gpor-20210630

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 June 30, 2021


☐			TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number 001-19514

Gulfport Energy Corporation

(Exact Name of Registrant As Specified in Its Charter)


Delaware		86-3684669
(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, $0.0001 par value per share

GPOR

The New York Stock Exchange

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 ¨ Accelerated filer ý 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

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.

Yes ý No ¨

As of July 29, 2021, 20,585,599 shares of the registrant’s common stock were outstanding.

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GULFPORT ENERGY CORPORATION

TABLE OF CONTENTS


		Page
PART I FINANCIAL INFORMATION

Item 1.	Consolidated Financial Statements (Unaudited):	4

	Consolidated Balance Sheets	4

	Consolidated Statements of Operations	6

	Consolidated Statements of Comprehensive Income (Loss)	8

	Consolidated Statements of Stockholders’ Equity (Deficit)	9

	Consolidated Statements of Cash Flows	11

	Notes to Consolidated Financial Statements	12

Item 2.	Management’s Discussion and Analysis of Financial Conditions and Results of Operations	46

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	68

Item 4.	Controls and Procedures	71

PART II OTHER INFORMATION

Item 1.	Legal Proceedings	72

Item 1A.	Risk Factors	72

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	73

Item 3.	Defaults Upon Senior Securities	74

Item 4.	Mine Safety Disclosures	74

Item 5.	Other Information	75

Item 6.	Exhibits	76

Signatures		78

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DEFINITIONS


Unless the context otherwise indicates, references to “us,” “we,” “our,” “ours,” “Gulfport,” the “Company” and “Registrant” refer to Gulfport Energy Corporation and its consolidated subsidiaries. All monetary values, other than per unit and per share amounts, are stated in thousands of U.S. dollars unless otherwise specified. In addition, the following are other abbreviations and definitions of certain terms used within this Quarterly Report on Form 10-Q:





2023 Notes. 6.625% Senior Notes due 2023.

2024 Notes. 6.000% Senior Notes due 2024.

2025 Notes. 6.375% Senior Notes due 2025.

2026 Notes. 6.375% Senior Notes due 2026.

ASC. Accounting Standards Codification.

ASU. Accounting Standards Update.

Bankruptcy Code. Chapter 11 of Title 11 of the United States Code.

Bankruptcy Court. The United States Bankruptcy Court for the Southern District of Texas.


Bbl. One stock tank barrel, or 42 U.S. gallons liquid volume, used herein in reference to crude oil or other liquid hydrocarbons.



Btu. British thermal unit, which represents the amount of energy needed to heat one pound of water by one degree Fahrenheit and can be used to describe the energy content of fuels.

Building Loan. Loan agreement for our corporate headquarters scheduled to mature in June 2025.

Chapter 11 Cases. Voluntary petitions filed on November 13, 2020 by Gulfport Energy Corporation, Gator Marine, Inc., Gator Marine Ivanhoe, Inc., Grizzly Holdings, Inc., Gulfport Appalachia, LLC, Gulfport Midcon, LLC, Gulfport Midstream Holdings, LLC, Jaguar Resources LLC, Mule Sky LLC, Puma Resources, Inc. and Westhawk Minerals LLC.

CODI. Cancellation of indebtedness income.

Completion. The process of treating a drilled well followed by the installation of permanent equipment for the production of natural gas, oil and NGL.

Current Combined Quarter. Combined Successor Period and Current Predecessor Quarter.

Current Combined YTD Period. Combined Successor Period and Current Predecessor YTD Period.

Current Predecessor Quarter. Period from April 1, 2021 through May 17, 2021.

Current Predecessor YTD Period. Period from January 1, 2021 through May 17, 2021.

DD&A. Depreciation, depletion and amortization.

Debtors. Collectively, Gulfport Energy Corporation, Gator Marine, Inc., Gator Marine Ivanhoe, Inc., Grizzly Holdings, Inc., Gulfport Appalachia, LLC, Gulfport Midcon, LLC, Gulfport Midstream Holdings, LLC, Jaguar Resources LLC, Mule Sky LLC, Puma Resources, Inc. and Westhawk Minerals LLC.



DIP Credit Facility. Senior secured superpriority debtor-in-possession revolving credit facility in an aggregate principal amount of $262.5 million.



Emergence Date. May 17, 2021.

Exit Credit Agreement. The Second Amended and Restated Credit Agreement with the Bank of Nova Scotia as lead administrative agent and various lender parties providing for the Exit Facility and the First-Out Term Loan Facility.

Exit Credit Facility. Collectively, the First-Out Term Loan Facility and the Exit Facility, with an initial borrowing base and elected commitment amount of up to $580 million.

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Exit Facility. Senior secured reserve-based revolving credit facility with The Bank of Nova Scotia as the lead arranger and administrative agent and various lender parties.

First-Out Term Loan Facility. Senior secured term loan in an aggregate maximum principal amount of $180 million.

Grizzly. Grizzly Oil Sands ULC.

Grizzly Holdings. Grizzly Holdings Inc.

Gross Acres or Gross Wells. Refers to the total acres or wells in which a working interest is owned.

Guarantors. All existing consolidated subsidiaries that guarantee the Company's revolving credit facility or certain other debt.



Indentures. Collectively, the 1145 Indenture and the 4(a)(2) Indenture governing the Successor Senior Notes.

IRC. The Internal Revenue Code of 1986, as amended.

LIBOR. London Interbank Offered Rate.

LOE. Lease operating expenses.

MBbl. One thousand barrels of crude oil, condensate or natural gas liquids.

Mcf. One thousand cubic feet of natural gas.

Mcfe. One thousand cubic feet of natural gas equivalent.


MMBtu. One million British thermal units.

MMcf. One million cubic feet of natural gas.

MMcfe. One million cubic feet of natural gas equivalent.

Natural Gas Liquids (NGL). Hydrocarbons in natural gas that are separated from the gas as liquids through the process of absorption, condensation, adsorption or other methods in gas processing or cycling plants. Natural gas liquids primarily include ethane, propane, butane, isobutene, pentane, hexane and natural gasoline.

Net Acres or Net Wells. Refers to the sum of the fractional working interests owned in gross acres or gross wells.


New Common Stock. $0.0001 par value common stock issued by the Successor on the Emergence Date.

New Preferred Stock. $0.0001 par value preferred stock issued by the Successor on the Emergence Date.

NYMEX. New York Mercantile Exchange.


Petition Date. November 13, 2020.

Plan. The Amended Joint Chapter 11 Plan of Reorganization of Gulfport Energy Corporation and Its Debtor Subsidiaries.

Pre-Petition Revolving Credit Facility. Senior secured revolving credit facility, as amended, with The Bank of Nova Scotia as the lead arranger and administrative agent and certain lenders from time to time party thereto with a maximum facility amount of $580 million.

Prior Predecessor Quarter. Period from April 1, 2020 through June 30, 2020.

Prior Predecessor YTD Period. Period from January 1, 2020 through June 30, 2020.







Restructuring. Restructuring contemplated under the Restructuring Support Agreement including equitizing a significant portion of our pre-petition indebtedness and rejecting or renegotiating certain contracts.


RSA. Restructuring Support Agreement.

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SCOOP. Refers to the South Central Oklahoma Oil Province, a term used to describe a defined area that encompasses many of the top hydrocarbon producing counties in Oklahoma within the Anadarko basin. The SCOOP play mainly targets the Devonian to Mississippian aged Woodford, Sycamore and Springer formations. Our acreage is primarily in Garvin, Grady and Stephens Counties.

SEC. The United States Securities and Exchange Commission.


Predecessor Senior Notes. Collectively, the 2023 Notes, 2024 Notes, 2025 Notes and 2026 Notes.



Successor Period. Period from May 18, 2021 through June 30, 2021.

Successor Senior Notes. 8.000% Senior Notes due 2026.

Undeveloped Acreage. Lease or mineral acreage on which wells have not been drilled or completed to a point that would permit the production of commercial quantities of crude oil and/or natural gas.


Utica. Refers to the hydrocarbon bearing rock formation located in the Appalachian Basin of the United States and Canada. Our acreage is located primarily in Belmont, Harrison, Jefferson and Monroe Counties in Eastern Ohio.

Working Interest (WI). The operating interest which gives the owner the right to drill, produce and conduct operating activities on the property and a share of production.

WTI. Refers to West Texas Intermediate.

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GULFPORT ENERGY CORPORATION

CONSOLIDATED BALANCE SHEETS

(In thousands, except share data)


	Successor		Predecessor
	June 30, 2021		December 31, 2020
	(Unaudited)
Assets
Current assets:
Cash and cash equivalents	$	9,389	$	89,861
Restricted cash	29,135		—
Accounts receivable—oil and natural gas sales	140,663		119,879
Accounts receivable—joint interest and other	10,695		12,200

Prepaid expenses and other current assets	24,737		160,664
Short-term derivative instruments	2,223		27,146
Total current assets	216,842		409,750
Property and equipment:
Oil and natural gas properties, full-cost method
Proved oil and natural gas properties	1,737,778		9,359,866
Unproved properties	224,214		1,457,043
Other property and equipment	6,914		88,538
Total property and equipment	1,968,906		10,905,447
Less: accumulated depletion, depreciation and amortization	(150,175)		(8,819,178)
Total property and equipment, net	1,818,731		2,086,269
Other assets:
Equity investments	—		24,816
Long-term derivative instruments	3,014		322


Operating lease assets	44		342

Other assets	27,557		18,372
Total other assets	30,615		43,852
Total assets	$	2,066,188	$	2,539,871

See accompanying notes to consolidated financial statements.

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GULFPORT ENERGY CORPORATION

CONSOLIDATED BALANCE SHEETS–CONTINUED

(In thousands, except share data)


	Successor		Predecessor
	June 30, 2021		December 31, 2020
	(Unaudited)
Liabilities, Mezzanine Equity and Stockholders’ Equity (Deficit)
Current liabilities:
Accounts payable and accrued liabilities	$	397,800	$	244,903

Short-term derivative instruments	192,730		11,641
Current portion of operating lease liabilities	39		—

Current maturities of long-term debt	60,000		253,743
Total current liabilities	650,569		510,287
Non-current liabilities:
Long-term derivative instruments	113,470		36,604
Asset retirement obligation	19,347		—


Non-current operating lease liabilities	5		—

Long-term debt, net of current maturities	773,847		—
Total non-current liabilities	906,669		36,604
Liabilities subject to compromise	—		2,293,480
Total liabilities	$	1,557,238	$	2,840,371
Commitments and contingencies (Note 9)

Mezzanine Equity:
New Preferred Stock - $0.0001 par value, 110 thousand shares authorized, 55.9 thousand issued and outstanding at June 30, 2021	55,860		—
Stockholders’ equity (deficit):
Predecessor common stock - $0.01 par value, 200.0 million shares authorized, 160.8 million issued and outstanding at December 31, 2020	—		1,607
Predecessor accumulated other comprehensive loss	—		(43,000)
New Common Stock - $0.0001 par value, 42.0 million shares authorized, 20.6 million issued and outstanding at June 30, 2021	2		—
Additional paid-in capital	693,921		4,213,752
New Common Stock held in reserve, 937 thousand shares	(30,216)		—
Accumulated deficit	(210,617)		(4,472,859)
Total stockholders’ equity (deficit)	$	453,090	$	(300,500)
Total liabilities, mezzanine equity and stockholders’ equity (deficit)	$	2,066,188	$	2,539,871

See accompanying notes to consolidated financial statements.

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GULFPORT ENERGY CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data)

(Unaudited)


	Successor		Predecessor
	Period from May 18, 2021 through June 30, 2021		Period from April 1, 2021 through May 17, 2021		Three Months Ended June 30, 2020
REVENUES:
Natural gas sales	$	111,718	$	109,069	$	140,688
Oil and condensate sales	17,587		10,867		8,390
Natural gas liquid sales	16,077		13,004		10,252
Net (loss) gain on natural gas, oil and NGL derivatives	(139,658)		(107,261)		26,971
Total Revenues	5,724		25,679		186,301
OPERATING EXPENSES:
Lease operating expenses	4,116		6,871		13,078
Taxes other than income	5,056		3,645		6,300
Transportation, gathering, processing and compression	41,376		55,219		113,865
Depreciation, depletion and amortization	32,362		21,617		64,790
Impairment of oil and natural gas properties	117,813		—		532,880

General and administrative expenses	6,518		6,418		9,766
Restructuring and liability management expenses	—		—		617
Accretion expense	226		424		755

Total Operating Expenses	207,467		94,194		742,051
(LOSS) INCOME FROM OPERATIONS	(201,743)		(68,515)		(555,750)
OTHER EXPENSE (INCOME):
Interest expense	8,894		898		32,366

Gain on debt extinguishment	—		—		(34,257)

Loss from equity method investments, net	—		—		45
Reorganization items, net	—		(305,617)		—
Other, net	(1,051)		1,958		7,164
Total Other Expense (Income)	7,843		(302,761)		5,318
(LOSS) INCOME BEFORE INCOME TAXES	(209,586)		234,246		(561,068)
Income tax benefit	—		(7,968)		—
NET (LOSS) INCOME	$	(209,586)	$	242,214	$	(561,068)
Dividends on New Preferred Stock	$	(1,031)	$	—	$	—

NET (LOSS) INCOME ATTRIBUTABLE TO COMMON STOCKHOLDERS	$	(210,617)	$	242,214	$	(561,068)

NET INCOME (LOSS) PER COMMON SHARE:
Basic	$	(10.36)	$	1.51	$	(3.51)
Diluted	$	(10.36)	$	1.51	$	(3.51)
Weighted average common shares outstanding—Basic	20,321		$	160,887	159,934
Weighted average common shares outstanding—Diluted	20,321		160,887		159,934

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GULFPORT ENERGY CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS—CONTINUED

(In thousands, except per share data)

(Unaudited)


	Successor		Predecessor
	Period from May 18, 2021 through June 30, 2021		Period from January 1, 2021 through May 17, 2021		Six Months Ended June 30, 2020
REVENUES:
Natural gas sales	$	111,718	$	344,390	$	301,696
Oil and condensate sales	17,587		29,106		31,541
Natural gas liquid sales	16,077		36,780		27,165
Net (loss) gain on natural gas, oil and NGL derivatives	(139,658)		(137,239)		125,237
Total Revenues	5,724		273,037		485,639
OPERATING EXPENSES:
Lease operating expenses	4,116		19,524		27,773
Taxes other than income	5,056		12,349		12,937
Transportation, gathering, processing and compression	41,376		161,086		224,222
Depreciation, depletion and amortization	32,362		62,764		142,818
Impairment of oil and natural gas properties	117,813		—		1,086,225
Impairment of other property and equipment	—		14,568		—
General and administrative expenses	6,518		19,175		25,388
Restructuring and liability management expenses	—		—		617
Accretion expense	226		1,229		1,496

Total Operating Expenses	207,467		290,695		1,521,476
(LOSS) INCOME FROM OPERATIONS	(201,743)		(17,658)		(1,035,837)
OTHER EXPENSE (INCOME):
Interest expense	8,894		4,159		65,356

Gain on debt extinguishment	—		—		(49,579)

Loss from equity method investments, net	—		342		10,834
Reorganization items, net	—		(266,898)		—
Other, net	(1,051)		1,711		8,868
Total Other Expense (Income)	7,843		(260,686)		35,479
(LOSS) INCOME BEFORE INCOME TAXES	(209,586)		243,028		(1,071,316)
Income tax (benefit) expense	—		(7,968)		7,290
NET (LOSS) INCOME	$	(209,586)	$	250,996	$	(1,078,606)
Dividends on New Preferred Stock	$	(1,031)	$	—	$	—

NET (LOSS) INCOME ATTRIBUTABLE TO COMMON STOCKHOLDERS	$	(210,617)	$	250,996	$	(1,078,606)

NET (LOSS) INCOME PER COMMON SHARE:
Basic	$	(10.36)	$	1.56	$	(6.75)
Diluted	$	(10.36)	$	1.56	$	(6.75)
Weighted average common shares outstanding—Basic	20,321		160,834		159,847
Weighted average common shares outstanding—Diluted	20,321		160,834		159,847

See accompanying notes to consolidated financial statements.

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GULFPORT ENERGY CORPORATION

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(In thousands)

(Unaudited)


	Successor		Predecessor
	Period from May 18, 2021 through June 30, 2021		Period from April 1, 2021 through May 17, 2021		Three months ended June 30, 2020
Net income (loss)	$	(209,586)	$	242,214	$	(561,068)
Foreign currency translation adjustment	—		—		6,872

Other comprehensive income (loss)	—		—		6,872
Comprehensive income (loss)	$	(209,586)	$	242,214	$	(554,196)


	Successor		Predecessor
	Period from May 18, 2021 through June 30, 2021		Period from January 1, 2021 through May 17, 2021		Six months ended June 30, 2020
Net income (loss)	$	(209,586)	$	250,996	$	(1,078,606)
Foreign currency translation adjustment	—		—		(8,158)

Other comprehensive income (loss)	—		—		(8,158)
Comprehensive income (loss)	$	(209,586)	$	250,996	$	(1,086,764)

See accompanying notes to consolidated financial statements.

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GULFPORT ENERGY CORPORATION

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT)

(In thousands)

(Unaudited)


				Common Stock Held in Reserve			Paid-in Capital		Accumulated Other Comprehensive Loss		Accumulated Deficit		Total Stockholders’ Equity
	Common Stock
	Shares	Amount		Shares	Amount
Balance at January 1, 2020 (Predecessor)	159,711	$	1,597	—	$	—	$	4,207,554	$	(46,833)	$	(2,847,726)	1,314,592
Net Loss	—	—		—	—		—		—		(517,538)		(517,538)
Other Comprehensive Loss	—	—		—	—		—		(15,030)		—		(15,030)
Stock Compensation	—	—		—	—		2,104		—		—		2,104
Shares Repurchased	(80)	(1)		—	—		(78)		—		—		(79)
Issuance of Restricted Stock	211	2		—	—		(2)		—		—		—
Balance at March 31, 2020 (Predecessor)	159,842	$	1,598	—	$	—	$	4,209,578	$	(61,863)	$	(3,365,264)	$	784,049
Net Loss	—	$	—	—	$	—	$	—	$	—	$	(561,068)	(561,068)
Other Comprehensive Income	—	—		—	—		—		6,872		—		6,872
Stock Compensation	—	—		—	—		1,515		—		—		1,515
Shares Repurchased	(27)	—		—	—		(28)		—		—		(28)
Issuance of Restricted Stock	301	3		—	—		(3)		—		—		—
Balance at June 30, 2020 (Predecessor)	160,116	$	1,601	—	$	—	$	4,211,062	$	(54,991)	$	(3,926,332)	$	231,340

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GULFPORT ENERGY CORPORATION

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT) CONTINUED

(In thousands)

(Unaudited)


			Common Stock Held in Reserve		Paid-in Capital	Accumulated Other Comprehensive (Loss) Income	Retained Earnings (Accumulated Deficit)	Total Stockholders’ Equity (Deficit)
	Common Stock
	Shares	Amount	Shares	Amount
Balance at January 1, 2021 (Predecessor)	160,762	1,607	—	—	4,213,752	(43,000)	(4,472,859)	(300,500)
Net Loss	—	—	—	—	—		8,780	8,780
Other Comprehensive Income	—	—	—	—	—	2,570	—	2,570
Stock Compensation	—	—	—	—	1,419	—	—	1,419
Shares Repurchased	(86)	(1)	—	—	(7)	—	—	(8)
Issuance of Restricted Stock	203	3	—	—	(2)	—	—	1
Balance at March 31, 2021 (Predecessor)	160,879	1,609	—	—	4,215,162	(40,430)	(4,464,079)	(287,738)
Net Income	—	—	—	—	—	—	242,214	242,214
Issuance of Restricted Stock	25	—	—	—	—	—	—	—
Shares Repurchased	(10)	—	—	—	—	—	—	—
Stock Compensation	—	—	—	—	5,095	—	—	5,095
Accumulated other comprehensive income extinguishment	—	—	—	—	—	40,430	—	40,430
Cancellation of Predecessor Equity	(160,894)	(1,609)	—	—	(4,220,256)	—	4,221,865	—
Issuance of New Common Stock	21,525	2	—	—	693,773	—	—	693,775
Shares of New Common Stock Held in Reserve	—	—	(1,679)	(54,109)	—	—	—	(54,109)
Balance at May 17, 2021 (Predecessor)	21,525	2	(1,679)	(54,109)	693,774	—	—	639,667


Balance at May 18, 2021 (Successor)	21,525	2	(1,679)	(54,109)	693,774	—	—	639,667
Net Loss	—	—	—	—	—	—	(209,586)	(209,586)
Release of New Common Stock Held in Reserve	—	—	741	23,893	—	—	—	23,893
Conversion of New Preferred Stock	10	—	—	—	147	—	—	147
Dividends on New Preferred Stock	—	—	—	—	—	—	(1,031)	(1,031)
Balance at June 30, 2021 (Successor)	21,535	2	(938)	(30,216)	693,921	—	(210,617)	453,090

See accompanying notes to consolidated financial statements.

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GULFPORT ENERGY CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)


	Successor		Predecessor
	Period from May 18, 2021 through June 30, 2021		Period from January 1, 2021 through May 17, 2021		Six Months Ended June 30, 2020
Cash flows from operating activities:
Net income (loss)	$	(209,586)	$	250,996	$	(1,078,606)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depletion, depreciation and amortization	32,362		62,764		142,818
Impairment of oil and natural gas properties	117,813		—		1,086,225
Impairment of other property and equipment	—		14,568		—
Loss from equity investments	—		342		10,834
Gain on debt extinguishment	—		—		(49,579)
Net loss (gain) on derivative instruments	139,658		137,239		(125,237)
Net cash receipts on settled derivative instruments	(6,689)		(3,361)		195,232
Non-cash reorganization items, net	—		(446,012)		—
Deferred income tax expense	—		—		7,290
Other, net	(397)		1,725		9,844
Changes in operating assets and liabilities, net	(34,796)		153,894		48,401
Net cash provided by operating activities	38,365		172,155		247,222
Cash flows from investing activities:
Additions to oil and natural gas properties	(40,424)		(102,330)		(274,851)
Proceeds from sale of oil and natural gas properties	225		15		45,185
Other, net	(77)		4,484		(424)
Net cash used in investing activities	(40,276)		(97,831)		(230,090)
Cash flows from financing activities:
Principal payments on pre-petition revolving credit facility	—		(318,961)		(323,000)
Borrowings on pre-petition revolving credit facility	—		26,050		326,000
Borrowings on exit credit facility	113,249		302,751		—
Principal payments on exit credit facility	(131,000)		—		—
Principal payments on DIP credit facility	—		(157,500)		—
Debt issuance costs and loan commitment fees	(1,206)		(7,100)		—
Repurchase of senior notes	—		—		(22,827)
Proceeds from issuance of New Preferred Stock	—		50,000		—

Other, net	(25)		(8)		(548)
Net cash used in financing activities	(18,982)		(104,768)		(20,375)
Net decrease in cash, cash equivalents and restricted cash	(20,893)		(30,444)		(3,243)
Cash, cash equivalents and restricted cash at beginning of period	59,417		89,861		6,060
Cash, cash equivalents and restricted cash at end of period	$	38,524	$	59,417	$	2,817

See accompanying notes to consolidated financial statements.

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GULFPORT ENERGY CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1.BASIS OF PRESENTATION

Description of Company

Gulfport Energy Corporation (the "Company" or "Gulfport") is an independent natural gas-weighted exploration and production company with assets primarily located in the Appalachia and Anadarko basins. Gulfport filed for voluntary reorganization under Chapter 11 of the Bankruptcy Code on November 13, 2020 and subsequently operated as a debtor-in-possession, in accordance with applicable provisions of the Bankruptcy Code, until its emergence on May 17, 2021. The Company refers to the post-emergence reorganized organization in the condensed financial statements and footnotes as the "Successor" for periods subsequent to May 17, 2021 and the pre-emergence organization as "Predecessor" for periods on or prior to May 17, 2021.

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements of Gulfport were prepared in accordance with GAAP and the rules and regulations of the SEC.

This Quarterly Report on Form 10-Q (this “Form 10-Q”) relates to the financial position and periods of May 18, 2021 through June 30, 2021 (“Successor Period”), April 1, 2021 through May 17, 2021 ("Current Predecessor Quarter"), January 1, 2021 through May 17, 2021 (“Current Predecessor YTD Period”), the three months ended June 30, 2020 (“Prior Predecessor Quarter”) and the six months ended June 30, 2020 ("Prior Predecessor YTD Period"). The Company's annual report on Form 10-K for the year ended December 31, 2020 (“2020 Form 10-K”) should be read in conjunction with this Form 10-Q. Except as disclosed herein, and with the exception of information in this report related to our emergence from Chapter 11 and fresh start accounting, there has been no material change in the information disclosed in the notes to the consolidated financial statements included in the 2020 Form 10-K. The accompanying unaudited consolidated financial statements reflect all normal recurring adjustments which, in the opinion of management, are necessary for a fair statement of our condensed consolidated financial statements and accompanying notes and include the accounts of our wholly-owned subsidiaries. Intercompany accounts and balances have been eliminated. The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern.

Certain reclassifications have been made to prior period financial statements and related disclosures to conform to current period presentation. These reclassifications have no impact on previous reported total assets, total liabilities, net loss or total operating cash flows.

Voluntary Reorganization Under Chapter 11 of the Bankruptcy Code

On the Petition Date, the Debtors filed voluntary petitions of relief under the Bankruptcy Code in the United States Bankruptcy Court for the Southern District of Texas. The Chapter 11 Cases were administered jointly under the caption In re Gulfport Energy Corporation, et al., Case No. 20-35562 (DRJ).

The Bankruptcy Court confirmed the Plan and entered the confirmation order on April 28, 2021. The Debtors emerged from the Chapter 11 Cases on the Emergence Date. The Company's bankruptcy proceedings and related matters have been summarized below.

During the pendency of the Chapter 11 Cases, the Company continued to operate its business in the ordinary course as debtors-in-possession in accordance with the applicable provisions of the Bankruptcy Code. The Bankruptcy Court granted the first day relief requested by the Company that was designed primarily to mitigate the impact of the Chapter 11 Cases on its operations, vendors, suppliers, customers and employees. As a result, the Company was able to conduct normal business activities and satisfy all associated obligations for the period following the Petition Date and was also authorized to pay mineral interest owner royalties, employee wages and benefits, and certain vendors and suppliers in the ordinary course for goods and services provided prior to the Petition Date. During the pendency of the Chapter 11 Cases, all transactions outside the ordinary course of business required the prior approval of the Bankruptcy Court.

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Subject to certain specific exceptions under the Bankruptcy Code, the filing of the Chapter 11 Cases automatically stayed all judicial or administrative actions against the Company and efforts by creditors to collect on or otherwise exercise rights or remedies with respect to pre-petition claims. Absent an order from the Bankruptcy Court, substantially all of the Debtors’ pre-petition liabilities were subject to compromise and discharge under the Bankruptcy Code. The automatic stay was lifted on the Emergence Date.

The Company applied FASB ASC Topic 852 - Reorganizations ("ASC 852") in preparing the consolidated financial statements for the period ended May 17, 2021. ASC 852 specifies the accounting and financial reporting requirements for entities reorganizing through Chapter 11 bankruptcy proceedings. These requirements include distinguishing transactions associated with the reorganization separate from activities related to the ongoing operations of the business. Accordingly, pre-petition liabilities that may be impacted by the Chapter 11 proceedings were classified as liabilities subject to compromise on the consolidated balance sheet as of December 31, 2020. Additionally, certain expenses, realized gains and losses and provisions for losses that are realized or incurred during the Chapter 11 Cases are recorded as reorganization items, net. Refer to Note 3 for more information regarding reorganization items.

Restricted Cash

As of June 30, 2021, we had restricted cash of $29.1 million. The restricted funds were maintained primarily to pay debtor-related professional fees associated with the Chapter 11 Cases.

Impact on Previously Reported Results

During the third quarter of 2020, the Company identified that certain firm transportation costs incurred in prior periods were misclassified as deducts to "natural gas sales" while they should have been included in "transportation, gathering, processing and compression" on its consolidated statements of operations. The Company assessed the materiality of this presentation on prior periods’ consolidated financial statements in accordance with the SEC Staff Accounting Bulletin No. 99, “Materiality”, codified in FASB ASC Topic 250 - Accounting Changes and Error Corrections. Based on this assessment, the Company concluded that the correction is not material to any previously issued financial statements. The correction had no impact on its consolidated balance sheets, consolidated statements of comprehensive income, consolidated statements of stockholders' equity or consolidated statements of cash flows. Additionally, the error had no impact on net loss or net loss per share. The following tables present the effect of the correction on all affected line items of our previously issued consolidated statements of operations for the Prior Predecessor Quarter and the Prior Predecessor YTD Period.


	Three months ended June 30, 2020
	Predecessor
	As Reported		Adjustments		As Revised
	(In thousands)
Natural gas sales	$	86,797	$	53,891	$	140,688
Total Revenues	$	132,410	$	53,891	$	186,301
Transportation, gathering, processing and compression	$	59,974	$	53,891	$	113,865
Total Operating Expenses	$	688,160	$	53,891	$	742,051

	Six months ended June 30, 2020
	Predecessor
	As Reported		Adjustments		As Revised
	(In thousands)
Natural gas sales	$	195,344	$	106,352	$	301,696
Total Revenues	$	379,287	$	106,352	$	485,639
Transportation, gathering, processing and compression	$	117,870	$	106,352	$	224,222
Total Operating Expenses	$	1,415,124	$	106,352	$	1,521,476

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Accounts Payable and Accrued Liabilities

Accounts payable and accrued liabilities consisted of the following at June 30, 2021 and December 31, 2020:

Successor

Predecessor

June 30, 2021

December 31, 2020

Accounts payable and other accrued liabilities

147,852