PART I FINANCIAL INFORMATION [Item 1. Consolidated Financial Statements (Unaudited)](index=4&type=section&id=Item%201.%20Consolidated%20Financial%20Statements%20(Unaudited)) Presents unaudited consolidated financial statements for Q2 and H1 2020, highlighting a going concern warning, property impairments, and debt structure [Consolidated Balance Sheets](index=4&type=section&id=Consolidated%20Balance%20Sheets) Total assets decreased to $2.58 billion as of June 30, 2020, driven by property impairments, causing stockholders' equity to fall to $231.3 million Consolidated Balance Sheet Summary (in thousands) | Account | June 30, 2020 (Unaudited) | December 31, 2019 | | :--- | :--- | :--- | | **Total Current Assets** | $151,901 | $305,877 | | **Property and equipment, net** | $2,370,366 | $3,463,794 | | **Total Assets** | **$2,580,257** | **$3,882,819** | | **Total Current Liabilities** | $328,120 | $451,198 | | **Long-term debt, net** | $1,910,318 | $1,978,020 | | **Total Liabilities** | **$2,348,917** | **$2,568,227** | | **Total Stockholders' Equity** | **$231,340** | **$1,314,592** | | **Total Liabilities and Stockholders' Equity** | **$2,580,257** | **$3,882,819** | [Consolidated Statements of Operations](index=7&type=section&id=Consolidated%20Statements%20of%20Operations) Reports a Q2 2020 net loss of $561.1 million, driven by a $532.9 million impairment charge and a 63% decline in revenue Statement of Operations Highlights (in thousands, except per share data) | Metric | Q2 2020 | Q2 2019 | Six Months 2020 | Six Months 2019 | | :--- | :--- | :--- | :--- | :--- | | **Total Revenues** | $132,410 | $458,994 | $379,287 | $779,572 | | **Impairment of oil and natural gas properties** | $532,880 | $0 | $1,086,225 | $0 | | **(Loss) Income from Operations** | ($555,750) | $218,456 | ($1,035,837) | $311,467 | | **Net (Loss) Income** | **($561,068)** | **$234,956** | **($1,078,606)** | **$297,198** | | **Diluted EPS** | **($3.51)** | **$1.47** | **($6.75)** | **$1.84** | [Consolidated Statements of Cash Flows](index=10&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Net operating cash flow for H1 2020 decreased to $247.2 million due to lower commodity prices, with reduced capital expenditures lowering investing cash use Cash Flow Summary (in thousands) | Activity | Six Months Ended June 30, 2020 | Six Months Ended June 30, 2019 | | :--- | :--- | :--- | | **Net cash provided by operating activities** | $247,222 | $399,769 | | **Net cash used in investing activities** | ($230,090) | ($510,225) | | **Net cash (used in) provided by financing activities** | ($20,375) | $78,936 | | **Net decrease in cash** | ($3,243) | ($31,520) | | **Cash at end of period** | $2,817 | $20,777 | [Notes to Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) Provides critical context including a going concern warning, COVID-19 impacts, a $1.1 billion impairment charge, and details on debt and derivatives - **Going Concern Warning**: Management concluded there is substantial doubt about the Company's ability to continue as a going concern due to decreased commodity prices, reduced ability to access capital markets, and risk that its revolving credit facility may not be refinanced before it becomes a current liability at year-end 2020[28](index=28&type=chunk)[30](index=30&type=chunk) - **COVID-19 Impact**: The pandemic has led to decreased demand for oil and gas, significantly impairing the Company's ability to access capital; in response, Gulfport shut-in some production, reduced salaries, and implemented furloughs to preserve liquidity[23](index=23&type=chunk)[25](index=25&type=chunk)[27](index=27&type=chunk) - **Property Impairment**: The Company recorded a significant impairment of its oil and natural gas properties of **$532.9 million for Q2 2020** and **$1.1 billion for the first six months of 2020**, primarily due to reduced commodity prices[35](index=35&type=chunk) - **Debt Repurchases**: The Company repurchased $73.3 million in aggregate principal of its senior notes for $22.8 million during the first six months of 2020, recognizing a **$49.6 million gain on debt extinguishment**[59](index=59&type=chunk) - **Subsequent Event - Credit Facility Amendment**: On July 27, 2020, the Company amended its credit agreement to, among other things, permit the issuance of up to **$750 million in second lien debt**, subject to certain conditions[52](index=52&type=chunk)[159](index=159&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=45&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Conditions%20and%20Results%20of%20Operations) Discusses severe challenges from the COVID-19 pandemic, including a going concern warning, production decreases, a quarterly net loss, and strained liquidity [Overview and COVID-19 Impact](index=45&type=section&id=Overview%20and%20COVID-19%20Impact) Details significant headwinds from the COVID-19 pandemic, leading to a going concern warning and cost-saving actions to preserve liquidity - The company's ability to access capital markets and refinance existing debt has been significantly impaired by the COVID-19 pandemic and low commodity prices, leading to a **substantial doubt about its ability to continue as a going concern**[182](index=182&type=chunk)[234](index=234&type=chunk) - In response to market conditions, the company shut-in a portion of its low-margin, liquids-weighted production in Q2 2020 and implemented tiered salary reductions and furloughs[178](index=178&type=chunk)[181](index=181&type=chunk) - The company expects it will be unable to meet its minimum volume obligations under existing firm transportation contracts due to reduced production, which will result in significant fees[183](index=183&type=chunk)[302](index=302&type=chunk) [Production and Drilling Activity](index=49&type=section&id=Production%20and%20Drilling%20Activity) Q2 2020 net production decreased 24% YoY to 1,027.1 MMcfe/day due to reduced development and voluntary shut-ins Average Daily Production by Area (Q2 2020 vs Q2 2019) | Area | Q2 2020 (Mcfe/day) | Q2 2019 (Mcfe/day) | % Change | | :--- | :--- | :--- | :--- | | Utica Shale | 792,106 | 1,050,724 | (25)% | | SCOOP | 234,396 | 298,343 | (21)% | | **Total** | **1,027,065** | **1,358,989** | **(24)%** | - In the first half of 2020, Gulfport spud 12 gross (11.1 net) wells in the Utica Shale and 6 gross (5.2 net) wells in the SCOOP[189](index=189&type=chunk)[191](index=191&type=chunk) [Results of Operations](index=51&type=section&id=Results%20of%20Operations) Financial results deteriorated in H1 2020, with a Q2 net loss of $561.1 million driven by a large non-cash impairment charge Key Operational Metrics per Mcfe (Q2 2020 vs Q2 2019) | Metric ($/Mcfe) | Q2 2020 | Q2 2019 | | :--- | :--- | :--- | | Avg. sales price (w/o derivatives) | $1.13 | $2.33 | | Lease operating expenses | $0.17 | $0.18 | | Midstream gathering & processing | $0.64 | $0.58 | | DD&A | $0.69 | $1.01 | - A non-cash impairment charge of **$532.9 million in Q2 2020** and **$1.1 billion for the first six months of 2020** was the primary driver of the net loss, resulting from a significant decline in commodity prices[194](index=194&type=chunk)[206](index=206&type=chunk)[228](index=228&type=chunk) - The decrease in loss from equity method investments was primarily due to a $125.4 million impairment charge on the Mammoth Energy investment taken in Q2 2019, which was not repeated in 2020 as the investment value was written down to zero in Q1 2020[47](index=47&type=chunk)[208](index=208&type=chunk) [Liquidity and Capital Resources](index=63&type=section&id=Liquidity%20and%20Capital%20Resources) Liquidity is severely constrained with $2.8 million in cash, a working capital deficit, and substantial doubt about its going concern status - As of June 30, 2020, the company had **$2.8 million in cash**, a net working capital deficit of $176.2 million, and $252.9 million of borrowing capacity under its revolving credit facility[236](index=236&type=chunk) - The 2020 capital expenditure budget for drilling and completion is estimated at **$265.0 million to $285.0 million**, a reduction of more than 50% from 2019 levels[246](index=246&type=chunk) - Net cash from operating activities for the first six months of 2020 was **$247.2 million**, down from $399.8 million in the prior-year period, due to lower realized prices and production volumes[248](index=248&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=68&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Exposed to significant market risk from commodity prices and interest rates, mitigated through derivative instruments like swaps and collars Open Derivative Positions as of June 30, 2020 | Year | Type | Commodity | Daily Volume | Avg. Price/Spread | | :--- | :--- | :--- | :--- | :--- | | 2020 | Swaps | Natural Gas (NYMEX) | 357,000 MMBtu | $2.86 | | 2021 | Collars | Natural Gas (NYMEX) | 250,000 MMBtu | $2.46 / $2.81 | | 2022 | Sold Calls | Natural Gas (NYMEX) | 628,000 MMBtu | $2.90 | | 2023 | Sold Calls | Natural Gas (NYMEX) | 628,000 MMBtu | $2.90 | | 2020 | Swaps | Oil (WTI) | 3,000 Bbls | $35.49 | | 2020 | Swaps | NGL (C3) | 1,500 Bbls | $20.27 | - The company is exposed to interest rate risk on its revolving credit facility, which had **$123.0 million in borrowings outstanding** at a weighted average rate of 2.44% as of June 30, 2020[269](index=269&type=chunk) - In August 2020, the company entered into additional natural gas fixed price swaps for Q4 2020, covering 100,000 MMBtu/day at an average price of $2.38 per MMBtu[162](index=162&type=chunk)[266](index=266&type=chunk) [Item 4. Controls and Procedures](index=70&type=section&id=Item%204.%20Controls%20and%20Procedures) Disclosure controls and procedures were deemed not effective as of June 30, 2020, due to a previously disclosed material weakness - The CEO and CFO concluded that **disclosure controls and procedures were not effective** as of June 30, 2020[271](index=271&type=chunk) - The ineffectiveness is due to a **material weakness** identified in Q4 2019 concerning the accounting for unevaluated oil and gas property costs[271](index=271&type=chunk)[272](index=272&type=chunk) - Management is actively implementing a remediation plan to address the material weakness[272](index=272&type=chunk) PART II OTHER INFORMATION [Item 1. Legal Proceedings](index=71&type=section&id=Item%201.%20Legal%20Proceedings) Involved in multiple legal proceedings, including environmental lawsuits, shareholder actions, a contract dispute, and an SEC investigation - Gulfport is a defendant in lawsuits filed by the State of Louisiana concerning alleged environmental damage to the coastal zone[83](index=83&type=chunk)[277](index=277&type=chunk) - The company is involved in a contract dispute with Stingray Pressure Pumping (a subsidiary of Mammoth Energy), with Stingray seeking approximately **$28 million in damages** as of June 2020[89](index=89&type=chunk)[284](index=284&type=chunk) - The SEC has an ongoing investigation into actions by former company management, including alleged improper use of company assets[92](index=92&type=chunk)[287](index=287&type=chunk) [Item 1A. Risk Factors](index=73&type=section&id=Item%201A.%20Risk%20Factors) Highlights severe financial stability threats, including credit facility refinancing risk, COVID-19 impacts, and penalties from unmet contract obligations - There is a substantial risk that the company will be **unable to refinance its revolving credit facility**, which matures in December 2021, on reasonable terms, contributing to the 'going concern' uncertainty[296](index=296&type=chunk) - The COVID-19 outbreak poses numerous risks, including reduced revenue from lower demand, operational disruptions, and difficulty accessing capital markets[297](index=297&type=chunk) - The company expects to be unable to meet its delivery obligations under firm transportation contracts due to reduced production, which will result in **significant fees** and may materially harm operations[302](index=302&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=74&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) Repurchased 27,294 shares in Q2 2020 to satisfy tax withholding on vested employee stock units, while the formal buyback program remains suspended Issuer Repurchases of Equity Securities (Q2 2020) | Period | Total Shares Purchased | Average Price Paid per Share | | :--- | :--- | :--- | | April 2020 | 18,338 | $0.72 | | May 2020 | 0 | $0.00 | | June 2020 | 8,956 | $1.69 | | **Total** | **27,294** | **$1.04** | - The shares were repurchased to satisfy tax withholding requirements upon the vesting of restricted stock unit awards[305](index=305&type=chunk) - The company's formal stock repurchase program was suspended in Q4 2019, and a May 2020 credit facility amendment prohibits further repurchases under it[306](index=306&type=chunk) [Item 3. Defaults Upon Senior Securities](index=75&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) No defaults upon senior securities were reported during the period - Not applicable; no defaults were reported[307](index=307&type=chunk) [Item 4. Mine Safety Disclosures](index=75&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This section is not applicable to the company's operations - Not applicable[308](index=308&type=chunk) [Item 5. Other Information](index=76&type=section&id=Item%205.%20Other%20Information) The Board authorized a redesigned incentive compensation program for its workforce in response to unprecedented industry disruption - On August 4, 2020, the Board authorized a redesigned incentive compensation program to retain and motivate employees amid industry disruption[310](index=310&type=chunk) - Executives participating must forfeit previous 2020 incentive awards; the new compensation is subject to repayment clauses based on continued employment and the achievement of new performance metrics[310](index=310&type=chunk) [Item 6. Exhibits](index=77&type=section&id=Item%206.%20Exhibits) Lists all exhibits filed with the Form 10-Q, including credit agreement amendments and executive certifications - Lists key documents filed with the report, including the Fifteenth and Sixteenth Amendments to the Credit Agreement[313](index=313&type=chunk)[316](index=316&type=chunk) - Includes certifications from the CEO and CFO pursuant to Rule 13a-14(a) and Section 1350 of the U.S. Code[316](index=316&type=chunk)

Gulfport Energy Corporation (NYSE:GPOR) Q2 2020 Earnings Conference Call August 5, 2020 10:00 AM ET Company Participants Jessica Antle – Director-Investor Relations David Wood – Chief Executive Officer and President Quentin Hicks – Executive Vice President and Chief Financial Officer Conference Call Participants Operator Greetings, and welcome to Gulfport's Second Quarter 2020 Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal pres ...

Gul INVESTOR PRESENTATION JUNE 2020 FORWARD LOOKING STATEMENT 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 Exchange Act. All statements, other than statements of historical facts, included in this presentation that address activities, events or developments that Gulfport expects or anticipates will or may occur in the fut ...

Financial Data and Key Metrics Changes - For Q1 2020, Gulfport reported approximately $16.6 million of adjusted net income and generated $128.3 million of adjusted EBITDA [16] - Operating cash flow before changes in working capital totaled $86.7 million, with a capital outspend of roughly $50 million for the quarter [16][21] - The company improved its balance sheet by reducing total long-term debt by approximately $79.6 million as of March 31, 2020, compared to year-end 2019 [21] Business Line Data and Key Metrics Changes - Average daily production for Q1 2020 was 1.05 billion cubic feet of gas equivalent per day, composed of 90% gas, 7% natural gas liquids, and 3% oil [34] - In the Utica, the company spud seven gross wells and achieved an average spud to rig release of 17.7 days, down 10.6% from 2019 [24] - In the SCOOP, the average spud to rig release was 37.4 days, a decrease of 32% compared to the 2019 program average [26] Market Data and Key Metrics Changes - The COVID-19 pandemic has caused severe demand declines for fossil fuels, leading to oil prices at 20-year lows and an expected decline in associated gas production [13] - Natural gas prices are expected to remain range-bound between $2.60 to $2.90 per MMBtu, with a potential tightening of the gas supply-demand balance as U.S. gas production declines [15] - Realized natural gas price before hedges was approximately $0.59 per Mcfe, below NYMEX prices, which was better than the guidance range of $0.70 to $0.80 per Mcf [34] Company Strategy and Development Direction - Gulfport remains committed to maximizing cash flow generation, reducing costs, and ensuring strong liquidity through 2020 [16] - The company plans to shut-in a portion of its operated production due to low prices, forecasting an impact of less than 20 million cubic feet of gas equivalent per day [18] - The management team is focused on increasing scale and efficiencies to maximize returns, aiming to transform Gulfport into a sizable natural gas-weighted producer [55] Management's Comments on Operating Environment and Future Outlook - Management expressed caution regarding the short-term and long-term impacts of COVID-19 on domestic gas demand, while remaining optimistic about a potential gas price rally [14] - The company is exploring opportunities to reshape production to align with better pricing, indicating that production guidance for 2020 should no longer be relied upon [19] - The management team emphasized the importance of maintaining a strong strategic hedging program to support long-term economic development [40] Other Important Information - Gulfport has a tax benefits preservation plan in place to protect its federal net operating losses (NOLs) from being limited due to ownership changes [51][52] - The company has retired approximately $73 million of senior notes for $23 million in cash spend, reducing its net debt by $50 million [49] Q&A Session Summary Question: Thoughts on hedges for 2021 - Management aims to build a strong hedge position as close to $3 as possible, with a focus on adding collars and swaps [57][59] Question: Production cadence for 2020 - The plan is to have higher production in the second half of the year, moving peak production from Q2 to Q3 and Q4 [77][78] Question: Impact of non-op shut-ins - The majority of production is operated, making non-op components relatively small and not significantly impactful [71][73] Question: Duration of potential shut-ins in Utica - The production curtailed is about 20 million cubic feet equivalent, with plans to bring wells back online as oil prices improve [81] Question: Plans for the rig in SCOOP - The rig is planned to remain active throughout the year, with all completion work in SCOOP already finished [84] Question: Capital allocation towards revolver versus bond repurchases - Management is focused on generating free cash flow and will evaluate the best allocation towards debt repayment and bond repurchases [92][94] Question: Market dynamics in Appalachia - Management believes that gas prices will stabilize around $2.60 to $2.90, with potential for increased activity as prices rise [99]

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 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 000-19514 Gulfport Energy Corporation (Exact Name of Registrant As Specified in Its Charter) Delaware 73-1521290 (State or Other J ...

Gult INVESTOR PRESENTATION MAY 2020 FORWARD LOOKING STATEMENT 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 Exchange Act. All statements, other than statements of historical facts, included in this presentation that address activities, events or developments that Gulfport expects or anticipates will or may occur in the fut ...

Gulfport Energy Corporation (NYSE:GPOR) Q4 2019 Earnings Conference Call February 28, 2020 10:00 AM ET Company Participants Jessica Antle – Director-Investor Relations David Wood – Chief Executive Officer and President Quentin Hicks – Executive Vice President and Chief Financial Officer Donnie Moore – Executive Vice President and Chief Operating Officer Conference Call Participants Neal Dingmann – SunTrust Holly Stewart – Scotia Howard Weil Jason Wangler – Imperial Capital Jane Trotsenko – Stifel Dun McInto ...

Gult INVESTOR PRESENTATION FEBRUARY 2020 FORWARD LOOKING STATEMENT 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 Exchange Act. All statements, other than statements of historical facts, included in this presentation that address activities, events or developments that Gulfport expects or anticipates will or may occur in th ...

PART I [Business](index=4&type=section&id=ITEM%201.%20BUSINESS) Gulfport Energy is an independent natural gas-weighted exploration and production company focused on the Utica Shale and SCOOP formations, aiming to generate sustainable free cash flow and reduce leverage - Gulfport is an independent natural gas-weighted E&P company with primary operations in the **Utica (Ohio)** and **SCOOP (Oklahoma)** basins[19](index=19&type=chunk) - The corporate strategy focuses on generating **sustainable free cash flow**, reducing leverage, and improving operational efficiencies[19](index=19&type=chunk)[23](index=23&type=chunk) Proved Reserves and Value (as of Dec 31, 2019) | Metric | Value | | :--- | :--- | | Proved Reserves (Tcfe) | 4.5 | | Standardized Measure ($ billion) | 1.7 | | PV-10 ($ billion) | 1.7 | 2020 Outlook | Metric | Value | | :--- | :--- | | Capital Expenditure Budget | $285 million - $310 million | | Expected Production | 1,100 - 1,150 MMcfe per day | | Average Operated Rigs (Utica) | ~1 | | Average Operated Rigs (SCOOP) | ~1.5 | [Operating Areas](index=5&type=section&id=Operating%20Areas) The company's primary operating areas are the Utica Shale in Eastern Ohio and the SCOOP Woodford and Springer formations in Central Oklahoma - **Utica (Eastern Ohio):** The company holds approximately **205,000 net reservoir acres**, primarily in Belmont, Harrison, Jefferson, and Monroe Counties. Production in Q4 2019 was about **1,090 MMcfe per day**[28](index=28&type=chunk) - **SCOOP (Oklahoma):** The company has approximately **76,000 net reservoir acres** targeting the Woodford and Springer formations, primarily in Garvin, Grady, and Stephens Counties. Production in Q4 2019 was about **255 MMcfe per day**[29](index=29&type=chunk) [Drilling Activity and Acreage](index=5&type=section&id=Drilling%20Activity%20and%20Acreage) This section details the company's drilling operations and acreage holdings as of year-end 2019 2019 Operated Drilling Activity | Area | Gross Wells Drilled | Net Wells Drilled | Gross Wells Turned to Sales | Net Wells Turned to Sales | | :--- | :--- | :--- | :--- | :--- | | Utica Shale | 16 | 14.6 | 47 | 41.6 | | SCOOP | 10 | 8.6 | 14 | 12.6 | | **Total** | **26** | **23.2** | **61** | **54.2** | Acreage Summary (as of Dec 31, 2019) | Metric | Gross Acres | Net Acres | | :--- | :--- | :--- | | Developed Acreage | 160,181 | 122,059 | | Undeveloped Acreage | 142,904 | 126,774 | [Oil, Natural Gas and NGL Reserves](index=7&type=section&id=Oil,%20Natural%20Gas%20and%20NGL%20Reserves) This section provides a summary of the company's proved oil, natural gas, and NGL reserves as of December 31, 2019 Total Proved Reserves by Type (as of Dec 31, 2019) | Category | Natural Oil (MMbbl) | Gas (Bcf) | NGL (MMbbl) | Total (Bcfe) | | :--- | :--- | :--- | :--- | :--- | | Proved developed | 8 | 1,757 | 30 | 1,984 | | Proved undeveloped | 10 | 2,291 | 32 | 2,544 | | **Total proved** | **18** | **4,048** | **62** | **4,528** | - Proved reserves decreased from **4,743 Bcfe** at year-end 2018 to **4,528 Bcfe** at year-end 2019. The decrease was driven by production (**502 Bcfe**) and downward revisions (**734 Bcfe**), partially offset by extensions and discoveries (**1,097 Bcfe**)[47](index=47&type=chunk) - Downward revisions were primarily caused by changes in the development plan pushing some PUDs beyond the 5-year rule (**347.2 Bcfe**) and lower commodity prices (**296.4 Bcfe**)[50](index=50&type=chunk)[51](index=51&type=chunk) - Proved Undeveloped Reserves (PUDs) totaled **2,544 Bcfe**, representing **56% of total proved reserves**. All PUDs are scheduled to be drilled within five years of their initial booking[54](index=54&type=chunk)[61](index=61&type=chunk) [Production, Prices and Production Costs](index=11&type=section&id=Production,%20Prices%20and%20Production%20Costs) This section details the company's production volumes, average sales prices, and production costs for 2019 compared to 2018 Production and Average Sales Price (2019 vs 2018) | Metric | 2019 | 2018 | | :--- | :--- | :--- | | Total Production (MMcfe) | 501,742 | 496,505 | | Avg. Sales Price w/o derivatives ($/Mcfe) | $2.27 | $2.98 | | Avg. Sales Price w/ derivatives ($/Mcfe) | $2.51 | $2.86 | Average Production Costs (2019 vs 2018) | Metric | 2019 ($/Mcfe) | 2018 ($/Mcfe) | | :--- | :--- | :--- | | Production costs | $0.17 | $0.18 | | Production taxes | $0.06 | $0.07 | | Midstream gathering and processing | $0.58 | $0.58 | | **Total** | **$0.81** | **$0.83** | [Regulation - Environment, Health and Safety](index=17&type=section&id=Regulation%20-%20Environment,%20Health%20and%20Safety) The company's operations are subject to extensive federal, state, and local environmental, health, and safety regulations - The company's operations are subject to extensive federal, state, and local laws and regulations covering environmental, health, and safety aspects, including drilling permits, hydraulic fracturing, water use, air emissions, and well abandonment[83](index=83&type=chunk)[84](index=84&type=chunk) - Potential regulatory changes concerning hydraulic fracturing, conservation, and federal land use could impose further restrictions and increase compliance costs, potentially reducing the amount of hydrocarbons the company can produce commercially[86](index=86&type=chunk)[87](index=87&type=chunk) [Risk Factors](index=20&type=section&id=ITEM%201A.%20RISK%20FACTORS) The company faces significant risks from volatile commodity prices, substantial debt, operational uncertainties, extensive environmental regulations, and a material weakness in internal financial controls - **Commodity Price Risk:** Revenues and profitability are highly dependent on volatile natural gas, oil, and NGL prices. A prolonged period of low prices could materially harm the business and lead to write-downs of asset values[99](index=99&type=chunk)[100](index=100&type=chunk) - **Financial and Debt Risk:** The company has significant indebtedness of approximately **$2.0 billion** as of December 31, 2019. This leverage could make it difficult to satisfy obligations, obtain additional financing, and could place it at a competitive disadvantage[104](index=104&type=chunk)[105](index=105&type=chunk) - **Reserve and Operational Risk:** A significant portion (**56.2%**) of total proved reserves are undeveloped (PUDs), which require substantial capital to recover. There is a risk that these reserves may not be ultimately developed or produced[133](index=133&type=chunk) - **Regulatory and Environmental Risk:** The business is subject to extensive regulation. Initiatives related to hydraulic fracturing, seismic activity, climate change, and endangered species could lead to operational delays, increased costs, or potential bans on activities[162](index=162&type=chunk)[166](index=166&type=chunk)[168](index=168&type=chunk)[173](index=173&type=chunk) - **Internal Control Risk:** A material weakness was identified in internal controls over the accounting for transfers of unevaluated capitalized costs to the amortization base, which could adversely affect the accuracy and timeliness of financial reporting[209](index=209&type=chunk) [Unresolved Staff Comments](index=42&type=section&id=ITEM%201B.%20UNRESOLVED%20STAFF%20COMMENTS) The company has no unresolved staff comments from the SEC - None[223](index=223&type=chunk) [Properties](index=42&type=section&id=ITEM%202.%20PROPERTIES) Property information is detailed in Item 1 (Business) and Note 19 of the consolidated financial statements - Information regarding properties is included in Item 1 and Note 19 of the consolidated financial statements[224](index=224&type=chunk) [Legal Proceedings](index=42&type=section&id=ITEM%203.%20LEGAL%20PROCEEDINGS) Gulfport is involved in legal proceedings including environmental complaints, a derivative action, royalty underpayment lawsuits, and an SEC investigation into former management - The company is a defendant in two complaints filed by the State of Louisiana concerning alleged violations of the State and Local Coastal Resources Management Act[226](index=226&type=chunk) - A stockholder of Mammoth Energy filed a derivative action against Mammoth's board and significant stockholders, including Gulfport, alleging breach of fiduciary duties[229](index=229&type=chunk) - Two separate lawsuits were filed in Oklahoma by royalty holders alleging underpayment of royalties[230](index=230&type=chunk)[231](index=231&type=chunk) - The SEC has an ongoing investigation regarding alleged improper personal use of company assets by former management and potential violations of the Sarbanes-Oxley Act[232](index=232&type=chunk) [Mine Safety Disclosures](index=44&type=section&id=ITEM%204.%20MINE%20SAFETY%20DISCLOSURES) This item is not applicable to the company's operations - Not applicable[237](index=237&type=chunk) PART II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=44&type=section&id=ITEM%205.%20MARKET%20FOR%20REGISTRANT'S%20COMMON%20EQUITY,%20RELATED%20STOCKHOLDER%20MATTERS%20AND%20ISSUER%20PURCHASES%20OF%20EQUITY%20SECURITIES) The company's common stock trades on Nasdaq under "GPOR", initiated a $400 million share repurchase program in 2019 (later suspended), and has never paid dividends - The company's common stock trades on the Nasdaq under the symbol "GPOR"[239](index=239&type=chunk) - A **$400 million** stock repurchase program was approved in January 2019. In 2019, **3.8 million shares** were repurchased for **$30.0 million**. The program was suspended in Q4 2019 with **$370.0 million** remaining[241](index=241&type=chunk) - The company has never paid dividends on its common stock and does not anticipate doing so in the foreseeable future[242](index=242&type=chunk) [Selected Financial Data](index=44&type=section&id=ITEM%206.%20SELECTED%20FINANCIAL%20DATA) The company reported a significant **$2.0 billion net loss** in 2019, primarily due to a **$2.04 billion impairment** of oil and natural gas properties, contrasting with **$430.6 million net income** in 2018 Selected Financial Data (2019 vs. 2018) | Metric (in thousands) | 2019 | 2018 | | :--- | :--- | :--- | | Revenues | $1,346,008 | $1,355,044 | | Impairment of oil and natural gas properties | $2,039,770 | $0 | | (Loss) Income from Operations | $(1,703,693) | $398,959 | | Net (Loss) Income | $(2,002,358) | $430,560 | | Net (Loss) Income Per Share—Diluted | $(12.49) | $2.45 | | Total assets | $3,882,819 | $6,051,036 | | Total debt | $1,978,651 | $2,087,416 | [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=46&type=section&id=ITEM%207.%20MANAGEMENT'S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) In 2019, Gulfport divested non-core assets, increased production by 1%, reported a **$2.0 billion net loss** due to impairment, reduced unit operating expenses, and plans significantly lower 2020 capital expenditures - Key activities in 2019 included divesting non-core assets in Louisiana and the Utica shale, and repurchasing **$190.1 million** of senior notes at a discount[250](index=250&type=chunk)[256](index=256&type=chunk) - Production increased **1%** to **501,742 MMcfe** in 2019, while unit lease operating expense decreased **10%** to **$0.17 per Mcfe**[256](index=256&type=chunk) - A net loss of **$2.0 billion** was reported for 2019, compared to net income of **$430.6 million** in 2018, primarily due to a **$2.0 billion** non-cash impairment charge on oil and gas properties[288](index=288&type=chunk) - The 2020 capital expenditure budget is estimated at **$265-$285 million** for drilling and completions, a **51% reduction** from 2019, which is expected to lead to an **18% decrease** in production volumes[275](index=275&type=chunk) [Liquidity and Capital Resources](index=47&type=section&id=Liquidity%20and%20Capital%20Resources) The company's liquidity is primarily derived from operating cash flow and its revolving credit facility, with a net working capital deficit at year-end 2019 - Primary sources of liquidity are operating cash flow, borrowings under the revolving credit facility, and security issuances. As of Dec 31, 2019, the company had a cash balance of **$6.1 million** and a net working capital deficit of **$145.3 million**[252](index=252&type=chunk)[254](index=254&type=chunk) Debt and Liquidity Summary (as of Dec 31, 2019) | Metric | Value | | :--- | :--- | | Total Principal Debt ($ billion) | 2.0 | | Revolver Borrowing Base ($ billion) | 1.2 | | Revolver Borrowings Outstanding ($ million) | 120.0 | | Letters of Credit ($ million) | 243.6 | | Available Revolver Capacity ($ million) | 636.4 | - During 2019, the company repurchased **$190.1 million** in aggregate principal of its senior notes for **$138.8 million**, recognizing a **$48.6 million gain** on debt extinguishment[265](index=265&type=chunk) [Results of Operations](index=52&type=section&id=Results%20of%20Operations) This section provides a comparative analysis of the company's operational results for 2019 versus 2018, highlighting key revenue and expense drivers Comparison of Operations (2019 vs. 2018) | Metric (in thousands) | 2019 | 2018 | | :--- | :--- | :--- | | Natural Gas, Oil & NGL Sales | $1,137,648 | $1,478,523 | | Lease Operating Expenses | $82,998 | $91,640 | | DD&A | $550,108 | $486,664 | | Impairment of Oil & Gas Properties | $2,039,770 | $0 | | Net (Loss) Income | $(2,002,358) | $430,560 | - The **23% decrease** in total revenues (before derivatives) was driven by lower market prices for natural gas (**-21%**), oil (**-15%**), and NGLs (**-33%**), along with decreased oil and NGL sales volumes[289](index=289&type=chunk)[290](index=290&type=chunk) - Total lease operating expenses decreased by **9%** to **$83.0 million**, primarily due to the divestiture of higher-cost Louisiana properties[293](index=293&type=chunk) - Depreciation, Depletion, and Amortization (DD&A) expense increased by **13%** to **$550.1 million** due to a larger base of amortizable properties and a decrease in total proved reserves volume[297](index=297&type=chunk) [Critical Accounting Policies and Estimates](index=61&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) This section outlines the company's critical accounting policies and estimates, particularly concerning oil and natural gas properties, reserves, and income taxes - **Oil and Natural Gas Properties:** The company uses the full cost method of accounting, capitalizing all costs associated with acquisition, exploration, and development. A quarterly ceiling test is performed, which resulted in a **$2.0 billion impairment** in 2019 due to declining commodity prices[310](index=310&type=chunk)[313](index=313&type=chunk) - **Oil, Natural Gas and NGL Reserves:** Estimates of reserves are critical as they impact depletion and impairment calculations. These estimates are subject to revision based on production data, prices, and costs[314](index=314&type=chunk) - **Income Taxes:** The company uses the asset and liability method. A valuation allowance of **$647.6 million** was established against net deferred tax assets as of Dec 31, 2019, as it is more likely than not that some portion will not be realized[315](index=315&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=62&type=section&id=ITEM%207A.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) The company's primary market risk is commodity price volatility, managed through derivatives with a **$73.3 million net asset fair value**, and it faces interest rate risk from its **$120.0 million outstanding** revolving credit facility - The company's main market risk is commodity price volatility. It uses derivative instruments, primarily swaps and options, to manage this risk and increase revenue certainty[323](index=323&type=chunk)[324](index=324&type=chunk) Open Derivative Positions (as of Dec 31, 2019) | Commodity | Type | Period | Daily Volume (MMBtu) | Weighted Avg. Price ($/MMBtu) | Fair Value (in thousands) | | :--- | :--- | :--- | :--- | :--- | :--- | | Natural Gas | Swaps | 2020 | 548,000 | $2.88 | $121,934 | | Natural Gas | Sold Calls | 2022-2023 | 628,000 | $2.90 | $(53,135) | | Oil | Swaps | 2020 | 6,000 Bbls | $59.82/Bbl | $2,952 | | NGL | Swaps | 2020 | 500 Bbls | $21.63/Bbl | $461 | - The company faces interest rate risk from its revolving credit facility. At Dec 31, 2019, **$120.0 million** was outstanding at a weighted average rate of **3.30%**. A **1% increase** in the average interest rate would increase annual interest expense by approximately **$1.2 million**[334](index=334&type=chunk) [Financial Statements and Supplementary Data](index=66&type=section&id=ITEM%208.%20FINANCIAL%20STATEMENTS%20AND%20SUPPLEMENTARY%20DATA) This section presents the audited consolidated financial statements for 2019, with Grant Thornton LLP issuing an unqualified opinion on financials but an adverse opinion on internal controls due to a material weakness - The independent auditor, Grant Thornton LLP, issued an unqualified opinion on the financial statements but an adverse opinion on internal control over financial reporting as of December 31, 2019, due to a material weakness[340](index=340&type=chunk)[582](index=582&type=chunk) - The material weakness identified relates to ineffective design and maintenance of controls over the completeness and accuracy of accounting for transfers of unevaluated capitalized costs into the amortization base[583](index=583&type=chunk) [Consolidated Balance Sheets](index=70&type=section&id=Consolidated%20Balance%20Sheets) This section presents the company's consolidated balance sheets as of December 31, 2019, and 2018, detailing assets, liabilities, and stockholders' equity Balance Sheet Summary (as of Dec 31, 2019 vs 2018) | Account (in thousands) | 2019 | 2018 | | :--- | :--- | :--- | | Total current assets | $305,877 | $316,363 | | Property and equipment, net | $3,463,794 | $5,479,405 | | **Total assets** | **$3,882,819** | **$6,051,036** | | Total current liabilities | $451,198 | $539,432 | | Long-term debt, net | $1,978,020 | $2,086,765 | | **Total liabilities** | **$2,568,227** | **$2,723,268** | | **Total stockholders' equity** | **$1,314,592** | **$3,327,768** | [Consolidated Statements of Operations](index=72&type=section&id=Consolidated%20Statements%20of%20Operations) This section presents the company's consolidated statements of operations for the year ended December 31, 2019, detailing revenues, expenses, and net income or loss Statement of Operations Summary (Year ended Dec 31, 2019) | Account (in thousands) | 2019 | | :--- | :--- | | Total Revenues | $1,346,008 | | Total Costs and expenses | $3,049,701 | | (Loss) Income from Operations | $(1,703,693) | | Net (Loss) Income | $(2,002,358) | | Net (Loss) Income Per Share - Diluted | $(12.49) | [Consolidated Statements of Cash Flows](index=75&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) This section presents the company's consolidated statements of cash flows for the years ended December 31, 2019, and 2018, detailing cash flows from operating, investing, and financing activities Cash Flow Summary (Year ended Dec 31, 2019 vs 2018) | Account (in thousands) | 2019 | 2018 | | :--- | :--- | :--- | | Net cash provided by operating activities | $723,993 | $786,271 | | Net cash used in investing activities | $(674,771) | $(676,874) | | Net cash used in financing activities | $(95,459) | $(156,657) | | **Net decrease in cash** | **$(46,237)** | **$(47,260)** | [Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](index=124&type=section&id=ITEM%209.%20CHANGES%20IN%20AND%20DISAGREEMENTS%20WITH%20ACCOUNTANTS%20ON%20ACCOUNTING%20AND%20FINANCIAL%20DISCLOSURE) The company reports no disagreements with its accountants regarding accounting principles, financial disclosure, or auditing scope - None[569](index=569&type=chunk) [Controls and Procedures](index=124&type=section&id=ITEM%209A.%20CONTROLS%20AND%20PROCEDURES) Due to a material weakness in internal controls over financial reporting, management concluded disclosure controls were ineffective as of December 31, 2019, and a remediation plan is underway - Management concluded that disclosure controls and procedures were not effective as of December 31, 2019, due to a material weakness in internal control over financial reporting[570](index=570&type=chunk) - The material weakness identified was the failure to effectively design and maintain controls over the completeness and accuracy of accounting for transfers of unevaluated capitalized costs into the amortization base[577](index=577&type=chunk) - A remediation plan is underway to address the weakness by redesigning controls, enhancing processes, and providing additional training[572](index=572&type=chunk) [Other Information](index=128&type=section&id=ITEM%209B.%20OTHER%20INFORMATION) This item is not applicable - Not applicable[590](index=590&type=chunk) PART III [Directors, Executive Officers and Corporate Governance](index=128&type=section&id=ITEM%2010.%20DIRECTORS,%20EXECUTIVE%20OFFICERS%20AND%20CORPORATE%20GOVERNANCE) Information on directors, executive officers, and corporate governance is incorporated by reference from the 2020 Proxy Statement - Information is incorporated by reference from the 2020 Proxy Statement[592](index=592&type=chunk) [Executive Compensation](index=128&type=section&id=ITEM%2011.%20EXECUTIVE%20COMPENSATION) Executive compensation information is incorporated by reference from the 2020 Proxy Statement - Information is incorporated by reference from the 2020 Proxy Statement[593](index=593&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=128&type=section&id=ITEM%2012.%20SECURITY%20OWNERSHIP%20OF%20CERTAIN%20BENEFICIAL%20OWNERS%20AND%20MANAGEMENT%20AND%20RELATED%20STOCKHOLDER%20MATTERS) Security ownership information is incorporated by reference from the 2020 Proxy Statement - Information is incorporated by reference from the 2020 Proxy Statement[594](index=594&type=chunk) [Certain Relationships and Related Transactions, and Director Independence](index=128&type=section&id=ITEM%2013.%20CERTAIN%20RELATIONSHIPS%20AND%20RELATED%20TRANSACTIONS,%20AND%20DIRECTOR%20INDEPENDENCE) Information on related party transactions and director independence is incorporated by reference from the 2020 Proxy Statement - Information is incorporated by reference from the 2020 Proxy Statement[595](index=595&type=chunk) [Principal Accounting Fees and Services](index=128&type=section&id=ITEM%2014.%20PRINCIPAL%20ACCOUNTING%20FEES%20AND%20SERVICES) Principal accounting fees and services information is incorporated by reference from the 2020 Proxy Statement - Information is incorporated by reference from the 2020 Proxy Statement[596](index=596&type=chunk) PART IV [Exhibits and Financial Statement Schedules](index=129&type=section&id=ITEM%2015.%20EXHIBITS%20AND%20FINANCIAL%20STATEMENT%20SCHEDULES) This section lists all financial statements, schedules, and exhibits filed with the Form 10-K, including corporate documents and certifications - This item lists all financial statements, schedules, and exhibits filed with the Form 10-K, including consents of experts and certifications[599](index=599&type=chunk)[602](index=602&type=chunk) [Form 10-K Summary](index=134&type=section&id=ITEM%2016.%20FORM%2010-K%20SUMMARY) The company has elected not to provide a summary of the Form 10-K - None[608](index=608&type=chunk)

Gulf INVESTOR PRESENTATION OCTOBER 2019 FORWARD LOOKING STATEMENT 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 Exchange Act. All statements, other than statements of historical facts, included in this presentation that address activities, events or developments that Gulfport expects or anticipates will or may occur in the ...