatives. The values we report in our financial statements are as of a point in time and subsequently change as these estimates are revised to reflect actual results, changes in market conditions and other factors. See Note 11 of our consolidated financial statements for further discussion of the fair value measurements associated with our derivatives.

As of March 31, 2024, our natural gas, oil and NGL derivative instruments consisted of the following types of instruments:

•Swaps: We receive a fixed price and pay a floating market price to the counterparty for the hedged commodity. In exchange for higher fixed prices on certain of our swap trades, we may sell call options.

•Basis Swaps: These instruments are arrangements that guarantee a fixed price differential to NYMEX from a specified delivery point. We receive the fixed price differential and pay the floating market price differential to the counterparty for the hedged commodity.

•Costless Collars: Each two-way collar has a set floor and ceiling price for the hedged production. If the applicable monthly price indices are outside of the ranges set by the floor and ceiling prices in the various collars, the Company will cash-settle the difference with the counterparty.

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•Call Options: We sell, and occasionally buy, call options in exchange for a premium. At the time of settlement, if the market price exceeds the fixed price of the call option, we pay the counterparty the excess on sold call options, and we would receive the excess on bought call options. If the market price settles below the fixed price of the call option, no payment is due from either party.

Our hedge arrangements may expose us to risk of financial loss in certain circumstances, including instances where production is less than expected or commodity prices increase. At March 31, 2024, we had a net asset derivative position of $220.0 million as compared to a net asset derivative position of $240.2 million as of December 31, 2023. Utilizing actual derivative contractual volumes, a 10% increase in underlying commodity prices would have decreased our asset by approximately $82.7 million, while a 10% decrease in underlying commodity prices would have increased our asset by approximately $81.1 million. However, any realized derivative gain or loss would be substantially offset by a decrease or increase, respectively, in the actual sales value of production covered by the derivative instrument.

Interest Rate Risk. Our Credit Facility is structured under floating rate terms, as advances under these facilities may be in the form of either base rate loans or term benchmark loans. As such, our interest expense is sensitive to fluctuations in the prime rates in the United States, or, if the term benchmark rates are elected, the term benchmark rates. At March 31, 2024, we had $87.0 million outstanding borrowings under our Credit Facility which bore interest at a weighted average rate of 8.33% for the three months ended March 31, 2024. As of March 31, 2024, we did not have any interest rate swaps to hedge interest rate risks.


ITEM 4.			CONTROLS AND PROCEDURES

Evaluation of Disclosure Control and Procedures. Under the supervision of our Chief Executive Officer and our Chief Financial Officer, and with participation of management, we have established disclosure controls and procedures that are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. The disclosure controls and procedures are also intended to ensure that such information is accumulated and communicated to management, including our Chief Executive Officer and our Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosures.

As of March 31, 2024, an evaluation was performed under the supervision and with the participation of management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures pursuant to Rule 13a-15(b) under the Exchange Act. Based upon our evaluation, our Chief Executive Officer and our Chief Financial Officer have concluded that, as of March 31, 2024, our disclosure controls and procedures are effective.

In designing and evaluating the Company's disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable, and not absolute, assurance that the objectives of the control system will be met. In addition, the design of any control system is based in part upon certain assumptions about the likelihood of future events and the application of judgment in evaluating the cost-benefit relationship of possible controls and procedures. Because of these and other inherent limitations of control systems, there is only reasonable assurance that the Company's controls will succeed in achieving their goals under all potential future conditions.

Changes in Internal Control over Financial Reporting. There have not been any changes in our internal control over financial reporting that occurred during our last fiscal quarter that have materially affected, or are reasonably likely to materially affect, internal controls over financial reporting.

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PART II


ITEM 1.			LEGAL PROCEEDINGS

The information with respect to this Item 1. Legal Proceedings is set forth in Note 9 of our consolidated financial statements.


ITEM 1A.			RISK FACTORS

Our business has many risks. Factors that could materially adversely affect our business, financial condition, operating results or liquidity and the trading price of our common stock or senior notes are described below and under "Risk Factors" in Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2023.


ITEM 2.			UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Unregistered Sales of Equity Securities

None.

Issuer Repurchases of Equity Securities

Our common stock repurchase activity for the three months ended March 31, 2024 was as follows:


Period	Total Number of Shares Purchased(1)	Average Price Paid per Share		Total number of shares purchased as part of publicly announced plans or programs	Approximate maximum dollar value of shares that may yet be purchased under the plans or programs
January 1 - January 31	60,720	$	127.33	56,232	$	243,197,000
February 1 - February 29	56,657	$	129.56	56,624	$	235,860,000
March 1 - March 31	100,768	$	153.88	97,219	$	220,858,000
Total	218,145	$	140.17	210,075

_____________________

(1) We repurchased and canceled 4,488, 33 and 3,549 shares of our common stock at a weighted average price of $128.82, $99.37 and $142.07 to satisfy tax withholding requirements incurred upon the vesting of restricted stock unit awards during January, February and March 2024, respectively.


ITEM 3.			DEFAULTS UPON SENIOR SECURITIES

None.


ITEM 4.			MINE SAFETY DISCLOSURES

Not applicable.


ITEM 5.			OTHER INFORMATION

Trading Arrangements

During the three months ended March 31, 2024, none of our officers (as defined in Rule 16a-1(f) of the Exchange Act) or directors adopted or terminated any contract, instruction or written plan for the purchase or sale of our securities that was intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) or any "non-Rule 10b5-1 trading arrangement"(as defined in Item 408 of Regulation S-K).

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ITEM 6.			EXHIBITS

INDEX OF EXHIBITS

Incorporated by Reference

Exhibit Number

Description

Form

SEC File Number

Exhibit

Filing Date

Filed or Furnished Herewith

2.1

Amended Joint Chapter 11 Plan of Reorganization of Gulfport Energy Corporation and its Debtor Subsidiaries, dated April 14, 2021.

8-K

001-19514

2.2

4/29/2021

3.1

Amended and Restated Certificate of Incorporation of Gulfport Energy Corporation.

8-K

000-19514

3.1

5/17/2021

3.2

Amended and Restated Bylaws of Gulfport Energy Corporation.

8-K

000-19514

3.2

5/17/2021

31.1

Certification of Chief Executive Officer of the Registrant pursuant to Rule 13a-14(a) promulgated under the Securities Exchange Act of 1934, as amended.

31.2

Certification of Chief Financial Officer of the Registrant pursuant to Rule 13a-14(a) promulgated under the Securities Exchange Act of 1934, as amended.

32.1

Certification of Chief Executive Officer of the Registrant pursuant to Rule 13a-14(b) promulgated under the Securities Exchange Act of 1934, as amended, and Section 1350 of Chapter 63 of Title 18 of the United States Code.

32.2

Certification of Chief Financial Officer of the Registrant pursuant to Rule 13a-14(b) promulgated under the Securities Exchange Act of 1934, as amended, and Section 1350 of Chapter 63 of Title 18 of the United States Code.

101.INS

XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

101.SCH

XBRL Taxonomy Extension Schema Document.

101.CAL

XBRL Taxonomy Extension Calculation Linkbase Document.

101.DEF

XBRL Taxonomy Extension Definition Linkbase Document.

101.LAB

XBRL Taxonomy Extension Labels Linkbase Document.

101.PRE

XBRL Taxonomy Extension Presentation Linkbase Document.

104

Cover Page Interactive Data File - the cover page interactive data file does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

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SIGNATURES

In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Date: May 1, 2024


GULFPORT ENERGY CORPORATION

By:						/s/ Michael Hodges
						Michael Hodges Chief Financial Officer