Quarterly report pursuant to Section 13 or 15(d)


3 Months Ended
Mar. 31, 2022
Accounting Policies [Abstract]  
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 March 31, 2022 ("Successor Quarter") and the three months ended March 31, 2021 (“Predecessor Quarter”). 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 March 31, 2022 and December 31, 2021 (in thousands):
March 31, 2022 December 31, 2021
Accounts payable and other accrued liabilities $ 183,786  $ 143,938 
Revenue payable and suspense 173,285  180,857 
Accrued contract rejection damages and shares held in reserve 40,996  69,216 
Total accounts payable and accrued liabilities $ 398,067  $ 394,011 
Reorganization Items, Net
In the Predecessor Quarter, 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 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 Predecessor Quarter (in thousands):
Three Months Ended March 31, 2021
Legal and professional fees $ 40,783 
Adjustment to allowed claims 2,088 
Gain on settlement of pre-petition accounts payable (4,150)
Reorganization items, net $ 38,721 
Other Income
Other, net included in the Company's consolidated statements of operations for the Successor Quarter included $11.5 million related to the TC claim distribution received as discussed in Note 7.
Supplemental Cash Flow and Non-Cash Information (in thousands)
Successor Predecessor
Three Months Ended March 31, 2022 Three Months Ended March 31, 2021
Supplemental disclosure of cash flow information:
Cash paid for reorganization items, net $ —  $ 21,367 
Interest payments $ 2,110  $ 4,763 
Changes in operating assets and liabilities:
Decrease (increase) in accounts receivable - oil and natural gas sales $ 25,985  $ (14,117)
Increase in accounts receivable - joint interest and other (17,722) (478)
Increase in accounts payable and accrued liabilities 2,135  15,555 
Decrease in prepaid expenses 6,811  26,356 
Increase in other assets (17) (655)
Total changes in operating assets and liabilities $ 17,192  $ 26,661 
Supplemental disclosure of non-cash transactions:
Capitalized stock-based compensation $ 597  $ 630 
Asset retirement obligation capitalized $ 16  $ 483 
Release of common stock held in reserve $ 28,220  $ — 
Foreign currency translation gain on equity method investments $ —  $ 2,570