LONG-TERM DEBT |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| Long-Term Debt, Unclassified [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| LONG-TERM DEBT |
LONG-TERM DEBT Long-term debt consisted of the following items as of December 31, 2025 and 2024 (in thousands):
Senior Notes
In September 2024, Gulfport Operating completed a private offering of $650.0 million aggregate principal amount of 6.75% senior notes due September 1, 2029. The 2029 Senior Notes are guaranteed on a senior unsecured basis by the Company and each of the Company's subsidiaries that guarantee the Credit Facility. Interest is payable semi-annually, on March 1 and September 1 of each year, beginning on March 1, 2025.
The 2029 Senior Notes were issued under the 2029 Senior Notes Indenture, dated as of September 13, 2024, by and among Gulfport Operating, UMB Bank, National Association, as trustee, and the Guarantors.
The 2029 Senior Notes Indenture contains covenants limiting Gulfport Operating’s and its restricted subsidiaries’ ability to incur additional indebtedness, make restricted payments, and engage in certain other transactions, subject to exceptions and qualifications. Certain covenants will be suspended if the 2029 Senior Notes achieve investment grade ratings.
The net proceeds from the 2029 Senior Notes offering, together with cash on hand were used to purchase and retire $524.3 million of its 2026 Senior Notes in a tender offer and to repay a portion of the Company's outstanding borrowings under the Credit Facility. The tender offer resulted in a $13.4 million loss on debt extinguishment. In May 2025, the Company redeemed the remaining balance of its 2026 Senior Notes, at par for $25.7 million. No additional fees or penalties were incurred as a result of the early redemption.
Credit Facility
The Company maintains a senior secured reserve-based revolving credit facility under its Third Amended and Restated Credit Agreement, as amended most recently by the Borrowing Base Reaffirmation Agreement and Fifth Amendment to Credit Agreement (the “Fifth Amendment”) dated October 30, 2025. The facility provides for a borrowing base of $1.1 billion and aggregate elected commitments of $1.0 billion. The facility matures on September 12, 2028, is secured by substantially all of the Company’s assets and is guaranteed by the Company's material domestic subsidiaries. Borrowings under the facility bear interest, at the Company’s election, at a rate equal to either the SOFR benchmark plus an applicable margin ranging from 2.25% to 3.25% per annum or a base rate plus an applicable margin ranging from 1.25% to 2.25% per annum, in each case based on borrowing base utilization. The Company also pays a commitment fee ranging from 0.375% to 0.50% per annum on the average daily unused portion of the elected commitments. The credit agreement contains customary affirmative and negative covenants, including financial covenants requiring the Company to maintain a net funded leverage ratio of not more than 3.50 to 1.00 and a current ratio of at least 1.00 to 1.00, measured as of the last day of each fiscal quarter.
As of December 31, 2025, the Company had $147.0 million outstanding borrowings under the Credit Facility, $48.7 million in letters of credit outstanding and was in compliance with all covenants under the credit agreement.
For the years ended December 31, 2025 and 2024, the Credit Facility bore interest at a weighted average rate of 6.53% and 8.23%, respectively.
Interest Expense
The following schedule shows the components of interest expense for the years ended December 31, 2025, 2024 and 2023 (in thousands):
The Company capitalized $6.2 million, $4.8 million and $4.1 million in interest expense for the years ended December 31, 2025, 2024 and 2023, respectively, to undeveloped oil and natural gas properties.
Fair Value of Debt
At December 31, 2025, the carrying value of the outstanding debt represented by the 2029 Senior Notes was approximately $641.2 million. Based on the quoted market prices (Level 1), the fair value of the 2029 Senior Notes was determined to be approximately $672.3 million at December 31, 2025.
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