EX-99.2 3 ea167816ex99-2_gulfport.htm SUPPLEMENTAL FINANCIAL INFORMATION

Exhibit 99.2

 

 

 

Three months and nine months ended September 30, 2022

Supplemental Information of Gulfport Energy

 

Table of Contents: Page:
Production Volumes by Asset Area 2
Production and Pricing 4
Consolidated Statements of Income 6
Consolidated Balance Sheets 8
Consolidated Statement of Cash Flows 10
Updated 2022E Guidance 12
Derivatives 13
Non-GAAP Reconciliations 14
Definitions 15
Adjusted Net Income 16
Adjusted EBITDA 18
Free Cash Flow 20
Recurring General and Administrative Expenses 22

 

 

 

 

 

 

Production Volumes by Asset Area: Three months ended September 30, 2022

 

Production Volumes

 

   Successor 
   Three Months Ended
September 30,
2022		   Three Months Ended
September 30,
2021		 
Natural gas (Mcf/day)        
Utica   597,027    678,154 
SCOOP   218,633    188,292 
Other   —    — 
Total   815,660    866,446 
Oil and condensate (Bbl/day)          
Utica   646    958 
SCOOP   3,721    4,335 
Other   —    78 
Total   4,366    5,371 
NGL (Bbl/day)          
Utica   2,458    2,516 
SCOOP   9,714    9,918 
Other   —    — 
Total   12,172    12,434 
Combined (Mcfe/day)          
Utica   615,649    698,998 
SCOOP   299,239    273,812 
Other   —    471 
Total   914,888    973,281 
Totals may not sum or recalculate due to rounding.          

 

Page 2

 

 

 

 

Production Volumes by Asset Area : Nine months ended September 30, 2022

 

Production Volumes

 

   Successor   Predecessor   Non-GAAP Combined 
   Nine Months Ended
September 30,
2022		   Period from
May 18,
2021 through
September 30,
2021		   Period from
January 1,
2021 through
May 17,
2021		   Nine Months Ended
September 30,
2021		 
Natural gas (Mcf/day)                
Utica   664,960    682,596    780,791    731,873 
SCOOP   200,847    190,305    126,294    158,182 
Other   7    38    63    51 
Total   865,814    872,939    907,148    890,106 
Oil and condensate (Bbl/day)                    
Utica   688    1,012    1,336    1,175 
SCOOP   3,539    4,493    2,508    3,497 
Other   1    76    35    55 
Total   4,228    5,581    3,879    4,727 
NGL (Bbl/day)                    
Utica   2,251    2,588    2,638    2,613 
SCOOP   9,275    9,645    6,200    7,916 
Other   1    —    3    2 
Total   11,526    12,233    8,841    10,531 
Combined (Mcfe/day)                    
Utica   682,594    704,196    804,633    754,598 
SCOOP   277,730    275,134    178,545    226,662 
Other   17    498    288    392 
Total   960,341    979,828    983,466    981,653 
Totals may not sum or recalculate due to rounding.                    

 

Page 3

 

 

 

 

Production and Pricing: Three months ended September 30, 2022

 

The following table summarizes production and related pricing for the three months ended September 30, 2022, as compared to such data for the three months ended September 30, 2021:

 

   Successor 
   Three Months Ended
September 30,
2022		   Three Months Ended
September 30,
2021		 
Natural gas sales        
Natural gas production volumes (MMcf)   75,041    79,713 
Natural gas production volumes (MMcf) per day   816    866 
Total sales  $585,596   $301,516 
Average price without the impact of derivatives ($/Mcf)  $7.80   $3.78 
Impact from settled derivatives ($/Mcf)  $(4.72)  $(1.04)
Average price, including settled derivatives ($/Mcf)  $3.08   $2.74 
           
Oil and condensate sales          
Oil and condensate production volumes (MBbl)   402    494 
Oil and condensate production volumes (MBbl) per day   4    5 
Total sales  $36,050   $33,279 
Average price without the impact of derivatives ($/Bbl)  $89.75   $67.37 
Impact from settled derivatives ($/Bbl)  $(22.49)  $(8.77)
Average price, including settled derivatives ($/Bbl)  $67.26   $58.60 
           
NGL sales          
NGL production volumes (MBbl)   1,120    1,144 
NGL production volumes (MBbl) per day   12    12 
Total sales  $44,351   $45,153 
Average price without the impact of derivatives ($/Bbl)  $39.61   $39.47 
Impact from settled derivatives ($/Bbl)  $(2.53)  $(5.23)
Average price, including settled derivatives ($/Bbl)  $37.08   $34.24 
           
Natural gas, oil and condensate and NGL sales          
Natural gas equivalents (MMcfe)   84,170    89,542 
Natural gas equivalents (MMcfe) per day   915    973 
Total sales  $665,997   $379,948 
Average price without the impact of derivatives ($/Mcfe)  $7.91   $4.24 
Impact from settled derivatives ($/Mcfe)  $(4.35)  $(1.04)
Average price, including settled derivatives ($/Mcfe)  $3.56   $3.20 
           
Production Costs:          
Average lease operating expenses ($/Mcfe)  $0.18   $0.15 
Average taxes other than income ($/Mcfe)  $0.20   $0.13 
Average transportation, gathering, processing and compression ($/Mcfe)  $1.06   $0.94 
Total lease operating expenses, midstream costs and taxes other than income ($/Mcfe)  $1.44   $1.22 

 

Page 4

 

 

 

 

Production and Pricing: Nine months ended September 30, 2022

 

The following table summarizes production and related pricing for the nine months ended September 30, 2022, as compared to such data for the nine months ended September 30, 2021:

 

   Successor   Predecessor   Non-GAAP Combined 
   Nine Months Ended
September 30,
2022		   Period from
May 18,
2021
through
September 30,
2021		   Period from
January 1,
2021
through
May 17,
2021		   Nine Months Ended
September 30,
2021		 
Natural gas sales                
Natural gas production volumes (MMcf)   236,367    118,720    124,279    242,999 
Natural gas production volumes (MMcf) per day   866    873    907    890 
Total sales  $1,529,898   $413,234   $344,390   $757,624 
Average price without the impact of derivatives ($/Mcf)  $6.47   $3.48   $2.77   $3.12 
Impact from settled derivatives ($/Mcf)  $(3.19)  $(0.75)  $(0.03)  $(0.38)
Average price, including settled derivatives ($/Mcf)  $3.28   $2.73   $2.74   $2.74 
                     
Oil and condensate sales                    
Oil and condensate production volumes (MBbl)   1,154    759    531    1,290 
Oil and condensate production volumes (MBbl) per day   4    6    4    5 
Total sales  $111,298   $50,866   $29,106   $79,972 
Average price without the impact of derivatives ($/Bbl)  $96.42   $67.02   $54.81   $61.99 
Impact from settled derivatives ($/Bbl)  $(27.26)  $(5.71)  $—   $(3.36)
Average price, including settled derivatives ($/Bbl)  $69.16   $61.31   $54.81   $58.63 
                     
NGL sales                    
NGL production volumes (MBbl)   3,147    1,664    1,211    2,875 
NGL production volumes (MBbl) per day   12    12    9    11 
Total sales  $143,741   $61,230   $36,780   $98,010 
Average price without the impact of derivatives ($/Bbl)  $45.68   $36.80   $30.37   $34.09 
Impact from settled derivatives ($/Bbl)  $(4.38)  $(3.60)  $—   $(2.08)
Average price, including settled derivatives ($/Bbl)  $41.30   $33.20   $30.37   $32.01 
                     
Natural gas, oil and condensate and NGL sales                    
Natural gas equivalents (MMcfe)   262,173    133,257    134,735    267,992 
Natural gas equivalents (MMcfe) per day   960    980    983    982 
Total sales  $1,784,937   $525,330   $410,276   $935,606 
Average price without the impact of derivatives ($/Mcfe)  $6.81   $3.94   $3.05   $3.49 
Impact from settled derivatives ($/Mcfe)  $(3.05)  $(0.75)  $(0.02)  $(0.38)
Average price, including settled derivatives ($/Mcfe)  $3.76   $3.19   $3.03   $3.11 
                     
Production Costs:                    
Average lease operating expenses ($/Mcfe)  $0.18   $0.13   $0.14   $0.14 
Average taxes other than income ($/Mcfe)  $0.17   $0.13   $0.09   $0.11 
Average transportation, gathering, processing and compression ($/Mcfe)  $1.00   $0.94   $1.20   $1.07 
Total lease operating expenses, midstream costs and taxes other than income ($/Mcfe)  $1.35   $1.20   $1.43   $1.32 

 

Page 5

 

 

 

 

Consolidated Statements of Income: Three months ended September 30, 2022

 

(In thousands, except per share data)

(Unaudited)

 

   Successor 
   Three Months Ended
September 30,
2022		   Three Months Ended
September 30,
2021		 
REVENUES:        
Natural gas sales  $585,596   $301,516 
Oil and condensate sales   36,050    33,279 
Natural gas liquid sales   44,351    45,153 
Net loss on natural gas, oil and NGL derivatives   (474,895)   (622,476)
Total revenues   191,102    (242,528)
OPERATING EXPENSES:          
Lease operating expenses   15,363    13,864 
Taxes other than income   16,529    11,844 
Transportation, gathering, processing and compression   89,234    84,435 
Depreciation, depletion and amortization   64,419    62,573 
General and administrative expenses   8,752    16,691 
Restructuring and liability management expenses   —    2,858 
Accretion expense   673    488 
Total operating expenses   194,970    192,753 
LOSS FROM OPERATIONS   (3,868)   (435,281)
OTHER EXPENSE (INCOME):          
Interest expense   15,461    16,351 
Other, net   (857)   9,031 
Total other expense   14,604    25,382 
LOSS BEFORE INCOME TAXES   (18,472)   (460,663)
Income tax expense   —    650 
NET LOSS  $(18,472)  $(461,313)
Dividends on preferred stock  $(1,309)  $(2,095)
NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS  $(19,781)  $(463,408)
           
NET LOSS PER COMMON SHARE:          
Basic  $(1.01)  $(22.50)
Diluted  $(1.01)  $(22.50)
Weighted average common shares outstanding—Basic   19,635    20,598 
Weighted average common shares outstanding—Diluted   19,635    20,598 

 

Page 6

 

 

 

 

Consolidated Statements of Income: Nine months ended September 30, 2022

 

   Successor   Predecessor 
   Nine Months Ended
September 30,
2022		   Period from May 18,
2021
through
September 30,
2021		   Period from
January 1,
2021
through
May 17,
2021		 
REVENUES:            
Natural gas sales  $1,529,898   $413,234   $344,390 
Oil and condensate sales   111,298    50,866    29,106 
Natural gas liquid sales   143,741    61,230    36,780 
Net loss on natural gas, oil and NGL derivatives   (1,436,317)   (762,134)   (137,239)
Total revenues   348,620    (236,804)   273,037 
OPERATING EXPENSES:               
Lease operating expenses   47,246    17,980    19,524 
Taxes other than income   45,679    16,900    12,349 
Transportation, gathering, processing and compression   261,778    125,811    161,086 
Depreciation, depletion and amortization   189,305    94,935    62,764 
Impairment of oil and natural gas properties   —    117,813    — 
Impairment of other property and equipment   —    —    14,568 
General and administrative expenses   24,128    23,209    19,175 
Restructuring and liability management expenses   —    2,858    — 
Accretion expense   2,057    714    1,229 
Total operating expenses   570,193    400,220    290,695 
LOSS FROM OPERATIONS   (221,573)   (637,024)   (17,658)
OTHER EXPENSE (INCOME):               
Interest expense   43,679    25,245    4,159 
Loss from equity method investments, net   —    —    342 
Reorganization items, net   —    —    (266,898)
Other, net   (11,385)   7,980    1,713 
Total other expense (income)   32,294    33,225    (260,684)
(LOSS) INCOME BEFORE INCOME TAXES   (253,867)   (670,249)   243,026 
Income tax expense (benefit)   —    650    (7,968)
NET (LOSS) INCOME  $(253,867)  $(670,899)  $250,994 
Dividends on preferred stock  $(4,136)  $(3,126)  $— 
NET (LOSS) INCOME ATTRIBUTABLE TO COMMON STOCKHOLDERS  $(258,003)  $(674,025)  $250,994 
                
NET (LOSS) INCOME PER COMMON SHARE:               
Basic  $(12.58)  $(32.87)  $1.56 
Diluted  $(12.58)  $(32.87)  $1.56 
Weighted average common shares outstanding—Basic   20,514    20,507    160,834 
Weighted average common shares outstanding—Diluted   20,514    20,507    160,834 

 

Page 7

 

 

 

 

Consolidated Balance Sheets

 

(In thousands)

 

   Successor 
   September 30,
2022		   December 31,
2021		 
Assets  (Unaudited)     
Current assets:        
Cash and cash equivalents  $8,287   $3,260 
Accounts receivable—oil and natural gas sales   317,528    232,854 
Accounts receivable—joint interest and other   35,480    20,383 
Prepaid expenses and other current assets   9,273    12,359 
Short-term derivative instruments   53,342    4,695 
Total current assets   423,910    273,551 
Property and equipment:          
Oil and natural gas properties, full-cost method          
Proved oil and natural gas properties   2,303,728    1,917,833 
Unproved properties   184,075    211,007 
Other property and equipment   6,153    5,329 
Total property and equipment   2,493,956    2,134,169 
Less: accumulated depletion, depreciation and amortization   (467,485)   (278,341)
Total property and equipment, net   2,026,471    1,855,828 
Other assets:          
Long-term derivative instruments   24,335    18,664 
Operating lease assets   3,060    322 
Other assets   21,570    19,867 
Total other assets   48,965    38,853 
Total assets  $2,499,346   $2,168,232 

 

Page 8

 

 

 

 

Consolidated Balance Sheets

 

(In thousands, except share data)

 

   Successor 
   September 30,
2022		   December 31,
2021		 
   (Unaudited)     
Liabilities, Mezzanine Equity and Stockholders’ Equity        
Current liabilities:        
Accounts payable and accrued liabilities  $466,563   $394,011 
Short-term derivative instruments   817,384    240,735 
Current portion of operating lease liabilities   831    182 
Total current liabilities   1,284,778    634,928 
Non-current liabilities:          
Long-term derivative instruments   299,150    184,580 
Asset retirement obligation   30,367    28,264 
Non-current operating lease liabilities   2,229    140 
Long-term debt, net of current maturities   728,101    712,946 
Total non-current liabilities   1,059,847    925,930 
Total liabilities  $2,344,625   $1,560,858 
Commitments and contingencies (Note 7)          
Mezzanine Equity:          
Preferred stock - $0.0001 par value, 110.0 thousand shares authorized, 52.3 thousand issued and outstanding at September 30, 2022, and 57.9 thousand issued and outstanding at December 31, 2021   52,345    57,896 
Stockholders’ Equity:          
Common stock - $0.0001 par value, 42.0 million shares authorized, 19.4 million issued and outstanding at September 30, 2022, and 20.6 million issued and outstanding at December 31, 2021   2    2 
Additional paid-in capital   472,846    692,521 
Common stock held in reserve, 62 thousand shares at September 30, 2022, and 938 thousand shares at December 31, 2021   (1,996)   (30,216)
Accumulated deficit   (366,696)   (112,829)
Treasury stock, at cost - 20.4 thousand shares at September 30, 2022, and no shares at December 31, 2021   (1,780)   — 
Total stockholders’ equity  $102,376   $549,478 
Total liabilities, mezzanine equity and stockholders’ equity  $2,499,346   $2,168,232 

 

Page 9

 

 

 

 

Consolidated Statement of Cash Flows: Three months ended September 30, 2022

 

   Successor 
   Three Months Ended
September 30,
2022		   Three Months Ended
September 30,
2021		 
Cash flows from operating activities:        
Net loss  $(18,472)  $(461,313)
Adjustments to reconcile net loss to net cash provided by operating activities:          
Depletion, depreciation and amortization   64,419    62,573 
Net loss on derivative instruments   474,895    622,476 
Net cash payments on settled derivative instruments   (365,950)   (92,885)
Other, net   3,232    1,885 
Changes in operating assets and liabilities, net   9,758    (6,464)
Net cash provided by operating activities   167,882    126,272 
Cash flows from investing activities:          
Additions to oil and natural gas properties   (150,207)   (78,882)
Proceeds from sale of oil and natural gas properties   2,630    375 
Other, net   (478)   2,639 
Net cash used in investing activities   (148,055)   (75,868)
Cash flows from financing activities:          
Principal payments on Credit Facility   (676,000)   — 
Borrowings on Credit Facility   731,000    — 
Borrowings on exit credit facility   —    193,606 
Principal payments on exit credit facility   —    (278,000)
Debt issuance costs and loan commitment fees   (42)   (19)
Dividends on preferred stock   (1,308)   — 
Repurchase of common stock under Repurchase Program   (70,579)   — 
Other, net   (1,192)   (30)
Net cash used in financing activities   (18,121)   (84,443)
Net increase (decrease) in cash, cash equivalents and restricted cash   1,706    (34,039)
Cash, cash equivalents and restricted cash at beginning of period   6,581    38,524 
Cash, cash equivalents and restricted cash at end of period  $8,287   $4,485 

 

Page 10

 

 

 

 

Consolidated Statement of Cash Flows: Nine months ended September 30, 2022

 

(In thousands)

(Unaudited)

 

   Successor   Predecessor 
   Nine Months Ended
September 30,
2022		   Period from
May 18,
2021
through
September 30,
2021		   Period from
January 1,
2021
through
May 17,
2021		 
Cash flows from operating activities:            
Net (loss) income  $(253,867)  $(670,899)  $250,994 
Adjustments to reconcile net (loss) income to net cash provided by operating activities:               
Depletion, depreciation and amortization   189,305    94,935    62,764 
Impairment of oil and natural gas properties   —    117,813    — 
Impairment of other property and equipment   —    —    14,568 
Loss from equity investments   —    —    342 
Net loss on derivative instruments   1,436,317    762,134    137,239 
Net cash payments on settled derivative instruments   (799,416)   (99,574)   (3,361)
Non-cash reorganization items, net   —    —    (446,012)
Other, net   8,303    1,488    1,727 
Changes in operating assets and liabilities, net   (29,560)   (41,260)   153,894 
Net cash provided by operating activities   551,082    164,637    172,155 
Cash flows from investing activities:               
Additions to oil and natural gas properties   (331,994)   (119,306)   (102,330)
Proceeds from sale of oil and natural gas properties   3,210    600    15 
Other, net   (536)   2,562    4,484 
Net cash used in investing activities   (329,320)   (116,144)   (97,831)
Cash flows from financing activities:               
Principal payments on pre-petition revolving credit facility   —    —    (318,961)
Borrowings on pre-petition revolving credit facility   —    —    26,050 
Principal payments on Credit Facility   (1,512,000)   —    — 
Borrowings on Credit Facility   1,527,000    —    — 
Borrowings on exit credit facility   —    306,855    302,751 
Principal payments on exit credit facility   —    (409,000)   — 
Principal payments on DIP credit facility   —    —    (157,500)
Debt issuance costs and loan commitment fees   (211)   (1,225)   (7,100)
Dividends on preferred stock   (4,136)   —    — 
Proceeds from issuance of preferred stock   —    —    50,000 
Repurchase of common stock under Repurchase Program   (225,791)   —    — 
Other, net   (1,597)   (55)   (8)
Net cash used in financing activities   (216,735)   (103,425)   (104,768)
Net increase (decrease) in cash, cash equivalents and restricted cash   5,027    (54,932)   (30,444)
Cash, cash equivalents and restricted cash at beginning of period   3,260    59,417    89,861 
Cash, cash equivalents and restricted cash at end of period  $8,287   $4,485   $59,417 

 

Page 11

 

 

 

 

Updated 2022E Guidance

 

Gulfport’s 2022 guidance assumes commodity strip prices as of October 10, 2022, adjusted for applicable commodity and location differentials, and no property acquisitions or divestitures.

 

   Year Ending 
   December 31, 2022 
   Low   High 
Production        
Average daily gas equivalent (MMcfepd)   975    1,000 
% Gas   ~90% 
           
Realizations (before hedges)          
Natural gas (differential to NYMEX settled price) ($/Mcf)  $(0.30)  $(0.40)
NGL (% of WTI)   45%   55%
Oil (differential to NYMEX WTI) ($/Bbl)  $(3.00)  $(4.00)
           
Operating costs          
Lease operating expense ($/Mcfe)  $0.16   $0.18 
Taxes other than income  ($/Mcfe)  $0.15   $0.17 
Transportation, gathering, processing and compression(1)  ($/Mcfe)  $0.96   $1.00 
Recurring cash general and administrative(2,3)  (in millions)  $42   $44 

 

(1)Assumes rejection of Rover firm transportation agreement.
(2)Recurring cash G&A includes capitalization. It excludes non-cash stock compensation and expenses related to certain legal and restructuring charges.

 

     
   Total 
Capital expenditures (incurred)  (in millions) 
D&C  $415 
Leasehold and land   35 
Total  $450 
      
Free cash flow(3)  $300 

 

(3)This is a non-GAAP measure. Reconciliations of these non-GAAP measures and other disclosures are provided with the supplemental financial tables available on our website at www.gulfportenergy.com.

  

Page 12

 

 

 

 

Derivatives

 

The below details Gulfport’s hedging positions as of November 1, 2022:

 

    2022(1)   2023    2024 
Natural Gas Contract Summary (NYMEX):               
Fixed Price Swaps               
Volume (BBtupd)   270    165    55 
Weighted Average Price ($/MMBtu)  $2.96   $3.64   $3.98 
                
Fixed Price Collars               
Volume (BBtupd)   390    285    80 
Weighted Average Floor Price ($/MMBtu)  $2.54   $2.93   $3.63 
Weighted Average Ceiling Price ($/MMBtu)  $2.96   $4.78   $7.02 
                
Fixed Price Calls Sold               
Volume (BBtupd)   153    408    202 
Weighted Average Price ($/MMBtu)  $2.90   $2.90   $3.33 
                
Rex Zone 3 Basis               
Volume (BBtupd)   —    40    — 
Differential ($/MMBtu)  $—   $(0.21)  $— 
                
Oil Contract Summary (WTI):               
Fixed Price Swaps               
Volume (Bblpd)   3,000    3,000    — 
Weighted Average Price ($/Bbl)  $66.03   $74.47   $— 
                
Fixed Price Collars               
Volume (Bblpd)   1,500    —    — 
Weighted Average Floor Price ($/Bbl)  $55.00   $—   $— 
Weighted Average Ceiling Price ($/Bbl)  $60.00   $—   $— 
                
NGL Contract Summary:               
C3 Propane Fixed Price Swaps               
Volume (Bblpd)   4,000    3,000    — 
Weighted Average Price ($/Bbl)  $36.62   $38.07   $— 
                
(1) October 1 - December 31, 2022               

 

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Non-GAAP Reconciliations

 

Gulfport’s management uses certain non-GAAP financial measures for planning, forecasting and evaluating business and financial performance, and believes that they are useful tool to assess Gulfport’s operating results. Although these are not measures of performance calculated in accordance with generally accepted accounting principles (GAAP), management believes that these financial measures are useful to an investor in evaluating Gulfport because (i) analysts utilize these metrics when evaluating company performance and have requested this information as of a recent practicable date, (ii) these metrics are widely used to evaluate a company’s operating performance, and (iii) we want to provide updated information to investors. Investors should not view these metrics as a substitute for measures of performance that are calculated in accordance with GAAP. In addition, because all companies do not calculate these measures identically, these measures may not be comparable to similarly titled measures of other companies.

 

These non-GAAP financial measures include adjusted net income, adjusted EBITDA, free cash flow, and recurring general and administrative expense. A reconciliation of each financial measure to its most directly comparable GAAP financial measure is included in the tables below. These non-GAAP measure should be considered in addition to, but not instead of, the financial statements prepared in accordance with GAAP.

 

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Definitions

 

Adjusted net income is a non-GAAP financial measure equal to (loss) income before income taxes less reorganization items, non-cash derivative loss, impairments of oil and gas properties, property and equipment, contractual charges on midstream disputes, non-recurring general and administrative expenses, stock-based compensation expenses, restructuring and liability management expenses, loss from equity method investments and other items which include rig termination fees, stock-based compensation and other non-material expenses.

 

Adjusted EBITDA is a non-GAAP financial measure equal to net (loss) income, the most directly comparable GAAP financial measure, plus interest expense, income tax expense (benefit), depreciation, depletion and amortization, and impairment of oil and gas properties, property and equipment, accretion, reorganization items, non-cash derivative loss, contractual charges on midstream disputes, non-recurring general and administrative expenses, stock-based compensation expenses, restructuring and liability management expenses, loss from equity method investments and other items which include rig termination fees, stock-based compensation and other non-material expenses.

 

Free cash flow is a non-GAAP measure defined as adjusted EBITDA plus certain non-cash items that are included in net cash provided by (used in) operating activities but excluded from adjusted EBITDA less interest expense, capital expenses incurred and capital expenditures incurred. Gulfport includes a free cash flow estimate for 2022. We are unable, however, to provide a quantitative reconciliation of the forward-looking non-GAAP measure to its most directly comparable forward-looking GAAP measure because management cannot reliably quantify certain of the necessary components of such forward-looking GAAP measure.

 

Recurring general and administrative expense is a non-GAAP financial measure equal to general and administrative expense (GAAP) plus capitalized general and administrative expense, less non-recurring general and administrative expense. Gulfport includes a recurring general and administrative expense estimate for 2022. We are unable, however, to provide a quantitative reconciliation of the forward-looking non-GAAP measure to its most directly comparable forward-looking GAAP measure because management cannot reliably quantify certain of the necessary components of such forward-looking GAAP measure.

 

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Adjusted Net Income: Three months ended September 30, 2022

 

(In thousands)

(Unaudited)

 

   Successor 
   Three Months Ended
September 30,
2022		   Three Months Ended
September 30,
2021		 
         
Income (Loss) Before Income Taxes (GAAP)  $(18,472)  $(460,663)
           
Adjustments:          
Non-cash derivative loss   108,945    529,590 
Non-recurring general and administrative expense   914    9,554 
Stock-based compensation expense   1,583    899 
Loss from equity method investments   —    2,858 
Other, net   (857)   9,031 
Adjusted Net Income (Non-GAAP)  $92,113   $91,269 
Dividends on preferred stock  $(1,309)  $(2,095)
Participating Securities - preferred stock  $(14,525)  $(17,010)
Adjusted Net Income Attributable to Common Stockholders (Non-GAAP)  $76,279   $72,164 
Re-allocation of participating securities  $733   $— 
Diluted net income attributable to common stockholders  $77,012   $72,164 
           
Adjusted Net Income Per Common Share, Basic (Non-GAAP)  $3.88   $3.50 
Adjusted Net Income Per Common Share, Diluted (Non-GAAP)  $3.69   $3.50 

 

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Adjusted Net Income: Nine months ended September 30, 2022

 

   Successor   Predecessor   Non-GAAP Combined 
   Nine Months Ended
September 30,
2022		   Period from
May 18,
2021
through
September 30,
2021		   Period from
January 1,
2021
through
May 17,
2021		   Nine Months Ended
September 30,
2021		 
                 
(Loss) Income Before Income Taxes (GAAP)  $(253,867)  $(670,249)  $243,026   $(427,223)
                     
Adjustments:                    
Reorganization items, net   —    —    (266,898)   (266,898)
Non-cash derivative loss   636,901    662,559    133,878    796,437 
Impairments   —    117,813    —    117,813 
Contractual charges on midstream disputes   —    —    30,351    30,351 
Non-recurring general and administrative expense   1,673    13,599    8,923    22,522 
Restructuring and liability management expenses   —    2,858    —    2,858 
Stock-based compensation expense   4,157    899    1,165    2,064 
Loss from equity method investments   —    —    342    342 
Other, net   (11,385)   7,980    2,044    10,024 
                     
Adjusted Net Income (Non-GAAP)  $377,479   $135,459   $152,831   $288,290 
Dividends on preferred stock  $(4,136)  $(3,126)  $—   $(3,126)
Participating Securities - preferred stock(1)  $(57,554)  $(25,341)  $—   $(50,997)
Adjusted Net Income Attributable to Common Stockholders (Non-GAAP)  $315,789   $106,992   $152,831   $234,167 
Re-allocation of participating securities  $3,309   $—   $—   $— 
Diluted net income attributable to common stockholders  $319,098   $106,992   $152,831   $234,167 
                     
Adjusted Net Income Per Common Share, Basic (Non-GAAP)(1)  $15.39   $5.22   $0.95   $11.42 
Adjusted Net Income Per Common Share, Diluted (Non-GAAP)(2)  $14.51   $5.22   $0.95   $11.42 

 

(1) For the Non-GAAP combined period, the Company calculated the impact of participating securities using the Adjusted Net Income amount of the Non-GAAP combined period.
(2) For the Non-GAAP combined period, the Company used the Successor’s diluted weighted average share count to calculate per share amounts.

 

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Adjusted EBITDA: Three months ended September 30, 2022

 

(In thousands)

(Unaudited)

 

 

   Successor 
   Three Months Ended
September 30,
2022		   Three Months Ended
September 30,
2021		 
         
Net income (loss) (GAAP)  $(18,472)  $(461,313)
           
Adjustments:          
Interest expense   15,461    16,351 
Income tax expense   —    650 
DD&A, impairment, and accretion   65,092    63,061 
Non-cash derivative (gain) loss   108,945    529,590 
Non-recurring general and administrative expenses   914    9,554 
Stock-based compensation expense   1,583    899 
Restructuring and liability management expenses   —    2,858 
Other, net   (857)   9,031 
Adjusted EBITDA (Non-GAAP)  $172,666   $170,681 

 

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Adjusted EBITDA: Nine months ended September 30, 2022

 

(In thousands)

(Unaudited)

 

   Successor   Predecessor   Non-GAAP Combined 
   Nine Months Ended
September 30,
2022		   Period from
May 18,
2021
through
September 30,
2021		   Period from
January 1,
2021
through
May 17,
2021		   Nine Months Ended
September 30,
2021		 
                 
Net (loss) income (GAAP)  $(253,867)  $(670,899)  $250,994   $(419,905)
                     
Adjustments:                    
Interest expense   43,679    25,245    4,159    29,404 
Income tax expense (benefit)   —    650    (7,968)   (7,318)
DD&A, impairment, and accretion   191,362    213,462    78,561    292,023 
Reorganization items, net   —    —    (266,898)   (266,898)
Non-cash derivative loss   636,901    662,559    133,878    796,437 
Contractual charges on midstream disputes   —    —    30,351    30,351 
Non-recurring general and administrative expenses   1,673    13,599    8,923    22,522 
Stock-based compensation expense   4,157    899    1,165    2,064 
Restructuring and liability management expenses   —    2,858    —    2,858 
Loss from equity method investments   —    —    342    342 
Other, net   (11,385)   7,977    2,044    10,021 
Adjusted EBITDA (Non-GAAP)  $612,520   $256,350   $235,551   $491,901 

 

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Free Cash Flow: Three months ended September 30, 2022

 

(In thousands)

(Unaudited)

 

   Successor 
   Three Months Ended
September 30,
2022		   Three Months Ended
September 30,
2021		 
         
Net cash provided by operating activities (GAAP)  $167,882   $126,272 
Adjustments:          
Interest expense   15,461    16,351 
Current income tax expense   —    650 
Non-recurring general and administrative expenses   914    9,554 
Restructuring and liability management expenses   —    2,858 
Other, net   (1,833)   8,532 
Changes in operating assets and liabilities, net   (9,758)   6,464 
Adjusted EBITDA (non-GAAP)  $172,666   $170,681 
Interest expense   (15,461)   (16,351)
Capitalized expenses incurred(1)   (4,109)   (3,706)
Capital expenditures incurred(2)   (142,017)   (80,914)
Free cash flow (non-GAAP)  $11,079   $69,710 

 

(1)Includes cash capitalized general and administrative expense and incurred capitalized interest expenses.
(2)Incurred capital expenditures and cash capital expenditures may vary from period to period due to the cash payment cycle.

 

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Free Cash Flow: Nine months ended September 30, 2022

 

   Successor   Predecessor   Non-GAAP Combined 
   Nine Months Ended
September 30,
2022		   Period from
May 18,
2021
through
September 30,
2021		   Period from
January 1,
2021
through
May 17,
2021		   Nine Months Ended
September 30,
2021		 
                 
Net cash provided by operating activities (GAAP)  $551,082   $164,637   $172,155   $336,792 
Adjustments:                    
Interest expense   43,679    25,245    4,159    29,404 
Current income tax benefit   —    650    (7,968)   (7,318)
Cash reorganization items, net   —    —    179,114    179,114 
Non-recurring general and administrative expenses   1,673    13,599    8,923    22,522 
Restructuring and liability management expenses   —    2,858    —    2,858 
Contractual charges on midstream disputes   —    —    30,351    30,351 
Other, net   (13,474)   8,104    2,711    10,815 
Changes in operating assets and liabilities, net   29,560    41,260    (153,894)   (112,634)
Adjusted EBITDA (non-GAAP)  $612,520   $256,353   $235,551   $491,904 
Interest expense   (43,679)   (25,245)   (4,159)   (29,404)
Capitalized expenses incurred(1)   (12,486)   (5,883)   (8,020)   (13,903)
Capital expenditures incurred(2)   (348,147)   (113,030)   (108,408)   (221,438)
Free cash flow (non-GAAP)  $208,208   $112,195   $114,964   $227,159 

 

(1)Includes cash capitalized general and administrative expense and incurred capitalized interest expenses.
(2)Incurred capital expenditures and cash capital expenditures may vary from period to period due to the cash payment cycle.

 

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Recurring General and Administrative Expenses:

Three months ended September 30, 2022

 

(In thousands)

(Unaudited)

 

   Successor 
   Three Months Ended September 30, 2022   Three Months Ended September 30, 2021 
   Cash   Non-Cash   Total   Cash   Non-Cash   Total 
                         
General and administrative expense (GAAP)  $7,169   $1,583   $8,752   $15,792   $899   $16,691 
Capitalized general and administrative expense   4,109    815    4,924    3,590    484    4,074 
Non-recurring general and administrative expense(1)   (914)   —    (914)   (9,554)   —    (9,554)
Recurring general and administrative before capitalization  $10,364   $2,398   $12,762   $9,828   $1,383   $11,211 

 

(1)Includes non-recurring general and administrative expenses related to certain legal and restructuring charges.

 

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Recurring General and Administrative Expenses:

Nine months ended September 30, 2022

 

   Successor   Predecessor   Non-GAAP Combined 
   Nine Months Ended September 30, 2022   Period from May 18, 2021 through September 30, 2021   Period from January 1, 2021 through May 17, 2021   Nine Months Ended September 30, 2021 
   Cash   Non-Cash   Total   Cash   Non-Cash   Total   Cash   Non-Cash   Total   Cash   Non-Cash   Total 
                                                 
General and administrative expense (GAAP)  $19,971   $4,157   $24,128   $22,310   $899   $23,209   $18,002   $1,173   $19,175   $40,312   $2,072   $42,384 
Capitalized general and administrative expense   12,486    2,142    14,628    5,767    484    6,251    7,097    922    8,019   $12,864   $1,406   $14,270 
Non-recurring general and administrative expense(1)   (1,673)   —    (1,673)   (13,599)   —    (13,599)   (8,923)   —    (8,923)  $(22,522)  $—   $(22,522)
Recurring general and administrative before capitalization  $30,784   $6,299   $37,083   $14,478   $1,383   $15,861   $16,176   $2,095   $18,271   $30,654   $3,478   $34,132 

 

(1)Includes non-recurring general and administrative expenses related to certain legal and restructuring charges.

 

 

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