gpor-20220930

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 September 30, 2022


☐			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)
713 Market Drive
Oklahoma City,	Oklahoma	73114
(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 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

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 October 27, 2022, 19,272,080 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	5

	Consolidated Statements of Comprehensive Income (Loss)	7

	Consolidated Statements of Stockholders’ Equity (Deficit)	8

	Consolidated Statements of Cash Flows	10

	Notes to Consolidated Financial Statements	11

	1. Basis of Presentation	11

	2. Property and Equipment	13

	3. Debt	14

	4. Mezzanine Equity and Equity	16

	5. Stock-Based Compensation	17

	6. Earnings Per Share	20

	7. Commitments and Contingencies	21

	8. Derivative Instruments	23

	9. Fair Value Measurements	27

	10. Revenue from Contracts with Customers	28

	11. Leases	29

	12. Income Taxes	31

	13. Subsequent Events	32

Item 2.	Management’s Discussion and Analysis of Financial Conditions and Results of Operations	33

	2022 Operation and Financial Highlights	34

	2022 Production and Drilling Activity	34

	Comparison of Quarter-to-Date	36



	Comparison of Year-to-Date	41

	Liquidity and Capital Resources	46

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	50

Item 4.	Controls and Procedures	51

PART II OTHER INFORMATION

Item 1.	Legal Proceedings	52

Item 1A.	Risk Factors	52

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	52

Item 3.	Defaults Upon Senior Securities	52

Item 4.	Mine Safety Disclosures	52

Item 5.	Other Information	52

Item 6.	Exhibits	53

Signatures		54

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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:

1145 Indenture. Agreement dated May 17, 2021 between the Company, UMB Bank, National Association, as trustee, and the guarantors party thereto, under section 1145 of the Bankruptcy Code for our 8.000% Senior Notes due 2026.















2026 Senior Notes. 8.000% Senior Notes due 2026.

4(a)(2) Indenture. Certain eligible holders have made an election entitling such holders to receive senior notes issued pursuant to an indenture, dated as of May 17, 2021, by and among the Company, UMB Bank, National Association, as trustee, and the guarantors party thereto, under Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”) as opposed to its share of the up to $550 million aggregate principal amount of our Senior Notes due 2026. The 4(a)(2) Indenture’s terms are substantially similar to the terms of the 1145 Indenture. The primary differences between the terms of the 4(a)(2) Indenture and the terms of the 1145 Indenture are that (i) affiliates of the Issuer holding 4(a)(2) Notes are permitted to vote in determining whether the holders of the required principal amount of indenture securities have concurred in any direction or consent under the 4(a)(2) Indenture, while affiliates of the Issuer holding 1145 Notes will not be permitted to vote on such matters under the 1145 Indenture, (ii) the covenants of the 1145 Indenture (other than the payment covenant) require that the Issuer comply with the covenants of the 4(a)(2) Indenture, as amended, and (iii) the 1145 Indenture requires that the 1145 Securities be redeemed pro rata with the 4(a)(2) Securities and that the 1145 Indenture be satisfied and discharged if the 4(a)(2) Indenture is satisfied and discharged.

ASC. Accounting Standards Codification.



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




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.



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.

Credit Facility. The Third Amended and Restated Credit Agreement with JPMorgan Chase Bank, N.A. as administrative agent and various lender parties, providing for a new money senior secured reserve-based revolving credit facility effective as of October 14, 2021.

Current Successor Quarter. Period from July 1, 2022 through September 30, 2022.

Current Successor YTD Period. Period from January 1, 2022 through September 30, 2022.



DD&A. Depreciation, depletion and amortization.









Disputed Claims Reserve. Reserve used to settle any pending claims of unsecured creditors that were in dispute as of the effective date of the Plan.

Emergence Date. May 17, 2021.









GAAP. Accounting principles generally accepted in the United States of America.





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.

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Incentive Plan. Gulfport Energy Corporation Stock Incentive Plan effective on the Emergence Date.

Indentures. Collectively, the 1145 Indenture and the 4(a)(2) Indenture governing the 2026 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.












NYMEX. New York Mercantile Exchange.




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



Prior Combined YTD Period. Period from January 1, 2021 through September 30, 2021.

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

Prior Successor Period. Period from May 18, 2021 through September 30, 2021.

Prior Successor Quarter. Period from July 1, 2021 through September 30, 2021











Repurchase Program. A stock repurchase program to acquire up to $300 million of Gulfport's outstanding common stock. It is authorized to extend through June 30, 2023, and may be suspended from time to time, modified, extended or discontinued by the board of directors at any time.






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.

Section 382. Internal Revenue Code Section 382.



SOFR. Secured Overnight Financing Rate.






Utica. Refers to the Utica Play that includes the hydrocarbon bearing rock formations commonly referred to as the Utica 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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Cautionary Note Regarding Forward-Looking Statements

This Form 10-Q may include forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and the Private Securities Litigation Reform Act of 1995, that are subject to risks and uncertainties. These statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. In some cases, you can identify forward looking statements by terms such as “may,” “will,” “should,” “could,” “would,” “expects,” “plans,” “anticipates,” “intends,” “believes,” “estimates,” “projects,” “predicts,” “potential” and similar expressions intended to identify forward-looking statements. All statements, other than statements of historical facts, included in this Form 10-Q that address activities, events or developments that we expect or anticipate will or may occur in the future, including the expected impact of the novel coronavirus disease (COVID-19) pandemic and the war in Ukraine on our business, our industry and the global economy, estimated future net revenues from oil and gas reserves and the present value thereof, future capital expenditures (including the amount and nature thereof), share repurchases, business strategy and measures to implement strategy, competitive strength, goals, expansion and growth of our business and operations, plans, references to future success, reference to intentions as to future matters and other such matters are forward-looking statements.

These forward-looking statements are largely based on our expectations and beliefs concerning future events, which reflect estimates and assumptions made by our management. These estimates and assumptions reflect our best judgment based on currently known market conditions and other factors relating to our operations and business environment, all of which are difficult to predict and many of which are beyond our control.

Although we believe our estimates and assumptions to be reasonable, they are inherently uncertain and involve a number of risks and uncertainties that are beyond our control. In addition, management's assumptions about future events may prove to be inaccurate. Management cautions all readers that the forward-looking statements contained in this Form 10-Q are not guarantees of future performance, and we cannot assure any reader that those statements will be realized or the forward-looking events and circumstances will occur. Actual results may differ materially from those anticipated or implied in the forward-looking statements due to the factors listed in Item 1A. “Risk Factors” and Item 7. “Management's Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2021 and elsewhere in this Form 10-Q. All forward-looking statements speak only as of the date of this Form 10-Q.

All forward-looking statements, expressed or implied, included in this Quarterly Report are expressly qualified in their entirety by this cautionary statement. This cautionary statement should also be considered in connection with any subsequent written or oral forward-looking statements that we or persons acting on our behalf may issue.

Except as otherwise required by applicable law, we disclaim any duty to update any forward-looking statements, all of which are expressly qualified by the statements in this section, to reflect events or circumstances after the date of this Quarterly Report.

We may use the Investors section of our website (www.gulfportenergy.com) to communicate with investors. It is possible that the financial and other information posted there could be deemed to be material information. The information on our website is not part of this Quarterly Report on Form 10-Q.

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GULFPORT ENERGY CORPORATION

CONSOLIDATED BALANCE SHEETS

(In thousands)


	Successor
	September 30, 2022		December 31, 2021
Assets	(Unaudited)
Current assets:
Cash and cash equivalents	$	8,287	$	3,260
Accounts receivable—oil, natural gas, and natural gas liquids sales	317,528		232,854
Accounts receivable—joint interest and other	35,480		20,383
Prepaid expenses and other current assets	9,273		12,359
Short-term derivative instruments	53,342		4,695
Total current assets	423,910		273,551
Property and equipment:
Oil and natural gas properties, full-cost method
Proved oil and natural gas properties	2,303,728		1,917,833
Unproved properties	184,075		211,007
Other property and equipment	6,153		5,329
Total property and equipment	2,493,956		2,134,169
Less: accumulated depletion, depreciation and amortization	(467,485)		(278,341)
Total property and equipment, net	2,026,471		1,855,828
Other assets:

Long-term derivative instruments	24,335		18,664
Operating lease assets	3,060		322
Other assets	21,570		19,867
Total other assets	48,965		38,853
Total assets	$	2,499,346	$	2,168,232




Liabilities, Mezzanine Equity and Stockholders’ Equity
Current liabilities:
Accounts payable and accrued liabilities	$	466,563	$	394,011

Short-term derivative instruments	817,384		240,735
Current portion of operating lease liabilities	831		182

Total current liabilities	1,284,778		634,928
Non-current liabilities:
Long-term derivative instruments	299,150		184,580
Asset retirement obligation	30,367		28,264
Non-current operating lease liabilities	2,229		140
Long-term debt	728,101		712,946
Total non-current liabilities	1,059,847		925,930

Total liabilities	$	2,344,625	$	1,560,858
Commitments and contingencies (Note 7)
Mezzanine Equity:
Preferred stock - $0.0001 par value, 110.0 thousand shares authorized, 52.3 thousand issued and outstanding at September 30, 2022, and 57.9 thousand issued and outstanding at December 31, 2021	52,345		57,896
Stockholders’ Equity:
Common stock - $0.0001 par value, 42.0 million shares authorized, 19.4 million issued and outstanding at September 30, 2022, and 20.6 million issued and outstanding at December 31, 2021	2		2
Additional paid-in capital	472,846		692,521
Common stock held in reserve, 62 thousand shares at September 30, 2022, and 938 thousand shares at December 31, 2021	(1,996)		(30,216)
Accumulated deficit	(366,696)		(112,829)
Treasury stock, at cost - 20.4 thousand shares at September 30, 2022, and no shares at December 31, 2021	(1,780)		—
Total stockholders’ equity	$	102,376	$	549,478
Total liabilities, mezzanine equity and stockholders’ equity	$	2,499,346	$	2,168,232

See accompanying notes to consolidated financial statements.

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GULFPORT ENERGY CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands)

(Unaudited)


	Successor
	Three Months Ended September 30, 2022		Three Months Ended September 30, 2021
REVENUES:
Natural gas sales	$	585,596	$	301,516
Oil and condensate sales	36,050		33,279
Natural gas liquid sales	44,351		45,153
Net loss on natural gas, oil and NGL derivatives	(474,895)		(622,476)
Total revenues	191,102		(242,528)
OPERATING EXPENSES:
Lease operating expenses	15,363		13,864
Taxes other than income	16,529		11,844
Transportation, gathering, processing and compression	89,234		84,435
Depreciation, depletion and amortization	64,419		62,573


General and administrative expenses	8,752		16,691
Restructuring and liability management expenses	—		2,858
Accretion expense	673		488

Total operating expenses	194,970		192,753
LOSS FROM OPERATIONS	(3,868)		(435,281)
OTHER EXPENSE (INCOME):
Interest expense	15,461		16,351





Other, net	(857)		9,031
Total other expense	14,604		25,382
LOSS BEFORE INCOME TAXES	(18,472)		(460,663)
Income tax expense	—		650
NET LOSS	$	(18,472)	$	(461,313)
Dividends on preferred stock	$	(1,309)	$	(2,095)

NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS	$	(19,781)	$	(463,408)

NET LOSS PER COMMON SHARE:
Basic	$	(1.01)	$	(22.50)
Diluted	$	(1.01)	$	(22.50)
Weighted average common shares outstanding—Basic	19,635		20,598
Weighted average common shares outstanding—Diluted	19,635		20,598

See accompanying notes to consolidated financial statements.

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GULFPORT ENERGY CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands)

(Unaudited)


	Successor				Predecessor
	Nine Months Ended September 30, 2022		Period from May 18, 2021 through September 30, 2021		Period from January 1, 2021 through May 17, 2021
REVENUES:
Natural gas sales	$	1,529,898	$	413,234	$	344,390
Oil and condensate sales	111,298		50,866		29,106
Natural gas liquid sales	143,741		61,230		36,780
Net loss on natural gas, oil and NGL derivatives	(1,436,317)		(762,134)		(137,239)
Total revenues	348,620		(236,804)		273,037
OPERATING EXPENSES:
Lease operating expenses	47,246		17,980		19,524
Taxes other than income	45,679		16,900		12,349
Transportation, gathering, processing and compression	261,778		125,811		161,086
Depreciation, depletion and amortization	189,305		94,935		62,764
Impairment of oil and natural gas properties	—		117,813		—
Impairment of other property and equipment	—		—		14,568
General and administrative expenses	24,128		23,209		19,175
Restructuring and liability management expenses	—		2,858		—
Accretion expense	2,057		714		1,229

Total operating expenses	570,193		400,220		290,695
LOSS FROM OPERATIONS	(221,573)		(637,024)		(17,658)
OTHER EXPENSE (INCOME):
Interest expense	43,679		25,245		4,159



Loss from equity method investments, net	—		—		342
Reorganization items, net	—		—		(266,898)
Other, net	(11,385)		7,980		1,713
Total other expense (income)	32,294		33,225		(260,684)
(LOSS) INCOME BEFORE INCOME TAXES	(253,867)		(670,249)		243,026
Income tax expense (benefit)	—		650		(7,968)
NET (LOSS) INCOME	$	(253,867)	$	(670,899)	$	250,994
Dividends on preferred stock	$	(4,136)	$	(3,126)	$	—

NET (LOSS) INCOME ATTRIBUTABLE TO COMMON STOCKHOLDERS	$	(258,003)	$	(674,025)	$	250,994

NET (LOSS) INCOME PER COMMON SHARE:
Basic	$	(12.58)	$	(32.87)	$	1.56
Diluted	$	(12.58)	$	(32.87)	$	1.56
Weighted average common shares outstanding—Basic	20,514		20,507		160,834
Weighted average common shares outstanding—Diluted	20,514		20,507		160,834

See accompanying notes to consolidated financial statements.

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GULFPORT ENERGY CORPORATION

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(In thousands)

(Unaudited)


	Successor
	Three Months Ended September 30, 2022		Three Months Ended September 30, 2021
Net loss	$	(18,472)	$	(461,313)


Other comprehensive income	—		—
Comprehensive loss	$	(18,472)	$	(461,313)


	Successor				Predecessor
	Nine Months Ended September 30, 2022		Period from May 18, 2021 through September 30, 2021		Period from January 1, 2021 through May 17, 2021
Net (loss) income	$	(253,867)	$	(670,899)	$	250,994
Foreign currency translation adjustment	—		—		2,570

Other comprehensive income	—		—		2,570
Comprehensive (loss) income	$	(253,867)	$	(670,899)	$	253,564

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			Treasury Stock		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 income	—	—		—	—		—		—		—		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 common stock	21,525	2		—	—		—		693,773		—		—		693,775
Shares of 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 common stock held in reserve	—	—		741	23,893		—		—		—		—		23,893
Conversion of preferred stock	10	—		—	—		—		147		—		—		147
Dividends on preferred stock	—	—		—	—		—		(1,031)		—		—		(1,031)
Balance at June 30, 2021 (Successor)	21,535	$	2	(938)	$	(30,216)	$	—	$	692,890	$	—	$	(209,586)	$	453,090
Net loss	—	—		—	—		—		—		—		(461,313)		(461,313)
Stock Compensation	—	—		—	—		—		1,387		—		—		1,387
Dividends on preferred stock	—	—		—	—		—		(2,095)		—		—		(2,095)
Balance at September 30, 2021 (Successor)	21,535	$	2	(938)	$	(30,216)	$	—	$	692,182	$	—	$	(670,899)	$	(8,931)

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GULFPORT ENERGY CORPORATION

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT) CONTINUED

(In thousands)

(Unaudited)


				Common Stock Held in Reserve			Treasury Stock		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, 2022 (Successor)	21,537	$	2	(938)	$	(30,216)	$	—	$	692,521	$	—	$	(112,829)	$	549,478
Net loss	—	—		—	—		—		—		—		(491,975)		(491,975)
Conversion of preferred stock	1	—		—	—		—		18		—		—		18
Stock compensation	—	—		—	—		—		1,755		—		—		1,755
Repurchase of common stock under Repurchase Program	(378)	—		—	—		(5,318)		(30,194)		—		—		(35,512)
Issuance of common stock held in reserve	—	—		876	28,220		—		—		—		—		28,220
Issuance of restricted stock, net of shares withheld for income taxes	2	—		—	—		—		(80)		—		—		(80)
Dividends on preferred stock	—	—		—	—		—		(1,447)		—		—		(1,447)
Balance at March 31, 2022 (Successor)	21,162	$	2	(62)	$	(1,996)	$	(5,318)	$	662,573	$	—	$	(604,804)	$	50,457
Net income	—	—		—	—		—		—		—		256,580		256,580
Conversion of preferred stock	342	—		—	—		—		4,706		—		—		4,706
Stock compensation	—	—		—	—		—		2,145		—		—		2,145
Issuance of restricted stock, net of shares withheld for income taxes	8	—		—	—		—		(325)		—		—		(325)
Repurchase of common stock under Repurchase Program	(1,382)	—		—	—		(2,491)		(125,019)		—		—		(127,510)
Dividends on preferred stock	—	—		—	—		—		(1,380)		—		—		(1,380)
Balance at June 30, 2022 (Successor)	20,130	$	2	(62)	$	(1,996)	$	(7,809)	$	542,700	$	—	$	(348,224)	$	184,673
Net loss	—	—		—	—		—		—		—		(18,472)		(18,472)
Conversion of preferred stock	60	—		—	—		—		827		—		—		827
Stock compensation	—	—		—	—		—		2,398		—		—		2,398
Issuance of restricted stock, net of shares withheld for income taxes	39	—		—	—		—		(1,192)		—		—		(1,192)
Repurchase of common stock under Repurchase Program	(827)	—		—	—		6,029		(70,578)		—		—		(64,549)
Dividends on preferred stock	—	—		—	—		—		(1,309)		—		—		(1,309)
Balance at September 30, 2022 (Successor)	19,402	$	2	(62)	$	(1,996)	$	(1,780)	$	472,846	$	—	$	(366,696)	$	102,376

See accompanying notes to consolidated financial statements.

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GULFPORT ENERGY CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)


	Successor				Predecessor
	Nine Months Ended September 30, 2022		Period from May 18, 2021 through September 30, 2021		Period from January 1, 2021 through May 17, 2021
Cash flows from operating activities:
Net (loss) income	$	(253,867)	$	(670,899)	$	250,994
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Depletion, depreciation and amortization	189,305		94,935		62,764
Impairment of oil and natural gas properties	—		117,813		—
Impairment of other property and equipment	—		—		14,568
Loss from equity investments	—		—		342

Net loss on derivative instruments	1,436,317		762,134		137,239
Net cash payments on settled derivative instruments	(799,416)		(99,574)		(3,361)
Non-cash reorganization items, net	—		—		(446,012)

Other, net	8,303		1,488		1,727
Changes in operating assets and liabilities, net	(29,560)		(41,260)		153,894
Net cash provided by operating activities	551,082		164,637		172,155
Cash flows from investing activities:
Additions to oil and natural gas properties	(331,994)		(119,306)		(102,330)
Proceeds from sale of oil and natural gas properties	3,210		600		15
Other, net	(536)		2,562		4,484
Net cash used in investing activities	(329,320)		(116,144)		(97,831)
Cash flows from financing activities:
Principal payments on pre-petition revolving credit facility	—		—		(318,961)
Borrowings on pre-petition revolving credit facility	—		—		26,050
Principal payments on Credit Facility	(1,512,000)		—		—
Borrowings on Credit Facility	1,527,000		—		—
Borrowings on exit credit facility	—		306,855		302,751
Principal payments on exit credit facility	—		(409,000)		—
Principal payments on DIP credit facility	—		—		(157,500)
Debt issuance costs and loan commitment fees	(211)		(1,225)		(7,100)
Dividends on preferred stock	(4,136)		—		—
Proceeds from issuance of preferred stock	—		—		50,000
Repurchase of common stock under Repurchase Program	(225,791)		—		—
Other, net	(1,597)		(55)		(8)
Net cash used in financing activities	(216,735)		(103,425)		(104,768)
Net increase (decrease) in cash, cash equivalents and restricted cash	5,027		(54,932)		(30,444)
Cash, cash equivalents and restricted cash at beginning of period	3,260		59,417		89,861
Cash, cash equivalents and restricted cash at end of period	$	8,287	$	4,485	$	59,417

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 focused on the production of natural gas, crude oil and NGL in the United States. The Company's principal properties are located in eastern Ohio targeting the Utica and in central Oklahoma targeting the SCOOP Woodford and SCOOP Springer formations. 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 as of and for the three months ended September 30, 2022 ("Current Successor Quarter"), as of and for the nine months ended September 30, 2022 ("Current Successor YTD Period"), May 18, 2021 through September 30, 2021 (“Prior Successor Period”), the three months ended September 30, 2021 ("Prior Successor Quarter"), and January 1, 2021 through May 17, 2021 (“Prior Predecessor YTD Period”). The Company's annual report on Form 10-K for the year ended December 31, 2021 (“2021 Form 10-K”) should be read in conjunction with this Form 10-Q. 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.

Voluntary Reorganization Under Chapter 11 of the Bankruptcy Code

In connection with the Company's emergence from bankruptcy and in accordance with ASC 852, the Company qualified for and applied fresh start accounting on the Emergence Date. For further information on the Company’s reorganization value and the resulting fresh start adjustments made on the Emergence Date, refer to the “Fresh Start Accounting” footnote in the notes to the consolidated financial statements in Item 8 of the Company’s 2021 Form 10-K.

Accounts Payable and Accrued Liabilities

Accounts payable and accrued liabilities consisted of the following at September 30, 2022 and December 31, 2021 (in thousands):


	Successor
	September 30, 2022		December 31, 2021
Accounts payable and other accrued liabilities	$	202,838	$	143,938
Revenue payable and suspense	222,729		180,857
Accrued contract rejection damages and shares held in reserve	40,996		69,216
Total accounts payable and accrued liabilities	$	466,563	$	394,011

Reorganization Items, Net

In the Prior Predecessor YTD Period, the Company incurred significant expenses related to its Chapter 11 filing. The amount of these items, which were incurred in reorganization items, net within the Company's accompanying consolidated

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statements of operations, significantly affected the Company's statements of operations. The Company also incurred adjustments for allowable claims related to its legal proceedings and executory contracts approved for rejection by the Bankruptcy Court.

The following table summarizes the components in reorganization items, net included in the Company's consolidated statements of operations for the Current Successor YTD Period, Prior Successor Period, and Prior Predecessor YTD Period (in thousands):


	Successor				Predecessor
	Nine Months Ended September 30, 2022		Period from May 18, 2021 through September 30, 2021		Period from January 1, 2021 through May 17, 2021
Legal and professional advisory fees	$	—	$	—	$	81,565
Net gain on liabilities subject to compromise	—		—