Quarterly report pursuant to Section 13 or 15(d)

Stock-Based Compensation

 v2.3.0.11
Stock-Based Compensation
6 Months Ended
Jun. 30, 2011
Stock-Based Compensation  
Stock-Based Compensation
8.   STOCK-BASED COMPENSATION

During the three months and six months ended June 30, 2011, the Company's stock-based compensation expense was $325,000 and $453,000, respectively, of which the Company capitalized $130,000 and $181,000, respectively, relating to its exploration and development efforts. During the three months and six months ended June 30, 2010, the Company's stock based compensation expense was $108,000 and $233,000, respectively, of which the Company capitalized $43,000 and $93,000, respectively, relating to its exploration and development efforts. Stock based compensation included in general and administrative expense reduced basic and diluted earnings per share by $0.00 and $0.01 each for the three months and six months ended June 30, 2011, and $0.00 and $0.00 each for the three months and six months ended June, 30, 2010, respectively. Options and restricted common stock are reported as share based payments and their fair value is amortized to expense using the straight-line method over the vesting period. The shares of stock issued once the options are exercised will be from authorized but unissued common stock.

The fair value of each option award is estimated on the date of grant using the Black-Scholes option valuation model that uses certain assumptions. Expected volatilities are based on the historical volatility of the market price of Gulfport's common stock over a period of time ending on the grant date. Based upon historical experience of the Company, the expected term of options granted is equal to the vesting period plus one year. The risk-free rate for periods within the contractual life of the option is based on the U.S. Treasury yield curve in effect at the time of the grant. The 2005 Stock Incentive Plan provides that all options must have an exercise price not less than the fair value of the Company's common stock on the date of the grant.

No stock options were issued during the six months ended June 30, 2011 and 2010.

The Company has not declared dividends and does not intend to do so in the foreseeable future, and thus did not use a dividend yield. In each case, the actual value that will be realized, if any, depends on the future performance of the common stock and overall stock market conditions. There is no assurance that the value an optionee actually realizes will be at or near the value estimated using the Black-Scholes model.

A summary of the status of stock options and related activity for the six months ended June 30, 2011 is presented below:

 

                                 
     Shares     Weighted
Average
Exercise
Price

per Share
     Weighted
Average
Remaining
Contractual Term
     Aggregate
Intrinsic
Value
 

Options outstanding at December 31, 2010

     458,241      $ 7.23         4.48       $ 6,621,000   
    

 

 

   

 

 

    

 

 

    

 

 

 

Granted

     —          —                       

Exercised

     (41,000     9.67                  710,000   

Forfeited/expired

     —          —                       
    

 

 

   

 

 

                   

Options outstanding at June 30, 2011

     417,241      $ 6.99         3.96       $ 9,471,000   
    

 

 

   

 

 

    

 

 

    

 

 

 

Options exercisable at June 30, 2011

     417,241      $ 6.99         3.96       $ 9,471,000   
    

 

 

   

 

 

    

 

 

    

 

 

 

Unrecognized compensation expense as of June 30, 2011 related to outstanding stock options and restricted shares was $3,920,000. The expense is expected to be recognized over a weighted average period of 2.41 years.

The following table summarizes information about the stock options outstanding at June 30, 2011:

 

             

Exercise
Price

  

Number

Outstanding

  

Weighted Average

Remaining Life

(in years)

  

Number

Exercisable

$3.36

   217,241    3.56    217,241

$9.07

   25,000    4.19    25,000

$11.20

   175,000    4.42    175,000
    

 

       

 

     417,241         417,241
    

 

       

 

 

The following table summarizes restricted stock activity for the six months ended June 30, 2011:

 

                 
     Number of
Unvested
Restricted Shares
    Weighted
Average
Grant Date
Fair Value
 

Unvested shares as of December 31, 2010

     113,386      $ 11.72   

Granted

     106,666        30.32   

Vested

     (33,597     11.98   

Forfeited

     —          —     
    

 

 

   

 

 

 

Unvested shares as of June 30, 2011

     186,455      $ 22.32