EX-99.2 3 ea020489601ex99-2_gulfport.htm SUPPLEMENTAL FINANCIAL INFORMATION

Exhibit 99.2

 

 

Three months ended March 31, 2024

Supplemental Information of Gulfport Energy

 

Table of Contents:   Page:
Production Volumes by Asset Area   2
Production and Pricing   3
Consolidated Statements of Income   4
Consolidated Balance Sheets   5
Consolidated Statement of Cash Flows   7
2024E Guidance   8
Derivatives   9
Non-GAAP Reconciliations   10
Definitions   11
Adjusted Net Income   12
Adjusted EBITDA   13
Adjusted Free Cash Flow   14
Recurring General and Administrative Expenses   15

 

 

 

Production Volumes by Asset Area : Three months ended March 31, 2024

 

Production Volumes

 

   Three Months Ended
March 31,
2024		   Three Months Ended
March 31,
2023		 
Natural gas (Mcf/day)        
Utica & Marcellus   811,357    718,815 
SCOOP   162,207    225,592 
Total   973,564    944,408 
Oil and condensate (Bbl/day)          
Utica & Marcellus   1,348    590 
SCOOP   1,980    4,139 
Total   3,329    4,729 
NGL (Bbl/day)          
Utica & Marcellus   1,981    2,690 
SCOOP   8,050    11,406 
Total   10,031    14,096 
Combined (Mcfe/day)          
Utica & Marcellus   831,333    738,498 
SCOOP   222,389    318,861 
Total   1,053,722    1,057,359 
Totals may not sum or recalculate due to rounding.          

 

Page 2

 

Production and Pricing : Three months ended March 31, 2024

 

The following table summarizes production and related pricing for the three months ended March 31, 2024, as compared to such data for the three months ended March 31, 2023:

 

   Three Months Ended
March 31,
2024		   Three Months Ended
March 31,
2023		 
Natural gas sales        
Natural gas production volumes (MMcf)   88,594    84,997 
Natural gas production volumes (MMcf) per day   974    944 
Total sales  $188,286   $282,534 
Average price without the impact of derivatives ($/Mcf)  $2.13   $3.32 
Impact from settled derivatives ($/Mcf)  $0.75   $— 
Average price, including settled derivatives ($/Mcf)  $2.88   $3.32 
           
Oil and condensate sales          
Oil and condensate production volumes (MBbl)   303    426 
Oil and condensate production volumes (MBbl) per day   3    5 
Total sales  $21,701   $30,714 
Average price without the impact of derivatives ($/Bbl)  $71.64   $72.16 
Impact from settled derivatives ($/Bbl)  $0.04   $(1.04)
Average price, including settled derivatives ($/Bbl)  $71.68   $71.12 
           
NGL sales          
NGL production volumes (MBbl)   913    1,269 
NGL production volumes (MBbl) per day   10    14 
Total sales  $28,106   $39,912 
Average price without the impact of derivatives ($/Bbl)  $30.79   $31.46 
Impact from settled derivatives ($/Bbl)  $(1.25)  $0.77 
Average price, including settled derivatives ($/Bbl)  $29.54   $32.23 
           
Natural gas, oil and condensate and NGL sales          
Natural gas equivalents (MMcfe)   95,889    95,162 
Natural gas equivalents (MMcfe) per day   1,054    1,057 
Total sales  $238,093   $353,160 
Average price without the impact of derivatives ($/Mcfe)  $2.48   $3.71 
Impact from settled derivatives ($/Mcfe)  $0.68   $— 
Average price, including settled derivatives ($/Mcfe)  $3.16   $3.71 
           
Production Costs:          
Average lease operating expenses ($/Mcfe)  $0.18   $0.21 
Average taxes other than income ($/Mcfe)  $0.09   $0.11 
Average transportation, gathering, processing and compression ($/Mcfe)  $0.90   $0.92 
Total lease operating expenses, taxes other than income and midstream costs ($/Mcfe)  $1.16   $1.24 
Totals may not sum or recalculate due to rounding.          

 

Page 3

 

Consolidated Statements of Income: Three months ended March 31, 2024

 

(In thousands, except per share data)

(Unaudited)

 

   Three Months Ended
March 31,
2024		   Three Months Ended
March 31,
2023		 
REVENUES:        
Natural gas sales  $188,286   $282,534 
Oil and condensate sales   21,701    30,714 
Natural gas liquid sales   28,106    39,912 
Net gain on natural gas, oil and NGL derivatives   45,136    378,061 
Total revenues   283,229    731,221 
OPERATING EXPENSES:          
Lease operating expenses   16,808    19,862 
Taxes other than income   8,260    10,695 
Transportation, gathering, processing and compression   86,619    87,617 
Depreciation, depletion and amortization   80,023    79,094 
General and administrative expenses   9,198    8,733 
Restructuring costs   —    1,869 
Accretion expense   555    764 
Total operating expenses   201,463    208,634 
INCOME FROM OPERATIONS   81,766    522,587 
OTHER EXPENSE (INCOME):          
Interest expense   15,003    13,756 
Other, net   (125)   (14,223)
Total other expense (income)   14,878    (467)
INCOME BEFORE INCOME TAXES   66,888    523,054 
INCOME TAX EXPENSE:          
Current   —    — 
Deferred   14,853    — 
Total income tax expense   14,853    — 
NET INCOME  $52,035   $523,054 
Dividends on preferred stock   (1,105)   (1,307)
Participating securities - preferred stock   (7,532)   (86,221)
NET INCOME ATTRIBUTABLE TO COMMON STOCKHOLDERS  $43,398   $435,526 
NET INCOME PER COMMON SHARE:          
Basic  $2.39   $23.08 
Diluted  $2.34   $22.90 
Weighted average common shares outstanding—Basic   18,193    18,868 
Weighted average common shares outstanding—Diluted   18,604    19,049 

 

Page 4

 

Consolidated Balance Sheets

 

(In thousands, except share data)

(Unaudited)

 

   March 31,
2024		   December 31,
2023		 
Assets        
Current assets:        
Cash and cash equivalents  $8,209   $1,929 
Accounts receivable—oil, natural gas, and natural gas liquids sales   85,022    122,479 
Accounts receivable—joint interest and other   26,366    22,221 
Prepaid expenses and other current assets   5,334    16,951 
Short-term derivative instruments   228,579    233,226 
Total current assets   353,510    396,806 
Property and equipment:          
Oil and natural gas properties, full-cost method          
Proved oil and natural gas properties   3,033,571    2,904,519 
Unproved properties   207,644    204,233 
Other property and equipment   9,984    9,165 
Total property and equipment   3,251,199    3,117,917 
Less: accumulated depletion, depreciation and amortization   (945,646)   (865,618)
Total property and equipment, net   2,305,553    2,252,299 
Other assets:          
Long-term derivative instruments   45,617    47,566 
Deferred tax asset   510,303    525,156 
Operating lease assets   11,099    14,299 
Other assets   28,000    31,487 
Total other assets   595,019    618,508 
Total assets  $3,254,082   $3,267,613 

 

Page 5

  

Consolidated Balance Sheets

 

(In thousands, except share data)

(Unaudited)

 

   March 31, 2024   December 31, 2023 
Liabilities, Mezzanine Equity and Stockholders’ Equity        
Current liabilities:        
Accounts payable and accrued liabilities  $290,144   $309,532 
Short-term derivative instruments   37,607    21,963 
Current portion of operating lease liabilities   9,949    12,959 
Total current liabilities   337,700    344,454 
Non-current liabilities:          
Long-term derivative instruments   16,547    18,602 
Asset retirement obligation   30,710    29,941 
Non-current operating lease liabilities   1,150    1,340 
Long-term debt   636,442    667,382 
Total non-current liabilities   684,849    717,265 
Total liabilities  $1,022,549   $1,061,719 
Commitments and contingencies          
Mezzanine equity:          
Preferred stock - $0.0001 par value, 110.0 thousand shares authorized, 44.2 thousand issued and outstanding at March 31, 2024, and 44.2 thousand issued and outstanding at December 31, 2023   44,203    44,214 
Stockholders’ equity:          
Common stock - $0.0001 par value, 42.0 million shares authorized, 18.1 million issued and outstanding at
March 31, 2024, and 18.3 million issued and outstanding at December 31, 2023		   2    2 
Additional paid-in capital   288,450    315,726 
Common stock held in reserve, 0 shares at March 31, 2024, and 62.0 thousand shares at December 31, 2023   —    (1,996)
Retained earnings   1,898,878    1,847,948 
Total stockholders’ equity  $2,187,330   $2,161,680 
Total liabilities, mezzanine equity and stockholders’ equity  $3,254,082   $3,267,613 

 

Page 6

 

Consolidated Statement of Cash Flows: Three months ended March 31, 2024

 

(In thousands)

(Unaudited)

 

   Three Months Ended
March 31,
2024		   Three Months Ended
March 31,
2023		 
         
Cash flows from operating activities:        
Net income  $52,035   $523,054 
Adjustments to reconcile net income to net cash provided by operating activities:          
Depletion, depreciation and amortization   80,023    79,094 
Net gain on derivative instruments   (45,136)   (378,061)
Net cash receipts on settled derivative instruments   65,322    367 
Deferred income tax expense   14,853    — 
Stock-based compensation expense   2,403    2,205 
Other, net   1,568    2,637 
Changes in operating assets and liabilities, net   16,954    74,759 
Net cash provided by operating activities   188,022    304,055 
Cash flows from investing activities:          
Additions to oil and natural gas properties   (118,146)   (130,400)
Proceeds from sale of oil and natural gas properties   —    2,463 
Other, net   (806)   (644)
Net cash used in investing activities   (118,952)   (128,581)
Cash flows from financing activities:          
Principal payments on Credit Facility   (303,000)   (313,000)
Borrowings on Credit Facility   272,000    168,000 
Debt issuance costs and loan commitment fees   (107)   (7)
Dividends on preferred stock   (1,105)   (1,307)
Repurchase of common stock under Repurchase Program   (14,491)   (32,672)
Repurchase of common stock under Repurchase Program - related party   (15,002)   — 
Shares exchanged for tax withholdings   (1,085)   (287)
Net cash used in financing activities   (62,790)   (179,273)
Net change in cash and cash equivalents   6,280    (3,799)
Cash and cash equivalents at beginning of period   1,929    7,259 
Cash and cash equivalents at end of period  $8,209   $3,460 

 

Page 7

 

2024E Guidance

 

Gulfport's 2024 guidance assumes commodity strip prices as of April 16, 2024, adjusted for applicable commodity and location differentials, and no property acquisitions or divestitures.

 

   Year Ending 
   December 31, 2024 
   Low   High 
Production        
Average daily gas equivalent (MMcfepd)   1,045    1,080 
% Gas   ~92%
           
Realizations (before hedges)          
Natural gas (differential to NYMEX settled price) ($/Mcf)  $(0.20)  $(0.35)
NGL (% of WTI)   35%   40%
Oil (differential to NYMEX WTI) ($/Bbl)  $(4.75)  $(5.75)
           
Operating costs          
Lease operating expense ($/Mcfe)  $0.17   $0.19 
Taxes other than income  ($/Mcfe)  $0.08   $0.10 
Transportation, gathering, processing and compression  ($/Mcfe)  $0.90   $0.94 
Recurring cash general and administrative(1,2)  ($/Mcfe)  $0.11   $0.13 
           
    Total 
Capital expenditures (incurred)   (in millions) 
D&C  $330   $360 
Maintenance leasehold and land  $50   $60 
Total base capital expenditures  $380   $420 

 

(1)Recurring cash G&A includes capitalization. It excludes non-cash stock compensation and expenses related to the continued administration of our prior Chapter 11 filing.

 

(2)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 8

 

Derivatives

 

The below details Gulfport's hedging positions as of April 25, 2024:

 

   2Q2024   3Q2024   4Q2024   Full Year
2024(1)		   Full Year
2025		 
Natural Gas Contract Summary (NYMEX):                    
Fixed Price Swaps                    
Volume (BBtupd)   330    400    400    377    200 
Weighted Average Price ($/MMBtu)  $4.04   $3.77   $3.77   $3.85   $3.94 
                          
Fixed Price Collars                         
Volume (BBtupd)   225    225    225    225    180 
Weighted Average Floor Price ($/MMBtu)  $3.36   $3.36   $3.36   $3.36   $3.39 
Weighted Average Ceiling Price ($/MMBtu)  $5.14   $5.14   $5.14   $5.14   $4.33 
                          
Fixed Price Calls Sold                         
Volume (BBtupd)   202    202    202    202    193 
Weighted Average Price ($/MMBtu)  $3.33   $3.33   $3.33   $3.33   $5.80 
                          
Rex Zone 3 Basis                         
Volume (BBtupd)   150    150    150    150    — 
Differential ($/MMBtu)  $(0.15)  $(0.15)  $(0.15)  $(0.15)  $— 
                          
Tetco M2 Basis                         
Volume (BBtupd)   210    190    190    197    120 
Differential ($/MMBtu)  $(0.93)  $(0.92)  $(0.92)  $(0.92)  $(0.98)
                          
NGPL TX OK  Basis                         
Volume (BBtupd)   70    70    70    70    30 
Differential ($/MMBtu)  $(0.31)  $(0.31)  $(0.31)  $(0.31)  $(0.27)
                          
Oil Contract Summary (WTI):                         
Fixed Price Swaps                         
Volume (Bblpd)   500    500    500    500    — 
Weighted Average Price ($/Bbl)  $77.50   $77.50   $77.50   $77.50   $— 
                          
Fixed Price Collars                         
Volume (Bblpd)   1,000    1,000    1,000    1,000    — 
Weighted Average Floor Price ($/Bbl)  $62.00   $62.00   $62.00   $62.00   $— 
Weighted Average Ceiling Price ($/Bbl)  $80.00   $80.00   $80.00   $80.00   $— 
                          
NGL Contract Summary:                         
C3 Propane Fixed Price Swaps                         
Volume (Bblpd)   2,500    2,500    2,500    2,500    2,000 
Weighted Average Price ($/Bbl)  $30.25   $30.25   $30.25   $30.25   $30.09 
                          
(1) April 2024 - December 2024.                         

 

Page 9

 

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 tools 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, adjusted 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.

 

Page 10

 

Definitions

 

Adjusted net income is a non-GAAP financial measure equal to net income (loss) less non-cash derivative loss (gain), non-recurring general and administrative expenses comprised of expenses related to the continued administration of our prior Chapter 11 filing, stock-based compensation expenses, restructuring costs, other items which include items related to our Chapter 11 filing and other non-material expenses and the tax effect of the adjustments to net income.

 

Adjusted EBITDA is a non-GAAP financial measure equal to net income (loss), the most directly comparable GAAP financial measure, plus interest expense, deferred income tax expense (benefit), depreciation, depletion, amortization and accretion, non-cash derivative loss (gain), non-recurring general and administrative expenses comprised of expenses related to the continued administration of our prior Chapter 11 filing, stock-based compensation, restructuring costs, and other items which include items related to our Chapter 11 filing and other non-material expenses.

 

Adjusted 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 operating activities but excluded from adjusted EBITDA less interest expense, capitalized expenses incurred and capital expenditures incurred excluding discretionary acreage acquisitions. Gulfport includes a adjusted free cash flow estimate for 2024. 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. Accordingly, Gulfport is relying on the exception provided by Item 10(e)(1)(i)(B) of Regulation S-K to exclude such reconciliation. Items excluded in net cash provided by (used in) operating activities to arrive at adjusted free cash flow include interest expense, income taxes, capitalized expenses as well as one-time items or items whose timing or amount cannot be reasonably estimated.

 

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 expenses comprised of expenses related to the continued administration of our prior Chapter 11 filing. Gulfport includes a recurring general and administrative expense estimate for 2024. 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. Accordingly, Gulfport is relying on the exception provided by Item 10(e)(1)(i)(B) of Regulation S-K to exclude such reconciliation. Items excluded in general and administrative expense to arrive at recurring general and administrative expense include capitalized expenses as well as one-time items or items whose timing or amount cannot be reasonably estimated. The non-GAAP measure recurring general and administrative expenses allows investors to compare Gulfport’s total general and administrative expenses, including capitalization, to peer companies that account for their oil and gas operations using the successful efforts method.

 

Page 11

 

Adjusted Net Income: Three months ended March 31, 2024

 

(In thousands)

(Unaudited)

 

   Three Months Ended
March 31,
2024		   Three Months Ended
March 31,
2023		 
         
Net Income (GAAP)  $52,035   $523,054 
           
Adjustments:          
Non-cash derivative loss (gain)   20,186    (377,694)
Non-recurring general and administrative expense   810    1,297 
Stock-based compensation expense   2,403    1,754 
Restructuring costs   —    1,869 
Other, net(1)   (125)   (14,223)
Tax effect of adjustments(2)   (5,225)   — 
Adjusted Net Income (Non-GAAP)  $70,084   $136,057 

 

(1) For the three months ended March 31, 2023, “Other, net” included a $17.8 million receipt of funds related to our interim  claim distribution from our Chapter 11 Plan of Reorganization and a $1 million administrative payment to Rover as part of the executed settlement. For more discussion, refer to in Note 1 of our consolidated financial statements included in our Quarterly Report on Form 10-Q for the three months ended March 31, 2024. Additionally, “Other, net” included a $0.5 million expense to terminate one of our short-term drilling commitments.
(2) Deferred income taxes were approximately 22% for the three months ended March 31, 2024. For the three months ended March 31, 2023, the Company’s effective tax rate was 0% primarily as a result of the valuation allowance on the Company’s deferred tax asset.

 

Page 12

 

Adjusted EBITDA: Three months ended March 31, 2024

 

(In thousands)

(Unaudited)

 

   Three Months Ended March 31, 2024   Three Months Ended March 31, 2023 
         
Net Income (GAAP)  $52,035   $523,054 
           
Adjustments:          
Interest expense   15,003    13,756 
Deferred income tax expense   14,853    — 
DD&A and accretion   80,578    79,858 
Non-cash derivative loss (gain)   20,186    (377,694)
Non-recurring general and administrative expenses   810    1,297 
Stock-based compensation expense   2,403    1,754 
Restructuring costs   —    1,869 
Other, net(1)   (125)   (14,223)
Adjusted EBITDA (Non-GAAP)  $185,743   $229,671 

 

(1) For the three months ended March 31, 2023, “Other, net” included a $17.8 million receipt of funds related to our interim  claim distribution from our Chapter 11 Plan of Reorganization and a $1 million administrative payment to Rover as part of the executed settlement. For more discussion, refer to in Note 1 of our consolidated financial statements included in our Quarterly Report on Form 10-Q for the three months ended March 31, 2024. Additionally, “Other, net” included a $0.5 million expense to terminate one of our short-term drilling commitments.

 

Page 13

 

 

Adjusted Free Cash Flow: Three months ended March 31, 2024

 

(In thousands)

(Unaudited)

 

   Three Months Ended
March 31,
2024		   Three Months Ended
March 31,
2023		 
         
Net cash provided by operating activity (GAAP)  $188,022   $304,055 
Adjustments:          
Interest expense   15,003    13,756 
Non-recurring general and administrative expenses   810    1,297 
Restructuring costs   —    1,869 
Other, net(1)   (1,138)   (16,547)
Changes in operating assets and liabilities, net:          
Accounts receivable - oil, natural gas, and natural gas liquids sales   (37,457)   (158,541)
Accounts receivable - joint interest and other   4,145    1,837 
Accounts payable and accrued liabilities   16,656    82,671 
Prepaid expenses   (299)   (764)
Other assets   1    38 
Total changes in operating assets and liabilities  $(16,954)  $(74,759)
Adjusted EBITDA (Non-GAAP)  $185,743   $229,671 
Interest expense   (15,003)   (13,756)
Capitalized expenses incurred(2)   (5,654)   (5,083)
Capital expenditures incurred(3,4)   (126,238)   (147,687)
Adjusted free cash flow (Non-GAAP)  $38,848   $63,145 

 

(1) For the three months ended March 31, 2023, “Other, net” included a $17.8 million receipt of funds related to our interim  claim distribution from our Chapter 11 Plan of Reorganization and a $1 million administrative payment to Rover as part of the executed settlement. For more discussion, refer to in Note 1 of our consolidated financial statements included in our Quarterly Report on Form 10-Q for the three months ended March 31, 2024. Additionally, “Other, net” included a $0.5 million expense to terminate one of our short-term drilling commitments.
(2) Includes cash capitalized general and administrative expense and incurred capitalized interest expenses.
(3) Incurred capital expenditures and cash capital expenditures may vary from period to period due to the cash payment cycle.
(4) For the three months ended March 31, 2024, includes $1.8 million of non-D&C capital.

 

Page 14

 

Recurring General and Administrative Expenses:

Three months ended March 31, 2024

 

(In thousands)

(Unaudited)

 

   Three Months Ended
March 31, 2024		   Three Months Ended
March 31, 2023		 
   Cash   Non-Cash   Total   Cash   Non-Cash   Total 
                         
General and administrative expense (GAAP)  $6,795   $2,403   $9,198   $6,979   $1,754   $8,733 
Capitalized general and administrative expense   4,522    1,183    5,706    4,259    864    5,123 
Non-recurring general and administrative expense   (810)   —    (810)   (1,297)   —    (1,297)
Recurring general and administrative before capitalization (Non-GAAP)  $10,507   $3,586   $14,093   $9,941   $2,618   $12,559 

 

 

Page 15