true--12-31Q320190000874499P3Y60.6552.6260.6552.628.0315000011P3Y028730370000.010.012000000002000000001629860451597092211629860451597092210.0600000.250P5YP1YP1Y11218000001100000000.120.120.010.015000000500000000001000003000030000 0000874499 2019-01-01 2019-09-30 0000874499 2019-10-25 0000874499 2019-09-30 0000874499 2018-12-31 0000874499 2018-01-01 2018-12-31 0000874499 us-gaap:OilAndCondensateMember 2019-07-01 2019-09-30 0000874499 2018-07-01 2018-09-30 0000874499 2018-01-01 2018-09-30 0000874499 2019-07-01 2019-09-30 0000874499 gpor:NaturalgasliquidsalesMember 2018-07-01 2018-09-30 0000874499 us-gaap:NaturalGasProductionMember 2019-07-01 2019-09-30 0000874499 us-gaap:NaturalGasProductionMember 2018-07-01 2018-09-30 0000874499 gpor:NaturalgasliquidsalesMember 2019-01-01 2019-09-30 0000874499 us-gaap:NaturalGasProductionMember 2019-01-01 2019-09-30 0000874499 us-gaap:OilAndCondensateMember 2018-01-01 2018-09-30 0000874499 gpor:NaturalgasliquidsalesMember 2018-01-01 2018-09-30 0000874499 us-gaap:OilAndCondensateMember 2019-01-01 2019-09-30 0000874499 us-gaap:OilAndCondensateMember 2018-07-01 2018-09-30 0000874499 gpor:NaturalgasliquidsalesMember 2019-07-01 2019-09-30 0000874499 us-gaap:NaturalGasProductionMember 2018-01-01 2018-09-30 0000874499 2018-01-01 2018-03-31 0000874499 us-gaap:CommonStockMember 2018-07-01 2018-09-30 0000874499 us-gaap:AdditionalPaidInCapitalMember 2018-06-30 0000874499 2018-04-01 2018-06-30 0000874499 us-gaap:CommonStockMember 2017-12-31 0000874499 us-gaap:RetainedEarningsMember 2018-07-01 2018-09-30 0000874499 2018-06-30 0000874499 us-gaap:AdditionalPaidInCapitalMember 2018-04-01 2018-06-30 0000874499 us-gaap:AdditionalPaidInCapitalMember 2018-09-30 0000874499 us-gaap:AdditionalPaidInCapitalMember 2018-01-01 2018-03-31 0000874499 us-gaap:RetainedEarningsMember 2017-12-31 0000874499 us-gaap:CommonStockMember 2018-04-01 2018-06-30 0000874499 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2018-06-30 0000874499 2018-09-30 0000874499 us-gaap:AdditionalPaidInCapitalMember 2018-07-01 2018-09-30 0000874499 us-gaap:CommonStockMember 2018-03-31 0000874499 us-gaap:RetainedEarningsMember 2018-06-30 0000874499 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2018-09-30 0000874499 us-gaap:CommonStockMember 2018-09-30 0000874499 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2018-03-31 0000874499 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2018-01-01 2018-03-31 0000874499 us-gaap:RetainedEarningsMember 2018-01-01 2018-03-31 0000874499 us-gaap:CommonStockMember 2018-06-30 0000874499 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2017-12-31 0000874499 us-gaap:CommonStockMember 2018-01-01 2018-03-31 0000874499 us-gaap:AdditionalPaidInCapitalMember 2017-12-31 0000874499 us-gaap:RetainedEarningsMember 2018-03-31 0000874499 us-gaap:RetainedEarningsMember 2018-04-01 2018-06-30 0000874499 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2018-07-01 2018-09-30 0000874499 us-gaap:AdditionalPaidInCapitalMember 2018-03-31 0000874499 us-gaap:RetainedEarningsMember 2018-09-30 0000874499 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2018-04-01 2018-06-30 0000874499 2017-12-31 0000874499 2018-03-31 0000874499 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2018-12-31 0000874499 us-gaap:CommonStockMember 2019-07-01 2019-09-30 0000874499 2019-06-30 0000874499 us-gaap:CommonStockMember 2019-01-01 2019-03-31 0000874499 2019-04-01 2019-06-30 0000874499 us-gaap:CommonStockMember 2019-03-31 0000874499 us-gaap:AdditionalPaidInCapitalMember 2019-03-31 0000874499 us-gaap:RetainedEarningsMember 2019-03-31 0000874499 2019-03-31 0000874499 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2019-03-31 0000874499 us-gaap:RetainedEarningsMember 2019-09-30 0000874499 us-gaap:CommonStockMember 2019-04-01 2019-06-30 0000874499 us-gaap:CommonStockMember 2019-06-30 0000874499 2019-01-01 2019-03-31 0000874499 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2019-06-30 0000874499 us-gaap:AdditionalPaidInCapitalMember 2019-09-30 0000874499 us-gaap:AdditionalPaidInCapitalMember 2019-04-01 2019-06-30 0000874499 us-gaap:RetainedEarningsMember 2018-12-31 0000874499 us-gaap:CommonStockMember 2019-09-30 0000874499 us-gaap:AdditionalPaidInCapitalMember 2019-06-30 0000874499 us-gaap:AdditionalPaidInCapitalMember 2019-07-01 2019-09-30 0000874499 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2019-07-01 2019-09-30 0000874499 us-gaap:RetainedEarningsMember 2019-07-01 2019-09-30 0000874499 us-gaap:CommonStockMember 2018-12-31 0000874499 us-gaap:AdditionalPaidInCapitalMember 2019-01-01 2019-03-31 0000874499 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2019-09-30 0000874499 us-gaap:RetainedEarningsMember 2019-01-01 2019-03-31 0000874499 us-gaap:RetainedEarningsMember 2019-06-30 0000874499 us-gaap:AdditionalPaidInCapitalMember 2018-12-31 0000874499 us-gaap:RetainedEarningsMember 2019-04-01 2019-06-30 0000874499 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2019-04-01 2019-06-30 0000874499 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2019-01-01 2019-03-31 0000874499 srt:RestatementAdjustmentMember 2019-07-01 2019-09-30 0000874499 srt:RestatementAdjustmentMember 2019-09-30 0000874499 srt:ScenarioPreviouslyReportedMember 2019-09-30 0000874499 srt:ScenarioPreviouslyReportedMember 2019-07-01 2019-09-30 0000874499 srt:ScenarioPreviouslyReportedMember 2019-01-01 2019-09-30 0000874499 srt:RestatementAdjustmentMember 2019-01-01 2019-09-30 0000874499 srt:ScenarioPreviouslyReportedMember us-gaap:RetainedEarningsMember 2019-09-30 0000874499 srt:ScenarioPreviouslyReportedMember us-gaap:RetainedEarningsMember 2019-07-01 2019-09-30 0000874499 srt:RestatementAdjustmentMember us-gaap:RetainedEarningsMember 2019-09-30 0000874499 srt:RestatementAdjustmentMember us-gaap:RetainedEarningsMember 2019-07-01 2019-09-30 0000874499 gpor:MisclassificationbetweenOperationandFinancingActivitiesMember 2019-01-01 2019-09-30 0000874499 2019-07-03 2019-07-03 0000874499 us-gaap:DisposalGroupDisposedOfBySaleNotDiscontinuedOperationsMember 2019-07-03 0000874499 srt:MaximumMember 2019-01-01 2019-09-30 0000874499 gpor:UticaPropertiesMember 2019-09-30 0000874499 gpor:OtherNonProducingPropertiesMember 2019-09-30 0000874499 gpor:MidConMember 2019-09-30 0000874499 srt:MinimumMember 2019-01-01 2019-09-30 0000874499 gpor:GrizzlyOilSandsUlcMember 2019-01-01 2019-09-30 0000874499 gpor:MammothEnergyServicesLPMember 2019-01-01 2019-09-30 0000874499 gpor:GrizzlyOilSandsUlcMember 2018-01-01 2018-09-30 0000874499 gpor:MammothEnergyServicesLPMember 2019-07-01 2019-09-30 0000874499 gpor:GrizzlyOilSandsUlcMember 2019-09-30 0000874499 gpor:TatexThailandIiLlcMember 2019-01-01 2019-09-30 0000874499 gpor:StrikeForceMidstreamLLCMember us-gaap:InvesteeMember 2018-05-31 0000874499 gpor:WindsorMidstreamLlcMember 2019-09-30 0000874499 gpor:GrizzlyOilSandsUlcMember 2018-07-01 2018-09-30 0000874499 gpor:MammothEnergyServicesLPMember 2018-07-01 2018-09-30 0000874499 gpor:ApicoLlcMember gpor:TatexThailandIiLlcMember 2019-01-01 2019-09-30 0000874499 gpor:MammothEnergyServicesLPMember 2019-01-01 2019-09-30 0000874499 gpor:ApicoLlcMember gpor:PhuHormFieldMember 2019-01-01 2019-09-30 0000874499 gpor:MammothEnergyServicesLPMember 2019-09-30 0000874499 gpor:TatexThailandIiLlcMember gpor:ApicoLlcMember 2019-09-30 0000874499 gpor:WindsorMidstreamLlcMember 2019-01-01 2019-09-30 0000874499 gpor:MammothEnergyServicesLPMember us-gaap:InvesteeMember 2019-09-30 0000874499 gpor:GrizzlyOilSandsUlcMember 2019-07-01 2019-09-30 0000874499 gpor:MammothEnergyServicesLPMember 2019-07-01 2019-09-30 0000874499 gpor:MammothEnergyServicesLPMember 2018-01-01 2018-09-30 0000874499 gpor:MammothEnergyPartnersLPMember 2019-01-01 2019-09-30 0000874499 gpor:StrikeForceMidstreamLLCMember 2019-07-01 2019-09-30 0000874499 gpor:TimberWolfTerminalsLlcMember 2019-09-30 0000874499 gpor:StrikeForceMidstreamLLCMember 2018-12-31 0000874499 gpor:TimberWolfTerminalsLlcMember 2018-07-01 2018-09-30 0000874499 gpor:StrikeForceMidstreamLLCMember 2019-09-30 0000874499 gpor:TatexThailandIiLlcMember 2019-09-30 0000874499 gpor:TimberWolfTerminalsLlcMember 2019-01-01 2019-09-30 0000874499 gpor:GrizzlyOilSandsUlcMember 2018-12-31 0000874499 gpor:MammothEnergyPartnersLPMember 2018-01-01 2018-09-30 0000874499 gpor:MammothEnergyPartnersLPMember 2019-07-01 2019-09-30 0000874499 gpor:TatexThailandIiLlcMember 2019-07-01 2019-09-30 0000874499 gpor:TimberWolfTerminalsLlcMember 2019-07-01 2019-09-30 0000874499 gpor:TatexThailandIiLlcMember 2018-07-01 2018-09-30 0000874499 gpor:StrikeForceMidstreamLLCMember 2018-07-01 2018-09-30 0000874499 gpor:StrikeForceMidstreamLLCMember 2019-01-01 2019-09-30 0000874499 gpor:MammothEnergyPartnersLPMember 2019-09-30 0000874499 gpor:TimberWolfTerminalsLlcMember 2018-12-31 0000874499 gpor:StrikeForceMidstreamLLCMember 2018-01-01 2018-09-30 0000874499 gpor:TatexThailandIiLlcMember 2018-01-01 2018-09-30 0000874499 gpor:MammothEnergyPartnersLPMember 2018-07-01 2018-09-30 0000874499 gpor:WindsorMidstreamLlcMember 2019-07-01 2019-09-30 0000874499 gpor:WindsorMidstreamLlcMember 2018-12-31 0000874499 gpor:WindsorMidstreamLlcMember 2018-07-01 2018-09-30 0000874499 gpor:MammothEnergyPartnersLPMember 2018-12-31 0000874499 gpor:WindsorMidstreamLlcMember 2018-01-01 2018-09-30 0000874499 gpor:TatexThailandIiLlcMember 2018-12-31 0000874499 gpor:TimberWolfTerminalsLlcMember 2018-01-01 2018-09-30 0000874499 gpor:StrikeForceMidstreamLLCMember 2018-05-01 0000874499 gpor:A6.625SeniorNotesMember us-gaap:SeniorNotesMember 2019-09-30 0000874499 gpor:A6.375SeniorNotesMember us-gaap:SeniorNotesMember 2019-09-30 0000874499 gpor:A6.000SeniorNotesMember us-gaap:SeniorNotesMember 2019-09-30 0000874499 us-gaap:LineOfCreditMember gpor:AmendedAndRestatedCreditAgreementMember gpor:NovaScotiaAmegyKeybankMember 2019-09-30 0000874499 us-gaap:ConstructionLoansMember 2019-09-30 0000874499 gpor:A6.375SeniorNotesDue2026Member us-gaap:SeniorNotesMember 2019-09-30 0000874499 us-gaap:LetterOfCreditMember gpor:AmendedAndRestatedCreditAgreementMember gpor:NovaScotiaAmegyKeybankMember 2019-09-30 0000874499 us-gaap:RevolvingCreditFacilityMember 2019-09-30 0000874499 us-gaap:LineOfCreditMember gpor:NovaScotiaAmegyKeybankMember 2019-01-01 2019-09-30 0000874499 us-gaap:LineOfCreditMember gpor:AmendedAndRestatedCreditAgreementMember gpor:NovaScotiaAmegyKeybankMember 2019-06-03 0000874499 us-gaap:RevolvingCreditFacilityMember 2019-01-01 2019-09-30 0000874499 us-gaap:LetterOfCreditMember gpor:InterBankMember us-gaap:ConstructionLoansMember 2018-12-31 0000874499 gpor:A6.625SeniorNotesMember us-gaap:SeniorNotesMember 2018-12-31 0000874499 gpor:A6.375SeniorNotesDue2026Member us-gaap:SeniorNotesMember 2018-12-31 0000874499 gpor:A6.375SeniorNotesMember us-gaap:SeniorNotesMember 2018-12-31 0000874499 us-gaap:LetterOfCreditMember gpor:InterBankMember us-gaap:ConstructionLoansMember 2019-09-30 0000874499 us-gaap:LineOfCreditMember gpor:AmendedAndRestatedCreditAgreementMember gpor:NovaScotiaAmegyKeybankMember 2018-12-31 0000874499 gpor:A6.000SeniorNotesMember us-gaap:SeniorNotesMember 2018-12-31 0000874499 srt:MaximumMember 2018-05-31 0000874499 gpor:ShareRepurchaseProgramMember us-gaap:CommonStockMember 2019-01-01 2019-09-30 0000874499 gpor:ShareRepurchaseProgramMember 2018-01-01 2018-12-31 0000874499 2018-01-31 0000874499 srt:MinimumMember 2018-05-31 0000874499 2019-01-01 2019-01-31 0000874499 us-gaap:PerformanceSharesMember 2019-01-01 2019-09-30 0000874499 srt:MinimumMember us-gaap:RestrictedStockMember 2019-01-01 2019-09-30 0000874499 us-gaap:RestrictedStockMember 2019-01-01 2019-09-30 0000874499 us-gaap:PerformanceSharesMember 2019-09-30 0000874499 us-gaap:RestrictedStockMember 2019-09-30 0000874499 srt:MaximumMember us-gaap:RestrictedStockMember 2019-01-01 2019-09-30 0000874499 us-gaap:PerformanceSharesMember 2018-12-31 0000874499 us-gaap:RestrictedStockMember 2018-12-31 0000874499 gpor:TransportationCommitmentMember 2019-09-30 0000874499 gpor:MuskieProppantLLCMember us-gaap:LossOnLongTermPurchaseCommitmentMember 2018-01-01 2018-09-30 0000874499 gpor:MuskieProppantLLCMember us-gaap:LossOnLongTermPurchaseCommitmentMember 2019-01-01 2019-09-30 0000874499 gpor:MuskieProppantLLCMember us-gaap:LossOnLongTermPurchaseCommitmentMember 2019-07-01 2019-09-30 0000874499 2013-12-11 2013-12-11 0000874499 gpor:MuskieProppantLLCMember us-gaap:LossOnLongTermPurchaseCommitmentMember 2018-07-01 2018-09-30 0000874499 gpor:JudicialDistrictCourtfortheParishofCameronMember 2016-02-09 2016-02-09 0000874499 2017-01-04 2017-01-04 0000874499 2019-04-15 2019-04-15 0000874499 gpor:JudicialDistrictCourtfortheParishofVermillionMember 2016-07-29 2016-07-29 0000874499 gpor:NYMEXHenryHubSwap2023Member us-gaap:CallOptionMember us-gaap:ShortMember 2017-09-30 2017-09-30 0000874499 gpor:NYMEXHenryHubSwap2019Member us-gaap:CallOptionMember us-gaap:ShortMember 2019-09-30 0000874499 gpor:NYMEXHenryHubSwap2022Member us-gaap:CallOptionMember us-gaap:ShortMember 2019-01-01 2019-09-30 0000874499 gpor:NYMEXHenryHubSwap2022Member us-gaap:CallOptionMember us-gaap:ShortMember 2019-09-30 0000874499 gpor:NYMEXHenryHubSwap2023Member us-gaap:CallOptionMember us-gaap:ShortMember 2019-09-30 0000874499 gpor:NYMEXHenryHubSwap2019Member us-gaap:CallOptionMember us-gaap:ShortMember 2019-01-01 2019-09-30 0000874499 gpor:TranscoZone42020Member us-gaap:LongMember 2019-01-01 2019-09-30 0000874499 gpor:FixedSpread2020Member us-gaap:LongMember 2019-09-30 0000874499 gpor:FixedSpread2020Member us-gaap:LongMember 2019-01-01 2019-09-30 0000874499 gpor:TranscoZone42019Member us-gaap:LongMember 2019-09-30 0000874499 gpor:TranscoZone42020Member us-gaap:LongMember 2019-09-30 0000874499 gpor:TranscoZone42019Member us-gaap:LongMember 2019-01-01 2019-09-30 0000874499 gpor:FixedPriceSwap2019Member 2018-12-01 2018-12-31 0000874499 gpor:FixedPriceSwap2019Member 2018-12-31 0000874499 gpor:FixedPriceSwap2019Member 2019-01-01 2019-09-30 0000874499 gpor:NYMEXWTISwap2020Member 2019-01-01 2019-09-30 0000874499 gpor:NYMEXWTISwap2019Member 2019-01-01 2019-09-30 0000874499 gpor:NYMEXWTISwap2020Member 2019-09-30 0000874499 gpor:NYMEXWTISwap2019Member 2019-09-30 0000874499 gpor:DerivativeThresholdThreeMember 2019-01-01 2019-09-30 0000874499 gpor:DerivativeThresholdOneMember 2019-01-01 2019-09-30 0000874499 gpor:GasMember 2018-07-01 2018-09-30 0000874499 srt:OilReservesMember 2018-07-01 2018-09-30 0000874499 srt:OilReservesMember 2018-01-01 2018-09-30 0000874499 gpor:ContingentLAConsiderationMember 2019-07-01 2019-09-30 0000874499 srt:NaturalGasReservesMember 2019-07-01 2019-09-30 0000874499 gpor:GasMember 2019-07-01 2019-09-30 0000874499 gpor:ContingentLAConsiderationMember 2019-01-01 2019-09-30 0000874499 gpor:ContingentLAConsiderationMember 2018-07-01 2018-09-30 0000874499 srt:OilReservesMember 2019-07-01 2019-09-30 0000874499 gpor:GasMember 2018-01-01 2018-09-30 0000874499 srt:NaturalGasReservesMember 2018-01-01 2018-09-30 0000874499 srt:OilReservesMember 2019-01-01 2019-09-30 0000874499 srt:NaturalGasReservesMember 2018-07-01 2018-09-30 0000874499 gpor:GasMember 2019-01-01 2019-09-30 0000874499 srt:NaturalGasReservesMember 2019-01-01 2019-09-30 0000874499 gpor:ContingentLAConsiderationMember 2018-01-01 2018-09-30 0000874499 gpor:CommodityDerivativeInstrumentsMember 2019-09-30 0000874499 gpor:ContingentLAConsiderationMember 2018-12-31 0000874499 gpor:CommodityDerivativeInstrumentsMember 2018-12-31 0000874499 gpor:ContingentLAConsiderationMember 2019-09-30 0000874499 gpor:NYMEXHenryHubSwap2020Member 2019-09-30 0000874499 gpor:NYMEXHenryHubSwap2019Member 2019-09-30 0000874499 gpor:NYMEXHenryHubSwap2019Member 2019-01-01 2019-09-30 0000874499 gpor:NYMEXHenryHubSwap2020Member 2019-01-01 2019-09-30 0000874499 gpor:MontBelvieuC3Swap2019Member 2019-09-30 0000874499 gpor:MontBelvieuC3Swap2019Member 2019-01-01 2019-09-30 0000874499 gpor:MontBelvieuC22019Member 2019-01-01 2019-09-30 0000874499 gpor:MontBelvieuC5Swap2019Member 2019-01-01 2019-09-30 0000874499 gpor:MontBelvieuC5Swap2019Member 2019-09-30 0000874499 gpor:MontBelvieuC22019Member 2019-09-30 0000874499 gpor:DerivativeThresholdTwoMember 2019-09-30 0000874499 gpor:DerivativeThresholdOneMember 2019-09-30 0000874499 gpor:DerivativeThresholdTwoMember srt:MinimumMember 2019-09-30 0000874499 gpor:DerivativeThresholdTwoMember srt:MaximumMember 2019-09-30 0000874499 us-gaap:FairValueInputsLevel2Member 2018-12-31 0000874499 us-gaap:FairValueInputsLevel3Member 2018-12-31 0000874499 us-gaap:FairValueInputsLevel1Member 2018-12-31 0000874499 us-gaap:FairValueInputsLevel2Member 2019-09-30 0000874499 us-gaap:FairValueInputsLevel1Member 2019-09-30 0000874499 us-gaap:FairValueInputsLevel3Member 2019-09-30 0000874499 us-gaap:EstimateOfFairValueFairValueDisclosureMember us-gaap:SeniorNotesMember 2019-09-30 0000874499 us-gaap:CarryingReportedAmountFairValueDisclosureMember us-gaap:SeniorNotesMember 2019-09-30 0000874499 us-gaap:AccountingStandardsUpdate201602Member 2019-01-01 0000874499 srt:MaximumMember gpor:DrillingRigMember 2019-09-30 0000874499 srt:MaximumMember 2019-09-30 0000874499 srt:MinimumMember 2019-09-30 0000874499 srt:MinimumMember gpor:DrillingRigMember 2019-09-30 0000874499 srt:ConsolidationEliminationsMember 2019-09-30 0000874499 srt:NonGuarantorSubsidiariesMember srt:ReportableLegalEntitiesMember 2019-09-30 0000874499 srt:ParentCompanyMember srt:ReportableLegalEntitiesMember 2019-09-30 0000874499 srt:GuarantorSubsidiariesMember srt:ReportableLegalEntitiesMember 2019-09-30 0000874499 srt:ConsolidationEliminationsMember 2018-12-31 0000874499 srt:GuarantorSubsidiariesMember srt:ReportableLegalEntitiesMember 2018-12-31 0000874499 srt:NonGuarantorSubsidiariesMember srt:ReportableLegalEntitiesMember 2018-12-31 0000874499 srt:ParentCompanyMember srt:ReportableLegalEntitiesMember 2018-12-31 0000874499 srt:NonGuarantorSubsidiariesMember srt:ReportableLegalEntitiesMember 2019-07-01 2019-09-30 0000874499 srt:ConsolidationEliminationsMember 2019-07-01 2019-09-30 0000874499 srt:GuarantorSubsidiariesMember srt:ReportableLegalEntitiesMember 2019-07-01 2019-09-30 0000874499 srt:ParentCompanyMember 2019-07-01 2019-09-30 0000874499 srt:GuarantorSubsidiariesMember 2019-07-01 2019-09-30 0000874499 srt:ParentCompanyMember srt:ReportableLegalEntitiesMember 2019-07-01 2019-09-30 0000874499 srt:NonGuarantorSubsidiariesMember 2019-07-01 2019-09-30 0000874499 srt:ConsolidationEliminationsMember 2018-07-01 2018-09-30 0000874499 srt:NonGuarantorSubsidiariesMember srt:ReportableLegalEntitiesMember 2018-07-01 2018-09-30 0000874499 srt:ParentCompanyMember srt:ReportableLegalEntitiesMember 2018-07-01 2018-09-30 0000874499 srt:GuarantorSubsidiariesMember srt:ReportableLegalEntitiesMember 2018-07-01 2018-09-30 0000874499 srt:NonGuarantorSubsidiariesMember srt:ReportableLegalEntitiesMember 2019-01-01 2019-09-30 0000874499 srt:GuarantorSubsidiariesMember 2019-01-01 2019-09-30 0000874499 srt:ParentCompanyMember srt:ReportableLegalEntitiesMember 2019-01-01 2019-09-30 0000874499 srt:ConsolidationEliminationsMember 2019-01-01 2019-09-30 0000874499 srt:GuarantorSubsidiariesMember srt:ReportableLegalEntitiesMember 2019-01-01 2019-09-30 0000874499 srt:NonGuarantorSubsidiariesMember 2019-01-01 2019-09-30 0000874499 srt:ParentCompanyMember 2019-01-01 2019-09-30 0000874499 srt:ParentCompanyMember srt:ReportableLegalEntitiesMember 2018-01-01 2018-09-30 0000874499 srt:ConsolidationEliminationsMember 2018-01-01 2018-09-30 0000874499 srt:GuarantorSubsidiariesMember srt:ReportableLegalEntitiesMember 2018-01-01 2018-09-30 0000874499 srt:NonGuarantorSubsidiariesMember srt:ReportableLegalEntitiesMember 2018-01-01 2018-09-30 0000874499 srt:ConsolidationEliminationsMember 2017-12-31 0000874499 srt:ParentCompanyMember srt:ReportableLegalEntitiesMember 2017-12-31 0000874499 srt:NonGuarantorSubsidiariesMember srt:ReportableLegalEntitiesMember 2018-09-30 0000874499 srt:GuarantorSubsidiariesMember srt:ReportableLegalEntitiesMember 2018-09-30 0000874499 srt:NonGuarantorSubsidiariesMember srt:ReportableLegalEntitiesMember 2017-12-31 0000874499 srt:ConsolidationEliminationsMember 2018-09-30 0000874499 srt:GuarantorSubsidiariesMember srt:ReportableLegalEntitiesMember 2017-12-31 0000874499 srt:ParentCompanyMember srt:ReportableLegalEntitiesMember 2018-09-30 0000874499 gpor:FixedPriceSwap2020Member us-gaap:SubsequentEventMember 2019-10-01 2019-10-31 0000874499 gpor:FixedPriceSwap2019Member us-gaap:SubsequentEventMember 2019-10-01 2019-10-31 0000874499 gpor:FixedPriceSwap2020Member us-gaap:SubsequentEventMember 2019-10-31 utreg:acre iso4217:USD gpor:usd_per_mcf xbrli:pure xbrli:shares iso4217:USD xbrli:shares iso4217:USD utreg:bbl gpor:violation utreg:MMBTU iso4217:USD utreg:MMBTU gpor:site gpor:complaint utreg:bbl
Table of Contents


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
 
FORM 10-Q/A
(Amendment No. 1)
 
(Mark One)
QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2019
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 Jurisdiction of Incorporation or Organization)
(IRS Employer Identification Number)
3001 Quail Springs Parkway

Oklahoma City,
Oklahoma
73134
(Address of Principal Executive Offices)
(Zip Code)
(405) 252-4600
(Registrant Telephone Number, Including Area Code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
 
Trading Symbol(s)
 
Name of each exchange on which registered
Common stock, par value $0.01 per share
 
GPOR
 
Nasdaq Global Select Market
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.     Yes  ý    No  ¨
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (Section 232.405 of this chapter) during the preceding 12 months (or such shorter period that the registrant was required to submit such files).     Yes  ý    No  ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):
Large Accelerated filer  ý     Accelerated filer   ¨   
Non-accelerated filer  ¨    Smaller reporting company  
Emerging growth company  
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes      No  ý
As of October 25, 2019, 159,709,221 shares of the registrant’s common stock were outstanding.


Table of Contents


EXPLANATORY NOTE
This Amendment No. 1 to the Quarterly Report on Form 10-Q/A (the “Amendment”) is being filed by Gulfport Energy Corporation (the "Company") to amend the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2019, which was originally filed with the Securities and Exchange Commission (the "SEC") on November 1, 2019 (the “Original Filing”). The Amendment sets forth the information in Original Filing in its entirety, as adjusted for the effects of the restatement described below.
On February 25, 2020, the Audit Committee of the Company's Board of Directors, in conjunction with senior management, concluded that the Company's unaudited consolidated financial statements as of and for the periods ended September 30, 2019 included in the Company's quarterly report on Form 10-Q for the quarterly period ended September 30, 2019 should be restated to correct the error discussed below and should no longer be relied upon.
In the course of preparing the consolidated financial statements for the year ended December 31, 2019, the Company identified a misstatement of its depreciation, depletion and amortization and impairment of oil and gas properties as of September 30, 2019 of approximately $554 million ($436 million net of the tax benefit) related to unrecorded transfers of its unevaluated oil and natural gas properties into the amortization base. This error impacted the related calculations of the Company's depreciation, depletion and amortization and impairment of oil and natural gas properties for the three and nine month periods ended September 2019. Net (loss) income and income tax benefit have also been impacted.
This Amendment is being filed solely to (i) restate the consolidated financial statements for the misstatement described above to the consolidated financial statements (and to make corresponding changes to the Risk Factors and Management's Discussion and Analysis of Financial Condition and Results of Operations sections in this Amendment) and (ii) amend Item 4 (Controls and Procedures).
The following sections in the Original Filing are revised in this Amendment to reflect the restatement:
Part I - Item 1. Consolidated Financial Statements
Part I - Item 2. Management's Discussion and Analysis of Financial Conditions and Results of Operations
Part I - Item 4. Controls and Procedures
Part II - Item 1A. Risk Factors
Part II - Item 6. Exhibits
Our consolidated financial statements as of September 30, 2019 and for the three and nine month periods then ended have been restated to correctly reflect the unproved oil and natural gas properties excluded from amortization and accumulated depletion, depreciation, amortization and impairment in the consolidated balance sheet and the depreciation, depletion and amortization, impairment of oil and natural gas properties, income tax benefit and net loss in the consolidated statements of operations and consolidated statements of cash flows and other related effects on the consolidated financial statements and related footnotes. See restated Note 1 for the adjustments to the consolidated financial statements related to this misstatement. The Company has also made corresponding amendments to Management's Discussion and Analysis of Financial Conditions and Results of Operations.
This Amendment resulted from a material weakness in internal control over financial reporting. As such, Item 4 of Part I has been amended for our assessment of the effectiveness of our disclosure controls and procedures pursuant to Rule 13a-15(b) under the Exchange Act. This Amendment includes new certifications from the Company’s Chief Executive Officer and President and Chief Financial Officer dated as of the date of filing of this Amendment, as required by Sections 302 and 906 of the Sarbanes-Oxley act of 2002. The certifications are included in this Amendment as Exhibits 31.1, 31.2, 32.1 and 32.2.
This Amendment does not reflect events occurring after the filing of the Original Filing, or modify or update those disclosures affected by subsequent events, except for the effects of the restatement. Disclosures not affected by the restatement are unchanged and reflect the disclosures made at the time of the Original Filing. Accordingly, this Amended Form 10-Q should be read in conjunction with our filings with the SEC subsequent to the date on which we filed the Original Filing with the SEC.
GULFPORT ENERGY CORPORATION
TABLE OF CONTENTS
 


Table of Contents


 
 
Page
 
 
 
Item 1.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Item 2.
 
 
 
Item 3.
 
 
 
Item 4.
 
 
 
 
 
 
Item 1.
 
 
 
Item 1A.
 
 
 
Item 2.
 
 
 
Item 3.
 
 
 
Item 4.
 
 
 
Item 5.
 
 
 
Item 6.
 
 
 
 

 



1

Table of Contents


GULFPORT ENERGY CORPORATION
CONSOLIDATED BALANCE SHEETS
(Unaudited)
 
September 30, 2019
 
December 31, 2018
 
(In thousands, except share data)
 
As Restated
 
 
Assets
 
 
 
Current assets:
 
 
 
Cash and cash equivalents
$
10,124

 
$
52,297

Accounts receivable—oil and natural gas sales
112,657

 
210,200

Accounts receivable—joint interest and other
41,327

 
22,497

Prepaid expenses and other current assets
5,658

 
10,017

Short-term derivative instruments
134,571

 
21,352

Total current assets
304,337

 
316,363

Property and equipment:
 
 
 
Oil and natural gas properties, full-cost accounting, $2,260,759 and $2,873,037 excluded from amortization in 2019 and 2018, respectively
10,551,713

 
10,026,836

Other property and equipment
96,233

 
92,667

Accumulated depletion, depreciation, amortization and impairment
(5,616,988
)
 
(4,640,098
)
Property and equipment, net
5,030,958

 
5,479,405

Other assets:
 
 
 
Equity investments
73,962

 
236,121

Long-term derivative instruments
23,419

 

Deferred tax asset
323,378

 

Inventories
7,022

 
5,344

Operating lease assets
13,920

 

Operating lease assets - related parties
48,449

 

Other assets
11,653

 
13,803

Total other assets
501,803

 
255,268

Total assets
$
5,837,098

 
$
6,051,036

Liabilities and Stockholders’ Equity
 
 
 
Current liabilities:
 
 
 
Accounts payable and accrued liabilities
$
439,019

 
$
518,380

Short-term derivative instruments
429

 
20,401

Current portion of operating lease liabilities
12,848

 

Current portion of operating lease liabilities - related parties
21,017

 

Current maturities of long-term debt
622

 
651

Total current liabilities
473,935

 
539,432

Long-term derivative instruments
72,040

 
13,992

Asset retirement obligation—long-term
59,819

 
79,952

Uncertain tax position liability
3,127

 
3,127

Non-current operating lease liabilities
1,072

 

Non-current operating lease liabilities - related parties
27,432

 

Long-term debt, net of current maturities
2,076,569

 
2,086,765

Total liabilities
2,713,994

 
2,723,268

Commitments and contingencies (Note 8)

 

Preferred stock, $0.01 par value; 5,000,000 shares authorized (30,000 authorized as redeemable 12% cumulative preferred stock, Series A), and none issued and outstanding

 

Stockholders’ equity:
 
 
 
Common stock - $0.01 par value, 200,000,000 shares authorized, 159,709,221 issued and outstanding at September 30, 2019 and 162,986,045 at December 31, 2018
1,597

 
1,630

Paid-in capital
4,205,158

 
4,227,532

Accumulated other comprehensive loss
(50,679
)
 
(56,026
)
Accumulated deficit
(1,032,972
)
 
(845,368
)
Total stockholders’ equity
3,123,104

 
3,327,768

Total liabilities and stockholders’ equity
$
5,837,098

 
$
6,051,036


See accompanying notes to consolidated financial statements.

2

Table of Contents


GULFPORT ENERGY CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
 
 
Three months ended September 30,
 
Nine months ended September 30,
 
2019
 
2018
 
2019
 
2018
 
(In thousands, except share data)
 
As Restated
 
 
 
As Restated
 
 
Revenues:
 
 
 
 
 
 
 
Natural gas sales
$
213,227

 
$
271,167

 
$
714,500

 
$
753,261

Oil and condensate sales
24,550

 
45,682

 
93,942

 
140,687

Natural gas liquid sales
20,324

 
53,776

 
78,136

 
141,883

Net gain (loss) on natural gas, oil and NGLs derivatives
27,074

 
(9,663
)
 
178,169

 
(96,737
)
 
285,175

 
360,962

 
1,064,747

 
939,094

Costs and expenses:

 
 
 
 
 
 
Lease operating expenses
22,473

 
22,325

 
64,668

 
64,143

Production taxes
6,565

 
9,348

 
22,584

 
23,861

Midstream gathering and processing expenses
78,435

 
78,913

 
220,732

 
214,546

Depreciation, depletion and amortization
163,270

 
119,915

 
406,654

 
352,848

Impairment of oil and natural gas properties
571,442

 

 
571,442

 

General and administrative expenses
14,659

 
15,848

 
39,482

 
42,955

Accretion expense
747

 
1,037

 
3,173

 
3,056

 
857,591

 
247,386

 
1,328,735

 
701,409

(LOSS) INCOME FROM OPERATIONS
(572,416
)
 
113,576

 
(263,988
)
 
237,685

OTHER EXPENSE (INCOME):

 
 
 
 
 
 
Interest expense
34,095

 
33,253

 
103,095

 
100,922

Interest income
(338
)
 
(92
)
 
(649
)
 
(162
)
Gain on debt extinguishment
(23,600
)
 

 
(23,600
)
 

Gain on sale of equity method investments

 
(2,733
)
 

 
(124,768
)
Loss (income) from equity method investments, net
43,082

 
(12,858
)
 
164,391

 
(35,282
)
Other expense
3,194

 
856

 
3,757

 
485

 
56,433

 
18,426

 
246,994

 
(58,805
)
(LOSS) INCOME BEFORE INCOME TAXES
(628,849
)
 
95,150

 
(510,982
)
 
296,490

INCOME TAX BENEFIT
(144,047
)
 

 
(323,378
)
 
(69
)
NET (LOSS) INCOME
$
(484,802
)
 
$
95,150

 
$
(187,604
)
 
$
296,559

NET (LOSS) INCOME PER COMMON SHARE:
 
 
 
 
 
 
 
Basic
$
(3.04
)
 
$
0.55

 
$
(1.17
)
 
$
1.69

Diluted
$
(3.04
)
 
$
0.55

 
$
(1.17
)
 
$
1.68

Weighted average common shares outstanding—Basic
159,548,477

 
173,057,538

 
160,553,796

 
175,776,312

Weighted average common shares outstanding—Diluted
159,548,477

 
173,304,914

 
160,553,796

 
176,440,461


See accompanying notes to consolidated financial statements.


3

Table of Contents


GULFPORT ENERGY CORPORATION
CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME
(Unaudited)
 
Three months ended September 30,
 
Nine months ended September 30,
 
2019
 
2018
 
2019
 
2018
 
(In thousands)
 
As Restated
 
 
 
As Restated
 
 
Net (loss) income
$
(484,802
)
 
$
95,150

 
$
(187,604
)
 
$
296,559

Foreign currency translation adjustment
(2,064
)
 
3,052

 
5,347

 
(5,815
)
Other comprehensive (loss) income
(2,064
)
 
3,052

 
5,347

 
(5,815
)
Comprehensive (loss) income
$
(486,866
)
 
$
98,202

 
$
(182,257
)
 
$
290,744



See accompanying notes to consolidated financial statements.


4

Table of Contents


GULFPORT ENERGY CORPORATION
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(Unaudited)

 
 
 
 
 

Paid-in
Capital
 
Accumulated
Other
Comprehensive (Loss) Income
 
Accumulated
Deficit
 
Total
Stockholders’
Equity
 
Common Stock
 
 
 
 
 
Shares
 
Amount
 
 
 
 
 
(In thousands, except share data)
Balance at January 1, 2019
162,986,045

 
$
1,630

 
$
4,227,532

 
$
(56,026
)
 
$
(845,368
)
 
$
3,327,768

Net Income

 

 

 

 
62,242

 
62,242

Other Comprehensive Income

 

 

 
3,801

 

 
3,801

Stock Compensation

 

 
2,785

 

 

 
2,785

Shares Repurchased
(3,618,634
)
 
(37
)
 
(28,293
)
 

 

 
(28,330
)
Issuance of Restricted Stock
54,554

 
1

 
(1
)
 

 

 

Balance at March 31, 2019
159,421,965

 
$
1,594

 
$
4,202,023

 
$
(52,225
)
 
$
(783,126
)
 
$
3,368,266

Net Income

 

 

 

 
234,956

 
234,956

Other Comprehensive Income

 

 

 
3,610

 

 
3,610

Stock Compensation

 

 
2,846

 

 

 
2,846

Shares Repurchased
(296,587
)
 
(3
)
 
(2,267
)
 

 

 
(2,270
)
Issuance of Restricted Stock
270,639

 
3

 
(3
)
 

 

 

Balance at June 30, 2019
159,396,017

 
$
1,594

 
$
4,202,599

 
$
(48,615
)
 
$
(548,170
)
 
$
3,607,408

Net Loss (As Restated)

 

 

 

 
(484,802
)
 
(484,802
)
Other Comprehensive Loss

 

 

 
(2,064
)
 

 
(2,064
)
Stock Compensation

 

 
2,651

 

 

 
2,651

Shares Repurchased
(35,977
)
 

 
(89
)
 

 

 
(89
)
Issuance of Restricted Stock
349,181

 
3

 
(3
)
 

 

 

Balance at September 30, 2019 (As Restated)
159,709,221

 
$
1,597

 
$
4,205,158

 
$
(50,679
)
 
$
(1,032,972
)
 
$
3,123,104

(Continued on next page)

5

Table of Contents


GULFPORT ENERGY CORPORATION
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (continued)
(Unaudited)

 
 
 
 
 

Paid-in
Capital
 
Accumulated
Other
Comprehensive (Loss) Income
 
Accumulated
Deficit
 
Total
Stockholders’
Equity
 
Common Stock
 
 
 
 
 
Shares
 
Amount
 
 
 
 
 
(In thousands, except share data)
Balance at January 1, 2018
183,105,910

 
$
1,831

 
$
4,416,250

 
$
(40,539
)
 
$
(1,275,928
)
 
$
3,101,614

Net Income

 

 

 

 
90,090

 
90,090

Other Comprehensive Loss

 

 

 
(5,503
)
 

 
(5,503
)
Stock Compensation

 

 
2,685

 

 

 
2,685

Shares Repurchased
(9,692,356
)
 
(97
)
 
(99,900
)
 

 

 
(99,997
)
Issuance of Restricted Stock
109,933

 
1

 
(1
)
 

 

 

Balance at March 31, 2018
173,523,487

 
$
1,735

 
$
4,319,034

 
$
(46,042
)
 
$
(1,185,838
)
 
$
3,088,889

Net Income

 

 

 

 
111,319

 
111,319

Other Comprehensive Loss

 

 

 
(3,364
)
 

 
(3,364
)
Stock Compensation

 

 
3,355

 

 

 
3,355

Shares Repurchased
(412,516
)
 
(4
)
 
(4,996
)
 

 

 
(5,000
)
Issuance of Restricted Stock
191,084

 
2

 
(2
)
 

 

 

Balance at June 30, 2018
173,302,055

 
$
1,733

 
$
4,317,391

 
$
(49,406
)
 
$
(1,074,519
)
 
$
3,195,199

Net Income

 

 

 

 
95,150

 
95,150

Other Comprehensive Income

 

 

 
3,052

 

 
3,052

Stock Compensation

 

 
3,614

 

 

 
3,614

Shares Repurchased
(400,597
)
 
(4
)
 
(4,996
)
 

 

 
(5,000
)
Issuance of Restricted Stock
317,185

 
3

 
(3
)
 

 

 

Balance at September 30, 2018
173,218,643

 
$
1,732

 
$
4,316,006

 
$
(46,354
)
 
$
(979,369
)
 
$
3,292,015


See accompanying notes to consolidated financial statements.

6

Table of Contents


GULFPORT ENERGY CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
 
Nine months ended September 30,
 
2019
 
2018
 
(In thousands)
 
As Restated
 
 
Cash flows from operating activities:
 
 
 
Net (loss) income
$
(187,604
)
 
$
296,559

Adjustments to reconcile net (loss) income to net cash provided by operating activities:
 
 
 
Accretion expense
3,173

 
3,056

Depletion, depreciation and amortization
406,654

 
352,848

Impairment of oil and natural gas properties
571,442

 

Stock-based compensation expense
4,969

 
5,792

Loss (income) from equity investments
164,532

 
(35,040
)
Gain on debt extinguishment
(23,600
)
 

Change in fair value of derivative instruments
(97,425
)
 
106,373

Deferred income tax benefit
(323,378
)
 
(69
)
Amortization of loan costs
4,821

 
4,554

Gain on sale of equity investments and other assets
(178
)
 
(124,768
)
Distributions from equity method investments
2,457

 
1,978

Changes in operating assets and liabilities:
 
 
 
Decrease (increase) in accounts receivable—oil and natural gas sales
97,543

 
(10,618
)
Increase in accounts receivable—joint interest and other
(18,830
)
 
(2,277
)
Increase in accounts receivable—related parties

 
(79
)
Decrease (increase) in prepaid expenses and other current assets
4,359

 
(4,830
)
(Increase) decrease in other assets
(30
)
 
1,228

Increase in accounts payable, accrued liabilities and other
8,567

 
36,809

Settlement of asset retirement obligation
(117
)
 
(719
)
Net cash provided by operating activities
617,355

 
630,797

Cash flows from investing activities:
 
 
 
Additions to other property and equipment
(4,694
)
 
(7,134
)
Additions to oil and natural gas properties
(646,535
)
 
(777,104
)
Proceeds from sale of oil and natural gas properties
10,864

 
4,820

Proceeds from sale of other property and equipment
204

 
217

Proceeds from sale of equity method investments

 
226,487

Contributions to equity method investments
(432
)
 
(2,318
)
Distributions from equity method investments
1,945

 
446

Net cash used in investing activities
(638,648
)
 
(554,586
)
Cash flows from financing activities:
 
 
 
Principal payments on borrowings
(550,500
)
 
(165,428
)
Borrowings on line of credit
640,000

 
225,000

Repurchase of senior notes
(79,480
)
 

Debt issuance costs and loan commitment fees
(211
)
 
(772
)
Payments for repurchase of stock
(30,689
)
 
(109,997
)
Net cash used in financing activities
(20,880
)
 
(51,197
)
Net (decrease) increase in cash, cash equivalents and restricted cash
(42,173
)
 
25,014

Cash, cash equivalents and restricted cash at beginning of period
52,297

 
99,557

Cash, cash equivalents and restricted cash at end of period
$
10,124

 
$
124,571

Supplemental disclosure of cash flow information:
 
 
 
Interest payments
$
85,272

 
$
75,045

Income tax receipts
$
(1,794
)
 
$

Supplemental disclosure of non-cash transactions:
 
 
 
Capitalized stock-based compensation
$
3,313

 
$
3,862

Asset retirement obligation capitalized
$
6,846

 
$
1,094

Asset retirement obligation removed due to divestiture
$
(30,035
)
 
$

Interest capitalized
$
2,782

 
$
3,956

Fair value of contingent consideration asset on date of divestiture
$
(1,137
)
 
$

Foreign currency translation gain (loss) on equity method investments
$
5,347

 
$
(5,815
)
 See accompanying notes to consolidated financial statements.

7

Table of Contents


GULFPORT ENERGY CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1.
BASIS OF PRESENTATION, RESTATEMENT AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
These consolidated financial statements have been prepared by Gulfport Energy Corporation (the “Company” or “Gulfport”) without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”), and reflect all adjustments that, in the opinion of management, are necessary for a fair presentation of the results for the interim periods reported in all material respects, on a basis consistent with the annual audited consolidated financial statements. All such adjustments are of a normal, recurring nature. Certain information, accounting policies, and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles ("GAAP") have been omitted pursuant to such rules and regulations, although the Company believes that the disclosures are adequate to make the information presented not misleading. These consolidated financial statements should be read in conjunction with the consolidated financial statements and the summary of significant accounting policies and notes included in the Company’s most recent annual report on Form 10-K. Results for the three and nine months ended September 30, 2019 are not necessarily indicative of the results expected for the full year.
Restatement of Previously Issued Unaudited Consolidated Financial Statements
The Company has restated its unaudited consolidated financial statements to correct an error in the balance of unproved oil and natural gas properties, which impacted related depletion, depreciation and amortization and impairment of oil and natural gas properties. This error as of September 30, 2019 was identified in the course of preparing the Company's consolidated financial statements for the year ended December 31, 2019.
The following tables present the effect of the error correction discussed above on all affected line items of our previously issued consolidated balance sheets as of September 30, 2019, consolidated statements of operations for the three and nine months ended September 30, 2019, consolidated statements of comprehensive income for the three and nine months ended September 30, 2019, consolidated statements of stockholders' equity for the three months ended September 30, 2019 and the consolidated statements of cash flows for the nine months ended September 30, 2019.
Consolidated Balance Sheets
 
September 30, 2019
 
As Reported
 
Adjustments
 
As Restated
 
(In thousands)
Accumulated depletion, depreciation, amortization and impairment
(5,063,413
)
 
(553,575
)
 
(5,616,988
)
Property and equipment, net(1)
5,584,533

 
(553,575
)
 
5,030,958

 
 
 
 
 
 
Deferred tax asset
205,853

 
117,525

 
323,378

Total other assets
384,278

 
117,525

 
501,803

Total assets
$
6,273,148

 
(436,050
)
 
$
5,837,098

 
 
 

 
 
Accumulated deficit
(596,922
)
 
(436,050
)
 
(1,032,972
)
Total stockholders’ equity
3,559,154

 
(436,050
)
 
3,123,104

Total liabilities and stockholders’ equity
$
6,273,148

 
(436,050
)
 
$
5,837,098

 
 
 
 
 
 
(1) Amount excluded from amortization in 2019
$
2,814,334

 
(553,575
)
 
$
2,260,759

Consolidated Statements of Operations

8

Table of Contents


 
Three Months Ended September 30, 2019
 
As Reported
 
Adjustments
 
As Restated
 
(In thousands)
Depreciation, depletion and amortization
$
145,490

 
17,780

 
$
163,270

Impairment of oil and natural gas properties
35,647

 
535,795

 
571,442

Total Costs and Expenses
304,016

 
553,575

 
857,591

(LOSS) INCOME FROM OPERATIONS
(18,841
)
 
(553,575
)
 
(572,416
)
(LOSS) INCOME BEFORE INCOME TAXES
(75,274
)
 
(553,575
)
 
(628,849
)
INCOME TAX BENEFIT
(26,522
)
 
(117,525
)
 
(144,047
)
NET (LOSS) INCOME
$
(48,752
)
 
(436,050
)
 
$
(484,802
)
NET (LOSS) INCOME PER COMMON SHARE:
 
 
 
 
 
Basic
$
(0.31
)
 
$
(2.73
)
 
$
(3.04
)
Diluted
$
(0.31
)
 
$
(2.73
)
 
$
(3.04
)
 
Nine Months Ended September 30, 2019
 
As Reported
 
Adjustments
 
As Restated
 
(In thousands, except share data)
Depreciation, depletion and amortization
$
388,874

 
17,780

 
$
406,654

Impairment of oil and natural gas properties
35,647

 
535,795

 
571,442

Total Costs and Expenses
775,160

 
553,575

 
1,328,735

(LOSS) INCOME FROM OPERATIONS
289,587

 
(553,575
)
 
(263,988
)
(LOSS) INCOME BEFORE INCOME TAXES
42,593

 
(553,575
)
 
(510,982
)
INCOME TAX BENEFIT
(205,853
)
 
(117,525
)
 
(323,378
)
NET (LOSS) INCOME
$
248,446

 
(436,050
)
 
$
(187,604
)
NET (LOSS) INCOME PER COMMON SHARE:
 
 
 
 
 
Basic
$
1.55

 
$
(2.72
)
 
$
(1.17
)
Diluted
$
1.51

 
$
(2.68
)
 
$
(1.17
)
Weighted average common shares outstanding—Diluted
164,820,002

 
(4,266,206
)
 
160,553,796

Consolidated Statements of Comprehensive Income
 
Three Months Ended September 30, 2019
 
As Reported
 
Adjustments
 
As Restated
 
(In thousands)
Net (loss) income
$
(48,752
)
 
(436,050
)
 
$
(484,802
)
Comprehensive (loss) income
$
(50,816
)
 
(436,050
)
 
$
(486,866
)
 
Nine Months Ended September 30, 2019
 
As Reported
 
Adjustments
 
As Restated
 
(In thousands)
Net (loss) income
$
248,446

 
(436,050
)
 
$
(187,604
)
Comprehensive (loss) income
$
253,793

 
(436,050
)
 
$
(182,257
)
Consolidated Statements of Stockholders' Equity

9

Table of Contents


 
Accumulated Deficit
 
As Reported
 
Adjustments
 
As Restated
 
(In thousands)
Net loss
$
(48,752
)
 
(436,050
)
 
$
(484,802
)
Balance at September 30, 2019
$
(596,922
)
 
(436,050
)
 
$
(1,032,972
)
 
Total Stockholders' Equity
 
As Reported
 
Adjustments
 
As Restated
 
(In thousands)
Net loss
$
(48,752
)
 
(436,050
)
 
$
(484,802
)
Balance at September 30, 2019
$
3,559,154

 
(436,050
)
 
$
3,123,104


Consolidated Statements of Cash Flows
 
Nine Months Ended September 30, 2019
 
As Reported
 
Adjustments
 
As Restated
 
(In thousands)
Cash flows from operating activities:
 
 
 
 
 
Net (loss) income
$
248,446

 
(436,050
)
 
$
(187,604
)
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
 
 
 
 
 
Depletion, depreciation and amortization
388,874

 
17,780

 
406,654

Impairment of oil and natural gas properties
35,647

 
535,795

 
571,442

Deferred income tax benefit
(205,853
)
 
(117,525
)
 
(323,378
)

Statements of Cash Flows
During the third quarter of 2019, the Company identified that certain activities were misclassified between cash flows from operating activities and cash flows from investing activities. These activities had been included in accounts payable, accrued liabilities and other and presented as cash flows from operating activities while they should have been presented as additions to oil and natural gas properties in cash flows from investing activities.  The Company corrected the previously presented statements of cash flows for these additions and in doing so, for the nine months ended September 30, 2018, the consolidated statements of cash flows and the condensed consolidating statements of cash flows were adjusted to increase net cash flows provided by operating activities by $21.8 million with a corresponding increase in net cash flows used in investing activities. The Company has evaluated the effect of the incorrect presentation, both qualitatively and quantitatively, and concluded that it did not have a material impact on any previously filed annual or quarterly consolidated financial statements.
Recently Issued Accounting Pronouncements    
In February 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2016-02, Leases (Topic 842). The standard supersedes the previous lease guidance by requiring lessees to recognize a right-to-use asset and lease liability on the balance sheet for all leases with lease terms of greater than one year while maintaining substantially similar classifications for financing and operating leases. Subsequent to ASU 2016-02, the FASB issued several related ASU’s to clarify the application of the lease standard. The Company adopted the new standard as of January 1, 2019 on a prospective basis using the simplified transition method permitted by ASU 2018-11, Leases (Topic 842): Targeted Improvements. The comparative information has not been restated and continues to be reported under the historic accounting standards in effect for those periods. See Note 13 for further discussion of the lease standard.

10

Table of Contents


In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments-Credit Losses: Measurement of Credit Losses on Financial Instruments. This ASU amends guidance on reporting credit losses for assets held at amortized cost basis and available for sale debt securities. For assets held at amortized cost basis, this ASU eliminates the probable initial recognition threshold in current GAAP and instead, requires an entity to reflect its current estimate of all expected credit losses. The amendments affect loans, debt securities, trade receivables, net investments in leases, off balance sheet credit exposure, reinsurance receivables and any other financial assets not excluded from the scope that have the contractual right to receive cash. Additionally, in May 2019, the FASB issued ASU No. 2019-05, Financial Instruments—Credit Losses (Topic 326): Targeted Transition Relief. The amendments in this update allow preparers to irrevocably elect the fair value option, on an instrument-by-instrument basis, for eligible financial assets measured at amortized cost basis upon adoption of 2016-13. The guidance is effective for periods after December 15, 2019, with early adoption permitted. The Company is in the process of designing processes and controls needed to comply with the requirements of the new standard. Although the standard will have an impact, the Company does not currently anticipate the ASU to have a material effect on its consolidated financial statements and related disclosures.
In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement, which removes, modifies, and adds certain disclosure requirements on fair value measurements. The amendment will be effective for reporting periods beginning after December 15, 2019, and early adoption is permitted. The Company does not anticipate the new standard to have a material effect on its consolidated financial statements and related disclosures.
In August 2018, the FASB also issued ASU No. 2018-15, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract, which aligns the accounting for costs associated with implementing a cloud computing arrangement in a hosting arrangement that is a service contract with the accounting for implementation costs incurred to develop or obtain internal-use software. The amendment will be effective for reporting periods beginning after December 15, 2019, and early adoption is permitted. The Company does not anticipate the new standard to have a material effect on its consolidated financial statements and related disclosures.
In November 2018, the FASB issued ASU No. 2018-18, Collaborative Arrangements (Topic 808): Clarifying the Interaction Between Topic 808 and Topic 606, which provides guidance on how to assess whether certain transactions between participants in a collaborative arrangement should be accounted for within the ASU No. 2014-09 revenue recognition standard discussed above. The amendment will be effective for reporting periods beginning after December 15, 2019, and early adoption is permitted. The Company does not anticipate the new standard to have a material effect on its consolidated financial statements and related disclosures.
In July 2019, the FASB issued ASU No. 2019-07, Codification Updates to SEC Sections, Amendments to SEC Paragraphs Pursuant to SEC Final Rule Releases No. 33-10532, Disclosure Update and Simplification, and Nos. 33-10231 and 33-10442, Investment Company Reporting Modernization, and Miscellaneous Updates. This ASU amends various SEC sections within the FASB Codification to align with the updated requirements of certain SEC final rules and includes miscellaneous updates to agree the language in the Codification to the electronic Code of Federal Regulations. ASU No. 2019-07 is effective upon issuance, and the Company has adopted the changes with no material impacts.
2.
PROPERTY AND EQUIPMENT
The major categories of property and equipment and related accumulated depletion, depreciation, amortization and impairment as of September 30, 2019 and December 31, 2018 are as follows:

11

Table of Contents


 
September 30, 2019
 
December 31, 2018
 
(In thousands)
 
As Restated
 
 
Oil and natural gas properties
$
10,551,713

 
$
10,026,836

Other depreciable property and equipment
90,712

 
87,146

Land
5,521

 
5,521

Total property and equipment
10,647,946

 
10,119,503

Accumulated depletion, depreciation, amortization and impairment
(5,616,988
)
 
(4,640,098
)
Property and equipment, net
$
5,030,958

 
$
5,479,405



Under the full cost method of accounting, the Company is required to perform a ceiling test each quarter. The test determines a limit, or ceiling, on the book value of the Company's oil and natural gas properties. At September 30, 2019, the net book value of the Company's oil and gas properties, less related deferred income taxes, was above the calculated ceiling as a result of reduced commodity prices for the period leading up to September 30, 2019. As a result, the Company was required to record an impairment of its oil and natural gas properties under the full cost method of accounting in the amount of $571.4 million (as restated) for the three and nine months ended September 30, 2019. No impairment was required for oil and natural gas properties for the three and nine months ended September 30, 2018. Additional impairments of oil and natural gas properties are expected to occur in upcoming quarters should commodity prices continue below the average of the previous 12 months. However, the amount of any future impairments is difficult to predict as it depends on changes in commodity prices, production rates, proved reserves, evaluation of costs excluded from amortization, future development costs and production costs.
Included in oil and natural gas properties at September 30, 2019 is the cumulative capitalization of $229.6 million in general and administrative costs incurred and capitalized to the full cost pool. General and administrative costs capitalized to the full cost pool represent management’s estimate of costs incurred directly related to exploration and development activities such as geological and other administrative costs associated with overseeing exploration and development activities. All general and administrative costs not directly associated with exploration and development activities were charged to expense as they were incurred. Capitalized general and administrative costs were approximately $9.8 million and $26.3 million for the three and nine months ended September 30, 2019, respectively, and $10.6 million and $28.8 million for the three and nine months ended September 30, 2018, respectively.
The average depletion rate per Mcfe, which is a function of capitalized costs, future development costs and the related underlying reserves in the periods presented, was $1.05 (as restated) and $0.94 per Mcfe for the nine months ended September 30, 2019 and 2018, respectively.
The following table summarizes the Company’s unproved properties excluded from amortization by area at September 30, 2019:
 
September 30, 2019
 
(In thousands)
 
As Restated
Utica
$
1,112,148

MidContinent
1,148,271

Other
340

 
$
2,260,759


At December 31, 2018, approximately $2.9 billion of non-producing leasehold costs was not subject to amortization.
The Company evaluates the costs excluded from its amortization calculation at least annually. Subject to industry conditions and the level of the Company’s activities, the inclusion of most of the above referenced costs into the Company’s amortization calculation typically occurs within three to five years. However, the majority of the Company’s non-producing leases in the Utica Shale have five-year extension terms which could extend this time frame beyond five years.

12

Table of Contents


Divestitures
In December of 2018, the Company entered into an agreement to sell its non-core assets located in the West Cote Blanche Bay ("WCBB") and Hackberry fields of Louisiana to an undisclosed third party for a purchase price of approximately $19.7 million. The sale closed on July 3, 2019, subject to customary post-closing terms and conditions, with an effective date of August 15, 2018. The Company received approximately $9.2 million in cash and retained contingent overriding royalty interests. In addition, the Company could also receive contingent payments based on commodity prices exceeding specified thresholds over the two years following the closing date. See Note 9 for further discussion of the contingent consideration arrangement, which was determined to be an embedded derivative. The buyer assumed all plugging and abandonment liabilities associated with these assets which totaled approximately $30.0 million at the divestiture date.
Asset Retirement Obligation
A reconciliation of the Company’s asset retirement obligation for the nine months ended September 30, 2019 and 2018 is as follows:
 
September 30, 2019
 
September 30, 2018
 
(In thousands)
Asset retirement obligation, beginning of period
$
79,952

 
$
75,100

Liabilities incurred
5,769

 
1,468

Liabilities settled
(117
)
<