GULFPORT ENERGY CORP

Comparison of the Three Month Periods Ended March 31, 2024 and 2023

Natural Gas, Oil and Condensate and NGL Production and Pricing (sales totals in thousands)

The following table summarizes our natural gas, oil and condensate and NGL production, and related pricing for the three months ended March 31, 2024 as compared to the three months ended March 31, 2023. Some totals below may not sum or recalculate due to rounding.

Natural Gas, Oil and Condensate and NGL Sales (in thousands)

The decrease in natural gas sales without the impact of derivatives when comparing the three months ended March 31, 2024, to the three months ended March 31, 2023 was due to a 36% decrease in realized prices, partially offset by a 4% increase in sales volumes. The realized price change was primarily driven by the decrease in the average Henry Hub gas index from $3.42 per Mcf in the three months ended March 31, 2023, to $2.24 per Mcf during the three months ended March 31, 2024. The 4% increase in natural gas production was primarily due to our 2023 and 2024 development programs in the Utica/Marcellus partially offset by natural declines and limited activity in the SCOOP.

The decrease in oil and condensate sales without the impact of derivatives when comparing the three months ended March 31, 2024, to the three months ended March 31, 2023, was due to a 29% decrease in sales volumes, partially offset by a 1% decrease in realized prices. The 29% decrease in oil and condensate production was primarily due to natural declines and limited 2023 development activity in the SCOOP.

The decrease in NGL sales without the impact of derivatives when comparing the three months ended March 31, 2024, to the three months ended March 31, 2023, was due to a 2% decrease in realized prices and a 28% decrease in NGL sales volumes. The realized price change was driven by the decrease in the average Mont Belvieu NGL index from $35.24 per barrel in the three months ended March 31, 2023, to $34.67 per barrel during the three months ended March 31, 2024. The 28% decrease in NGL production was primarily due to natural declines and limited 2023 development activity in the SCOOP.

Natural Gas, Oil and NGL Derivatives (in thousands)

We recognize fair value changes on our natural gas, oil and NGL derivative instruments in each reporting period. The changes in fair value resulted from new positions and settlements that occurred during each period, as well as the relationship between contract prices and the associated forward curves. The significant change in the total gain (loss) for the three months ended March 31, 2024 compared to the three months ended March 31, 2023, was primarily the result of changes in futures pricing for oil, natural gas, and NGLs during each period. See Note 10 of our consolidated financial statements for hedged volumes and pricing.

Lease Operating Expenses (in thousands, except per unit)

The decrease in our total and per unit LOE for the three months ended March 31, 2024 compared to the three months ended March 31, 2023, was primarily the result of a decrease in water hauling, surface rental and labor expenses throughout our SCOOP operations and non-operated expenses in Utica/Marcellus.

Taxes Other Than Income (in thousands, except per unit)

The decrease in total and per unit taxes other than income for the three months ended March 31, 2024 compared to the three months ended March 31, 2023, was primarily related to a decrease in production taxes resulting from the decrease in our natural gas, oil and NGL revenues excluding the impact of hedges discussed above.

Transportation, Gathering, Processing and Compression (in thousands, except per unit)

Transportation, gathering, processing and compression for the three months ended March 31, 2024 compared to the three months ended March 31, 2023, decreased on a per unit basis primarily as a result of lower minimum volume commitments.

Depreciation, Depletion and Amortization (in thousands, except per unit)

The total and per unit depreciation, depletion and amortization of our oil and gas properties for the three months ended March 31, 2024 compared to the three months ended March 31, 2023, remained consistent primarily due to our drilling and development activities during 2023 and 2024.

General and Administrative Expenses (in thousands, except per unit)

The increase in general and administrative expenses for the three months ended March 31, 2024 compared to March 31, 2023, was primarily driven by increases in employee headcount and compensation.

Restructuring costs

During the three months ended March 31, 2023, Gulfport recognized $1.9 million in personnel-related restructuring expenses associated with changes in the organizational structure and leadership team resulting from the appointment of Gulfport's new CEO in January 2023. Of these expenses, $0.5 million resulted from accelerated vesting of share-based grants, which are non-cash charges.

Interest Expense (in thousands, except per unit)

Interest expense on our Credit Facility increased 23% for the three months ended March 31, 2024 compared to the three months ended March 31, 2023, as a result of a higher average balance outstanding and increased interest rates resulting from the current inflationary environment. Amortization of loan costs increased by 79% for the three months ended March 31, 2024 compared to the three months ended March 31, 2023, as a result of the Third Amendment to the Credit Facility which increased the elected commitments and borrowing base. See Note 3 of our consolidated financial statements for further details of our Credit Facility. The Company also capitalized $1.1 million in interest expense for the three months ended March 31, 2024 compared to $0.8 million for the three months ended March 31, 2023.

Other, net (in thousands)

As part of its Chapter 11 Cases and restructuring efforts, the Company filed motions to reject certain firm transportation agreements between the Company and affiliates of TC Energy Corporation ("TC") and Rover Pipeline LLC ("Rover"). During the three months ended March 31, 2023, Gulfport finalized a settlement agreement with Rover that was approved by the Bankruptcy Court on February 21, 2023. Pursuant to the settlement agreement, Gulfport and Rover agreed that the firm transportation contracts between them would be rejected. As part of the settlement, Gulfport paid a $1.0 million administrative claim, which is included in Other, net. Additionally, on February 24, 2023, Gulfport received an additional $17.8 million interim distribution for its TC claim, which is also included in Other, net.

Income Taxes

We recorded income tax expense of $14.9 million for the three months ended March 31, 2024. We did not record any income tax expense for the three months ended March 31, 2023, as a result of maintaining a full valuation allowance against our net deferred tax asset. See Note 14 of our consolidated financial statements for further discussion of our income tax benefit.