Quarterly report pursuant to Section 13 or 15(d)

Stock-Based Compensation

v2.4.0.6
Stock-Based Compensation
 9 Months Ended
Sep. 30, 2012
Share-based Compensation [Abstract]  
Stock-Based Compensation
STOCK-BASED COMPENSATION

During the three months and nine months ended September 30, 2012, the Company’s stock-based compensation expense was $1,157,000 and $3,427,000, respectively, of which the Company capitalized $463,000 and $1,371,000, respectively, relating to its exploration and development efforts. During the three months and nine months ended September 30, 2011, the Company’s stock-based compensation expense was $384,000 and $837,000, respectively, of which the Company capitalized $154,000 and $335,000, respectively, relating to its exploration and development efforts.

Options and restricted common stock are reported as share based payments and their fair value is amortized to expense using the straight-line method over the vesting period. The shares of stock issued once the options are exercised will be from authorized but unissued common stock.

The fair value of each option award is estimated on the date of grant using the Black-Scholes option valuation model that uses certain assumptions. Expected volatilities are based on the historical volatility of the market price of Gulfport’s common stock over a period of time ending on the grant date. Based upon historical experience of the Company, the expected term of options granted is equal to the vesting period plus one year. The risk-free rate for periods within the contractual life of the option is based on the U.S. Treasury yield curve in effect at the time of the grant. The 2005 Stock Incentive Plan provides that all options must have an exercise price not less than the fair value of the Company’s common stock on the date of the grant.

No stock options were issued during the nine months ended September 30, 2012 and 2011.

The Company has not declared dividends and does not intend to do so in the foreseeable future, and thus did not use a dividend yield. In each case, the actual value that will be realized, if any, depends on the future performance of the common stock and overall stock market conditions. There is no assurance that the value an optionee actually realizes will be at or near the value estimated using the Black-Scholes model.

A summary of the status of stock options and related activity for the nine months ended September 30, 2012 is presented below:
 
 
Shares
 
Weighted
Average
Exercise
Price
per Share
 
Weighted
Average
Remaining
Contractual Term
 
Aggregate
Intrinsic
Value
Options outstanding at December 31, 2011
356,241

 
$
6.51

 
3.41

 
$
8,172,000

Granted
—

 
—

 

 

Exercised
—

 
—

 

 

Forfeited/expired
—

 
—

 

 

Options outstanding at September 30, 2012
356,241

 
$
6.51

 
2.66

 
$
8,816,000

Options exercisable at September 30, 2012
356,241

 
$
6.51

 
2.66

 
$
8,816,000



The following table summarizes information about the stock options outstanding at September 30, 2012:
 
Exercise
Price
 
Number
Outstanding
 
Weighted Average
Remaining Life
(in years)
 
Number
Exercisable
$
3.36

 
206,241

 
2.31

 
206,241

$
9.07

 
25,000

 
2.94

 
25,000

$
11.20

 
125,000

 
3.17

 
125,000

 
 
356,241

 
 
 
356,241



The following table summarizes restricted stock activity for the nine months ended September 30, 2012:
 
 
Number
of
Unvested
Restricted
Shares
 
Weighted
Average
Grant
Date Fair
Value
Unvested shares as of December 31, 2011
203,348

 
$
26.02

Granted
183,500

 
36.09

Vested
(96,331
)
 
30.17

Forfeited
(9,334
)
 
22.76

Unvested shares as of September 30, 2012
281,183

 
$
31.28



Unrecognized compensation expense as of September 30, 2012 related to outstanding stock options and restricted shares was $7,801,000. The expense is expected to be recognized over a weighted average period of 1.69 years.