GULFPORT ENERGY CORP

Comparison of the Three Month Periods Ended September 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 September 30, 2024 as compared to the three months ended September 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 September 30, 2024, to the three months ended September 30, 2023 was due to a 10% decrease in realized prices. The realized price change was primarily driven by the decrease in the average Henry Hub gas index from $2.55 per Mcf in the three months ended September 30, 2023, to $2.16 per Mcf during the three months ended September 30, 2024.

The increase in oil and condensate sales without the impact of derivatives when comparing the three months ended September 30, 2024, to the three months ended September 30, 2023, was due to a 45% increase in sales volumes, partially offset by a 11% decrease in realized prices. The 45% increase in oil and condensate production was primarily due to commencement of sales on new wells targeting the Utica liquids window, partially offset by lower SCOOP production as a result of limited 2023 development activity. The realized price change was primarily driven by the decrease in the average WTI crude index from $82.26 per barrel in the three months ended September 30, 2023, to $75.09 per barrel during the three months ended September 30, 2024.

The decrease in NGL sales without the impact of derivatives when comparing the three months ended September 30, 2024, to the three months ended September 30, 2023, was due to a 5% decrease in NGL sales volumes, partially offset by a 4% increase in realized prices. The 5% decrease in NGL 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 Mont Belvieu NGL index from $28.27 per barrel in the three months ended September 30, 2023, to $30.22 per barrel during the three months ended September 30, 2024.

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 change in the total gain for the three months ended September 30, 2024 compared to the three months ended September 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 increase in our total and per unit LOE for the three months ended September 30, 2024 compared to the three months ended September 30, 2023, was primarily the result of an increase in water disposal activities in the Utica/Marcellus and an increase in repairs, maintenance and compression activities in the SCOOP.

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

The decrease in total taxes other than income for the three months ended September 30, 2024 compared to the three months ended September 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 September 30, 2024 compared to the three months ended September 30, 2023, increased primarily as a result of the increase in our production as noted above.

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 September 30, 2024 compared to the three months ended September 30, 2023, increased 4% primarily as a result of our drilling and development activities during 2023 and 2024.

Impairment of Oil and Natural Gas Properties

At September 30, 2024, the net book value of our oil and gas properties exceeded the calculated ceiling. As a result, we recorded a non-cash ceiling test impairment of $30.5 million for the three months ended September 30, 2024. The impairment resulted from declines in the full cost ceiling, which primarily resulted from the significant decrease in the 12-month average trailing price for natural gas. We did not record an impairment during the three months ended September 30, 2023.

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

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

Interest Expense (in thousands, except per unit)

Due to the tender of the 2026 Senior Notes, interest paid on the 2026 Senior Notes decreased 18% for the three months ended September 30, 2024 compared to the three months September 30, 2023. The Company also paid $2.2 million of interest on the 2029 Senior Notes for the three months ended September 30, 2024. Interest expense on our Credit Facility increased 8% for the three months ended September 30, 2024 compared to the three months ended September 30, 2023, as a result of a higher average balance outstanding. Amortization of loan costs increased 10% for the three months ended September 30, 2024 compared to the three months ended September 30, 2023, as a result of the Third and Fourth Amendments to the Credit Facility which increased the elected commitments and borrowing base. The Company also capitalized $1.2 million and $1.1 million in interest expense for the three months ended September 30, 2024 and September 30, 2023, respectively.

Loss on Debt Extinguishment

In September 2024, Gulfport Operating purchased and retired $524.3 million of the 2026 Senior Notes in a tender offer using net proceeds from the 2029 Senior Notes offering. The 2026 Senior Notes were tendered at an average price equal to 102.3% of the principal amount. The retirement of the 2026 Senior Notes resulted in a loss on debt extinguishment of $13.4 million, which included cash costs of $12.9 million.

Other, net (in thousands)

Other, net in the Company’s consolidated statements of operations for the three months ended September 30, 2024, included approximately $3.0 million related to changes in the Company’s legal reserves for certain litigation and regulatory proceedings.

Income Taxes

We recorded income tax benefit of $3.8 million and $554.7 million for the three months ended September 30, 2024 and September 30, 2023, respectively. See Note 14 of our consolidated financial statements for further discussion of our income tax benefit.