PART I [Business](index=12&type=section&id=ITEM%201%2E%20BUSINESS) Gulfport is a natural gas E&P company that emerged from bankruptcy in 2021 with a renewed focus on free cash flow generation - Gulfport is an independent natural gas-weighted exploration and production company with principal properties in the **Utica** and **SCOOP** formations[56](index=56&type=chunk) - The company emerged from Chapter 11 bankruptcy on May 17, 2021, reducing its total indebtedness by **$1.4 billion** and focusing on sustainable free cash flow[59](index=59&type=chunk)[61](index=61&type=chunk) Proved Reserves by Area (December 31, 2021) | Area | Oil (MMBbl) | Natural Gas (Bcf) | NGL (MMBbl) | Total (Bcfe) | | :--- | :--- | :--- | :--- | :--- | | **Utica** | 7 | 2,555 | 13 | 2,673 | | **SCOOP** | 10 | 921 | 40 | 1,223 | | **Total Proved** | **16** | **3,478** | **54** | **3,898** | Changes in Proved Reserves (2021, in Bcfe) | Category | Volume (Bcfe) | | :--- | :--- | | **Proved Reserves, Dec 31, 2020** | **2,588** | | Extensions and discoveries | 695 | | Revisions of prior reserve estimates | 982 | | Current production | (366) | | **Proved Reserves, Dec 31, 2021** | **3,898** | - Upward revisions of **982.2 Bcfe** in 2021 were primarily driven by higher commodity prices, with the average natural gas price increasing to **$3.60/MMBtu**[77](index=77&type=chunk) 2021 Production and Pricing Summary (Combined Period) | Metric | Natural Gas | Oil & Condensate | NGL | | :--- | :--- | :--- | :--- | | **Production Volume** | 332,921 MMcf | 1,699 MBbl | 3,869 MBbl | | **Avg. Daily Production** | 912 MMcf/d | 5 MBbl/d | 11 MBbl/d | | **Avg. Price (w/o derivatives)** | $3.76 /Mcf | $65.01 /Bbl | $36.68 /Bbl | | **Avg. Price (w/ derivatives)** | $2.85 /Mcf | $59.29 /Bbl | $33.33 /Bbl | - For 2022, the company plans a capital expenditure program of **$340 million to $380 million**, expecting to generate **975 to 1,025 MMcfe per day** of production[63](index=63&type=chunk)[64](index=64&type=chunk) [Risk Factors](index=30&type=section&id=ITEM%201A%2E%20RISK%20FACTORS) The company faces significant risks from commodity price volatility, reserve replacement challenges, and extensive environmental regulations - The company's financial performance is significantly dependent on volatile **natural gas, oil, and NGL prices**, which are beyond its control[138](index=138&type=chunk)[140](index=140&type=chunk) - Future success is highly dependent on the ability to find, develop, or acquire additional economically recoverable reserves to replace production[159](index=159&type=chunk) - Approximately **44% of total estimated proved reserves** were proved undeveloped (PUDs) as of December 31, 2021, requiring significant future capital[162](index=162&type=chunk) - The company is subject to extensive and changing governmental regulations regarding environmental matters, which could increase costs or restrict operations[204](index=204&type=chunk)[209](index=209&type=chunk)[212](index=212&type=chunk) - The recent emergence from Chapter 11 bankruptcy may adversely affect business relationships and makes historical financial information not comparable[225](index=225&type=chunk)[226](index=226&type=chunk) - The company has minimum volume commitments under midstream contracts, representing a long-term contractual obligation of approximately **$1.8 billion**[193](index=193&type=chunk) PART II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=50&type=section&id=ITEM%205%2E%20MARKET%20FOR%20REGISTRANT%27S%20COMMON%20EQUITY%2C%20RELATED%20STOCKHOLDER%20MATTERS%20AND%20ISSUER%20PURCHASES%20OF%20EQUITY%20SECURITIES) The company's new common stock began trading on the NYSE in May 2021, and a $100 million stock repurchase program was authorized - Upon emergence from bankruptcy on May 17, 2021, predecessor common stock was cancelled and new stock was issued on the NYSE under the symbol **"GPOR"**[243](index=243&type=chunk)[244](index=244&type=chunk) - No dividends were paid on New Common Stock in 2021, but **$1.5 million in cash** and paid-in-kind shares were issued for New Preferred Stock[246](index=246&type=chunk)[248](index=248&type=chunk) - On November 2, 2021, the Board authorized a stock repurchase program for up to **$100 million** of common stock, though no shares were repurchased in 2021[249](index=249&type=chunk)[250](index=250&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=53&type=section&id=ITEM%207%2E%20MANAGEMENT%27S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) Post-bankruptcy operations saw higher revenues from commodity prices, improved liquidity, and a focus on funding development within cash flow - The company emerged from Chapter 11 in May 2021, reducing total indebtedness by **$1.4 billion** and focusing on sustainable free cash flow[259](index=259&type=chunk)[260](index=260&type=chunk) - In October 2021, the company entered into a new credit facility with an initial borrowing base of **$850 million**, increasing liquidity by over $160 million[264](index=264&type=chunk)[271](index=271&type=chunk) - The 2022 capital expenditure program is budgeted at **$340 million to $380 million**, with anticipated inflationary pressures on costs[270](index=270&type=chunk) [Results of Operations](index=56&type=section&id=Results%20of%20Operations) Higher commodity prices drove an 88% revenue increase in 2021, offset by derivative losses and lower production volumes Revenue and Production Comparison (Combined 2021 vs. 2020) | Metric | Combined 2021 | 2020 | | :--- | :--- | :--- | | **Total Sales (unhedged)** | $1,502.9 M | $801.3 M | | **Total Production (MMcfe/d)** | 1,003 | 1,037 | | **Avg. Price (unhedged, $/Mcfe)** | $4.10 | $2.11 | | **Avg. Price (hedged, $/Mcfe)** | $3.21 | $2.53 | - The **88% increase in unhedged revenue** was primarily driven by higher commodity prices, with the average Henry Hub index rising to **$3.89/MMBtu** in 2021[275](index=275&type=chunk) - The company experienced derivative settlement losses of **$326.2 million** for the combined 2021 period, compared to gains of $159.4 million in 2020[277](index=277&type=chunk) - Transportation and gathering costs decreased on a per-unit basis from **$1.20/Mcfe to $1.02/Mcfe** due to midstream contract renegotiations[280](index=280&type=chunk)[281](index=281&type=chunk) - A non-cash impairment charge of **$117.8 million** was recorded on oil and gas properties in the Successor period, compared to a $1.4 billion impairment in 2020[283](index=283&type=chunk) [Liquidity and Capital Resources](index=62&type=section&id=Liquidity%20and%20Capital%20Resources) The company significantly reduced debt post-bankruptcy and secured a new credit facility to support its 2022 capital program - As of December 31, 2021, the company had a cash balance of $3.3 million and total principal debt of **$714.0 million**, a significant reduction from $2.3 billion at year-end 2020[299](index=299&type=chunk) - In October 2021, the company entered into a new credit facility with an initial borrowing base of **$850.0 million** and an initial elected commitment of $700.0 million[302](index=302&type=chunk) - The 2022 drilling and completion capital expenditure program is budgeted to be between **$320 million and $360 million**[315](index=315&type=chunk) Contractual Obligations as of December 31, 2021 (in thousands) | Contractual Obligations | Total | 2022 | 2023-2024 | 2025-2026 | 2027 and Thereafter | | :--- | :--- | :--- | :--- | :--- | :--- | | **Long-term debt (Principal & Interest)** | $906,500 | $44,000 | $88,000 | $774,500 | $0 | | **Firm transportation and gathering contracts** | $1,778,093 | $225,200 | $438,514 | $268,131 | $846,248 | | **Operating lease liabilities** | $322 | $182 | $140 | $0 | $0 | [Critical Accounting Policies and Estimates](index=66&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) Key accounting policies include fresh start accounting, the full cost method for oil and gas properties, and reserve estimation - The company applied **fresh start accounting** upon emergence from Chapter 11, making financial statements after May 17, 2021, not comparable to prior periods[324](index=324&type=chunk)[325](index=325&type=chunk) - Gulfport uses the **full cost method** of accounting, requiring a quarterly ceiling test that is highly sensitive to commodity prices and reserve estimates[326](index=326&type=chunk)[329](index=329&type=chunk) - Estimates of oil and natural gas reserves are critical for calculating **DD&A** and are a primary factor in the impairment ceiling test[330](index=330&type=chunk) - A full valuation allowance of **$907.4 million** was established against the company's net deferred tax asset as of December 31, 2021[332](index=332&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=67&type=section&id=ITEM%207A%2E%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) The company's primary market risks are commodity price volatility, managed through derivatives, and interest rate fluctuations - The company's main market risk is **commodity price volatility**, which it manages using derivative instruments to achieve more predictable cash flows[336](index=336&type=chunk)[337](index=337&type=chunk) - As of December 31, 2021, the company had a net liability derivative position of **$402.0 million** due to rising commodity prices[342](index=342&type=chunk) - A **10% change in commodity prices** would alter the company's derivative liability by approximately **$171 million to $183 million**[342](index=342&type=chunk) - The company is exposed to interest rate risk from its floating-rate credit facility, where a **1% rate increase** would raise annual interest expense by approximately **$2 million**[344](index=344&type=chunk) [Financial Statements and Supplementary Data](index=70&type=section&id=ITEM%208%2E%20FINANCIAL%20STATEMENTS%20AND%20SUPPLEMENTARY%20DATA) This section contains the audited consolidated financial statements, which reflect the application of fresh start accounting in 2021 [Supplemental Information On Oil And Gas Exploration And Production Activities](index=125&type=section&id=20%2E%20Supplemental%20Information%20On%20Oil%20And%20Gas%20Exploration%20And%20Production%20Activities) Supplemental data shows a significant increase in proved reserves and their discounted future net cash flows due to higher prices Proved Reserve Changes (in Bcfe) | Category | 2021 | 2020 | 2019 | | :--- | :--- | :--- | :--- | | **Beginning Balance** | 2,588 | 4,528 | 4,743 | | Extensions and discoveries | 695 | 240 | 1,097 | | Revisions of prior estimates | 982 | (1,725) | (734) | | Production | (366) | (380) | (502) | | Sales of reserves | 0 | (75) | (77) | | **Ending Balance** | **3,898** | **2,588** | **4,528** | - Proved undeveloped reserves (PUDs) constituted **44% of total proved reserves** at year-end 2021, totaling 1,733 Bcfe[591](index=591&type=chunk) Standardized Measure of Discounted Future Net Cash Flows (in millions) | Year | Standardized Measure | | :--- | :--- | | **2021 (Successor)** | $4,138 | | **2020 (Predecessor)** | $540 | | **2019 (Predecessor)** | $1,703 | - The significant increase in the standardized measure in 2021 was primarily driven by net positive changes in prices and costs, which contributed **$2.6 billion**[601](index=601&type=chunk) [Controls and Procedures](index=131&type=section&id=ITEM%209A%2E%20CONTROLS%20AND%20PROCEDURES) Management and the independent auditor concluded that the company's disclosure controls and internal controls were effective as of year-end 2021 - Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were **effective** as of December 31, 2021[608](index=608&type=chunk) - Management concluded that the company's internal control over financial reporting was **effective** as of December 31, 2021, supported by an unqualified audit opinion[612](index=612&type=chunk)[613](index=613&type=chunk)[617](index=617&type=chunk) - Changes to internal controls during 2021 included the addition of key controls related to the company's reorganization after emerging from bankruptcy[610](index=610&type=chunk) PART III [Directors, Executive Officers and Corporate Governance](index=134&type=section&id=ITEM%2010%2E%20DIRECTORS%2C%20EXECUTIVE%20OFFICERS%20AND%20CORPORATE%20GOVERNANCE) Information regarding directors, officers, and corporate governance is incorporated by reference from the 2022 Proxy Statement - Information for this item, including details on directors and corporate governance, is **incorporated by reference** from the 2022 Proxy Statement[629](index=629&type=chunk) [Executive Compensation](index=134&type=section&id=ITEM%2011%2E%20EXECUTIVE%20COMPENSATION) Information regarding executive compensation is incorporated by reference from the 2022 Proxy Statement - Information regarding executive compensation is **incorporated by reference** from the 2022 Proxy Statement[630](index=630&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=134&type=section&id=ITEM%2012%2E%20SECURITY%20OWNERSHIP%20OF%20CERTAIN%20BENEFICIAL%20OWNERS%20AND%20MANAGEMENT%20AND%20RELATED%20STOCKHOLDER%20MATTERS) Information regarding security ownership is incorporated by reference from the 2022 Proxy Statement - Information regarding security ownership is **incorporated by reference** from the 2022 Proxy Statement[631](index=631&type=chunk) [Certain Relationships and Related Transactions, and Director Independence](index=134&type=section&id=ITEM%2013%2E%20CERTAIN%20RELATIONSHIPS%20AND%20RELATED%20TRANSACTIONS%2C%20AND%20DIRECTOR%20INDEPENDENCE) Information regarding related transactions and director independence is incorporated by reference from the 2022 Proxy Statement - Information regarding related party transactions and director independence is **incorporated by reference** from the 2022 Proxy Statement[632](index=632&type=chunk) [Principal Accounting Fees and Services](index=134&type=section&id=ITEM%2014%2E%20PRINCIPAL%20ACCOUNTING%20FEES%20AND%20SERVICES) Information regarding accounting fees and services is incorporated by reference from the 2022 Proxy Statement - Information regarding principal accounting fees and services is **incorporated by reference** from the 2022 Proxy Statement[633](index=633&type=chunk) PART IV [Exhibits and Financial Statement Schedules](index=135&type=section&id=ITEM%2015%2E%20EXHIBITS%20AND%20FINANCIAL%20STATEMENT%20SCHEDULES) This section lists all financial statements, schedules, and exhibits filed with the Form 10-K, including the reserve report - This section provides an index of all exhibits filed with the Form 10-K, including the plan of reorganization, new debt indentures, and credit agreements[635](index=635&type=chunk)[637](index=637&type=chunk) - The independent petroleum engineering firm Netherland, Sewell & Associates, Inc. provided a summary reserve report, which is included as **Exhibit 99.1**[90](index=90&type=chunk)[638](index=638&type=chunk)

Gulfport Energy Corporation (NYSE:GPOR) Q4 2021 Earnings Conference Call March 1, 2022 9:00 AM ET Company Participants Jessica Antle - Director of Investor Relations Timothy Cutt - Chairman and Chief Executive Officer William Buese - Executive Vice President and Chief Financial Officer Conference Call Participants Neal Dingmann - Truist Securities, Inc. Leo Mariani - KeyBanc Capital Markets Inc. Zachary Parham - JPMorgan Chase & Co. Operator Greetings. Welcome to the Gulfport's Fourth Quarter 2021 Conferenc ...

Investor Presentation Februar y 2022 Forward Looking Statements & Non-GAAP Financial Measures This presentation includes "forward-looking statements" for purposes of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements are statements other than statements of historical fact. They include statements regarding Gulfport's current expectations, ...

[PART I FINANCIAL INFORMATION](index=4&type=section&id=PART%20I%20FINANCIAL%20INFORMATION) This section presents Gulfport Energy Corporation's unaudited financial statements and management's analysis, detailing the impact of its Chapter 11 emergence and fresh start accounting [Item 1. Consolidated Financial Statements (Unaudited)](index=4&type=section&id=Item%201.%20Consolidated%20Financial%20Statements%20(Unaudited)) This section presents the unaudited consolidated financial statements of Gulfport Energy Corporation, distinguishing between the 'Successor' (post-May 17, 2021, Chapter 11 emergence) and 'Predecessor' (prior to May 17, 2021) periods, reflecting the significant impact of fresh start accounting and the company's reorganization [Consolidated Balance Sheets](index=4&type=section&id=Consolidated%20Balance%20Sheets) This section provides a snapshot of the company's financial position, highlighting assets, liabilities, and equity before and after its Chapter 11 emergence Consolidated Balance Sheet Highlights (in thousands) | Metric | September 30, 2021 (Successor) | December 31, 2020 (Predecessor) | | :-------------------------------- | :------------------------------- | :------------------------------- | | Total Assets | $2,088,208 | $2,539,871 | | Total Liabilities | $2,039,219 | $2,840,371 | | Total Stockholders' Equity (Deficit) | $(8,931) | $(300,500) | | Current Assets | $220,724 | $409,750 | | Property and Equipment, Net | $1,840,993 | $2,086,269 | | Current Liabilities | $1,056,928 | $510,287 | | Liabilities Subject to Compromise | $0 | $2,293,480 | - Current assets decreased significantly, primarily due to a reduction in **cash and cash equivalents** and **prepaid expenses**[28](index=28&type=chunk) - Current liabilities increased substantially, largely driven by a significant rise in **short-term derivative instrument liabilities** and **accounts payable**[31](index=31&type=chunk) - Liabilities subject to compromise were eliminated, reflecting the company's emergence from Chapter 11[31](index=31&type=chunk) [Consolidated Statements of Operations](index=6&type=section&id=Consolidated%20Statements%20of%20Operations) This section details the company's revenues, expenses, and net income or loss across different reporting periods, reflecting the impact of reorganization Consolidated Statements of Operations Highlights (in thousands, except per share data) | Metric | Three Months Ended Sep 30, 2021 (Successor) | Three Months Ended Sep 30, 2020 (Predecessor) | | :------------------------------------ | :------------------------------------------ | :------------------------------------------ | | Total Revenues | $(242,528) | $136,176 | | Net Loss | $(461,313) | $(380,963) | | Basic Net Loss Per Common Share | $(22.50) | $(2.37) | | Metric | May 18, 2021 - Sep 30, 2021 (Successor) | Jan 1, 2021 - May 17, 2021 (Predecessor) | Nine Months Ended Sep 30, 2020 (Predecessor) | | :------------------------------------ | :-------------------------------------- | :--------------------------------------- | :----------------------------------------- | | Total Revenues | $(236,804) | $273,037 | $621,815 | | Net (Loss) Income | $(670,898) | $250,996 | $(1,459,569) | | Basic Net (Loss) Income Per Common Share | $(32.87) | $1.56 | $(9.12) | - Total revenues for the three months ended September 30, 2021, showed a significant loss, primarily due to a **net loss on natural gas, oil, and NGL derivatives**[34](index=34&type=chunk) - The Successor period (May 18 - Sep 30, 2021) reported a substantial **net loss**, contrasting with the Predecessor period (Jan 1 - May 17, 2021) which showed **net income**[36](index=36&type=chunk) [Consolidated Statements of Comprehensive Income (Loss)](index=8&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income%20(Loss)) This section presents the comprehensive income or loss, including net income and other comprehensive income items, for various reporting periods Consolidated Statements of Comprehensive Income (Loss) Highlights (in thousands) | Metric | Three Months Ended Sep 30, 2021 (Successor) | Three Months Ended Sep 30, 2020 (Predecessor) | | :------------------------ | :------------------------------------------ | :------------------------------------------ | | Comprehensive Loss | $(461,313) | $(377,302) | | Metric | May 18, 2021 - Sep 30, 2021 (Successor) | Jan 1, 2021 - May 17, 2021 (Predecessor) | Nine Months Ended Sep 30, 2020 (Predecessor) | | :------------------------ | :-------------------------------------- | :--------------------------------------- | :----------------------------------------- | | Comprehensive (Loss) Income | $(670,898) | $250,996 | $(1,464,066) | [Consolidated Statements of Stockholders' Equity (Deficit)](index=9&type=section&id=Consolidated%20Statements%20of%20Stockholders'%20Equity%20(Deficit)) This section outlines changes in stockholders' equity, reflecting the impact of the Chapter 11 reorganization, stock issuance, and accumulated deficit Total Stockholders' Equity (Deficit) (in thousands) | Date | Amount | | :------------------- | :------- | | September 30, 2021 (Successor) | $(8,931) | | December 31, 2020 (Predecessor) | $(300,500) | - The statements reflect the cancellation of Predecessor common stock and the issuance of **New Common Stock** and **New Preferred Stock** on the Emergence Date (May 17, 2021) as part of the Chapter 11 reorganization[43](index=43&type=chunk)[63](index=63&type=chunk) - Additional paid-in capital saw significant adjustments due to the extinguishment of Predecessor paid-in capital and the issuance of new common stock[43](index=43&type=chunk)[85](index=85&type=chunk) [Consolidated Statements of Cash Flows](index=11&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) This section details the cash inflows and outflows from operating, investing, and financing activities across different periods, post-reorganization Consolidated Statements of Cash Flows Highlights (in thousands) | Metric | May 18, 2021 - Sep 30, 2021 (Successor) | Jan 1, 2021 - May 17, 2021 (Predecessor) | Nine Months Ended Sep 30, 2020 (Predecessor) | | :------------------------------------ | :-------------------------------------- | :--------------------------------------- | :----------------------------------------- | | Net Cash Provided by Operating Activities | $164,637 | $172,155 | $200,001 | | Net Cash Used in Investing Activities | $(116,144) | $(97,831) | $(290,696) | | Net Cash (Used in) Provided by Financing Activities | $(103,425) | $(104,768) | $135,678 | | Cash, Cash Equivalents and Restricted Cash at End of Period | $4,485 | $59,417 (at May 17, 2021) | $51,043 (at Sep 30, 2020) | [Notes to Consolidated Financial Statements](index=12&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) This section provides detailed explanations and disclosures supporting the consolidated financial statements, including accounting policies and significant events [1. BASIS OF PRESENTATION](index=12&type=section&id=1.%20BASIS%20OF%20PRESENTATION) This note describes the company's business, its Chapter 11 reorganization, and the application of fresh start accounting for financial reporting - Gulfport Energy Corporation is an independent natural gas-weighted exploration and production company with assets primarily in the **Appalachia and Anadarko basins**[49](index=49&type=chunk) - The Company filed for voluntary reorganization under **Chapter 11 of the Bankruptcy Code** on November 13, 2020, and emerged on May 17, 2021[49](index=49&type=chunk)[53](index=53&type=chunk)[54](index=54&type=chunk) - Financial statements distinguish between the 'Successor' (post-May 17, 2021) and 'Predecessor' (on or prior to May 17, 2021) periods, and the Company applied **FASB ASC Topic 852 - Reorganizations** and **fresh start accounting**[49](index=49&type=chunk)[57](index=57&type=chunk) [2. CHAPTER 11 EMERGENCE](index=14&type=section&id=2.%20CHAPTER%2011%20EMERGENCE) This note details the company's emergence from Chapter 11, including the effective date, cancellation of old stock, and issuance of new securities - The Plan of Reorganization was confirmed on April 28, 2021, and became effective on **May 17, 2021**, marking the Company's emergence from Chapter 11[54](index=54&type=chunk)[62](index=62&type=chunk) - All Predecessor common stock and outstanding obligations under Predecessor Senior Notes were cancelled[63](index=63&type=chunk) - The Company issued **19,845,780 shares of New Common Stock** and **55,000 shares of New Preferred Stock**[63](index=63&type=chunk) - A Second Amended and Restated Credit Agreement (Exit Credit Agreement) was entered into, providing for an **Exit Facility** and a **First-Out Term Loan**, and **$550 million aggregate principal amount of 8.000% Successor Senior Notes due 2026** were issued[63](index=63&type=chunk)[65](index=65&type=chunk) [3. FRESH START ACCOUNTING](index=16&type=section&id=3.%20FRESH%20START%20ACCOUNTING) This note explains the application of fresh start accounting, revaluation of assets and liabilities, and the resulting non-comparability of financial statements - The Company qualified for and applied fresh start accounting on the Emergence Date (May 17, 2021), as existing voting shareholders received less than **50% of the Successor's equity** and reorganization value was less than post-petition liabilities and allowed claims[67](index=67&type=chunk) - The enterprise value of the Successor was estimated between **$1.3 billion and $1.9 billion**, with management concluding **$1.6 billion** as the best estimate[69](index=69&type=chunk) - Assets and liabilities were revalued to their estimated fair values, making post-May 17, 2021, financial statements not comparable to prior periods[68](index=68&type=chunk) Reorganization Items, Net (Predecessor Period Jan 1, 2021 - May 17, 2021, in thousands) | Item | Amount | | :------------------------------------------ | :------- | | Net gain on liabilities subject to compromise | $575,182 | | Legal and professional advisory fees | $(81,565) | | Fresh start adjustments, net | $(160,756) | | Elimination of predecessor accumulated other comprehensive income | $(40,430) | | Debt issuance costs | $(3,150) | | Other items, net | $(22,383) | | **Total reorganization items, net** | **$266,898** | [4. PROPERTY AND EQUIPMENT](index=24&type=section&id=4.%20PROPERTY%20AND%20EQUIPMENT) This note details the company's property and equipment, including oil and natural gas properties, impairment charges, and unevaluated properties by area Property and Equipment, Net (in thousands) | Date | Amount | | :------------------- | :------- | | September 30, 2021 (Successor) | $1,840,993 | | December 31, 2020 (Predecessor) | $2,086,269 | - No impairment of oil and natural gas properties was recorded during the third quarter of 2021, as the net book value was below the calculated ceiling[94](index=94&type=chunk) - The Company recorded impairment charges of **$117.8 million** for its oil and natural gas properties during the Current Combined YTD Period[94](index=94&type=chunk) Unevaluated Properties by Area at September 30, 2021 (in thousands) | Area | Amount | | :----- | :------- | | Utica | $179,449 | | SCOOP | $36,905 | | Other | $3 | | **Total** | **$216,357** | [5. LONG-TERM DEBT](index=25&type=section&id=5.%20LONG-TERM%20DEBT) This note outlines the company's long-term debt structure post-emergence, including the Exit Facility, Term Loan, and Senior Notes, and prior debt termination Total Debt (in thousands) | Date | Amount | | :------------------- | :------- | | September 30, 2021 (Successor) | $749,502 | | December 31, 2020 (Predecessor) | $2,258,962 | - Post-emergence debt at September 30, 2021, included **$35.6 million** outstanding under the Exit Facility, **$165.0 million** under the First-Out Term Loan, and **$550.0 million** in 8.000% senior unsecured notes due 2026[106](index=106&type=chunk)[107](index=107&type=chunk) - The Exit Credit Facility was subsequently amended and refinanced with the **New Credit Facility** on October 14, 2021[101](index=101&type=chunk)[102](index=102&type=chunk) - Predecessor Senior Notes, the DIP Credit Facility, and the Pre-Petition Revolving Credit Facility were terminated or converted upon the Emergence Date[112](index=112&type=chunk)[113](index=113&type=chunk)[114](index=114&type=chunk) [6. EQUITY](index=28&type=section&id=6.%20EQUITY) This note describes the changes in equity due to the Chapter 11 reorganization, including the cancellation of old stock and issuance of new common and preferred shares - On the Emergence Date, all existing shares of Predecessor common stock were cancelled, and approximately **19.8 million shares of New Common Stock** and **55,000 shares of New Preferred Stock** were issued[119](index=119&type=chunk)[120](index=120&type=chunk) - Holders of New Preferred Stock are entitled to cumulative quarterly dividends at a rate of **10% per annum for cash dividends** and **15% per annum for PIK Dividends**, with PIK dividends required if the Total Net Funded Debt to EBITDAX ratio is equal to or greater than 1.50[121](index=121&type=chunk) - New Preferred Stock is convertible into New Common Stock at the holder's option[122](index=122&type=chunk) New Preferred Stock Outstanding | Date | Shares | | :------------------- | :----- | | May 18, 2021 (Successor) | 55,000 | | September 30, 2021 (Successor) | 57,920 | [7. STOCK-BASED COMPENSATION](index=29&type=section&id=7.%20STOCK-BASED%20COMPENSATION) This note details the impact of Chapter 11 on stock-based awards, the adoption of a new incentive plan, and related compensation expenses - Predecessor stock-based compensation awards were cancelled upon emergence, resulting in the recognition of **$4.4 million of previously unamortized expense**[127](index=127&type=chunk) - The Company adopted the **Gulfport Energy Corporation 2021 Stock Incentive Plan**, reserving **2,828,123 shares of New Common Stock** for issuance[65](index=65&type=chunk)[128](index=128&type=chunk) - Stock-based compensation expense for the Current Successor Quarter was **$1.4 million**, with **$0.5 million capitalized**[128](index=128&type=chunk) - Unrecognized compensation expense as of September 30, 2021, was **$12.2 million for restricted stock units** (expected over 3.05 years) and **$6.3 million for performance vesting restricted shares** (expected over 2.8 years)[131](index=131&type=chunk)[132](index=132&type=chunk) [8. EARNINGS (LOSS) PER SHARE](index=31&type=section&id=8.%20EARNINGS%20(LOSS)%20PER%20SHARE) This note presents the basic and diluted earnings per share for various periods, considering the impact of the company's net loss and preferred stock Net (Loss) Income Per Common Share | Period | Basic EPS | Diluted EPS | | :------------------------------------------ | :-------- | :---------- | | Three Months Ended Sep 30, 2021 (Successor) | $(22.50) | $(22.50) | | May 18, 2021 - Sep 30, 2021 (Successor) | $(32.87) | $(32.87) | | Jan 1, 2021 - May 17, 2021 (Predecessor) | $1.56 | $1.56 | | Nine Months Ended Sep 30, 2020 (Predecessor) | $(9.12) | $(9.12) | - New Preferred Stock is considered a participating security but was anti-dilutive for the Current Successor YTD Period due to the Company's net loss[139](index=139&type=chunk)[140](index=140&type=chunk) [9. COMMITMENTS AND CONTINGENCIES](index=32&type=section&id=9.%20COMMITMENTS%20AND%20CONTINGENCIES) This note outlines the company's future firm transportation and gathering commitments, along with details of significant settlement agreements Future Firm Transportation and Gathering Commitments (in thousands) | Period | Amount | | :------------- | :--------- | | Remaining 2021 | $61,609 | | 2022 | $224,537 | | 2023 | $222,730 | | 2024 | $215,865 | | 2025 | $137,116 | | Thereafter | $977,616 | | **Total** | **$1,839,473** | - The Company finalized a settlement agreement with TC Energy Corporation in September 2021, rejecting firm transportation contracts for a **$43.8 million cash payment**, with substantially all of this amount expected to be recovered through assigned claims[148](index=148&type=chunk)[233](index=233&type=chunk) - An agreement in principle was reached with Stingray Pressure Pumping LLC in September 2021, fully resolving the litigation between the parties[153](index=153&type=chunk)[237](index=237&type=chunk) - Settlements were reached with Muskie for **$3.1 million** and Bryon Lefort for approximately **$0.7 million**, resolving respective claims[155](index=155&type=chunk)[156](index=156&type=chunk) [10. DERIVATIVE INSTRUMENTS](index=35&type=section&id=10.%20DERIVATIVE%20INSTRUMENTS) This note describes the company's use of derivative instruments to manage commodity price volatility and details the net loss on these derivatives - The Company uses **fixed price swaps, sold natural gas call options, costless collars, and natural gas basis swaps** to mitigate commodity price volatility for natural gas, oil, and NGL[161](index=161&type=chunk)[162](index=162&type=chunk)[164](index=164&type=chunk)[166](index=166&type=chunk)[169](index=169&type=chunk) Total Commodity Derivative Position (in thousands) | Date | Amount | | :------------------- | :----------- | | September 30, 2021 (Successor) | $(830,554) | | December 31, 2020 (Predecessor) | $(20,777) | Net Loss on Natural Gas, Oil and NGL Derivatives (in thousands) | Period | Amount | | :------------------------------------------ | :----------- | | Three Months Ended Sep 30, 2021 (Successor) | $(622,476) | | May 18, 2021 - Sep 30, 2021 (Successor) | $(762,134) | [11. FAIR VALUE MEASUREMENTS](index=37&type=section&id=11.%20FAIR%20VALUE%20MEASUREMENTS) This note explains the fair value measurements for derivative instruments and other assets and liabilities, including the impact of fresh start accounting - Derivative instruments are classified as **Level 2 fair value measurements**, utilizing industry-standard models with observable inputs[181](index=181&type=chunk) - The contingent consideration arrangement from the SCOOP water infrastructure sale is a **Level 3 fair value measurement**, valued at **$5.3 million** as of September 30, 2021, based on unobservable inputs[182](index=182&type=chunk) - The application of fresh start accounting on the Emergence Date resulted in assets and liabilities being recorded at fair value, with oil and natural gas properties and asset retirement obligations primarily using **Level 3 unobservable inputs**[186](index=186&type=chunk) [12. REVENUE FROM CONTRACTS WITH CUSTOMERS](index=39&type=section&id=12.%20REVENUE%20FROM%20CONTRACTS%20WITH%20CUSTOMERS) This note details the company's revenue recognition policies for natural gas, oil, and NGL sales, and presents receivables from customer contracts - Revenues are primarily derived from the sale of natural gas, oil, and NGL, recognized in the period that performance obligations are satisfied, generally upon transfer of control of the product[187](index=187&type=chunk) Receivables from Contracts with Customers (in thousands) | Date | Amount | | :------------------- | :------- | | September 30, 2021 | $185,900 | | December 31, 2020 | $119,900 | - The Company utilizes practical expedients for short-term contracts (one year or less) and variable consideration allocated to wholly unsatisfied performance obligations, exempting certain disclosures[189](index=189&type=chunk)[190](index=190&type=chunk) [13. EQUITY INVESTMENTS](index=40&type=section&id=13.%20EQUITY%20INVESTMENTS) This note discusses the revaluation of equity investments, specifically the interest in Grizzly Oil Sands, and the settlement of claims with previously owned shares - The Company's approximate **24.5% interest in Grizzly Oil Sands ULC** was revalued to zero upon the Emergence Date due to suspended operations and no anticipated future funding, leading to the cessation of equity method accounting[196](index=196&type=chunk)[197](index=197&type=chunk) - Previously owned shares of Mammoth Energy Services, Inc. were used to settle Class 4A claims as part of the Chapter 11 reorganization[198](index=198&type=chunk) [14. RESTRUCTURING AND LIABILITY MANAGEMENT](index=41&type=section&id=14.%20RESTRUCTURING%20AND%20LIABILITY%20MANAGEMENT) This note details the restructuring and liability management charges, primarily due to workforce reductions, aligning with the company's operating environment Restructuring and Liability Management Charges (in thousands) | Period | Reduction in Workforce | Liability Management | Total | | :------------------------------------------ | :--------------------- | :------------------- | :------ | | Three Months Ended Sep 30, 2021 (Successor) | $2,858 | $0 | $2,858 | | May 18, 2021 - Sep 30, 2021 (Successor) | $2,858 | $0 | $2,858 | | Nine Months Ended Sep 30, 2020 (Predecessor) | $1,460 | $8,141 | $9,601 | - Restructuring charges in the Current Successor Quarter were primarily due to a **workforce reduction**, aligning the workforce and leadership structure to the current operating environment[199](index=199&type=chunk) [15. LEASES](index=41&type=section&id=15.%20LEASES) This note provides information on the company's operating leases, including remaining lease terms, maturities of liabilities, and total lease costs - The Company has operating leases on certain equipment and field offices, with a weighted-average remaining lease term of **0.89 years** as of September 30, 2021[201](index=201&type=chunk)[206](index=206&type=chunk) Maturities of Operating Lease Liabilities at September 30, 2021 (in thousands) | Period | Amount | | :------------- | :----- | | Remaining 2021 | $10 | | 2022 | $25 | | **Total Lease Payments** | **$35** | | Less: Imputed interest | $(1) | | **Total** | **$34** | Total Lease Cost (in thousands) | Period | Amount | | :------------------------------------------ | :----- | | Three Months Ended Sep 30, 2021 (Successor) | $2,883 | | May 18, 2021 - Sep 30, 2021 (Successor) | $5,051 | | Jan 1, 2021 - May 17, 2021 (Predecessor) | $4,537 | | Nine Months Ended Sep 30, 2020 (Predecessor) | $16,373 | [16. INCOME TAXES](index=43&type=section&id=16.%20INCOME%20TAXES) This note discusses the impact of cancellation of indebtedness income on tax attributes, the valuation allowance against deferred tax assets, and income tax expense - The estimated **cancellation of indebtedness income (CODI)** of approximately **$708.8 million**, resulting from debt discharge during Chapter 11, will reduce the Company's tax attributes[207](index=207&type=chunk) - The Company maintains a **full valuation allowance** against its net deferred tax assets as of May 17, 2021, and September 30, 2021, indicating that it is more likely than not that some or all of the benefit from these assets will not be realized[209](index=209&type=chunk) - An income tax expense of **$0.7 million** was recognized for the Current Successor Quarter, attributable to an adjustment related to an Oklahoma refund claim[211](index=211&type=chunk) [17. SUBSEQUENT EVENTS](index=44&type=section&id=17.%20SUBSEQUENT%20EVENTS) This note discloses significant events occurring after the reporting period, including a new credit facility, stock repurchase program, and additional derivative contracts - On October 14, 2021, the Company entered into a **Third Amended and Restated Credit Agreement (New Credit Facility)** with an initial borrowing base of **$850.0 million** and an initial aggregate elected commitment amount of **$700.0 million**, maturing in October 2025[212](index=212&type=chunk)[213](index=213&type=chunk)[214](index=214&type=chunk) - On November 1, 2021, the Board of Directors approved a **stock repurchase program** to acquire up to **$100.0 million of its New Common Stock** through December 31, 2022[218](index=218&type=chunk) - Subsequent to September 30, 2021, the Company entered into additional natural gas derivative contracts, including **basis swaps and fixed price swaps for 2021-2023**[220](index=220&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Conditions and Results of Operations](index=48&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Conditions%20and%20Results%20of%20Operations) This section provides management's perspective on Gulfport's financial condition, results of operations, and liquidity, highlighting the impact of its Chapter 11 emergence and fresh start accounting [Introduction](index=48&type=section&id=Introduction) This introduction outlines Gulfport's business, strategic focus, and management's approach to presenting financial results post-reorganization - Gulfport is an independent natural gas-weighted exploration and production company with principal properties in **Eastern Ohio (Utica formation)** and **central Oklahoma (SCOOP Woodford and Springer formations)**[223](index=223&type=chunk) - The Company's strategy focuses on developing assets to generate **sustainable cash flow**, improve **margins and operating efficiencies**, and enhance **Environmental, Social and Governance (ESG) and safety performance**[223](index=223&type=chunk) - Management views operating results for the nine months ended September 30, 2021, by combining the Successor and Predecessor periods ('Current Combined YTD Period') for a more meaningful comparison to prior periods, despite not complying with GAAP[224](index=224&type=chunk) [Recent Developments](index=48&type=section&id=Recent%20Developments) This section highlights key recent events, including the company's Chapter 11 emergence, leadership changes, new credit facility, and stock repurchase program - The Company emerged from Chapter 11 voluntary reorganization on May 17, 2021, reducing total indebtedness by **$1.4 billion** and strengthening its balance sheet[225](index=225&type=chunk)[227](index=227&type=chunk) - Timothy Cutt fully assumed the role of Chief Executive Officer, dropping the 'Interim' designation, effective September 2, 2021[228](index=228&type=chunk) - A New Credit Facility was entered into on October 14, 2021, with an aggregate maximum principal amount of up to **$1.5 billion**, an initial borrowing base of **$850.0 million**, and an initial elected commitment of **$700.0 million**[229](index=229&type=chunk) - A **$100.0 million stock repurchase program** for New Common Stock was approved on November 1, 2021, authorized to extend through December 31, 2022[230](index=230&type=chunk) [2021 Operational and Financial Highlights](index=49&type=section&id=2021%20Operational%20and%20Financial%20Highlights) This section summarizes significant operational and financial achievements in 2021, including settlement agreements, drilling activities, and enhanced liquidity - Finalized a settlement agreement with TC Energy Corporation in September 2021, rejecting firm transportation contracts for a **$43.8 million cash payment**, with substantially all of this amount expected to be recovered through assigned claims[233](index=233&type=chunk)[234](index=234&type=chunk) - Reached an agreement in principle with Stingray Pressure Pumping LLC in September 2021, fully resolving longstanding litigation[237](index=237&type=chunk) - Completed the six-well Angelo pad in the Utica in September 2021, which came online in early October at a combined gross production rate of **250 MMcfe per day**[237](index=237&type=chunk) - The New Credit Facility, effective October 14, 2021, increased the elected commitment from **$580 million to $700 million**, enhancing liquidity by over **$160 million**[237](index=237&type=chunk) [2021 Production and Drilling Activity](index=50&type=section&id=2021%20Production%20and%20Drilling%20Activity) This section details the company's net production volumes and drilling activities in the Utica and SCOOP regions for the current and prior periods Total Net Production (MMcfe/day) | Period | Amount | | :------------------------------------------ | :----- | | Current Successor Quarter (Q3 2021) | 973.3 | | Prior Predecessor Quarter (Q3 2020) | 992.0 | | Current Combined YTD Period (2021) | 981.7 | | Prior Predecessor YTD Period (2020) | 1,024.2 | - The **2% decrease in Q3 2021 production** and **4% decrease in Current Combined YTD production** were largely due to the timing of development activity in the Utica[235](index=235&type=chunk)[238](index=238&type=chunk) - During the Current Combined YTD Period, the Company spud **12 gross (11.6 net) wells in the Utica** and **4 gross (3.9 net) wells in the SCOOP**[239](index=239&type=chunk)[240](index=240&type=chunk) - As of October 28, 2021, the Company had **two operated drilling rigs running in the Utica** and **one in the SCOOP**, with plans to add another SCOOP rig in the fourth quarter of 2021[240](index=240&type=chunk)[241](index=241&type=chunk) [Current Successor Quarter Compared to Prior Predecessor Quarter](index=52&type=section&id=Current%20Successor%20Quarter%20Compared%20to%20Prior%20Predecessor%20Quarter) This section compares key financial and operational metrics for the third quarter of 2021 (Successor) against the third quarter of 2020 (Predecessor) Key Financial and Operational Metrics (Q3 2021 vs Q3 2020) | Metric | Q3 2021 (Successor) | Q3 2020 (Predecessor) | Change (%) | | :------------------------------------------ | :------------------ | :------------------ | :--------- | | Natural Gas Sales (without derivatives, $k) | $301,516 | $155,163 | +94.3% | | Oil and Condensate Sales (without derivatives, $k) | $33,279 | $16,012 | +107.8% | | NGL Sales (without derivatives, $k) | $45,153 | $18,824 | +139.9% | | Total Sales (without derivatives, $k) | $379,948 | $189,999 | +100.0% | | Net Loss on Derivatives ($k) | $(622,476) | $(53,823) | -1056.6% | | Transportation, Gathering, Processing and Compression ($/Mcfe) | $0.94 | $1.21 | -22.3% | | General and Administrative Expenses, net ($k) | $16,691 | $20,331 | -17.8% | - The significant increase in sales revenues (without derivatives) was driven by a substantial increase in realized commodity prices across **natural gas (+102%)**, **oil and condensate (+87%)**, and **NGL (+94%)**[245](index=245&type=chunk)[246](index=246&type=chunk)[247](index=247&type=chunk) - Net loss on natural gas, oil, and NGL derivatives increased significantly due to the rise in both realized and futures pricing for commodities[248](index=248&type=chunk) - Transportation, gathering, processing, and compression costs decreased primarily due to savings associated with rejected midstream contracts and renegotiation through the bankruptcy process[251](index=251&type=chunk) [Current Successor YTD Period and Current Predecessor YTD Period Compared to Prior Predecessor YTD Period](index=57&type=section&id=Current%20Successor%20YTD%20Period%20and%20Current%20Predecessor%20YTD%20Period%20Compared%20to%20Prior%20Predecessor%20YTD%20Period) This section analyzes combined year-to-date financial and operational performance for 2021 against the prior year, highlighting significant changes Key Financial and Operational Metrics (Current Combined YTD 2021 vs Prior Predecessor YTD 2020) | Metric | Current Combined YTD 2021 | Prior Predecessor YTD 2020 | Change (%) | | :------------------------------------------ | :------------------------ | :------------------------- | :--------- | | Natural Gas Sales (without derivatives, $k) | $757,624 | $456,859 | +65.8% | | Oil and Condensate Sales (without derivatives, $k) | $79,972 | $47,553 | +68.1% | | NGL Sales (without derivatives, $k) | $98,010 | $45,989 | +113.1% | | Total Sales (without derivatives, $k) | $935,606 | $550,401 | +70.0% | | Net (Loss) Gain on Derivatives ($k) | $(899,373) | $71,414 | N/A (shift from gain to loss) | | Lease Operating Expenses ($/Mcfe) | $0.14 | $0.15 | -6.7% | | Transportation, Gathering, Processing and Compression ($/Mcfe) | $1.07 | $1.19 | -10.1% | | Impairment of Oil and Gas Properties ($k) | $117,813 | $1,357,099 | -91.3% | - Total sales revenues (without derivatives) increased significantly due to **higher realized commodity prices**, despite a slight decrease in sales volumes[261](index=261&type=chunk)[262](index=262&type=chunk)[263](index=263&type=chunk) - The Company experienced a significant shift from a net gain to a **net loss on natural gas, oil, and NGL derivatives**, primarily due to a substantial increase in futures pricing[264](index=264&type=chunk) - Lease operating expenses and transportation, gathering, processing, and compression costs decreased due to **ongoing cost reduction initiatives**, rejected midstream contracts, and lower production[265](index=265&type=chunk)[267](index=267&type=chunk) [Liquidity and Capital Resources](index=63&type=section&id=Liquidity%20and%20Capital%20Resources) This section discusses the company's liquidity strategy, funded debt, and capital expenditure plans, emphasizing cash flow and borrowing capacity - The Company aims to maintain sufficient liquidity through internally generated cash flows from operations, derivative contracts, and borrowing capacity under the New Credit Facility[280](index=280&type=chunk)[282](index=282&type=chunk) Funded Debt and Liquidity (in thousands) | Metric | September 30, 2021 | October 28, 2021 (Post New Credit Facility) | | :------------------------------------------ | :----------------- | :------------------------------------------ | | Cash and Cash Equivalents | $4,485 | $6,200 | | Borrowings under Exit/New Credit Facility | $35,600 | $246,000 | | Borrowings under First-Out Term Loan | $165,000 | N/A (refinanced) | | Letters of Credit Outstanding | $115,500 | $97,100 | | Outstanding 2026 Notes | $550,000 | $550,000 | | **Total Principal Amount of Funded Debt** | **$750,600** | **$796,000** | - Estimated capital expenditures for drilling and completion activities in 2021 are in the range of **$270 million to $290 million**[298](index=298&type=chunk) - A **$100.0 million stock repurchase program** was approved on November 1, 2021, to opportunistically acquire New Common Stock[304](index=304&type=chunk) [Critical Accounting Policies and Estimates](index=66&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) This section confirms that there have been no significant changes to the company's critical accounting policies and estimates since the last annual report - There have been no significant changes in the Company's critical accounting policies from those disclosed in its 2020 Annual Report on Form 10-K[308](index=308&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=67&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section discusses Gulfport's exposure to market risks, primarily commodity price volatility for natural gas, oil, and NGL, and interest rate risk on its floating-rate debt [Natural Gas, Oil and Natural Gas Liquids Derivative Instruments](index=67&type=section&id=Natural%20Gas%2C%20Oil%20and%20Natural%20Gas%20Liquids%20Derivative%20Instruments) This section details the company's use of derivative instruments to manage commodity price volatility and quantifies the potential impact of price changes - The Company uses various derivative instruments, including **swaps, basis swaps, call options, and costless collars**, to mitigate exposure to adverse market price changes for natural gas, oil, and NGL[316](index=316&type=chunk)[318](index=318&type=chunk)[322](index=322&type=chunk) Net Liability Derivative Position (in millions) | Date | Amount | | :------------------- | :------- | | September 30, 2021 | $(830.6) | | September 30, 2020 | $(80.6) | - A **10% increase in underlying commodity prices** would increase the Company's derivative liability by approximately **$231.5 million**, while a **10% decrease** would decrease it by approximately **$220.3 million**[323](index=323&type=chunk) [Interest Rate Risk](index=68&type=section&id=Interest%20Rate%20Risk) This section addresses the company's exposure to interest rate fluctuations on its floating-rate debt and the absence of hedging instruments - The Company's revolving credit agreement is structured under **floating rate terms**, making its interest expense sensitive to fluctuations in prime rates or Eurodollar rates[324](index=324&type=chunk) Borrowings Outstanding and Weighted Average Interest Rates at September 30, 2021 | Facility | Amount (in millions) | Weighted Average Rate | | :-------------------- | :------------------- | :-------------------- | | Exit Facility | $35.6 | 4.50% | | First-Out Term Loan | $165.0 | 5.50% | - As of September 30, 2021, the Company did not have any interest rate swaps to hedge interest rate risks[324](index=324&type=chunk) [Item 4. Controls and Procedures](index=69&type=section&id=Item%204.%20Controls%20and%20Procedures) This section confirms the effectiveness of Gulfport's disclosure controls and procedures as of September 30, 2021, and reports that there have been no material changes in internal control over financial reporting during the last fiscal quarter [Evaluation of Disclosure Control and Procedures](index=69&type=section&id=Evaluation%20of%20Disclosure%20Control%20and%20Procedures) This section reports on the evaluation of the company's disclosure controls and procedures, concluding their effectiveness as of September 30, 2021 - An evaluation of the effectiveness of the design and operation of disclosure controls and procedures was performed under the supervision of the Chief Executive Officer and Chief Financial Officer[325](index=325&type=chunk)[326](index=326&type=chunk) - Based on the evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the Company's disclosure controls and procedures were effective as of September 30, 2021[326](index=326&type=chunk) [Changes in Internal Control over Financial Reporting](index=69&type=section&id=Changes%20in%20Internal%20Control%20over%20Financial%20Reporting) This section confirms that no material changes occurred in internal control over financial reporting during the last fiscal quarter - There have been no changes in internal control over financial reporting during the last fiscal quarter that have materially affected, or are reasonably likely to materially affect, internal controls over financial reporting[328](index=328&type=chunk) [PART II OTHER INFORMATION](index=70&type=section&id=PART%20II%20OTHER%20INFORMATION) This section covers additional information not included in the financial statements, such as legal proceedings, risk factors, equity sales, and exhibits [Item 1. Legal Proceedings](index=70&type=section&id=Item%201.%20Legal%20Proceedings) This section refers to the detailed discussion of legal proceedings and related contingencies provided in Note 9 to the consolidated financial statements [Legal Proceedings](index=70&type=section&id=Legal%20Proceedings) This section directs readers to Note 9 for comprehensive information regarding the company's ongoing legal proceedings - Information regarding legal proceedings is set forth in **Note 9** in the accompanying condensed consolidated financial statements[331](index=331&type=chunk) [Item 1A. Risk Factors](index=70&type=section&id=Item%201A.%20Risk%20Factors) This section directs readers to the Company's Annual Report on Form 10-K for the year ended December 31, 2020, and the Quarterly Report on Form 10-Q for the quarter ended June 30, 2021, for a comprehensive discussion of factors that could materially adversely affect the business [Risk Factors](index=70&type=section&id=Risk%20Factors) This section refers to previous filings for a detailed discussion of factors that could materially adversely affect the company's business - Factors that could materially adversely affect the Company's business, financial condition, operating results, or liquidity are described in **Item 1A of the Annual Report on Form 10-K for the year ended December 31, 2020**, and the **Quarterly Report on Form 10-Q for the quarter ended June 30, 2021**[332](index=332&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=70&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section states that there were no unregistered sales of equity securities or issuer repurchases of equity securities during the reporting period [Unregistered Sales of Equity Securities](index=70&type=section&id=Unregistered%20Sales%20of%20Equity%20Securities) This section confirms that no unregistered sales of equity securities occurred during the reporting period - None[333](index=333&type=chunk) [Issuer Repurchases of Equity Securities](index=70&type=section&id=Issuer%20Repurchases%20of%20Equity%20Securities) This section confirms that no issuer repurchases of equity securities occurred during the reporting period - None[334](index=334&type=chunk) [Item 3. Defaults Upon Senior Securities](index=70&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) This section reports that there were no defaults upon senior securities during the reporting period [Defaults Upon Senior Securities](index=70&type=section&id=Defaults%20Upon%20Senior%20Securities) This section confirms that no defaults upon senior securities occurred during the reporting period - None[335](index=335&type=chunk) [Item 4. Mine Safety Disclosures](index=70&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This section indicates that this item is not applicable to the Company [Mine Safety Disclosures](index=70&type=section&id=Mine%20Safety%20Disclosures) This section states that mine safety disclosures are not applicable to the company's operations - Not applicable[336](index=336&type=chunk) [Item 5. Other Information](index=70&type=section&id=Item%205.%20Other%20Information) This section states that there is no other information to report under this item [Other Information](index=70&type=section&id=Other%20Information) This section confirms that no additional information is required to be reported under this item - None[337](index=337&type=chunk) [Item 6. Exhibits](index=71&type=section&id=Item%206.%20Exhibits) This section provides a list of exhibits filed as part of the Form 10-Q, including key agreements and certifications [INDEX OF EXHIBITS](index=71&type=section&id=INDEX%20OF%20EXHIBITS) This section lists all exhibits accompanying the report, including organizational documents, credit agreements, and officer certifications - Exhibits include the **Amended Joint Chapter 11 Plan of Reorganization, Amended and Restated Certificate of Incorporation and Bylaws, Third Amended and Restated Credit Agreement, CEO Agreement Amendment**, and various certifications (CEO, CFO)[340](index=340&type=chunk) [Signatures](index=73&type=section&id=Signatures) This section confirms the official signing of the Form 10-Q report by the authorized representative of Gulfport Energy Corporation [SIGNATURES](index=73&type=section&id=SIGNATURES) This section formally attests to the accuracy and completeness of the report through the signature of the Chief Financial Officer - The report was signed on November 3, 2021, by **William Buese, Chief Financial Officer**, on behalf of Gulfport Energy Corporation[345](index=345&type=chunk)

Gulfport Energy Corporation (NYSE:GPOR) Q3 2021 Earnings Conference Call November 3, 2021 9:00 AM ET Company Participants Tommy Renouard – Senior Analyst, Investor Relations Tim Cutt - Chief Executive Officer Bill Buese - Executive Vice President & Chief Financial Officer Conference Call Participants Neal Dingmann - Truist Zach Parham – JP Morgan Tarek Hamid - JPMorgan Steven Dechert - KeyBanc Operator Greetings. Welcome to the Gulfport Energy Corp Third Quarter 2021 Conference Call. At this time, all parti ...

Financial Highlights - The company's market capitalization is $1.7 billion[9] - The company's enterprise value is $2.5 billion[10] - The company has liquidity of $388 million[11] - The company's leverage is 1.2x[12] - The company estimates 2021 free cash flow to be $345 - $365 million[16] - The company estimates 2021 free cash flow yield to be approximately 21%[17] Operational Overview - The company estimates 2021 total capital expenditure to be $290 - $310 million[13] - The company estimates 2021 total net production to be 980 – 1,000 MMcfepd[14] - The company's production mix is 90% natural gas, 7% NGL, and 3% oil[15]

[FORM 10-Q Cover Page](index=1&type=section&id=FORM%2010-Q%20Cover%20Page) Presents Gulfport Energy Corporation's Q2 2021 Form 10-Q cover page, detailing filing status and registrant information - Gulfport Energy Corporation filed a Quarterly Report on Form 10-Q for the period ended **June 30, 2021**[1](index=1&type=chunk) Registrant Information | Field | Value | | :--- | :--- | | Exact Name | Gulfport Energy Corporation | | State of Incorporation | Delaware | | IRS Employer ID | 86-3684669 | | Principal Executive Offices | 3001 Quail Springs Parkway, Oklahoma City, Oklahoma 73134 | | Telephone Number | (405) 252-4600 | | Trading Symbol | GPOR | | Exchange | The New York Stock Exchange | | Common Stock Outstanding (July 29, 2021) | 20,585,599 shares | [Table of Contents](index=2&type=section&id=Table%20of%20Contents) Outlines the Form 10-Q's structure, including financial statements, MD&A, market risk, and controls and procedures - The report is divided into two main parts: **Part I (Financial Information)** and **Part II (Other Information)**[5](index=5&type=chunk) - Key financial statements and notes are located in **Part I, Item 1**, starting on **page 4**[5](index=5&type=chunk) - Management's Discussion and Analysis of Financial Conditions and Results of Operations is in **Part I, Item 2**, starting on **page 46**[5](index=5&type=chunk) [DEFINITIONS](index=3&type=section&id=DEFINITIONS) Provides a glossary of abbreviations and terms used in the Form 10-Q, clarifying company, monetary, and industry-specific definitions - References to 'us,' 'we,' 'our,' 'ours,' 'Gulfport,' the 'Company' and 'Registrant' refer to Gulfport Energy Corporation and its consolidated subsidiaries[8](index=8&type=chunk) - All monetary values, other than per unit and per share amounts, are stated in **thousands of U.S. dollars** unless otherwise specified[8](index=8&type=chunk) - Key terms defined include those related to the company's bankruptcy proceedings (e.g., Bankruptcy Code, Emergence Date, Plan, Restructuring) and oil and gas industry metrics (e.g., Bbl, Mcf, MMBtu, NGL, SCOOP, Utica)[9](index=9&type=chunk)[11](index=11&type=chunk)[14](index=14&type=chunk)[17](index=17&type=chunk)[18](index=18&type=chunk)[20](index=20&type=chunk)[21](index=21&type=chunk)[22](index=22&type=chunk)[23](index=23&type=chunk) [PART I FINANCIAL INFORMATION](index=4&type=section&id=PART%20I%20FINANCIAL%20INFORMATION) [Item 1. Consolidated Financial Statements (Unaudited)](index=4&type=section&id=Item%201.%20Consolidated%20Financial%20Statements%20(Unaudited)) Presents Gulfport's unaudited consolidated financial statements and notes, detailing Chapter 11 emergence and fresh start accounting [Consolidated Balance Sheets](index=4&type=section&id=Consolidated%20Balance%20Sheets) Reflects significant asset and liability decreases for the Successor period, driven by Chapter 11 reorganization and fresh start accounting Consolidated Balance Sheet Highlights (in thousands) | Metric | June 30, 2021 (Successor) | December 31, 2020 (Predecessor) | | :--- | :--- | :--- | | Total Assets | $2,066,188 | $2,539,871 | | Total Liabilities | $1,557,238 | $2,840,371 | | Total Stockholders' Equity (Deficit) | $453,090 | $(300,500) | | Cash and Cash Equivalents | $9,389 | $89,861 | | Property and Equipment, net | $1,818,731 | $2,086,269 | | Liabilities Subject to Compromise | $0 | $2,293,480 | - The company emerged from Chapter 11, leading to a revaluation of assets and liabilities under fresh start accounting, and the cancellation of Predecessor common stock and issuance of New Common Stock and Preferred Stock[29](index=29&type=chunk)[45](index=45&type=chunk)[66](index=66&type=chunk)[67](index=67&type=chunk) [Consolidated Statements of Operations](index=6&type=section&id=Consolidated%20Statements%20of%20Operations) Reflects Chapter 11 impact, showing Successor net loss from derivatives and impairment, contrasting with Predecessor net income Consolidated Statements of Operations Highlights (in thousands, except per share data) | Metric | Successor (May 18 - Jun 30, 2021) | Predecessor (Apr 1 - May 17, 2021) | Predecessor (Jan 1 - May 17, 2021) | Predecessor (Apr 1 - Jun 30, 2020) | Predecessor (Jan 1 - Jun 30, 2020) | | :--- | :--- | :--- | :--- | :--- | :--- | | Total Revenues | $5,724 | $25,679 | $273,037 | $186,301 | $485,639 | | Total Operating Expenses | $207,467 | $94,194 | $290,695 | $742,051 | $1,521,476 | | Net (Loss) Income | $(209,586) | $242,214 | $250,996 | $(561,068) | $(1,078,606) | | Net (Loss) Income Attributable to Common Stockholders | $(210,617) | $242,214 | $250,996 | $(561,068) | $(1,078,606) | | Basic EPS | $(10.36) | $1.51 | $1.56 | $(3.51) | $(6.75) | - Net loss in the Successor Period was significantly impacted by net losses on natural gas, oil, and NGL derivatives (**$139.7 million**) and impairment of oil and natural gas properties (**$117.8 million**)[31](index=31&type=chunk) - The Predecessor periods show substantial reorganization items, net, contributing to income in the Current Predecessor Quarter (**$305.6 million**) and YTD Period (**$266.9 million**)[31](index=31&type=chunk)[34](index=34&type=chunk) [Consolidated Statements of Comprehensive Income (Loss)](index=8&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income%20(Loss)) Shows Successor comprehensive loss equal to net loss, with Predecessor periods also reporting losses and minor foreign currency impact Consolidated Statements of Comprehensive Income (Loss) Highlights (in thousands) | Metric | Successor (May 18 - Jun 30, 2021) | Predecessor (Apr 1 - May 17, 2021) | Predecessor (Jan 1 - May 17, 2021) | Predecessor (Jun 30, 2020) | | :--- | :--- | :--- | :--- | :--- | | Net income (loss) | $(209,586) | $242,214 | $250,996 | $(561,068) | | Foreign currency translation adjustment | $0 | $0 | $0 | $6,872 | | Comprehensive income (loss) | $(209,586) | $242,214 | $250,996 | $(554,196) | [Consolidated Statements of Stockholders' Equity (Deficit)](index=9&type=section&id=Consolidated%20Statements%20of%20Stockholders'%20Equity%20(Deficit)) Illustrates Chapter 11 impact, with Predecessor equity cancellation and new equity issuance, transforming deficit to positive equity Stockholders' Equity (Deficit) Evolution (in thousands) | Metric | Balance at Jan 1, 2021 (Predecessor) | Balance at May 17, 2021 (Predecessor) | Balance at May 18, 2021 (Successor) | Balance at Jun 30, 2021 (Successor) | | :--- | :--- | :--- | :--- | :--- | | Total Stockholders' Equity (Deficit) | $(300,500) | $639,667 | $639,667 | $453,090 | | Predecessor Common Stock | $1,607 | $2 | $2 | $2 | | New Common Stock | $0 | $2 | $2 | $2 | | Additional Paid-in Capital | $4,213,752 | $693,774 | $693,774 | $693,921 | | Accumulated Deficit | $(4,472,859) | $0 | $0 | $(210,617) | | New Preferred Stock | $0 | $55,000 | $55,000 | $55,860 | - The cancellation of Predecessor Equity and issuance of New Common Stock and Preferred Stock on **May 17, 2021**, significantly altered the equity structure, moving from a deficit to positive equity[40](index=40&type=chunk) [Consolidated Statements of Cash Flows](index=11&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Operating activities generated positive cash flow, with significant investing cash use and financing impacted by Chapter 11 reorganization Consolidated Statements of Cash Flows Highlights (in thousands) | Metric | Successor (May 18 - Jun 30, 2021) | Predecessor (Jan 1 - May 17, 2021) | Predecessor (Jan 1 - Jun 30, 2020) | | :--- | :--- | :--- | :--- | | Net cash provided by operating activities | $38,365 | $172,155 | $247,222 | | Net cash used in investing activities | $(40,276) | $(97,831) | $(230,090) | | Net cash used in financing activities | $(18,982) | $(104,768) | $(20,375) | | Net decrease in cash, cash equivalents and restricted cash | $(20,893) | $(30,444) | $(3,243) | | Cash, cash equivalents and restricted cash at end of period | $38,524 | $59,417 | $2,817 | - Operating cash flow decreased from **$247.2 million** in H1 2020 to **$210.5 million** (combined Successor and Predecessor H1 2021), primarily due to reorganization items[42](index=42&type=chunk)[292](index=292&type=chunk) - Financing activities in 2021 included significant borrowings (**$113.2 million** Successor, **$302.8 million** Predecessor) and principal payments on the Exit Credit Facility (**$131.0 million** Successor) and DIP Credit Facility (**$157.5 million** Predecessor)[42](index=42&type=chunk) [Notes to Consolidated Financial Statements](index=12&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) Provides detailed explanations for financial statements, covering basis, Chapter 11 impact, debt, equity, and critical accounting policies [Note 1. BASIS OF PRESENTATION](index=14&type=section&id=Note%201.%20BASIS%20OF%20PRESENTATION) Details Gulfport's identity, Chapter 11 reorganization, and fresh start accounting, distinguishing 'Successor' and 'Predecessor' periods - Gulfport Energy Corporation is an independent natural gas-weighted exploration and production company with assets in the Appalachia and Anadarko basins[45](index=45&type=chunk) - The company filed for Chapter 11 bankruptcy on **November 13, 2020**, and emerged on **May 17, 2021**, leading to the adoption of fresh start accounting[45](index=45&type=chunk)[49](index=49&type=chunk)[50](index=50&type=chunk) - Financial statements distinguish between '**Successor**' (post-**May 17, 2021**) and '**Predecessor**' (on or prior to **May 17, 2021**) periods, with fresh start accounting making post-emergence statements not comparable to prior periods[45](index=45&type=chunk)[47](index=47&type=chunk)[67](index=67&type=chunk) - The company early adopted ASU No. 2020-06, simplifying accounting for convertible instruments, effective on the Emergence Date[58](index=58&type=chunk)[59](index=59&type=chunk) [Note 2. CHAPTER 11 EMERGENCE](index=17&type=section&id=Note%202.%20CHAPTER%2011%20EMERGENCE) Outlines significant transactions upon Chapter 11 emergence, including old stock cancellation, new equity/debt, and new Board composition - On **May 17, 2021**, all Predecessor common stock was cancelled, and **19,845,780 shares** of New Common Stock and **55,000 shares** of New Preferred Stock were issued[62](index=62&type=chunk) - All outstanding obligations under the Predecessor Senior Notes were cancelled[62](index=62&type=chunk) - The company entered into a new Exit Credit Agreement, providing for a **$1.5 billion** Exit Facility and a **$180 million** First-Out Term Loan Facility, with an initial borrowing base of up to **$580 million**[62](index=62&type=chunk) - Issued up to **$550 million** aggregate principal amount of **8.000%** senior notes due 2026 (Successor Senior Notes)[62](index=62&type=chunk) - The post-emergence Board of Directors is comprised of **five directors**, including the Interim CEO, **Timothy Cutt**[64](index=64&type=chunk) [Note 3. FRESH START ACCOUNTING](index=18&type=section&id=Note%203.%20FRESH%20START%20ACCOUNTING) Explains fresh start accounting post-Chapter 11, revaluing assets/liabilities to fair value, with reorganization value at $2.3 billion - Gulfport qualified for and applied fresh start accounting on **May 17, 2021**, because existing voting shareholders received less than **50%** of new equity and reorganization value (**$2.3 billion**) was less than post-petition liabilities (**$3.1 billion**)[66](index=66&type=chunk) - The enterprise value of the Successor was estimated at **$1.6 billion**, leading to a reorganization value of Successor assets of **$2.25 billion**[68](index=68&type=chunk)[69](index=69&type=chunk)[71](index=71&type=chunk) - Significant fair value adjustments were made to oil and natural gas properties (reduced by **$9.04 billion** in total property and equipment, net), derivative instruments, and equity investments (Grizzly investment reduced by **$27 million**)[71](index=71&type=chunk)[72](index=72&type=chunk)[75](index=75&type=chunk)[76](index=76&type=chunk)[79](index=79&type=chunk) Reorganization Items, Net (in thousands) | Item | Predecessor (Apr 1 - May 17, 2021) | Predecessor (Jan 1 - May 17, 2021) | | :--- | :--- | :--- | | Legal and professional advisory fees | $(40,782) | $(81,565) | | Net gain on liabilities subject to compromise | $571,032 | $575,182 | | Fresh start adjustments, net | $(160,756) | $(160,756) | | Total reorganization items, net | $305,617 | $266,898 | [Note 4. PROPERTY AND EQUIPMENT](index=27&type=section&id=Note%204.%20PROPERTY%20AND%20EQUIPMENT) Details property and equipment, primarily oil/gas, highlighting a $117.8 million impairment charge and asset retirement obligations Property and Equipment, Net (in thousands) | Category | June 30, 2021 (Successor) | December 31, 2020 (Predecessor) | | :--- | :--- | :--- | | Proved oil and natural gas properties | $1,737,778 | $9,359,866 | | Unproved properties | $224,214 | $1,457,043 | | Total property and equipment, net | $1,818,731 | $2,086,269 | | Accumulated DD&A and impairment | $(150,175) | $(8,819,178) | - A **$117.8 million** impairment of oil and natural gas properties was recorded for the Successor Period (ended **June 30, 2021**) due to the ceiling test, following **$532.9 million** and **$1.1 billion** impairments in prior Predecessor periods[91](index=91&type=chunk) - Unevaluated properties at **June 30, 2021**, totaled **$224.2 million**, primarily in Utica (**$186.0 million**) and SCOOP (**$38.2 million**)[94](index=94&type=chunk) Asset Retirement Obligation (in thousands) | Item | Amount | | :--- | :--- | | Asset retirement obligation at Jan 1, 2021 (Predecessor) | $63,560 | | Fresh start adjustments | $(46,257) | | Asset retirement obligation at May 18, 2021 (Successor) | $19,084 | | Asset retirement obligation at Jun 30, 2021 | $19,347 | [Note 5. LONG-TERM DEBT](index=28&type=section&id=Note%205.%20LONG-TERM%20DEBT) Details Gulfport's post-Chapter 11 long-term debt, including Exit Credit Facility and Successor Senior Notes, outlining terms and rates Long-Term Debt Structure (in thousands) | Debt Instrument | June 30, 2021 (Successor) | December 31, 2020 (Predecessor) | | :--- | :--- | :--- | | Exit Facility | $105,000 | $0 | | First-Out Term Loan | $180,000 | $0 | | 8.000% senior unsecured notes due 2026 | $550,000 | $0 | | DIP Credit Facility | $0 | $157,500 | | Pre-petition revolving credit facility | $0 | $292,910 | | Predecessor Senior Notes (various) | $0 | $1,786,688 | | Total Debt | $833,847 | $2,258,962 | - The Exit Credit Facility has an initial borrowing base of **$580 million**, matures on **May 17, 2024**, and includes a **$150 million** sublimit for letters of credit and a **$40 million** availability blocker[99](index=99&type=chunk)[100](index=100&type=chunk)[101](index=101&type=chunk) - The Exit Facility bore interest at a weighted average rate of **4.50%** and the First-Out Term Loan at **5.50%** as of **June 30, 2021**[102](index=102&type=chunk) - The company issued **$550 million** aggregate principal amount of **8.000%** senior notes due 2026, payable semi-annually[109](index=109&type=chunk)[111](index=111&type=chunk) - Predecessor Senior Notes and the Building Loan were cancelled upon emergence from bankruptcy[119](index=119&type=chunk)[120](index=120&type=chunk) [Note 6. EQUITY](index=31&type=section&id=Note%206.%20EQUITY) Details Gulfport's equity changes post-Chapter 11, including Predecessor stock cancellation, new common/preferred stock issuance, and preferred terms - On the Emergence Date, all Predecessor common stock was cancelled, and approximately **19.8 million shares** of New Common Stock and **55,000 shares** of New Preferred Stock were issued[124](index=124&type=chunk)[125](index=125&type=chunk) - New Preferred Stock holders are entitled to cumulative quarterly dividends at **10% per annum** (cash) or **15% per annum** (PIK Dividends), with PIK dividends mandatory if the Total Net Funded Debt to EBITDAX ratio is **1.50 or greater**[126](index=126&type=chunk) - Preferred Stock has conversion rights into common stock at the holder's option and redemption rights for Gulfport under certain conditions[127](index=127&type=chunk)[128](index=128&type=chunk)[129](index=129&type=chunk) - On **June 30, 2021**, dividends on New Preferred Stock included **1,006 shares** paid in kind and **$25 thousand** cash-in-lieu of fractional shares[131](index=131&type=chunk) [Note 7. STOCK-BASED COMPENSATION](index=32&type=section&id=Note%207.%20STOCK-BASED%20COMPENSATION) Explains Chapter 11 impact on stock-based compensation, with Predecessor awards cancelled and a new Incentive Plan adopted - All Predecessor stock-based compensation awards were cancelled upon emergence, resulting in the recognition of **$4.4 million** in previously unamortized expense[132](index=132&type=chunk) - The company adopted the Gulfport Energy Corporation 2021 Stock Incentive Plan, reserving **2,828,123 shares** of New Common Stock for future awards, with no grants made as of **June 30, 2021**[133](index=133&type=chunk) Predecessor Stock-Based Compensation Costs (in thousands) | Period | Stock-Based Compensation Cost | Capitalized Amount | | :--- | :--- | :--- | | Current Predecessor Quarter | $1,500 | $300 | | Current Predecessor YTD Period | $4,400 | $900 | | Prior Predecessor Quarter | $2,200 | $1,000 | | Prior Predecessor YTD Period | $4,300 | $1,900 | [Note 8. EARNINGS (LOSS) PER SHARE](index=33&type=section&id=Note%208.%20EARNINGS%20(LOSS)%20PER%20SHARE) Details EPS calculation, highlighting New Preferred Stock as participating securities and anti-dilutive effect during net loss periods - Basic EPS for the Successor Period was **$(10.36)**, while for the Current Predecessor Quarter and YTD Period, it was **$1.51** and **$1.56**, respectively[31](index=31&type=chunk)[34](index=34&type=chunk)[141](index=141&type=chunk) - New Preferred Stock is considered a participating security but does not participate in undistributed net losses[141](index=141&type=chunk) - Potential common shares from convertible New Preferred Stock (**4.0 million shares**) and unvested restricted stock (**1.3-1.6 million shares**) were anti-dilutive during periods of net loss[140](index=140&type=chunk) [Note 9. COMMITMENTS AND CONTINGENCIES](index=34&type=section&id=Note%209.%20COMMITMENTS%20AND%20CONTINGENCIES) Outlines Gulfport's significant commitments, including firm transportation and sales contracts, and various contingencies like litigation Future Firm Transportation and Gathering Commitments (in thousands) | Period | Amount | | :--- | :--- | | Remaining 2021 | $112,881 | | 2022 | $226,544 | | 2023 | $224,737 | | 2024 | $217,873 | | 2025 | $139,124 | | Thereafter | $1,013,822 | | Total | $1,934,981 | Future Firm Sales Commitments (MMBtu per day) | Period | Volume | | :--- | :--- | | Remaining 2021 | 16,000 | | 2022 | 4,000 | | 2023-Thereafter | 0 | - The company is litigating motions to reject certain firm transportation agreements, with potential liability exceeding **$80 million** if not granted[148](index=148&type=chunk) - Ongoing litigation includes environmental claims in Louisiana, a derivative action related to Mammoth Energy, a federal securities class action, and breach of contract claims with Stingray Pressure Pumping LLC and Muskie[149](index=149&type=chunk)[150](index=150&type=chunk)[151](index=151&type=chunk)[152](index=152&type=chunk)[153](index=153&type=chunk) [Note 10. DERIVATIVE INSTRUMENTS](index=38&type=section&id=Note%2010.%20DERIVATIVE%20INSTRUMENTS) Details Gulfport's use of derivative instruments to mitigate commodity price volatility, presenting fair values and a significant net liability - Gulfport uses fixed price swaps, sold call options, costless collars, and basis swaps to manage commodity price volatility for natural gas, oil, and NGL[160](index=160&type=chunk)[161](index=161&type=chunk)[162](index=162&type=chunk)[164](index=164&type=chunk)[166](index=166&type=chunk) Summary of Open Fixed Price Swap Positions (as of June 30, 2021) | Commodity | Location | Daily Volume | Weighted Average Price | | :--- | :--- | :--- | :--- | | Natural Gas (MMBtu/day) | NYMEX Henry Hub | 221,500 (2021), 80,411 (2022) | $2.79 (2021), $2.80 (2022) | | Oil (Bbl/day) | NYMEX WTI | 3,250 (2021), 1,000 (2022) | $57.35 (2021), $67.00 (2022) | | NGL (Bbl/day) | Mont Belvieu C3 | 3,100 (2021), 496 (2022) | $27.80 (2021), $27.30 (2022) | Fair Value of Derivative Instruments (in thousands) | Category | June 30, 2021 (Successor) | December 31, 2020 (Predecessor) | | :--- | :--- | :--- | | Short-term derivative asset | $2,223 | $27,146 | | Long-term derivative asset | $3,014 | $322 | | Short-term derivative liability | $(192,730) | $(11,641) | | Long-term derivative liability | $(113,470) | $(36,604) | | Total commodity derivative position | $(300,963) | $(20,777) | - The company had a net liability derivative position of **$301.0 million** at **June 30, 2021**, compared to a net asset position of **$3.3 million** at **June 30, 2020**[170](index=170&type=chunk)[174](index=174&type=chunk)[318](index=318&type=chunk) [Note 11. FAIR VALUE MEASUREMENTS](index=41&type=section&id=Note%2011.%20FAIR%20VALUE%20MEASUREMENTS) Describes Gulfport's fair value measurements, categorizing assets/liabilities into Level 1, 2, or 3 inputs, with derivatives primarily Level 2 - Fair value measurements are classified into **Level 1** (quoted prices in active markets), **Level 2** (observable inputs other than Level 1), and **Level 3** (unobservable inputs)[177](index=177&type=chunk) Fair Value of Financial Instruments (in thousands) | Category | Level 1 | Level 2 | Level 3 | | :--- | :--- | :--- | :--- | | **Assets (June 30, 2021):** | | | | | Derivative Instruments | $0 | $5,237 | $0 | | Contingent consideration arrangement | $0 | $0 | $6,500 | | **Liabilities (June 30, 2021):** | | | | | Derivative Instruments | $0 | $306,200 | $0 | - The fair value of the contingent consideration arrangement (**$6.5 million** at **June 30, 2021**) is calculated using discounted cash flow techniques with Level 3 inputs[179](index=179&type=chunk) - Fresh start accounting adjustments for oil and natural gas properties and asset retirement obligations involved significant Level 3 unobservable inputs, such as future production estimates, commodity prices, and discount rates[183](index=183&type=chunk) [Note 12. REVENUE FROM CONTRACTS WITH CUSTOMERS](index=42&type=section&id=Note%2012.%20REVENUE%20FROM%20CONTRACTS%20WITH%20CUSTOMERS) Outlines Gulfport's revenue recognition policies for natural gas, oil, and NGL sales, recognized upon transfer of control - Revenue from natural gas, oil, and NGL sales is recognized when control of the product is transferred to the customer, typically based on market indices and volumes delivered[184](index=184&type=chunk)[185](index=185&type=chunk) - Gathering, processing, and compression fees are presented as operating expenses, not deductions from revenue[186](index=186&type=chunk) - Receivables from contracts with customers were **$140.7 million** at **June 30, 2021**, and **$119.9 million** at **December 31, 2020**[189](index=189&type=chunk) [Note 13. EQUITY INVESTMENTS](index=44&type=section&id=Note%2013.%20EQUITY%20INVESTMENTS) Details Gulfport's equity investments, including a 24.5% interest in Grizzly Oil Sands ULC, reduced to zero post-emergence - Gulfport owns an approximate **24.5%** interest in Grizzly Oil Sands ULC, which was reduced to **zero** upon the Emergence Date due to suspended operations and no anticipated future funding[195](index=195&type=chunk)[197](index=197&type=chunk) - The investment in Mammoth Energy Services, Inc. was reduced to **zero** in Q1 2020 and its shares were used to settle Class 4A claims upon emergence[198](index=198&type=chunk) Summarized Financial Information for Equity Investments (in thousands) | Metric | June 30, 2021 | December 31, 2020 | | :--- | :--- | :--- | | Current assets | $462,478 | $483,300 | | Noncurrent assets | $1,079,557 | $1,092,490 | | Current liabilities | $125,359 | $132,970 | | Noncurrent liabilities | $124,628 | $148,240 | | Gross revenue (Q2 2021) | $66,805 | $60,109 (Q2 2020) | | Net loss (Q2 2021) | $(13,606) | $(14,922) (Q2 2020) | [Note 14. LEASES](index=45&type=section&id=Note%2014.%20LEASES) Describes Gulfport's operating leases for equipment and offices, recognizing right-of-use assets and lease liabilities - Gulfport has operating leases for equipment and field offices, recognizing right-of-use assets and lease liabilities for leases over **one year**[199](index=199&type=chunk)[201](index=201&type=chunk) Maturities of Operating Lease Liabilities (in thousands, as of June 30, 2021) | Period | Amount | | :--- | :--- | | Remaining 2021 | $20 | | 2022 | $25 | | Total lease payments | $45 | | Less: Imputed interest | $(1) | | Total | $44 | - The weighted-average remaining lease term was **1.14 years**, and the weighted-average discount rate was **3.98%** as of **June 30, 2021**[204](index=204&type=chunk) - Total lease cost for the Successor Period was **$2.168 million**, with the majority capitalized to the full cost pool[204](index=204&type=chunk) [Note 15. INCOME TAXES](index=46&type=section&id=Note%2015.%20INCOME%20TAXES) Explains Chapter 11 impact on income taxes, including **$708.8 million** CODI reducing NOLs, and a full valuation allowance on deferred tax assets - The Chapter 11 emergence resulted in approximately **$708.8 million** in Cancellation of Indebtedness Income (CODI), which will reduce the company's net operating losses[205](index=205&type=chunk) - As of **June 30, 2021**, Gulfport had an estimated federal net operating loss carryforward of approximately **$1.1 billion** after CODI reduction[205](index=205&type=chunk) - A full valuation allowance was deemed necessary against net deferred tax assets as of **May 17, 2021**, and **June 30, 2021**, leading to a **0%** effective tax rate and no income tax expense for the Successor Period[207](index=207&type=chunk)[209](index=209&type=chunk) - The company expects to apply IRC Section 382(l)(5) rules to mitigate limitations on its remaining tax attributes, but future ownership changes could further limit their realization[206](index=206&type=chunk) [Note 16. SUBSEQUENT EVENTS](index=47&type=section&id=Note%2016.%20SUBSEQUENT%20EVENTS) Discloses natural gas and oil derivative contracts entered into by Gulfport subsequent to **June 30, 2021** Natural Gas and Oil Derivative Contracts Entered After June 30, 2021 (as of July 31, 2021) | Commodity | Type of Derivative Instrument | Index | Daily Volume | Weighted Average Price | | :--- | :--- | :--- | :--- | :--- | | Natural Gas (MMBtu/day) | Fixed price swap | NYMEX Henry Hub | 80,073 (Apr-Dec 2022), 20,000 (Jan-Mar 2023) | $2.99 (2022), $3.13 (2023) | | Oil (Bbl/day) | Fixed price swap | NYMEX WTI | 1,104 (Jan-Dec 2022) | $65.54 (2022) | [Item 2. Management's Discussion and Analysis of Financial Conditions and Results of Operations](index=48&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Conditions%20and%20Results%20of%20Operations) Management's perspective on Gulfport's financial condition, operations, and liquidity, emphasizing Chapter 11 emergence and fresh start accounting [Introduction](index=48&type=section&id=Introduction) Overview of Gulfport's business, strategy for sustainable cash flow, and reporting approach for combined Predecessor and Successor periods - Gulfport is an independent natural gas-weighted exploration and production company with assets primarily in the Appalachia (Utica formation) and Anadarko (SCOOP Woodford and Springer formations) basins[213](index=213&type=chunk) - The company's strategy focuses on developing assets to generate sustainable cash flow, improve margins and operating efficiencies, and enhance ESG and safety performance[213](index=213&type=chunk) - Management combines Successor and Predecessor period results for the three and six months ended **June 30, 2021**, to provide a more meaningful comparison and understand operational trends, despite GAAP requiring separate reporting[214](index=214&type=chunk) [Recent Developments](index=48&type=section&id=Recent%20Developments) Highlights Gulfport's Chapter 11 emergence, **$1.4 billion** debt reduction, executive changes, and ongoing COVID-19 uncertainties - Gulfport emerged from Chapter 11 bankruptcy on **May 17, 2021**, reducing total indebtedness by **$1.4 billion** through equity issuance to unsecured noteholders and claimants[215](index=215&type=chunk)[217](index=217&type=chunk)[218](index=218&type=chunk) - **Timothy Cutt** was appointed Interim Chief Executive Officer and Chair of the Board, and **William Buese** was appointed Chief Financial Officer on **May 17, 2021**[219](index=219&type=chunk)[220](index=220&type=chunk)[221](index=221&type=chunk) - The COVID-19 pandemic continues to pose uncertainties regarding its impact on business operations, cash flows, liquidity, and commodity markets, despite no significant disruptions in H1 2021[221](index=221&type=chunk)[222](index=222&type=chunk) [2021 Operational and Financial Highlights](index=49&type=section&id=2021%20Operational%20and%20Financial%20Highlights) Gulfport achieved operational efficiencies and cost reductions, including **3%** Utica spud-to-rig time improvement and **13%** lease operating expense decrease - Emergence from Chapter 11 proceedings was a key achievement[223](index=223&type=chunk) - Operational efficiencies improved, with average spud-to-rig release time in Utica at **18.1 days**, a **3% improvement** from full year 2020[223](index=223&type=chunk) - Lease operating expenses per Mcfe decreased by **13%** for the Current Combined Quarter compared to the Prior Predecessor Quarter due to cost reduction initiatives[223](index=223&type=chunk) [2021 Production and Drilling Activity](index=50&type=section&id=2021%20Production%20and%20Drilling%20Activity) Total net production decreased by **4-5%** due to reduced development, aligning with sustainable free cash flow; drilling activity detailed Total Net Production Volumes (MMcfe/day) | Period | Current Combined Quarter (2021) | Prior Predecessor Quarter (2020) | Current Combined YTD Period (2021) | Prior Predecessor YTD Period (2020) | | :--- | :--- | :--- | :--- | :--- | | Total | 989,053 | 1,027,060 | 985,909 | 1,040,430 | | Change YoY | -4% | - | -5% | - | - The decrease in production is attributed to reduced development activities in 2020 and H1 2021, aligning with the strategy to generate sustainable free cash flow[224](index=224&type=chunk)[226](index=226&type=chunk) - In the Utica, **10 gross and net wells** were spud and **9 completed** during the Current Combined YTD Period; in the SCOOP, **2 gross (1.97 net) wells** were spud and **11 gross (9.3 net) completed**[227](index=227&type=chunk)[228](index=228&type=chunk) - As of **July 31, 2021**, Gulfport had no operated drilling rigs in Utica but expected to add one in Q3 2021; one rig was running in SCOOP, expected to continue through 2021[227](index=227&type=chunk)[228](index=228&type=chunk) [RESULTS OF OPERATIONS](index=51&type=section&id=RESULTS%20OF%20OPERATIONS) Analyzes Gulfport's financial performance, comparing Successor and Predecessor periods, focusing on production, pricing, and operating expenses [Successor Period and Current Predecessor Quarter Compared to Prior Predecessor Quarter](index=52&type=section&id=Successor%20Period%20and%20Current%20Predecessor%20Quarter%20Compared%20to%20Prior%20Predecessor%20Quarter) Compares Q2 2021 to Q2 2020, showing significant increases in realized commodity prices, offset by production decreases and derivative losses Average Commodity Prices (without derivatives) | Commodity | Combined Current Quarter (Q2 2021) | Prior Predecessor Quarter (Q2 2020) | Change | | :--- | :--- | :--- | :--- | | Natural Gas ($/Mcf) | $2.71 | $1.66 | +63.25% | | Oil and Condensate ($/Bbl) | $62.95 | $20.14 | +212.56% | | NGL ($/Bbl) | $29.89 | $10.29 | +190.48% | Net (Loss) Gains on Derivatives (in thousands) | Derivative Type | Combined Current Quarter (Q2 2021) | Prior Predecessor Quarter (Q2 2020) | | :--- | :--- | :--- | | Natural gas derivatives | $(227,982) | $35,689 | | Oil and condensate derivatives | $(9,752) | $(7,937) | | NGL derivatives | $(9,185) | $(781) | | Total | $(246,919) | $26,971 | Key Operating Expenses per Mcfe | Expense Category | Combined Current Quarter (Q2 2021) | Prior Predecessor Quarter (Q2 2020) | Change | | :--- | :--- | :--- | :--- | | Lease operating expenses | $0.12 | $0.14 | -14.29% | | Taxes other than income | $0.10 | $0.07 | +42.86% | | Transportation, gathering, processing and compression | $1.07 | $1.22 | -12.29% | - General and administrative expenses increased in Q2 2021 due to legal and professional fees associated with restructuring, now presented in G&A post-emergence[246](index=246&type=chunk) - Interest expense decreased in the Current Predecessor Quarter due to the cessation of interest accrual on borrowings subject to compromise[247](index=247&type=chunk) [Successor Period and Current Predecessor YTD Period Compared to Prior Predecessor YTD Period](index=59&type=section&id=Successor%20Period%20and%20Current%20Predecessor%20YTD%20Period%20Compared%20to%20Prior%20Predecessor%20YTD%20Period) Compares H1 2021 to H1 2020, showing substantial increases in realized commodity prices despite production decreases, and derivative losses Average Commodity Prices (without derivatives) | Commodity | Current Combined YTD Period (H1 2021) | Prior Predecessor YTD Period (H1 2020) | Change | | :--- | :--- | :--- | :--- | | Natural Gas ($/Mcf) | $2.79 | $1.76 | +58.52% | | Oil and Condensate ($/Bbl) | $58.66 | $33.26 | +76.37% | | NGL ($/Bbl) | $30.54 | $12.92 | +136.38% | Net (Loss) Gains on Derivatives (in thousands) | Derivative Type | Current Combined YTD Period (H1 2021) | Prior Predecessor YTD Period (H1 2020) | | :--- | :--- | :--- | | Natural gas derivatives | $(253,395) | $81,542 | | Oil and condensate derivatives | $(11,483) | $44,937 | | NGL derivatives | $(12,019) | $139 | | Total | $(276,897) | $125,237 | Key Operating Expenses per Mcfe | Expense Category | Current Combined YTD Period (H1 2021) | Prior Predecessor YTD Period (H1 2020) | Change | | :--- | :--- | :--- | :--- | | Lease operating expenses | $0.13 | $0.15 | -13.33% | | Taxes other than income | $0.10 | $0.07 | +42.86% | | Transportation, gathering, processing and compression | $1.13 | $1.18 | -4.24% | - Impairment of oil and gas properties was **$117.8 million** in the Successor Period (H1 2021) compared to **$1.1 billion** in Prior Predecessor YTD Period (H1 2020)[264](index=264&type=chunk) - General and administrative expenses decreased in H1 2021 due to cost reduction focus and lower non-recurring legal/consulting expenses[266](index=266&type=chunk) [Liquidity and Capital Resources](index=65&type=section&id=Liquidity%20and%20Capital%20Resources) Details Gulfport's post-emergence liquidity and capital resources, including new debt structure, capital expenditure plans, and cash flow - As of **August 2, 2021**, Gulfport had available liquidity of **$161.9 million**[276](index=276&type=chunk) - Total principal amount of funded debt as of **June 30, 2021**, was **$835.0 million**, comprising **$105.0 million** from Exit Facility, **$180.0 million** from First-Out Term Loan, and **$550 million** from Successor Senior Notes[276](index=276&type=chunk) - Capital expenditures for 2021 are estimated at **$270 million to $290 million** for drilling and completion, plus **$20 million** for non-D&C expenses[290](index=290&type=chunk) - Net cash flow from operating activities was **$38.4 million** for the Successor Period and **$172.2 million** for the Current Predecessor YTD Period, a decrease from **$247.2 million** in the Prior Predecessor YTD Period, primarily due to reorganization items[292](index=292&type=chunk) - Off-balance sheet arrangements include **$114.8 million** in letters of credit and **$90.7 million** in surety bonds outstanding as of **June 30, 2021**[298](index=298&type=chunk) [Critical Accounting Policies and Estimates](index=69&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) No significant changes in Gulfport's critical accounting policies and estimates as of **June 30, 2021**, compared to its 2020 Annual Report on Form 10-K - No significant changes in critical accounting policies and estimates as of **June 30, 2021**, compared to the 2020 Annual Report on Form 10-K[300](index=300&type=chunk) [Cautionary Note Regarding Forward-Looking Statements](index=70&type=section&id=Cautionary%20Note%20Regarding%20Forward-Looking%20Statements) Cautionary note on forward-looking statements in Form 10-Q, emphasizing risks and uncertainties that could cause actual results to differ - The Form 10-Q contains forward-looking statements subject to known and unknown risks and uncertainties[302](index=302&type=chunk) - Actual results may differ materially from anticipated outcomes due to factors listed in 'Risk Factors' and MD&A[304](index=304&type=chunk) - The company disclaims any duty to update forward-looking statements, which are qualified in their entirety by this cautionary statement[305](index=305&type=chunk)[306](index=306&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=70&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Details Gulfport's exposure to market risks, primarily commodity price and interest rate volatility, and use of derivatives for mitigation - Gulfport uses derivative instruments (fixed price swaps, basis swaps, call options, costless collars) to mitigate exposure to volatile natural gas, oil, and NGL prices[308](index=308&type=chunk)[310](index=310&type=chunk)[314](index=314&type=chunk) - As of **June 30, 2021**, the company had a net liability derivative position of **$301.0 million**[318](index=318&type=chunk) - A **10% increase** in underlying commodity prices would reduce derivative fair value by approximately **$160.3 million**, while a **10% decrease** would increase it by **$145.1 million**[318](index=318&type=chunk) - The company is exposed to interest rate risk on its floating-rate Exit Facility and First-Out Term Loan, which bore weighted average interest rates of **4.50%** and **5.50%** respectively, as of **June 30, 2021**[319](index=319&type=chunk) [Item 4. Controls and Procedures](index=71&type=section&id=Item%204.%20Controls%20and%20Procedures) Confirms Gulfport's disclosure controls and procedures were effective as of **June 30, 2021**, with no material changes in internal control - Disclosure controls and procedures were evaluated and deemed effective as of **June 30, 2021**, ensuring information required for SEC reports is recorded, processed, summarized, and reported timely[320](index=320&type=chunk)[321](index=321&type=chunk) - Management acknowledges that control systems provide reasonable, not absolute, assurance[322](index=322&type=chunk) - No material changes in internal control over financial reporting occurred during the last fiscal quarter[323](index=323&type=chunk) [PART II OTHER INFORMATION](index=72&type=section&id=PART%20II%20OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=72&type=section&id=Item%201.%20Legal%20Proceedings) Refers to **Note 9** for information on Gulfport's legal proceedings, including litigation related to firm transportation agreements - Information on legal proceedings is detailed in **Note 9** of the consolidated financial statements[326](index=326&type=chunk) [Item 1A. Risk Factors](index=72&type=section&id=Item%201A.%20Risk%20Factors) Outlines risks related to Chapter 11 emergence, including adverse effects on business relationships, stock volatility, and potential dilution - Emergence from bankruptcy may adversely affect business relationships with customers, vendors, contractors, and employees, potentially leading to contract terminations or difficulties in attracting talent[328](index=328&type=chunk)[330](index=330&type=chunk) - Actual financial results post-bankruptcy may not be comparable to historical information due to the Plan's implementation and fresh start accounting, and projections should not be relied upon[329](index=329&type=chunk) - The market price of New Common Stock is subject to volatility due to the new capital structure, limited trading history, and general market conditions[330](index=330&type=chunk)[331](index=331&type=chunk) - Changes in the board of directors post-emergence may lead to different strategic initiatives and plans[332](index=332&type=chunk) - Future sales of substantial amounts of common stock, or the perception thereof, could adversely affect the trading price and ability to raise capital[333](index=333&type=chunk)[334](index=334&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=75&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) Reports no unregistered sales of equity securities and details common stock repurchase activity for tax withholding during Predecessor Period - No unregistered sales of equity securities occurred[337](index=337&type=chunk) Common Stock Repurchase Activity (Predecessor Period) | Month | Total Shares Purchased | Average Price Paid per Share | | :--- | :--- | :--- | | April | 10,470 | $0.05 | - Shares were repurchased and canceled to satisfy tax withholding requirements upon vesting of restricted stock unit awards[339](index=339&type=chunk) [Item 3. Defaults Upon Senior Securities](index=74&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) States bankruptcy filing constituted an event of default for Pre-Petition Revolving Credit Facility and Predecessor Senior Notes - The bankruptcy filing triggered an event of default for Pre-Petition Revolving Credit Facility and Predecessor Senior Notes, accelerating obligations[340](index=340&type=chunk) - Section 362 of the Bankruptcy Code stayed creditors from taking action due to the default[340](index=340&type=chunk) - Additional details are provided in **Note 3** and **Note 5** of the financial statements[340](index=340&type=chunk) [Item 4. Mine Safety Disclosures](index=74&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) Mine Safety Disclosures are not applicable to Gulfport Energy Corporation - Mine Safety Disclosures are not applicable[341](index=341&type=chunk) [Item 5. Other Information](index=75&type=section&id=Item%205.%20Other%20Information) Reports a change in **Mr. Craine's** title to Chief Legal and Administrative Officer and a **$450,000** annual base salary increase - **Mr. Craine's** title changed to Chief Legal and Administrative Officer[343](index=343&type=chunk) - His base salary increased to **$450,000** annually due to additional responsibilities[343](index=343&type=chunk) [Item 6. Exhibits](index=76&type=section&id=Item%206.%20Exhibits) Provides an index of exhibits filed with the Form 10-Q, including key legal and corporate documents related to the company's reorganization - The exhibits include the Amended Joint Chapter 11 Plan of Reorganization, Amended and Restated Certificate of Incorporation and Bylaws, and new indentures for senior notes[346](index=346&type=chunk) - Key agreements such as the Second Amended and Restated Credit Agreement, Registration Rights Agreement, and executive employment agreements are also listed[346](index=346&type=chunk) [Signatures](index=78&type=section&id=Signatures) Contains official signatures for the Form 10-Q, certifying its submission by CFO **William Buese** on **August 9, 2021** - The report was signed by **William Buese**, Chief Financial Officer of Gulfport Energy Corporation, on **August 9, 2021**[352](index=352&type=chunk)

Financial Data and Key Metrics Changes - The company reported a net income of $33 million and generated $157 million of adjusted EBITDA for the second quarter [39] - Free cash flow for the same period was $74 million, defined as adjusted EBITDA minus capital expenditures, interest expense, and capitalized G&A [40] - Total assets at the end of the second quarter were approximately $2.1 billion, with total shareholders' equity around $453 million [42] Business Line Data and Key Metrics Changes - Production averaged 989 million cubic feet of gas equivalent per day during the second quarter, with expectations of a slight drop in production in the third quarter [13] - The Utica program produced 744 million cubic feet equivalent per day during the quarter, outperforming historical averages [16] - The 2021 SCOOP program is expected to yield rates of return of approximately 80% at $2.75 gas and $60 oil [18] Market Data and Key Metrics Changes - Midstream volume commitments have been reduced to 900,000 decatherm per day gross capacity, providing diversified takeaway capacity [21] - The company has entered into commodity derivative contracts totaling approximately 800 million cubic feet per day with an average floor price of $2.64 per Mcf for the remaining six months of 2021 [41] Company Strategy and Development Direction - The company has adopted a new business model focused on free cash flow generation and returns over production growth [9] - A maintenance-level capital spend of approximately $300 million per year is targeted, expected to result in roughly 1 Bcf equivalent per day of production [15] - The company aims to reduce outstanding debt using excess cash flow before returning capital to shareholders [9] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to generate significant free cash flow going forward, which is currently underappreciated [33] - The company is focused on continuous improvement and cost-effective production, supported by a strong balance sheet [30] - Management indicated that while they are focused on paying down debt, they are also studying options for future capital allocation based on market conditions [59][75] Other Important Information - The company has made significant progress in reducing greenhouse gas and methane emissions, with a renewed focus on sustainability [11][12] - Fresh start accounting was adopted upon emergence from bankruptcy, resulting in a new entity for financial reporting purposes [35] Q&A Session Summary Question: Potential non-core sales and inventory assessment - Management is currently assessing the standalone case for the business and does not see any non-core assets at this time [50][52] Question: Capital allocation focus between Utica and SCOOP - The company is targeting dry gas in the Utica while also taking advantage of liquid production opportunities in the SCOOP [53][54] Question: Utica production decline and midstream issues - Management explained that the production decline was due to a small development program and the timing of new wells coming online [64][68] Question: Remaining inventory in SCOOP and drilling focus - The company plans to focus on liquid-rich locations in the condensate window in the near term while maintaining a steady activity level [71][72] Question: Long-term growth and capital allocation strategy - Management emphasized the importance of steady operations and efficient capital spending, with a focus on paying down debt before considering growth investments [75]

Investor Presentation August 2021 Forward Looking Statements & Non-GAAP Financial Measures This presentation includes "forward-looking statements" for purposes of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements are statements other than statements of historical fact. They include statements regarding Gulfport's current expectations, man ...

Table of Contents Index to Financial Statements UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) ☒ ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2020 OR ☐ 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) (State or Ot ...