GULFPORT ENERGY CORP

Comparison of the Three Month Periods Ended June 30, 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 June 30, 2024 as compared to the three months ended June 30, 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 June 30, 2024, to the three months ended June 30, 2023 was due to a 12% decrease in realized prices, partially offset by a 3% increase in sales volumes. The realized price change was primarily driven by the decrease in the average Henry Hub gas index from $2.10 per Mcf in the three months ended June 30, 2023, to $1.89 per Mcf during the three months ended June 30, 2024. The 3% 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 June 30, 2024, to the three months ended June 30, 2023, was due to a 22% decrease in sales volumes, partially offset by a 9% increase in realized prices. The 22% decrease in oil and condensate production was primarily due to natural declines and limited 2023 development activity in the SCOOP. The realized price change was primarily driven by the increase in the average WTI crude index from $73.78 per barrel in the three months ended June 30, 2023, to $80.57 per barrel during the three months ended June 30, 2024.

The NGL sales without the impact of derivatives when comparing the three months ended June 30, 2024, to the three months ended June 30, 2023, remained consistent due to a 18% increase in realized prices offset by a 15% decrease in NGL sales volumes. The realized price change was primarily driven by the increase in the average Mont Belvieu NGL index from $25.99 per barrel in the three months ended June 30, 2023, to $31.50 per barrel during the three months ended June 30, 2024. The 15% 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 June 30, 2024 compared to the three months ended June 30, 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 LOE for the three months ended June 30, 2024 compared to the three months ended June 30, 2023, was primarily the result of a decrease in surface rental and labor expenses throughout our operations.

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 June 30, 2024 compared to the three months ended June 30, 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 June 30, 2024 compared to the three months ended June 30, 2023, increased primarily as a result of a 1% increase in production.

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

Depreciation, depletion and amortization of our oil and gas properties for the three months ended June 30, 2024 compared to the three months ended June 30, 2023, decreased 2% primarily as a result of a decrease in our depletion rate.

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

The increase in general and administrative expenses for the three months ended June 30, 2024 compared to the three months ended June 30, 2023, was primarily driven by increases in employee compensation.

Restructuring costs

During the three months ended June 30, 2023, Gulfport recognized $2.9 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, $0.8 million resulted from accelerated vesting of share-based grants, which are non-cash charges. As of June 30, 2023, there were no remaining employee termination liabilities for the impacted employees.

Interest Expense (in thousands, except per unit)

Interest expense on our Credit Facility increased 37% for the three months ended June 30, 2024 compared to the three months ended June 30, 2023, as a result of a higher average balance outstanding. Amortization of loan costs increased 9% for the three months ended June 30, 2024 compared to the three months ended June 30, 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 $1.2 million and $1.0 million in interest expense for the three months ended June 30, 2024 and June 30, 2023, respectively.

Other, net (in thousands)

Other, net in the Company's consolidated statements of operations for the three months ended June 30, 2023, included a $5.0 million recoupment of previously placed collateral for certain firm transportation commitments during our Chapter 11 Cases.

Income Taxes

We recorded income tax benefit of $7.6 million for the three months ended June 30, 2024. We did not record any income tax expense for the three months ended June 30, 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.