Gulfport Energy Corporation Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

Property And Equipment

Property And Equipment

3 Months Ended

Mar. 31, 2012

PROPERTY AND EQUIPMENT

The major categories of property and equipment and related accumulated depletion, depreciation, amortization and impairment as of March 31, 2012 and December 31, 2011 are as follows:


	March 31, 2012			December 31, 2011
Oil and natural gas properties	$	1,130,838,000		$	1,035,754,000
Office furniture and fixtures		3,774,000			3,692,000
Building		3,926,000			4,049,000
Land		260,000			283,000

Total property and equipment		1,138,798,000			1,043,778,000

Accumulated depletion, depreciation, amortization and impairment		(596,530,000	)		(575,142,000	)

Property and equipment, net	$	542,268,000		$	468,636,000

Included in oil and gas properties at March 31, 2012 is the cumulative capitalization of $25,470,000 in general and administrative costs incurred and capitalized to the full cost pool. General and administrative costs capitalized to the full cost pool represent management's estimate of costs incurred directly related to exploration and development activities such as geological and other administrative costs associated with overseeing the exploration and development activities. All general and administrative costs not directly associated with exploration and development activities were charged to expense as they were incurred. Capitalized general and administrative costs were approximately $1,976,000 and $1,377,000 for the three months ended March 31, 2012 and 2011, respectively.

The following table summarizes the Company's non-producing properties excluded from amortization by area at March 31, 2012:


	March 31, 2012
West Texas Permian	$	13,843,000
Colorado		4,441,000
Bakken		304,000
Southern Louisiana		357,000
Ohio		150,887,000
Belize		5,711,000
Other		44,000

	$	175,587,000

The Company evaluates the costs excluded from its amortization calculation at least annually. Subject to industry conditions and the level of the Company's activities, the inclusion of most of the above referenced costs into the Company's amortization calculation is expected to occur within three to five years.

A reconciliation of the asset retirement obligation for the three months ended March 31, 2012 and 2011 is as follows:


	March 31, 2012			March 31, 2011
Asset retirement obligation, beginning of period	$	12,653,000		$	10,845,000
Liabilities incurred		598,000			174,000
Liabilities settled		(531,000	)		—
Accretion expense		176,000			159,000

Asset retirement obligation as of end of period		12,896,000			11,178,000
Less current portion		620,000			635,000

Asset retirement obligation, long-term	$	12,276,000		$	10,543,000

- Definition

The entire disclosure for long-lived, physical assets that are used in the normal conduct of business to produce goods and services and not intended for resale. Examples include land, buildings, machinery and equipment, and other types of furniture and equipment including, but not limited to, office equipment, furniture and fixtures, and computer equipment and software. This disclosure may include property plant and equipment accounting policies and methodology, a schedule of property, plant and equipment gross, additions, deletions, transfers and other changes, depreciation, depletion and amortization expense, net, accumulated depreciation, depletion and amortization expense and useful lives, income statement disclosures, assets held for sale and public utility disclosures.

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